Human Capital: Transforming Federal Recruiting and Hiring Efforts
Published: 2008-05-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: To address the challenges that the nation faces, it will be important for federal agencies to change their cultures and create the institutional capacity to become high-performing organizations. This includes recruiting and retaining a federal workforce able to create, sustain, and thrive in organizations that are flatter, results-oriented, and externally focused. In 2001, GAO identified strategic human capital management as a governmentwide high-risk area because federal agencies lacked a strategic approach to human capital management that integrated human capital efforts with their missions and program goals. Although progress has been made since that time, strategic human capital management still remains a high-risk area. This testimony, based on a large body of completed work issued from January 2001 through April 2008, focuses on (1) challenges that federal agencies have faced in recruiting and hiring talented employees, (2) progress in addressing these challenges, and (3) additional actions that are needed to strengthen recruiting and hiring efforts. In its prior reports, GAO has made a range of recommendations to the Office of Personnel Management (OPM)--the government's personnel agency--and to agencies in such areas as hiring, workforce planning, and diversity management; a number of these recommendations have since been implemented. GAO is making no new recommendations at this time.
section_title: What GAO Found
paragraphs: Numerous studies over the years have identified a range of problems and challenges with recruitment and hiring in the federal government. Some of these problems and challenges include passive recruitment strategies, unclear job vacancy announcements, and manual processes that are time consuming and paperwork intensive. In recent years, Congress, OPM, and agencies have made important strides in improving federal recruitment and hiring. For example, Congress has provided agencies with hiring flexibilities that could help to streamline the hiring process. OPM has sponsored job fairs and developed automated tools. Individual agencies have developed targeted recruitment strategies to identify and help build a talented workforce. Building on the progress that has been made, additional efforts are needed in the following areas: (1) Human capital planning: federal agencies will have to bolster their efforts in strategic human capital planning to ensure that they are prepared to meet their current and emerging hiring needs. Agencies must determine the critical skills and competencies necessary to achieve programmatic goals and develop strategies that are tailored to address any identified gaps. (2) Diversity management: developing and maintaining workforces that reflect all segments of society and our nation's diversity is another significant aspect of agencies' recruitment challenges. Recruitment is a key first step toward establishing a diverse workforce. Agencies must consider active recruitment strategies, such as building formal relationships with targeted schools and colleges, and partnering with multicultural professional organizations. (3) Use of existing flexibilities: agencies need to reexamine the flexibilities provided to them under current authorities, including monetary recruitment and retention incentives, special hiring authorities, and work-life programs. Agencies can then identify those existing flexibilities that could be used more extensively or more effectively to meet their workforce needs. (4) OPM leadership: OPM has taken significant steps in fostering and guiding improvements in recruiting and hiring in the executive branch. For example, OPM, working with and through the Chief Human Capital Officers Council, has moved forward in compiling information on effective and innovative practices and sharing this information with agencies. Still, OPM must continue to work to ensure that agencies take action on this information. Also, OPM needs to make certain that it has the internal capacity to guide agencies' readiness to implement change and achieve desired outcomes. OPM and agencies should be held accountable for the ongoing monitoring and refinement of human capital approaches to recruit and hire a capable and committed federal workforce. With continued commitment and strong leadership, the federal government can indeed be an employer of choice.

section_title: Letter
paragraphs: Thank you for the opportunity to be here today to discuss recruiting and  hiring of the next generation of federal employees. Today’s hearing  coincides with Public Service Recognition Week, which honors the men  and women who serve America as federal, state, and local government  employees. We commend the subcommittee for this opportunity to  highlight the progress that the federal government has made in improving  its recruitment and hiring practices over the past few years as well as draw  attention to the continued challenges and opportunities facing federal  agencies in acquiring capable and committed employees.
The importance of a top-notch federal workforce cannot be overstated.  The nation is facing new and more complex challenges in the 21st century  as various forces are reshaping the United States and its place in the  world. These forces include a large and growing long-term fiscal  imbalance, evolving national and homeland security threats, increasing  global interdependence, and a changing economy. Further, as we have  pointed out in our High-Risk Series and other reports for Congress, some  federal agencies continue to face persistent performance and  accountability problems at a time when taxpayers have come to expect— and need—higher levels of performance and greater responsiveness by  public officials and programs.
To address these challenges, it will be important for federal agencies to  change their cultures and create the institutional capacity to become high- performing organizations. This includes recruiting and retaining  employees able to create, sustain, and thrive in organizations that are  flatter, results-oriented, and externally focused and that collaborate with  other governmental entities as well as with the private and nonprofit  sectors to achieve desired outcomes.
As you are aware, in 2001, we identified federal human capital  management as a governmentwide high-risk area because federal agencies  lacked a strategic approach to human capital management that integrated  human capital efforts with their missions and program goals. Although  progress has been made since that time, strategic human capital  management still remains on our high-risk list. As we have previously  reported in our work on human capital issues, federal agencies do not  consistently have the modern human capital programs and policies needed  to ensure that they have the right people in the right jobs at the right time  to meet the challenges they face.
Exacerbating this problem, governmentwide, about one-third of federal  employees on board at the end of fiscal year 2007 will become eligible to  retire by 2012. Proportions of workers eligible to retire are projected to be  especially high in certain occupations—some of them mission critical—as  well as in key leadership positions. Indeed, as we recently reported, about  51 percent of customs and border protection agents, 58 percent of air  traffic controllers, 85 percent of administrative law judges, and 64 percent  of career executives may be eligible to retire by 2012.
That said, the way forward is not gloomy. In many ways, the federal  government is well positioned to acquire, develop, and retain the people it  needs to carry out its diverse roles and responsibilities. Importantly,  federal employment offers rewards, such as interesting work and  opportunities to make a difference in the lives of others, as well as a  variety of tangible benefits and work-life flexibilities that make an  organization an employer of choice. Moreover, the Office of Personnel  Management (OPM) and agencies have made noteworthy progress in  addressing the various human capital challenges they face, often in  response to our findings and recommendations. For example:    OPM identified additional human capital flexibilities and worked to  build consensus for legislative change;  the Office of Management and Budget directed agencies to adopt a  strategic approach to acquisition workforce planning; and  the Department of Housing and Urban Development prepared a  strategic workforce plan to be better prepared to recruit and hire the  people it needs to fulfill its mission.
As requested, my testimony today will focus on (1) challenges that federal  agencies have faced in recruiting and hiring talented employees, (2) the  progress that has been made to date in addressing these challenges, and  (3) additional actions that are needed moving forward to strengthen the  government’s recruiting and hiring efforts. My remarks today will  underscore the following: Improving the federal recruiting and hiring  process to attract the next generation of federal employees is a shared  responsibility between the federal government’s central personnel  agency—OPM, individual agencies, and Congress. With sustained and  committed leadership, innovation, and planning, the federal government  can brand itself as an employer of choice and successfully compete in the  labor market for its fair share of the nation’s best and brightest individuals.
This testimony is based on a large body of our completed work issued  from January 2001 through April 2008. Our previous work included  reviews of OPM and agency documents related to federal hiring, studies on  recruiting and hiring that were completed by other organizations in recent  years, as well as data from OPM’s central database of governmentwide  personnel information. We also interviewed various officials from OPM,  the interagency Chief Human Capital Officers Council, and selected  federal agencies. We performed our performance audits in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on our  audit objectives.
subsections: section_title: Federal Recruiting and Hiring Has Been a Long-standing Challenge
paragraphs: For years it has been widely recognized that the federal hiring process all  too often does not meet the needs of (1) agencies in achieving their  missions; (2) managers in filling positions with the right talent; and (3)  applicants for a timely, efficient, transparent, and merit-based process. In  short, the federal hiring process is often an impediment to the very  customers it is designed to serve in that it makes it difficult for agencies  and managers to obtain the right people with the right skills, and  applicants can be dissuaded from public service because of the complex  and lengthy procedures.
Numerous studies over the past decade by OPM, the Merit Systems  Protection Board (MSPB), the National Academy of Public Administration,  the Partnership for Public Service, the National Commission on the Public  Service, and GAO have identified a range of problems and challenges with  recruitment and hiring in the federal government, including the following:  Passive recruitment strategies.    Poor and insufficient workforce planning.    Unclear job vacancy announcements.    Time-consuming and paperwork-intensive manual processes.
Imprecise candidate assessment tools.  Ineffective use of existing hiring flexibilities.
These problems put the federal government at a serious competitive  disadvantage in acquiring talent. For example, passive recruitment  strategies, such as infrequent or no outreach to college campuses, miss  opportunities to expose potential employees to information about federal  jobs. Unclear and unfriendly vacancy announcements can cause confusion  for applicants, delay hiring, and serve as poor recruiting tools. Weak  candidate assessment tools can inadequately predict future job  performance and result in the hiring of individuals who do not fully  possess the appropriate skills for the job. As evidence of these and other  problems, MSPB’s most recently published Merit Principles Survey results  found that only 5 percent of federal managers and supervisors said that  they faced no significant barriers to hiring employees for their agencies.
section_title: Congress, OPM, and Agencies Have Taken Significant Steps to Help Improve Recruiting and Hiring
paragraphs: In recent years, Congress, OPM, and agencies have taken a series of  important actions to improve recruiting and hiring in the federal sector.  For example, Congress has provided agencies with hiring flexibilities that  could help agencies streamline their hiring processes and give agency  managers more latitude in selecting among qualified job candidates.  Congress has also provided several agencies with exemptions from the pay  and classification restrictions of the General Schedule. Other examples of  congressional action related to recruitment and hiring follow.
Dual compensation waivers to rehire federal retirees. OPM may grant  waivers allowing agencies to fill positions with rehired federal  annuitants without offsetting the salaries by the amount of the  annuities. Agencies can request waivers on a case-by-case basis for  positions that are extremely difficult to fill or for emergencies or other  unusual circumstances. Agencies can also request from OPM a  delegation of authority to grant waivers for emergencies or other  unusual circumstances.
Special authority to hire for positions in contracting. Agencies can  rehire federal annuitants to fill positions in contracting without being  required to offset the salaries. Agencies are required only to notify and  submit their hiring plans to OPM.
Enhanced annual leave computation. Agencies may credit relevant  private sector experience when computing annual leave amounts.
As the federal government’s central personnel management agency, OPM  has a key role in helping agencies acquire, develop, retain, and manage  their human capital. In the areas of recruiting and hiring, OPM has, for  example, done the following.
Sponsored job fairs across the country and produced television  commercials to make the public more aware of the work that federal  employees do.
Developed a 45-day hiring model to help agencies identify the steps in  their processes that tend to bog them down, and created a detailed  checklist to assist agencies in undertaking a full-scale makeover of  their hiring process from beginning to end.
Developed a Hiring Tool Kit on its Web site that is to aid agencies in  improving and refining their hiring processes and that includes a tool to  assist agency officials in determining the appropriate hiring flexibilities  to use given their specific situations.
Updated and expanded its report Human Resources Flexibilities and  Authorities in the Federal Government, which serves as a handbook  for agencies in identifying current flexibilities and authorities and how  they can be used to address human capital challenges.
Established standardized vacancy announcement templates for  common occupations, such as secretarial, accounting, and accounting  technician positions, into which agencies can insert summary  information concerning their specific jobs prior to posting for public  announcement.
Individual federal agencies have also taken actions to meet their specific  recruitment and hiring needs. For example:    The National Aeronautics and Space Administration (NASA) has used a  combination of techniques to recruit workers with critical skills,  including targeted recruitment activities, educational outreach  programs, improved compensation and benefits packages, professional  development programs, and streamlined hiring authorities. Many of  NASA’s external hires have been for entry-level positions through the  Cooperative Education Program, which provides NASA centers with  the opportunity to develop and train future employees and assess the  abilities of potential employees before making them permanent job  offers.
The Nuclear Regulatory Commission (NRC) has endeavored to align its  human capital planning framework with its strategic goals and has  identified the activities needed to achieve a diverse, skilled workforce  and an infrastructure that supports the agency’s mission and goals.  NRC has used various flexibilities in recruiting and hiring new  employees, and it has tracked the frequency and cost associated with  the use of some flexibilities. While there was room for further  improvement, NRC has been effective in recruiting, developing, and  retaining a critically skilled workforce.
section_title: Additional Actions Are Needed to Strengthen Recruiting and Hiring
paragraphs: While these actions are all steps in the right direction, our past work has  found that additional efforts are needed in the areas of strategic human  capital planning, diversity management, and the use of existing  flexibilities. In addressing these areas, agency managers need to be held  accountable for maximizing the efficiency and effectiveness of their  recruiting efforts and hiring processes. In addition, OPM, working with  and through the Chief Human Capital Officers Council, must use its  leadership position to vigorously and convincingly encourage continuous  improvement in agencies and provide appropriate assistance to support  agencies’ recruitment and hiring efforts. In carrying out its important role,  OPM will need to ensure that it has the internal capacity to assist and  guide agencies’ readiness to implement needed improvements. I will  discuss each one of these areas in turn.
subsections: section_title: Human Capital Planning
paragraphs: First and foremost, federal agencies will have to bolster their efforts in  strategic human capital planning to ensure that they are prepared to meet  their current and emerging hiring needs. To build effective recruiting and  hiring programs, agencies must determine the critical skills and  competencies necessary to achieve programmatic goals and develop  strategies that are tailored to address any identified gaps. For example, an  agency’s strategic human capital plan should address the demographic  trends that the agency faces with its workforce, especially pending  retirements. We have found that leading organizations go beyond a  succession planning approach that focuses on simply replacing  individuals; instead, agencies should consider their future mission  requirements and the knowledge, skills, and abilities needed to meet those  requirements.
Recruiting and hiring for the acquisition workforce is a prime example of  the government’s strategic human capital planning challenges. Acquisition  of products and services from contractors consumes about a quarter of  discretionary spending governmentwide and is a key function in many  federal agencies. We have reported that many acquisition professionals  need to acquire a new set of skills focusing on business management  because of a more sophisticated business environment. At a GAO- sponsored forum in July 2006, acquisition experts reported that agency  leaders had not recognized or elevated the importance of the acquisition  profession within their organizations, and a strategic approach had not  been taken across government or within agencies to focus on workforce  challenges, such as creating a positive image essential to successfully  recruiting and retaining a new generation of talented acquisition  professionals.
section_title: Diversity Management
paragraphs: Developing and maintaining workforces that reflect all segments of society  and our nation’s diversity is another significant aspect of agencies’  recruitment challenges. As we have previously reported, recruitment is a  key first step toward establishing a diverse workforce. To ensure that  they are reaching out to diverse pools of talent, agencies must consider  active recruitment strategies, such as the following:    Widening the selection of schools from which they recruit to include,  for example, historically Black colleges and universities, Hispanic- serving institutions, women’s colleges, and schools with international  programs.
Building formal relationships with targeted schools and colleges to  ensure the cultivation of talent for future applicant pools.
Partnering with multicultural professional organizations and speaking  at their conferences to communicate their commitment to diversity to  external audiences and strengthen and maintain relationships.
For these types of recruitment strategies, agencies can calculate the cost  of recruiting channels and cross-reference those costs with the volume  and quality of candidates yielded in order to reallocate funds to the most  effective recruiting channels.
Several agencies have taken steps toward developing and implementing  active recruitment strategies that take into account a diverse pool of job  candidates. For example:    NASA developed a strategy for recruiting Hispanics that focuses on  increasing educational attainment, beginning in kindergarten and  continuing into college and graduate school, with the goal of attracting  students into the NASA workforce and aerospace community. NASA  said it must compete with the private sector for the pool of Hispanics  qualified for aerospace engineering positions, which is often attracted  by more-lucrative employment opportunities in the private sector in  more preferable locations. NASA centers sponsored, and its  employees participated in, mentoring, tutoring, and other programs to  encourage Hispanic and other students to pursue careers in science,  engineering, technology, and mathematics.
An official with the National Institute of Standards and Technology  (NIST) said that when NIST hosted recruitment or other programs, it  made use of relationships the agency had with colleges, universities,  and other groups to inform students about internship or employment  opportunities. One group that helped to arrange such recruitment  efforts was the National Organization of Black Chemists and Black  Chemical Engineers. The NIST official said that NIST had been active  in the professional organization’s leadership for years and that NIST  employees had served on its executive board. Another NIST official  said that the professional organization had helped with NIST’s efforts  to recruit summer interns.
The Federal Aviation Administration (FAA) developed internship  opportunities designed to recruit a diverse group of future candidates  for the agency. Its Minority-Serving Institutions Internship Program  was designed to provide professional knowledge and experience at  FAA or firms in the private sector for minority students and students  with disabilities who are enrolled in a college or university, major in  relevant fields and related disciplines, and have a minimum of a 3.0  grade point average. Students in the internship program could earn  academic credit for their participation during the fall or spring  semesters or over the summer.
section_title: Use of Existing Flexibilities
paragraphs: Additionally, the appropriate use of human capital flexibilities is crucial to  making further improvements in agencies’ efforts to recruit, hire, and  manage their workforces. Federal agencies often have varied statutory  authorities related to workforce management. These authorities provide  agencies with flexibility in helping them manage their human capital  strategically to achieve results. In previous reports and testimonies, we  have emphasized that in addressing their human capital challenges, federal  agencies should first identify and use the flexibilities already available  under existing laws and regulations and then seek additional flexibilities  only when necessary and based on sound business cases. Our work has  found that the insufficient and ineffective use of these existing flexibilities  can significantly hinder the ability of federal agencies to recruit, hire,  retain, and manage their human capital.
The ineffective use of available hiring flexibilities represents a lost  opportunity for agencies to effectively manage human capital. In 2002,  Congress provided agencies with two new hiring flexibilities. One of  these hiring flexibilities, known as category rating, permits an agency to  select best-qualified job candidates for a position rather than being limited  to the three top-ranked job candidates. The other hiring flexibility, often  referred to as direct hire, allows an agency to appoint people to positions  without adherence to certain competitive examination requirements when  there is a severe shortage of qualified candidates or a critical hiring need.  However, we have found that agencies were making limited use of these  available flexibilities. Various agency officials from across the federal  government often had previously cited both of these hiring flexibilities as  needed tools to help in improving the federal hiring process.
Agencies need to reexamine the flexibilities provided to them under  current authorities and identify those that could be used more extensively  or more effectively to meet their workforce needs. Our prior work has  identified several human capital flexibilities that agency officials and  union representatives frequently cited as most effective for managing their  workforces. These flexibilities encompass broad areas of personnel- related actions that could be especially beneficial for agencies’ recruiting  and hiring efforts. They include monetary recruitment and retention  incentives; special hiring authorities, such as student employment  programs; and work-life programs, such as alternative work schedules,  child care assistance, and transit subsidies.
section_title: OPM Leadership
paragraphs: As part of its key leadership role, OPM has taken significant steps in  fostering and guiding improvements in recruiting and hiring in the  executive branch. Still, OPM must continue to assist—and as appropriate,  require—the building of the infrastructures within agencies needed to  successfully implement and sustain human capital reforms to strengthen  recruitment and hiring. OPM can do this in part by encouraging  continuous improvement and providing appropriate assistance to support  agencies’ recruitment and hiring efforts. Innovative and best practices of  model agencies need to be made available to other agencies in order to  facilitate the transformation of agency hiring practices from compliance  based to agency mission based. OPM, working with and through the Chief  Human Capital Officers Council, has made progress in compiling  information on effective and innovative practices and distributing this  information to help agencies in determining when, where, and how the  various flexibilities are being used and should be used. OPM must  continue to work to ensure that agencies take action on this information.
Moreover, in leading governmentwide human capital reform, OPM has  faced challenges in its internal capacity to assist and guide agencies’  readiness to implement change. In October 2007, we issued a report on the  extent to which OPM has (1) addressed key internal human capital  management issues identified through employee survey responses and (2)  put in place strategies to ensure that it has the mission-critical talent it  needs to meet current and future strategic goals. We found that OPM has  taken positive actions to address specific concerns raised by its employees  and managers in the employee surveys. We also found that OPM has  strategies in place, such as workforce and succession management plans,  that are aligned with selected leading practices relevant to the agency’s  capacity to fulfill its strategic goals. However, OPM lacks a well- documented agencywide evaluation process of some of its workforce  planning efforts. In a relatively short time, there will also be a presidential  transition, and well-documented processes can help to ensure a seamless  transition that builds on the current momentum.
Equally important is OPM’s leadership in federal workforce diversity and  oversight of merit system principles. In our review of how OPM and the  Equal Employment Opportunity Commission (EEOC) carry out their  mutually shared responsibilities for helping to ensure a fair, inclusive, and  nondiscriminatory federal workplace, we found limited coordination  between the two agencies in policy and oversight matters. The lack of a  strategic partnership between the two agencies and an insufficient  understanding of their mutual roles, authority, and responsibilities can  result in a lost opportunity to realize consistency, efficiency, and public  value in federal equal employment opportunity and workplace diversity  human capital management practices. We recommended that OPM and  EEOC regularly coordinate in carrying out their responsibilities under the  equal employment opportunity policy framework and seek opportunities  for streamlining like reporting requirements. Both agencies acknowledged  that their collaborative efforts could be strengthened but took exception  to the recommendation to streamline requirements. We continue to believe  in the value of more collaboration.
Finally, OPM and agency leaders need to be held accountable and should  hold others accountable for the ongoing monitoring and refinement of  human capital approaches to recruit and hire a capable and committed  federal workforce. Leadership is critical for agencies to overcome their  natural resistance to change, to marshal the resources needed in many  cases to improve management, to build and maintain organizationwide  commitment to improving their ways of doing business, and to create the  conditions for effectively improving human capital approaches. Some  agency officials have told us that OPM rules and regulations are rigid, yet  agency officials are also often hesitant to implement new approaches  without specific guidance. It will be important for agencies and OPM to  define their appropriate roles and day-to-day working relationships as they  collaborate on developing and implementing innovative and more effective  recruitment efforts and hiring processes.
In conclusion, OPM and agencies have made progress in addressing the  impediments to effective recruitment and hiring since we first designated  strategic human capital management as a high-risk area in 2001. Still, as I  have discussed today, more can be done. Faced with a workforce that is  becoming more retirement eligible and finding gaps in talent because of  changes in the knowledge, skills, and competencies in occupations needed  to meet their missions, agencies must strengthen their recruiting and  hiring efforts. Moreover, human capital expertise within the agencies must  be up to the challenge for this transformation to be successful and  enduring. With an ongoing commitment to continuous improvement and  strong leadership in Congress, OPM, and the agencies, the federal  government can indeed be an employer of choice.
Mr. Chairman and members of the subcommittee, this completes my  prepared statement. I would be pleased to respond to any questions you  may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For further information regarding this statement, please contact Robert N.  Goldenkoff, Director, Strategic Issues, at (202) 512-6806 or  goldenkoffr@gao.gov. Individuals making key contributions to this  testimony include K. Scott Derrick, Assistant Director; Steven Berke;  Janice Latimer; Sabrina Streagle; and Jessica Thomsen.
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