Human Capital: Key Principles for Effective Strategic Workforce Planning
Published: 2003-12-11T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The federal government is in a period of profound transition and faces an array of challenges and opportunities to enhance performance, ensure accountability, and position the nation for the future. Effective results-oriented management of the government's most valued resource--its people--is at the heart of this transition. This report is part of a large body of GAO work examining issues in strategic human capital management. Based on GAO's reports and testimonies, review of studies by leading workforce planning organizations, and interviews with officials from the Office of Personnel Management and other federal agencies, this report describes the key principles of strategic workforce planning and provides illustrative examples of these principles drawn from selected agencies' strategic workforce planning experiences.
section_title: What GAO Found
paragraphs: Strategic workforce planning addresses two critical needs: (1) aligning an organization's human capital program with its current and emerging mission and programmatic goals and (2) developing long-term strategies for acquiring, developing, and retaining staff to achieve programmatic goals. While agencies' approaches to workforce planning will vary, GAO identified five key principles that strategic workforce planning should address irrespective of the context in which the planning is done: (1) involve top management, employees, and other stakeholders in developing, communicating, and implementing the strategic workforce plan, (2) determine the critical skills and competencies that will be needed to achieve current and future programmatic results, (3) develop strategies that are tailored to address gaps in number, deployment, and alignment of human capital approaches for enabling and sustaining the contributions of all critical skills and competencies, (4) build the capability needed to address administrative, educational, and other requirements important to support workforce planning strategies, and (5) monitor and evaluate the agency's progress toward its human capital goals and the contribution that human capital results have made toward achieving programmatic results.

section_title: Letter
paragraphs: The Homeland Security Act of 2002, recent congressional hearings on  proposals to reform the Department of Defense’s civilian personnel  reforms, and reports by the Commercial Activities Panel chaired by the  Comptroller General and the National Commission on the Public Service  recognize the important contribution that a properly designed and  implemented human capital program can make toward achieving an  agency’s mission and strategic goals.  Strategic workforce planning, also  called human capital planning, focuses on developing long-term strategies  for acquiring, developing, and retaining an organization’s total workforce  (including full- and part-time federal staff and contractors) to meet the  needs of the future.  It is an essential element of the institutional  infrastructure that each agency needs to ensure that its human capital  program capitalizes on its workforce’s strengths and addresses related  challenges in a manner that is clearly linked to achieving the agency’s  mission and goals.
This report is part of a large body of work examining issues in strategic  human capital management.  It was initially requested by Senators  Lieberman and Thompson in their capacities as Chairman and Ranking  Minority Member, respectively, of the Senate Committee on Governmental  Affairs, and by the chairmen and ranking minority members of the  committee’s two cognizant subcommittees.  This report, as agreed with  your offices, describes principles of human capital planning and provides  illustrative agency examples that will contribute to effective agency  strategic workforce plans.  GAO, like other agencies across government, is  in the midst of transforming how it does business.  Accordingly, our  internal strategic human capital planning efforts are consistent with the  principles described in this report.
To develop this information, we reviewed documents from  (1) organizations with governmentwide responsibilities for or expertise in  workforce planning models and tools, such as the Office of Personnel  Management (OPM) and the National Academy of Public Administration  (NAPA), and (2) federal agencies recommended by several sources as  having promising workforce planning programs.  We also reviewed our  own reports and testimonies on human capital issues.  In addition, we met  with officials from these organizations concerning existing workforce  planning models and lessons learned from their workforce planning  experiences.  We did not evaluate the effectiveness of specific workforce  planning processes being used by the agencies we contacted.  Appendix I  provides additional information on our scope and methodology.  A list of  recent GAO products related to federal agencies’ management of human  capital is included at the end of this report.
subsections: section_title: Background
paragraphs: Strategic human capital management is a pervasive challenge facing the  federal government.  In January 2001, and again in January 2003, we  identified strategic human capital management as a governmentwide high- risk area after finding that the lack of attention to strategic human capital  planning had created a risk to the federal government’s ability to serve the  American people effectively.  As our previous reports have made clear, the  widespread lack of attention to strategic human capital management in the  past has created a fundamental weakness in the federal government’s  ability to perform its missions economically, efficiently, and effectively.  In  the wake of extensive downsizing during the early 1990s, done largely  without sufficient consideration of the strategic consequences, agencies  are experiencing significant challenges to deploying the right skills, in the  right places, at the right time.  Agencies are also facing a growing number  of employees who are eligible for retirement and are finding it difficult to  fill certain mission-critical jobs, a situation that could significantly drain  agencies’ institutional knowledge.  Other factors such as emerging security  threats, rapidly evolving technology, and dramatic shifts in the age and  composition of the overall population exacerbate the problem.  Such  factors increase the need for agencies to engage in strategic workforce  planning to transform their workforces so that they will be effective in the  21st   century.
There are a variety of models of how federal agencies can conduct  workforce planning.  For example, in 1999 OPM published a five-step  model that suggests agencies define their strategic direction, assess their  current and future workforces, and develop and implement action plans for  closing identified gaps in future workforce needs.  Since then, NAPA and  the International Personnel Management Association (IPMA) have  reported on workforce models used by federal, state, and local  governments and industry, and developed their own generic models.
Comparing these models, NAPA and IPMA found that the following four  steps are generally common to strategic workforce planning efforts:  examining future organizational, environmental, and other issues that  may affect the agency’s ability to attain its strategic goals;   determining skills and competencies needed in the future workforce to  meet the organization’s goals and identifying gaps in skills and  competencies that an organization needs to address;  selecting and implementing human capital strategies that are targeted  toward addressing these gaps and issues; and  evaluating the success of the human capital strategies.
However, they also reported that federal agencies often implement these  steps differently and focus on a variety of issues based on their particular  circumstances when preparing their strategic workforce plans.  For  example, faced with a long lead time to train employees hired to replace  those retiring and an increasing workload, SSA focuses a large part of its  workforce planning effort on estimating and managing retirements.  Unlike  SSA, PBGC officials faced a future workload that could rise or fall sharply.   Consequently, PBGC focused its November 2002 workforce plan on  identifying skills to manage the combined efforts of federal staff and  contractors to address a volatile workload.
section_title: Principle 1: Involve Top Management, Employees, and Other Stakeholders in Developing, Communicating, and Implementing the Strategic Workforce Plan
paragraphs: Planning, developing, and implementing workforce planning strategies,  such as those that involve reshaping the current workforce through early  separations, managed attrition, or increased hiring, can cause significant  changes in how an agency implements its policies and programs.  Our work  on the human capital experiences of leading organizations as well as  organizations that are undergoing major mergers and transformations has  identified numerous lessons that can help federal agencies successfully  implement strategic workforce planning strategies.
These lessons include the following:  Ensuring that top management sets the overall direction and  goals of workforce planning.  Top leadership that is clearly and  personally involved in strategic workforce planning provides the  organizational vision that is important in times of change; can help  provide stability as the workforce plan is being developed and  implemented; and provides a cadre of champions within the agency,  including both political and career executives, to ensure that planning  strategies are thoroughly implemented and sustained over time.   It can  also help integrate workforce planning efforts with other key  management planning efforts, such as succession planning and  information technology or financial management reforms, to ensure that  such initiatives work together to achieve the agency’s goals.  For  example, we have reported that to be effective, succession planning  needs the support and commitment of an organization’s top leadership.   In other countries, government agencies’ top leadership (1) actively  participates in the succession planning and management programs;   (2) regularly uses these programs to develop, place, and promote  individuals; and (3) ensures that these programs receive sufficient  financial and staff resources and are maintained over time.
Involve employees and other stakeholders in developing and  implementing future workforce strategies.  Agency managers,  supervisors, employees, and employee unions need to work together to  ensure that the entire agency understands the need for and benefits of  changes described in the strategic workforce plan so that the agency  can develop clear and transparent policies and procedures to implement  the plan’s human capital strategies.  Involving employees and other  stakeholders on strategic workforce planning teams can develop new  synergies that identify ways to streamline processes and improve  human capital strategies and help the agency recognize and deal with  the potential impact that the organization’s culture—the underlying  assumptions, beliefs, values, attitudes, and expectations generally  shared by an organization’s members—can have on the implementation  of such improvements.  Changes that recognize how they may challenge  the existing culture, and include appropriate steps to deal with potential  problems, are more likely to succeed than strategies that do not.
Establish a communication strategy to create shared  expectations, promote transparency, and report progress.  A  communication strategy is especially crucial in the public sector where  a full range of stakeholders and interested parties are concerned not  only with what human capital and programmatic results will be  achieved by a plan, but also with the processes that are to be used to  achieve those results.  For example, if a workforce plan calls for  employing strategies that have not been extensively used before, such as  recruitment bonuses, employees may be concerned about whether the  processes will be followed consistently and fairly.  In general,  communication about the goals, approach, and results of strategic  workforce planning is most effective when done early, clearly, and often  and is downward, upward, and lateral.
Figure 2 describes how PBGC adopted several of these lessons during its  recent workforce planning efforts.
section_title: Principle 2: Determine the Critical Skills and Competencies That Will Be Needed to Achieve the Future Programmatic Results
paragraphs: It is essential that agencies determine the skills and competencies that are  critical to successfully achieving their missions and goals. This is especially  important as changes in national security, technology, budget constraints,  and other factors change the environment within which federal agencies  operate. For example, as discussed in our July 2003 report on the  Department of Homeland Security’s (DHS) international cargo container  programs, DHS Customs officials have developed two new programs for  increasing the security of such cargo that require recruiting and training  about 270 staff to work with their foreign counterparts at more than 40 international ports and international shipping companies.  To fully  implement the new security programs, DHS expects to recruit and train  candidates with diplomatic, language, and risk assessment (targeting) skills  for 2- to 3-year permanent assignments at foreign ports.  We reported that  because some of these ports are in countries that our government  considers hardship assignments, DHS faces a daunting challenge in  attracting U.S. personnel with the necessary skills for these assignments.   We recommended, among other improvements, that DHS develop human  capital plans that clearly describe how the cargo security programs will  meet the programs’ long-term demands for skilled staff. DHS officials  agreed to develop human capital plans to better ensure the programs’ long- term success.
We have reported on similar human capital challenges at other agencies.   For example, in June 2003, we testified that the Securities and Exchange  Commission (SEC) had failed to fill most of the new staff positions it  needed to examine recent high-profile corporate failures and accounting  scandals.  In our June 2002 report on the Federal Energy Regulatory  Commission (FERC), we stated that the increasing competitive nature of  the natural gas and electricity markets made it critical that FERC have  more staff members knowledgeable about how the energy markets work  and how to regulate these markets effectively.  However, FERC did not  have a strategic human capital management plan to guide its efforts to  transform its workforce and had not taken full advantage of the personnel  flexibilities and tools available to federal agencies in addressing its human  capital challenges.  In April 2002, we found that the individual federal trade  agencies responsible for negotiating, monitoring, and enforcing U.S. trade  agreements lacked sufficient staff members with the expertise to perform  the necessary economic, technical, and legal analyses for the new agreements.  The agencies collectively did not have sufficient expertise to  adequately complete these analyses and faced problems with recruitment  and high turnover rates.
The scope of agencies’ efforts to identify the skills and competencies  needed for their future workforces varies considerably, depending on the  needs and interests of a particular agency.  Whereas some agencies may  decide to define all the skills and competencies needed to achieve their  strategic goals, others may elect to focus their analysis on only those most  critical to achieving their goals.  The most important consideration is that  the skills and competencies identified are clearly linked to the agency’s  mission and long-term goals developed jointly with key congressional and  other stakeholders during the strategic planning process.  If an agency  identifies staff needs without linking the needs to strategic goals, or if the  agency has not obtained agreement from key stakeholders on the goals, the  needs assessment may be incomplete and premature.
Agencies can use various approaches for making a fact-based  determination of the critical human capital skills and competencies needed  for the future.  For example, PBGC collected qualitative information from  interviews with agency executives and managers on the factors influencing  the agency’s capability to acquire, develop, and retain critical skills and  competencies. Another approach, used by the Department of the Army, is  to collect extensive information from employee surveys on education,  training, and other factors that may influence employees’ skills.   Information on attrition rates and projected retirement rates, fluctuations  in workload, and geographic and demographic trends can also be useful.   When estimating the number of employees needed with specific skills and  competencies, it is also important to consider opportunities for reshaping  the workforce by reengineering current work processes, sharing work  among offices within the agency and with other agencies that have similar  missions, and competitive sourcing. (See fig. 3 for information on NHGRI’s  approach for determining critical skills and competencies needed to  achieve its strategic goals.)
Scenario planning is an approach that agencies have used to manage risks  of planning for future human capital needs in a changing environment.  As  discussed in our April 2003 report on agencies’ efforts to integrate human  capital strategies with their mission-oriented efforts, scenarios can  describe different future environments that agencies may face.  For  example, after the terrorist attacks of September 11, 2001, and during the  creation and implementation of DHS, senior U.S. Coast Guard officials  reexamined five long-term scenarios developed in 1999 to describe  different environments that could exist in the year 2020.  In 1999, these  scenarios had been the basis for agency leaders and planners to create  operational and human capital strategies that they thought would work  well for the U.S. Coast Guard in each independent scenario.  After  September 11, 2001, agency officials reviewed the scenarios to determine  whether additional scenarios were needed in light of the attacks and  decided to (1) create new long-term scenarios to guide planning beyond  2005 and (2) generate two scenarios with an 18-month horizon to guide  short-term operational and human capital planning.  Similarly, to prepare  its 2002 strategic workforce plan, PBGC used scenario analysis to  determine how the scope and volume of its activities might change in the  next 5 years.  The strategic workforce plans these organizations developed  identify gaps in workforce skills or competencies that they need to fill to  meet the likely scenarios rather than planning to meet the needs of a single  view of the future.  U.S. Coast Guard and PBGC managers believe that by  using multiple scenarios they gain flexibility in determining future  workforce requirements.
section_title: Principle 3: Develop Strategies Tailored to Address Gaps and Human Capital Conditions in Critical Skills and Competencies That Need Attention
paragraphs: Our March 2002 strategic human capital model stressed the importance of  agencies developing human capital strategies—the programs, policies, and  processes that agencies use to build and manage their workforces—that  are tailored to their unique needs.  Applying this to strategic workforce  planning means that agencies (1) develop hiring, training, staff  development, succession planning, performance management, use of  flexibilities, and other human capital strategies and tools that can be  implemented with the resources that can be reasonably expected to be  available and (2) consider how these strategies can be aligned to eliminate  gaps and improve the contribution of critical skills and competencies that  they have identified between the future and current skills and  competencies needed for mission success.  For example, we reported that  to manage the succession of their executives and other key employees,  agencies in Australia, Canada, New Zealand, and the United Kingdom are  implementing succession planning and management practices that protect  and enhance organizational capacity.  Specifically, their initiatives identify  high-potential employees from multiple organizational levels early in their  careers as well as identify and develop successors for employees with  critical knowledge and skills.  In addition, because they are facing  challenges in the demographic makeup and diversity of their senior  executives, agencies in other countries use succession planning and  management to achieve a more diverse workforce, maintain their  leadership capacity as their senior executives retire, and increase the  retention of high-potential staff.
Also, in June 2003, we testified that although the Federal Bureau of  Investigation (FBI) has taken some steps to address short-term human  capital needs related to implementing its changed priorities, as well as  completing a framework for a revised strategic plan, it has not completed a  strategic human capital plan.  We observed that the FBI should build a  more long-term approach to human capital by completing a strategic  human capital plan that outlines, among other things, the results of a data- driven assessment of its needs for critical skills and competencies.  Such an  analysis could become the basis for FBI officials deciding how to maximize  the use of available human capital flexibilities as a strategy for recruiting  and retaining agents with critical skills, intelligence analysts, and other  critically needed staff.
Our 2002 strategic human capital model identifies aspects of human capital  management that enable agencies to maximize their employees’  contributions, such as (1) the continuing attention of senior leaders and  managers to valuing and investing in their employees; (2) an investment in  human capital approaches that acquires, develops, and retains the best  employees; and (3) the use of performance management systems that elicit  the best results-oriented performance from the staff, and indicators to  measure the effectiveness of human capital approaches.  Before  beginning to develop specific workforce strategies, an agency can assess  these aspects of its human capital approach, using OPM’s Human Capital  Assessment and Accountability Framework, which OPM developed in  conjunction with the Office of Management and Budget (OMB) and GAO;  our model; and other tools.  The results will help agencies develop a sense  of the obstacles and opportunities that may occur in meeting their critical  workforce needs For example, an agency that attempts to develop creative  and innovative strategies will have a difficult time implementing the  strategies if its assessment concludes that its overall human capital  approach (1) does not effectively value people as assets whose value can  be enhanced and (2) is not results oriented.
Much of the authority that agencies’ leaders need to tailor human capital  strategies to their unique needs is already available under current laws and  regulations.  Therefore, in setting goals for its human capital program and  developing the tailored workforce planning strategies to achieve these  goals, it is important for agencies to identify and make use of all the  appropriate administrative authorities to build and maintain the workforce  needed for the future. As our December 2002 report states, this will involve  agencies reexamining the flexibilities provided to them under current  authorities, and identifying existing flexibilities that they could use more  extensively, to develop workforce planning strategies.  These flexibilities  may include providing early separation and early retirement incentives  authorized by the Homeland Security Act of 2002, recruitment and  retention bonuses and allowances, alternative work schedules, and special  hiring authorities to recruit employees with critical skills.  (See fig. 4 for  information on DOL’s use of flexibilities to recruit individuals with business  skills.)
section_title: Principle 4: Build the Capability Needed to Address Administrative, Educational, and Other Requirements Important to Supporting Workforce Strategies
paragraphs: In a December 2002 report, we identified key practices that agencies need  to employ to effectively take advantage of existing and new human capital  authorities.  Two of these practices—ensuring that the use of flexibilities  is part of an overall human capital strategy and ensuring stakeholder input  in developing flexibilities-related policies and procedures—are intrinsic to  effective workforce planning and have already been discussed.  However,  as agencies plan how to implement specific workforce strategies that  include flexibilities, it is important that they also consider other practices  that are important to the effective use of flexibilities.  These include the  following:  Educate managers and employees on the availability and use of  flexibilities.  Managers and supervisors can be more effective in using  human capital strategies that involve new flexibilities, such as  recruitment bonuses, if they are properly trained to identify when they  can be used and how to use the agency’s processes for ensuring  consistency, equity, and transparency.  To avoid confusion and  misunderstandings, it is also important to educate employees about how  the agency uses human capital flexibilities and employee rights under  policies and procedures related to human capital.
Streamline and improve administrative processes.  It is important  that agencies streamline administrative processes for using flexibilities  and review self-imposed constraints that may be excessively process  oriented.  Although sufficient controls are important to ensure  consistency and fairness, agency officials developing a workforce  strategy that uses flexibilities should look for instances in which  processes can be reengineered.
Build transparency and accountability into the system.  Clear and  transparent guidelines for using specific flexibilities, and holding  managers and supervisors accountable for their fair and effective use,  are essential to successfully implementing workforce strategies.   Guidelines can be used to (1) provide well-defined and documented  decision-making criteria for using flexibilities and help ensure that they  are consistently applied and (2) minimize managers’ and supervisors’  potential reluctance to use flexibilities by addressing their concerns that  without guidelines, employees may see them as unfairly applying the  flexibilities.  An agency can also use a results-oriented performance  management system to reinforce managers’ accountability for  implementing human capital strategies.  In October 2000, OPM amended  regulations to require agencies to, among other things, appraise  executive performance by balancing organizational results with areas  such as employee perspective.  We reported on selected agencies’  implementation of a set of balanced performance expectations for  senior executives and identified examples of executives’ expectations.    Examples of these performance expectations were to “help attract and  retain well-qualified employees” and “ensure workforce has skills  aligned with the agency’s objectives.” (See fig. 5 for information on GSA  Region 3’s efforts to build the capacity to support its workforce  strategies.)
section_title: Principle 5: Monitor and Evaluate the Agency’s Progress toward Its Human Capital Goals and the Contribution That Human Capital Results Have Made toward Achieving Programmatic Goals
paragraphs: High-performing organizations recognize the fundamental importance of  measuring both the outcomes of human capital strategies and how these  outcomes have helped the organizations accomplish their missions and  programmatic goals.  Performance measures, appropriately designed, can  be used to gauge two types of success:  (1) progress toward reaching  human capital goals and (2) the contribution of human capital activities  toward achieving programmatic goals. Identifying both types of measures,  and discussing how the agency will use these measures to evaluate the  strategies before it starts to implement the strategies, helps agency officials  think through the scope, timing, and possible barriers to evaluating the  workforce plan. Periodic measurement of an agency’s progress toward  human capital goals and the extent that human capital activities  contributed to achieving programmatic goals provides information for  effective oversight by identifying performance shortfalls and appropriate  corrective actions.
For example, a workforce plan can include measures that indicate whether  the agency executed its hiring, training, or retention strategies as intended  and achieved the goals for these strategies, and how these initiatives  changed the workforce’s skills and competencies. It can also include  additional measures that address whether the agency achieved its program  goals and the link between human capital and program results.  An agency’s  evaluation of its progress implementing human capital strategies would use  the first set of measures to determine if the agency met its human capital  goals and identify the reasons for any shortfalls, such as whether the  agency’s implementation plan adequately considered possible barriers to  achieving the goals, established effective checkpoints to allow necessary  adjustments to the strategy, and assigned people with sufficient authority  and resources. Further evaluation may determine that although the agency  achieved its workforce goals, its human capital efforts neither significantly  helped nor hindered the agency from reaching its programmatic goals.   This could occur if an agency misjudged the relationship between human  capital and programmatic goals when developing workforce plans and  consequently has mistakenly estimated the magnitude of changes in human  capital strategies that were needed to achieve program goals.  These results  could lead to the agency revising its human capital goals to better reflect  their relationship to programmatic goals, redesigning programmatic  strategies, and possibly shifting resources among human capital initiatives  during the next planning cycle.
Developing meaningful outcome-oriented performance goals and collecting  performance data to measure achievement of these goals is a major  challenge for many federal agencies.  Performance measurement tends to  focus on regularly collected data available on direct products and services  provided by a program, such as the number of staff trained to carry out an  activity.  In cases where outcomes are not quickly achieved or readily  observed, such as assessing the impact a training program has on achieving  an agency’s goals, performance measurement is more complex.
Federal agencies in general have experienced difficulties in defining  practical and meaningful measures that assess the impact human capital  strategies have on programmatic results. For example, in its fiscal year  2003 performance plan, the Federal Emergency Management Agency  identified goals of streamlining its organization and developing its  workforce, but listed no measures to gauge progress for either goal.  In  contrast, the Environmental Protection Agency’s (EPA) fiscal year 2003  performance plan includes measures of the agency’s efforts to achieve  activity-oriented human capital goals, such as implementing a workforce  planning model at five offices by the end of the year and completing a  comprehensive pay review. These performance measures provide a base  upon which EPA can seek to gauge how well its human capital efforts help  the agency to achieve its programmatic goals.
The challenge faced by EPA and other agencies in using such measures is  that there is not always a clear link between specific human capital  strategies and strategic programmatic outcomes. This is partly because  there may be multiple causes of a specific outcome, only one of which is  related to a targeted human capital strategy, and unforeseen circumstances  that affect implementation of a strategy. Our recent testimony on human  capital challenges at the SEC and key trade agencies illustrates the  practical difficulties that agencies may encounter. We testified that during  2001, U.S. trade agencies increased staff levels to address insufficient  monitoring and enforcement of trade agreements. However, we noted that  measuring the effectiveness of this strategy might be difficult because the  agencies’ workloads in other areas continue to grow, which could cause  them to shift resources intended for trade compliance to other program  areas. If shifts in resources occur, the agencies may not be able to  improve the effectiveness of trade compliance efforts, even though the  human capital strategy initially succeeded in acquiring additional  resources.
OPM’s Human Capital Assessment and Accountability Framework,  developed in conjunction with OMB and GAO, presents consolidated  guidance on standards for success and performance indicators that  agencies can refer to as they transform their strategic human capital  management programs.  For example, it includes such strategic workforce  planning indicators as whether agencies use best practices to determine  workloads and resource needs and have documented strategies for  workforce planning that define roles, responsibilities, and other  requirements of the strategies. As we stated in January 2003, the  framework represents a promising step that can improve agencies’ human  capital systems. Agencies can use its indicators as a basis for developing,  implementing, and evaluating their workforce planning processes.   Generally, agencies will need more specific indicators to measure the  success of their workforce plans.  (See fig. 6 for information on SSA’s  evaluation of retirement-related workforce strategies.)
section_title: Concluding Observations
paragraphs: There is an increasing awareness that federal agencies need to transform  themselves into more efficient, results-oriented organizations if they are to  meet the many fiscal, management, and policy challenges of the 21st  century.  To meet these challenges, federal managers will need to direct  considerable time, energy, and targeted investments toward efforts that  make the best use of the government’s most important resource—the  people that agencies employ now and in the future.  They will also need  effective strategic workforce planning to identify and focus these  investments on the long-term human capital issues that most affect their  ability to attain mission results. The principles presented here can enhance  the effectiveness of an agency’s strategic workforce planning by helping the  agency focus on the issues it needs to address, the information it needs to  consider, and the lessons that it can learn from other organizations’  experiences. By doing so, agencies can better ensure that their strategic  workforce planning processes appropriately address the human capital  challenges of the future and better contribute to the agencies’ major efforts  to meet their missions and goals.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Secretary of Labor, the Executive  Director of PBGC, the Director of NIH, the Administrator of GSA, and the  Commissioner of SSA.  Each of these organizations provided comments on  the draft report and agreed with the information presented.  DOL’s Director  of Workforce Planning and Diversity; PBGC’s Chief Human Capital Officer;  and GSA’s Program Management Officer, Office of the Chief People Officer,  also provided written technical comments to clarify specific points  regarding the information presented.  Where appropriate, we have made  changes to reflect those technical comments.  NIH and SSA officials did not  provide technical comments.
In addition to technical comments, GSA noted that while the report  presents a case study on workforce planning efforts of one region, GSA has  used and continues to use a robust agencywide workforce planning  process.  We have clarified the report to recognize that our example is  limited to the activities of one GSA region and does not address the  agency’s overall workforce planning efforts.
We are sending copies of this report to other interested congressional  parties, the Director of OPM, the Secretary of Labor, the Secretary of  Health and Human Services, the Commissioner of the Social Security  Administration, the Director of the National Institutes of Health, and the  Executive Director of the Pension Benefit Guaranty Corporation.  In  addition, we will make copies available to others upon request. The report  will also be available at no charge on the GAO Web site at  http://www.gao.gov.
If you have any questions about this report, please contact me or William  Doherty on (202) 512-6806.  Others who contributed to this report were  Bob Lilly, Adam Hoffman, Andrew Edelson, and Candyce Mitchell.
section_title: Scope and Methodology
paragraphs: To identify strategic workforce planning principles and illustrative agency  examples, we gathered and analyzed information from a variety of sources.   We reviewed our own guidance, reports, and testimonies on federal  agencies’ workforce planning and human capital management efforts, and  guidance available through the Internet and leading human capital  periodicals, such as the Workforce Planning Resource Guide for Public  Sector Human Resource Professionals issued by the International  Personnel Management Association.  We also met with officials from  organizations with governmentwide responsibilities for or expertise in  workforce planning, such as the Office of Personnel Management and the  National Academy of Public Administration, to identify additional guidance  available and to obtain their recommendations of federal agencies engaged  in effective workforce planning.  We synthesized information from these  meetings, reports, and guidance documents and our own experiences in  human capital management to (1) derive five principles that appeared most  important to effective strategic workforce planning and (2) identify  agencies we would contact for examples of workforce planning that  illustrated these principles.
We then selected five examples of agencies’ workforce planning activities  (one example corresponding to each of the five workforce planning  principles) to present in the report.  We met with human capital and  program officials and analyzed documents related to these examples to  more fully understand the specific workforce planning issues associated  with the examples and how the agencies addressed these issues.
We selected the examples that in our judgment collectively illustrated these  principles across a diverse set of federal programs.  Because our review  objectives did not include evaluating the effectiveness of agencies'  workforce planning processes, we did not evaluate these processes nor did  we require the presence of evaluations or other evidence demonstrating  planning effectiveness as a criterion for selecting examples.  We did  exclude from consideration, however, processes that agencies were just  beginning or that were not complete enough for agencies to be willing to  present them as successful planning efforts.
The fact that an agency is profiled to illustrate the principles of a particular  planning step is not meant to imply complete success for addressing the  matter or lack of success for addressing other aspects of workforce  planning.  Furthermore, the efforts in the examples do not represent all the  potential ways that an agency can implement workforce planning or  address the specific human capital issue being discussed.
We conducted our work in Washington, D.C., from March 2002 through  October 2003, in accordance with generally accepted government auditing  standards.
section_title: Related GAO Products
paragraphs: Foreign Assistance:  USAID Needs to Improve Its Workforce Planning and  Operating Expense Accounting.  GAO-03-1171T. Washington, D.C.:  September 23, 2003.
Human Capital: Insights for U.S. Agencies from Other Countries’  Succession Planning and Management Initiatives.  GAO-03-914.  Washington, D.C.: September 15, 2003.
DOD Personnel:  Documentation of the Army's Civilian Workforce- Planning Model Needed to Enhance Credibility.  GAO-03-1046.  Washington, D.C.: August 22, 2003.
Foreign Assistance:  Strategic Workforce Planning Can Help USAID  Address Current and Future Challenges.  GAO-03-946.  Washington, D.C.:   August 22, 2003.
Results-Oriented Cultures: Implementation Steps to Assist Mergers and  Organizational Transformations.  GAO-03-669.  Washington, D.C.:    July 2, 2003.
Human Capital: A Guide for Assessing Strategic Training and  Development Efforts in the Federal Government.  GAO-03-893G.   Washington, D.C.: July 1, 2003.
Tax Administration:  Workforce Planning Needs Further Development for  IRS's Taxpayer Education and Communication Unit.  GAO-03-711.  Washington, D.C.: May 30, 2003.
Federal Procurement:  Spending and Workforce Trends.  GAO-03-443.   Washington, D.C.: April 30, 2003.
Veterans Benefits Administration:  Better Collection and Analysis of  Attrition Data Needed to Enhance Workforce Planning.  GAO-03-491.   Washington, D.C.: April 28, 2003.
Human Capital: Selected Agency Actions to Integrate Human Capital  Approaches to Attain Mission Results.  GAO-03-446.  Washington, D.C.:   April 11, 2003.
Results-Oriented Cultures: Creating a Clear Linkage between Individual  Performance and Organizational Success.  GAO-03-488.  Washington,  D.C.:  March 14, 2003.
Human Capital Management:  FAA’s Reform Effort Requires a More  Strategic Approach.  GAO-03-156.  Washington, D.C.: February 3, 2003.
High-Risk Series:  Strategic Human Capital Management.  GAO-03-120.   Washington, D.C.: January 2003.
Major Management Challenges and Program Risks: Office of Personnel  Management.  GAO-03-115.  Washington, D.C.: January 2003.
Acquisition Workforce: Status of Agency Efforts to Address Future Needs.   GAO-03-55.  Washington, D.C.: December 18, 2002.
Human Capital: Effective Use of Flexibilities Can Assist Agencies in  Managing Their Workforces.  GAO-03-2.  Washington, D.C.: December 6,  2002.
Military Personnel:  Oversight Process Needed to Help Maintain  Momentum of DOD’s Strategic Human Capital Planning.  GAO-03-237.   Washington, D.C.: December 5, 2002.
Human Capital Legislative Proposals to NASA’s Fiscal Year 2003  Authorization Bill.  GAO-03-264R.  Washington, D.C.: November 15, 2002.
Highlights of a GAO Forum: Mergers and Transformation: Lessons  Learned for a Department of Homeland Security and Other Federal  Agencies.  GAO-03-293SP.  Washington, D.C.: November 14, 2002.
Highlights of a GAO Roundtable: The Chief Operating Officer Concept: A  Potential Strategy to Address Federal Governance Challenges.  GAO-03- 192SP.  Washington, D.C.:  October 4, 2002.
Results-Oriented Cultures: Using Balanced Expectations to Manage  Senior Executive Performance.  GAO-02-966.  Washington, D.C.:   September 27, 2002.
Human Capital Flexibilities. GAO-02-1050R.  Washington, D.C.: August 9,  2002.
Results-Oriented Cultures: Insights for U.S. Agencies from Other  Countries’ Performance Management Initiatives.  GAO-02-862.   Washington, D.C.:    August 2, 2002.
HUD Human Capital Management:  Comprehensive Strategic Workforce  Planning Needed.  GAO-02-839.  Washington, D.C.:  July 24, 2002.
NASA Management Challenges:  Human Capital and Other Critical Areas  Need to Be Addressed.  GAO-02-945T.  Washington, D.C.:  July 18, 2002.
Managing for Results: Using Strategic Human Capital Management to  Drive Transformational Change.  GAO-02-940T.  Washington, D.C.:    July 15, 2002.
Post-Hearing Questions Related to Federal Human Capital Issues.  GAO- 02-719R. Washington, D.C.:  May 10, 2002.
Human Capital:  Major Human Capital Challenges at SEC and Key  Trade Agencies.  GAO-02-662T.  Washington, D.C.: April 23, 2002.
Managing for Results:  Building on the Momentum for Strategic Human  Capital Reform.  GAO-02-528T.  Washington, D.C.: March 18, 2002.
A Model of Strategic Human Capital Management.  GAO-02-373SP.   Washington, D.C.: March 15, 2002.
Foreign Languages:  Human Capital Approach Needed to Correct  Staffing and Proficiency Shortfalls.  GAO-02-375.  Washington, D.C.:  January 31, 2002.
Human Capital:  Attracting and Retaining a High-Quality Information  Technology Workforce.  GAO-02-113T.  Washington, D.C.: October 4, 2001.
Securities and Exchange Commission:  Human Capital Challenges  Require Management Attention.  GAO-01-947.  Washington, D.C.:  September 17, 2001.
Human Capital: Practices That Empowered and Involved Employees.   GAO-01-1070.  Washington, D.C.: September 14, 2001.
Human Capital:  Building the Information Technology Workforce to  Achieve Results.  GAO-01-1007T.  Washington, D.C.: July 31, 2001.
Human Capital:  Implementing an Effective Workforce Strategy Would  Help EPA to Achieve Its Strategic Goals.  GAO-01-812.  Washington, D.C.:  July 31, 2001.
Single-Family Housing:  Better Strategic Human Capital Management  Needed at HUD’s Homeownership Centers.  GAO-01-590.  Washington,  D.C.: July 26, 2001.
Human Capital:  Taking Steps to Meet Current and Emerging Human  Capital Challenges.  GAO-01-965T.  Washington, D.C.: July 17, 2001.
Office of Personnel Management: Status of Achieving Key Outcomes and  Addressing Major Management Challenges.  GAO-01-884.  Washington,  D.C.: July 9, 2001.
Managing for Results:  Human Capital Management Discussions in  Fiscal Year 2001 Performance Plans.  GAO-01-236.  Washington, D.C.:  April 24, 2001.
Human Capital:  Major Human Capital Challenges at the Departments of  Defense and State.  GAO-01-565T.  Washington, D.C.: March 29, 2001.
Human Capital:  Meeting the Governmentwide High-Risk Challenge.   GAO-01-357T.  Washington, D.C.: February 1, 2001.
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