Senior Executive Service: Enhanced Agency Efforts Needed to Improve Diversity as the Senior Corps Turns Over
Published: 2003-01-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The federal government faces large losses in its Senior Executive Service (SES), primarily through retirement but also because of other normal attrition. This presents the governmental with substantial challenges to assuring an able management cadre and also provides opportunities to affect the composition of the SES. GAO estimated the number of SES members who would actually leave service through fiscal year 2007 and reviewed the implications for diversity, as defined by race, ethnicity, and gender, of the estimated losses. Specifically, GAO estimated by race, ethnicity, and gender the number of members of the career SES who will leave government service from October 1, 2000, through September 30, 2007, and what the profile of the SES will be if appointment trends do not change. GAO made the same estimates for the pool of GS-15s and GS-14s, from whose ranks the vast majority of replacements for departing SES members come, to ascertain the likely composition of that pool.
section_title: What GAO Found
paragraphs: More than half of the 6,100 career SES members employed on October 1, 2000, will have left service by October 1, 2007. Using current SES appointment trends, the only significant changes in diversity will be an increase in the number of white women and an essentially equal decrease in white men. About 46 percent of GS-15s and 34 percent of GS-14 workforce will provide agencies the opportunity to select minority members for the SES. Estimates for 24 large agencies showed substantial variation in SES losses in the proportion leaving and the effect on agencies' racial, ethnic, and gender profiles, with 10 agencies with decreases in minority representation and 12 with increases. The 6 agencies GAO visited recognize that the SES needs to be more diverse than GAO's projections estimate and have efforts under way to address SES diversity. They also recognize that more will have to be done than in the past if diversity is to be enhanced.

section_title: Letter
paragraphs: The federal government’s civilian workforce faces large losses over the  next 5 years, primarily through retirements.  We estimated in an earlier  report that, from fiscal years 1999 through 2006, 15 percent of the  workforce would retire.  The Senior Executive Service (SES) generally  represents the most experienced, and one of the older in age, segments of  the workforce, and retirements are expected to be even higher for SES  members.  This has important implications for government management  and emphasizes the need for good succession planning for this leadership  group.  Racial, ethnic, and gender diversity in the SES corps is important  because they are the people who run the government’s programs, and  diversity in the senior leadership is an important component for the  effective operation of the government.  Diversity can bring a wider variety  of perspectives and approaches to bear on policy development and  implementation, strategic planning, problem solving, and decision making  and can be an organizational strength that contributes to achieving results.
You asked us to explore the implications for diversity, as defined by race,  ethnicity,and gender, of the expected loss of SES members over the next  several years.  Our objectives were to (1) estimate by race, ethnicity, and  gender the number of members of the career SES who will leave  government service from October 1, 2000, through September 30, 2007, and  what the profile of the SES will be if appointment trends do not change, (2)  make the same estimates for the pool from which the vast majority of SES  replacements will come (i.e., those in the General Schedule (GS) at grades  GS-15 and GS-14), and (3) obtain from the Office of Personnel Management  (OPM), the Equal Employment Opportunity Commission (EEOC), and four  selected agencies their observations on our estimates and on SES diversity  during this time of change.
To address the objectives, we developed a model to estimate statistically  the number of career SES members by race, ethnicity, and gender who  would leave the government, primarily through retirement but including  other reasons, such as moving to private sector employment and death.    We used actual separation experience from fiscal years 1996 through 2000  as the basis for the model.  We made estimates for both the executive  branch overall and by agency for the 24 Chief Financial Officer (CFO)  agencies.  We then used actual SES appointment data by race, ethnicity,  and gender for fiscal years 1995 through 2000 to project what the SES  profile would be by October 1, 2007, if appointment trends do not change.   We used the same techniques to estimate losses to and replacements for  the GS-15 and GS-14 pool of potential SES replacements.  We asked OPM  and EEOC to comment on our estimates and their implications for diversity  in the SES.  We also asked OPM and EEOC to provide information on any  efforts they had under way or planned to address diversity considering the  magnitude of estimated SES losses.  In addition, we visited four federal  agencies—two with relatively high proportions of women and/or racial and  ethnic minorities in the SES and two with relatively low proportions—and  sought the same information from them as we had from OPM.  Our work  was performed from October 2001 through December 2002 in accordance  with generally accepted government auditing standards.  Details on our  methodology in general and our modeling and projection methods in  particular are presented in appendix I.
subsections: section_title: Background
paragraphs: In a 2001 report, we estimated that by the end of fiscal year 2006 about 31  percent of the 24 CFO agencies’ employees working in 1998, or 493,000  people, will be eligible to retire, and about half of the eligible employees  (236,000 people, the equivalent of 15 percent of the 1998 workforce) would  actually retire.  We included the SES in our analysis, but did not separately  analyze or break out data for the SES.  In 2000, we reported on SES  retirement eligibility and pointed out that because individuals normally do  not enter the SES until well into their careers, SES retirement eligibility is  much higher than for the workforce in general.  Our analysis showed that  71 percent of the almost 6,000 career SES members employed as of  October 1, 1998, would reach regular retirement eligibility by the end of  fiscal year 2005.  We concluded that the retirement eligibility trends of the  SES point to the importance of agencies placing appropriate emphasis and  attention on SES succession planning because SES retirements will result  in a loss of leadership continuity, institutional knowledge, and expertise  among the government’s top career managers.  The importance that we  place on workforce planning, including planning related to employee  retirement, is illustrated by our designation of strategic human capital  management as a governmentwide high-risk area that needs urgent  attention to ensure that the federal government functions economically,  efficiently, and effectively.
The Civil Service Reform Act of 1978 that established the SES states,  among other things, that the policy of the federal government is to ensure  equal employment opportunity in the workforce.  It is generally recognized  that a diverse SES corps can be an organizational strength that contributes  to achieving results.  In fact, we consider diversity so important that we  identify it in our model for federal agencies on strategic human capital  management as one of the eight critical success factors for strategic  management.  The demographics of the public served by the federal  government are changing, and diversity has evolved from public policy to a  business need.  SES losses over the next several years present both a  challenge for the federal government in filling the vacant positions and an  opportunity to affect, through selections to the SES, the diversity of the  corps.
section_title: Government Has Important Opportunity To Affect SES Diversity, but Little Will Change If Current Appointment Trends Continue
paragraphs: Because of the wave of retirements and normal attrition for other reasons,  the federal government will have the challenge and opportunity to replace  over half of its SES corps during fiscal years 2001 through 2007.  Our  simulation estimates that almost 3,400 of the 6,100 career SES members as  of October 2000 will have left the service by October 2007.  While a large  portion of the GS-15s and GS-14s who represent the primary pool of  replacements will also have left by October 2007, substantial numbers of  minorities and women will be among the potential SES candidates in that  pool.  However, if current SES appointment trends continue, the proportion  of the SES represented by minorities will remain essentially unchanged.
Table 1 presents the results by racial, ethnic, and gender groups of our  simulation of SES attrition and projection of SES appointments using  current trends.  The simulation estimates that 56 percent of the SES  members who held positions at the start of fiscal year 2001 will leave  service during the ensuing 7 years.  The table also shows that the  racial/ethnic profile of those SES members who will remain in the service  throughout the 7-year period will be about the same as it was for all SES  members in October 2000.  This is because minorities will be leaving at  essentially the same rate overall as white members.  Thus, any change in  minority representation will be the result of new appointments to the SES.   However, as the last columns of table 1 show, if current appointment trends  continue, the result of replacing over half of the SES will be a corps whose  racial and ethnic profile is virtually the same as it was before.  The outlook  regarding gender diversity is somewhat different because the percentage  represented by white women is estimated to increase by 4 percentage  points and the percentage of minority women minimally by 0.5 percentage  point.  The proportion representing minority men is estimated to be  virtually unchanged, only a 0.2 percentage point increase while white men’s  proportion will decrease by 5 percentage points.
To ascertain what the racial, ethnic, and gender profile of the candidate  pool for SES replacements will look like, we performed the same  simulations and projections for GS-15s and GS-14s as we did for the SES.   Over 80 percent of career SES appointments of federal employees come  from the ranks of GS-15s.  Similarly, those promoted to GS-15 are GS-14s  over 90 percent of the time.  Table 2 presents the results for GS-15s and  table 3 for GS-14s.  The results for both are similar to those for the SES, but  a somewhat lower proportion will leave because GS-15s and GS-14s are  generally younger and have somewhat different propensities to leave than  SES members.
Almost half of the GS-15s (24,499, or 47 percent) and about a third of GS- 14s (28,419, or 34 percent) will have left government service by October  2007 according to our simulation.  Minority representation among those  GS-15s who remain will be about the same as it was in fiscal year 2001,  indicating that whites and minorities will leave at about the same rates.   However, the proportion of the remaining GS-14s represented by minorities  will increase somewhat (by 1.5 percentage points) and the proportion of  both grades represented by white and minority women will also increase.   Moreover, if current promotion trends to GS-15 and GS-14 continue,  marginal gains by almost all of the racial and ethnic groups would result.   Our simulation shows that significant numbers of minority GS-15s (4,673)  and GS-14s (10,567) will be employed throughout fiscal years 2000 through  2007, and our projection of promotions also shows substantial numbers of  minorities at the GS-15 (8,957) and GS-14 (15,672) levels.  These numbers  indicate that significant numbers of minority candidates for appointment to  the SES should be available.
With respect to gender, the percentage of white women at GS-15 is  projected to increase by 2.6 percentage points and at GS-14 by 1.0  percentage point.  The proportions of minority women will increase by 0.9  percentage point for GS-15s and 0.6 percentage point for GS-14s while  those for minority men will increase 0.7 percentage point for GS-15s and 0.5  percentage point for GS-14s.  White men will represent 4.2 percentage  points less of GS-15s and 2.1 percentage points less of GS-14s.
section_title: Picture at 24 CFO Agencies Varies, but Estimated Diversity Changes Usually Small
paragraphs: The results of our simulation of SES attrition and our projection of  appointments to the SES over the October 1, 2000, through September 30,  2007, period show variation across the 24 CFO agencies, as illustrated in  table 4.  However, as with the governmentwide numbers discussed in the  previous section, agencies tend to increase the proportion of women in the  SES, particularly white women, and decrease the proportion of white men.   The proportion represented by minorities tended to change relatively little.   The precision of our estimates of SES attrition at individual agencies by  racial, ethnic, and gender groups is likely to be less precise than for our  overall SES estimates because of the smaller numbers involved.
Nevertheless, the agency-specific numbers should be indicative of what  agency profiles will look like on October 1, 2007, if current appointment  trends continue.
The racial, ethnic, and gender profiles of the career SES at the 24 CFO  agencies varied significantly on October 1, 2000.  The representation of  women ranged from 13.7 percent to 36.1 percent with half of the agencies  having 27 percent or fewer women.  For minority representation, rates  varied even more and ranged from 3.1 percent to 35.6 percent with half of  the agencies having less than 15 percent minorities in the SES. Detailed  data on each CFO agency in the same format as tables 1, 2, and 3 are  included in appendix II.
Our simulation results also varied for the proportion of SES members who  will leave service by October 1, 2007, but most of the CFO agencies are  estimated to lose at least half of their SES corps.  The effect on  representation of minorities and women in the residual SES also varies but  exhibits little change at most agencies for minorities from the October 1,  2000, profile.  Only 3 agencies exhibited increases in minority  representation of more than 1 percentage point.  Increases for women were  higher once again with only 1 agency having an increase of less than 3  percentage points.  Most of the changes for women were accounted for by  white women.
Our projection of what the SES would look like if current appointment  trends continued through October 1, 2007, also showed variation with 12  agencies having increased minority representation and 10 having less.   While projected changes for women are often appreciable, with 16 agencies  having gains of 4 percentage points or more and no decreases, projected  minority representation changes in the SES at most of the CFO agencies  are small, exceeding a 2 percentage point increase at only 6 agencies, with  10 agencies having decreases.
The diversity picture for GS-15s and GS-14s is somewhat better than that  for the SES at most agencies.  The main differences from the SES are that a  smaller proportion of the GS-15 and GS-14 population is estimated to leave  government service and projected representation of minorities tends to be  somewhat greater for those grades compared to the SES.  Even after  considering estimated attrition, agencies tend to have substantial numbers  of minorities and women in the SES replacement pool and projected  promotions to GS-15 and GS-14 increase those numbers.  As mentioned  above, appendix II presents detailed information on GS-15s and GS-14s at  the CFO agencies.  Again, our estimates for the GS-15 and GS-14  populations at individual agencies are likely to be less precise than our  governmentwide figures because of the smaller numbers involved but  should be indicative of what agency profiles will look like in October 2007.
section_title: OPM and the Federal Agencies Said That Further Action Is Needed to Promote SES Diversity
paragraphs: OPM has recently reaffirmed its commitment to diversity in the career SES,  and has provided guidance to federal departments and agencies on  maintaining and increasing workforce diversity.  The four federal agencies  we visited had implemented, or were in the process of implementing, many  if not all of the steps recommended by OPM in its guidance.  OPM, EEOC,  and the four federal agencies we visited all said that our analysis was an  accurate reflection of the likely future composition of the career SES if  current patterns of selection and attrition continue.  They all said that more  diversity was needed in the SES and that based on our estimates more  efforts would need to be taken if diversity is to increase.
subsections: section_title: OPM Guidance and Agency Response
paragraphs: In an April 2002 memorandum to federal departments and agencies, the  Director of OPM reaffirmed OPM’s commitment to diversity in the SES.   About 2 years before, in June 2000, OPM provided comprehensive guidance  to federal departments and agencies for building and maintaining a diverse  workforce.  OPM recommended the following:  incorporate diversity program activities and objectives into agency  workforce planning and executive succession planning;  incorporate diversity into recruitment planning and activities, and use  tools and techniques that are more likely to discover and attract a more  diverse field of candidates (i.e., visits to majority-minority campuses,  partnerships with minority organizations, and advertisement in specialty  media);  continually monitor the agency workforce profile, and the numbers of  women and minorities participating in agency development programs;  and  build accountability for hiring, retaining, and developing a diverse, high- quality workforce into the performance management system for  managers and supervisors.
We visited the departments of Energy, the Interior, and Veterans Affairs  (VA) and the Social Security Administration (SSA), each of which has had  efforts in these OPM-recommended areas under way, often for a number of  years.  According to agency officials, three of the four agencies have  diversity goals for their career SES.  Officials at all four agencies told us  that they have in place, or are putting in place, agencywide human capital  planning and executive succession management, which includes diversity  as an element in planning.  All four agencies have programs for entry-level  minority recruiting and for leadership development, which they believe will  lead to an increased minority presence in leadership and executive ranks  sometime in the future.  Officials at all four agencies said that building a  diverse workforce was an element in their current performance evaluation  for agency executives.  All four agencies either have in place or are putting  in place human capital information systems that will be able to generate,  periodically or on request, reports to management officials on the diversity  of the current workforce at any level, and on the ethnic and gender  composition of recent agency hires.  (See app. III for details on the  responses of OPM and the four agencies concerning workforce diversity in  general and SES diversity in particular.)
Response to GAO’s Analysis OPM officials, after reviewing our analysis of present SES diversity and  projections of future SES composition, said that women and minorities  continued to be underrepresented in the federal executive corps.  They said  that it would be unsatisfactory if the racial, ethnic, and gender composition  of the career SES in 2007 were as we projected.  EEOC expressed concern  about the trends suggested by our analyses to the extent that they may  point to the presence of arbitrary barriers that limit qualified members of  any group from advancing into the SES.
Energy, Interior, VA, and SSA said that our analysis of their current and  future career SES diversity was reasonable.  All of the agencies agreed that  improvements needed to be made in their current SES diversity.  All of  them also said that the composition of the career SES that we projected if  present selection trends continued would not be acceptable.  Moreover, all  four agreed that they would need to undertake additional efforts beyond  those currently used if diversity is, in fact, to be enhanced.
section_title: Agency Comments
paragraphs: We asked OPM, EEOC, and the four agencies we visited for comments on a  draft of this report.  The Director of OPM’s comments are reprinted in  appendix IV.  Also, the comments of EEOC’s Acting Director of  Communications and Legislative Affairs are reprinted in appendix V, those  from the Commissioner of SSA in appendix VI, those from the Secretary of  Veterans Affairs in appendix VII, and those from the Director, Office of  Management, Budget and Evaluation, Department of Energy, are in  appendix VIII.  The Department of the Interior said that it had no comments  on the draft report.
OPM said that it concurs with our findings and welcomes the attention this  report will bring to a critical opportunity facing the federal workforce and  federal hiring officials.  The Director said that increasing diversity in the  executive ranks continues to be a top priority for OPM and that the agency  has been proactive in its efforts to help federal agencies obtain and retain a  diverse workforce, particularly in the senior ranks.  She also said that talk  is not enough, only results matter and that OPM itself in the past year has  expanded its efforts to attract senior managers from government and the  private sector and changed its SES performance standards to reflect a  priority recruitment of qualified minorities.  The comments cited several  efforts OPM had under way to promote diversity, such as leading the  Interagency Task Force on Hispanic Employment and reaching out to the  next generation of public servants—college and university  undergraduates—as they begin to choose career paths by such actions as  hosting a reception in January 2003 for students from Historically Black  Colleges and Universities to introduce them to and explain the hiring  process for the federal government.
EEOC said that the projected large losses in the SES ranks present the  government with both a challenge and an opportunity to further strengthen  the SES through employment practices that will ensure that the SES corps  is staffed with the best and brightest talent available regardless of race,  ethnicity, gender, or disability.  EEOC went on to say that in the years  ahead, federal agencies will need to continue their vigilance in ensuring a  level playing field for all federal workers and should explore proactive  strategies, such as succession planning, SES development, and mentoring  programs for midlevel employees, to ensure a diverse group of highly  qualified candidates for SES positions.  EEOC listed a number of initiatives  it said it had begun recently to help agencies identify and remove barriers  to free and open competition in the federal workplace.  However, most of  these initiatives were related to the equal employment opportunity (EEO)  compliant process and EEO data reporting and only tangentially to SES  diversity.
SSA said that it agrees with the reports findings and conclusions, including  the value of all the OPM recommended actions we cite in the report.  SSA  said that it has been implementing such actions since late 1998.  SSA also  commented that it agrees with all of the information we present about  SSA’s efforts to increase SES diversity.
Energy said that more needs to be done to enhance SES diversity,  particularly in light of the retirement and other losses anticipated over the  next 5 years.  Energy said that the attrition has important implications for  government management and emphasizes the need for good succession  planning as well as racial, ethnic, and gender diversity in the SES corps.   Energy reiterated the efforts it has under way, discussed earlier in this  report and in appendix III, to enhance SES diversity in the future and said  that it is committed to enhancing diversity.
VA commented that it generally agreed with our observations.  VA said that  it is undertaking efforts to increase diversity within its SES ranks.
EEOC, Energy, and VA also made technical comments, which we  incorporated where appropriate.
Unless you announce its contents earlier, we will make no further  distribution of this report until 30 days after its date.  At that time, we will  send copies to the Director of OPM, the Chair of EEOC, the heads of the 24  CFO agencies covered by the report, and other interested committees and  members of Congress.  We will also make copies available to others on  request.  In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.  If you have questions, please call me on  (202) 512-6806 or contact Thomas G. Dowdal, Assistant Director, on (202)  512-6588 or at dowdalt@gao.gov.  Major contributors to this report are  listed in appendix IX.
section_title: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) identify the effect of estimated employment  separations on the racial, ethnic, and gender diversity among the career  Senior Executive Service (SES), GS-15s, and GS-14s in the 24 Chief  Financial Officer (CFO) agencies and governmentwide, (2) determine the  effect of estimated appointments to refill these vacancies on diversity, and  (3) obtain from the Office of Personnel Management (OPM), the Equal  Employment Opportunity Commission (EEOC), and four selected agencies  their observations on our estimates and on SES diversity during this time of  change.
subsections: section_title: Analysis of Separation Trends
paragraphs: To determine the effect of estimated employment separations and  appointments to fill these vacancies on racial, ethnic, and gender diversity,  we analyzed personnel data from OPM’s Central Personnel Data File  (CPDF) to determine past trends and used statistical simulation to estimate  future trends.  We analyzed separation data for fiscal years 1996 through  fiscal year 2000 (the most recent data available at the time we started our  analyses) for each of the three grade levels.  We included voluntary  retirements, other retirements, resignations, death, and terminations for  poor performance or conduct in separations.
For separations, we calculated each employee’s years of service by finding  the difference between the service computation date (we used the 15th of  each month as the day) and the date of actual separation.  Similarly, we  calculated age at separation by finding the difference between the date of  birth (we used the 15th of each month as the day) and the date of  separation.  We calculated the age and years of service for employees at  the end of the fiscal year similarly but used September 30 as the end date.
For each 2-year interval in the years of service and age of those who  separated from service during the period 1996 through 2000, we calculated  the probability of leaving by dividing the number of workers that separated  by the number of employees in the workforce with a similar combination of  years of service and age who were on board at the end of the fiscal year  preceding the fiscal year of separations.  We put all staff members who  were 67 years and older into a single group.  We similarly grouped all  employees with 32 or more years of service.   Using regression, we then  modeled the rate of separation as a function of years of service, age, agency  type (civilian or defense), race (white or nonwhite), and gender.  We  developed an equation that estimates the rate of separation for any age,  years of service, as well as agency type, race, and gender combination.
section_title: Estimation Methodology of Future SES Separations
paragraphs: We applied a statistical simulation technique to each of the 83,153 GS-14,  51,826 GS-15 and 6,110 SES workforce members on board as of September  30, 2000 (the end of fiscal year 2000).  Each employee’s age and years of  service as well as race, ethnicity, gender, and agency type were used as  input into the simulation.  Based on the simulation results, an employee  was considered to have “separated” if the predicted rate of separation  (from zero to 1.0) was greater than a simulation-generated random number  from zero to 1.  If the predicted value was less than a generated random  number then the individual employee was deemed not to have separated.    This process was repeated for each employee.  The process was then  continued for those employees who were not estimated as having  separated in fiscal year 2001, but with each employee now being 1 year  older and having 1 more year of service.  As before, the employee’s new age  and new years of service were used as input into the model and a predicted  rate of separation was contrasted with a new generated random number to  determine whether the employee was considered as separated in fiscal year  2002.  A separation decision was made for each of the remaining  employees, and each employee was either counted as having separated in  fiscal year 2002 or 1 year was again added to both age and years of service.   This process was repeated seven times for each year from fiscal years 2001  through 2007.   The total number of separations by grade level, agency type,  race, ethnicity, and gender was calculated across all 7 years.
To determine how many employees remained after the separations, we  subtracted the number separated for each combination of grade level, race,  ethnicity, and gender from the total number of staff in the agency at that  grade level.  To determine what percentage of this remaining workforce  was in each of the race, ethnicity, and gender groups, we divided the  number remaining for each race, ethnicity, and gender by the total number  of staff remaining at each agency.
section_title: Analysis of Appointment Trends
paragraphs: To estimate the race and gender profile of expected appointments in fiscal  years 2001 through 2007, we analyzed by agency career appointment trends  for the SES, GS-15, and GS-14 grade levels by race and gender for fiscal  years 1995 through 2000.  We included conversions, appointments (new  hires), and promotions into each grade level.  We combined the data for  each fiscal year into a single 6-year total for each grade level.  We  determined what percentage each equal employment opportunity (EEO)  group (race and ethnicity by gender; for example, African-American  females) constituted of these past accessions for each level.   We assumed  that the number of separations estimated for fiscal years 2001 through 2007  would all be refilled through accessions.  Therefore, the number of  estimated accessions equaled the number of estimated separations.
To estimate how many accessions would occur for each EEO group during  fiscal years 2001 through fiscal year 2007, we multiplied an agency’s  predicted total separations times an EEO group’s percentage of an agency’s  past accessions.  For example, if the Department of Commerce was  expected to have 100 separations for a particular grade level and African- American males were 6 percent of Commerce’s past accessions at that  grade level, then we estimated that Commerce’s accessions to fill these 100  vacancies would include six African-American males (100 separations  times 0.06).  These calculations were done for the period from fiscal years  2001 through 2007 as a whole, not year by year.
To assess the effect that accessions to refill the positions vacated by  separations had on the EEO profile, we added these expected career  accessions to the career staff members we expected to remain after  separations in each agency at each grade level at the end of fiscal year 2007.   We then calculated the percentage for each racial and ethnic group by  gender in each grade level within each agency.   These calculations were  done for each of the 100 iterations of separation predictions for each race,  ethnicity, gender, agency, and grade level.  Because these replacement  calculations were done for each of the 100 iterations, we determined  confidence intervals around all estimates reported.  In general, confidence  intervals for EEO groups for specific agencies are likely to be less precise  than the governmentwide ones.
section_title: Limitations
paragraphs: We used regression analysis to develop a statistical model using five  variables: (1) age at the end of each year for fiscal years 2001 through 2007,   (2) years of service at the end of each year for fiscal years 2001 through  2007, (3) race and ethnicity, (4) gender, and (5) whether employed by a  Defense agency or a non-Defense agency that most closely fits actual rates  of separation over fiscal years 1996 through 2000.   The objective in  developing the statistical model was to minimize the squared differences  between the actual rates of separation and the predicted rates of  separation.  An index, which is known as the squared correlation  coefficient and is bounded between zero and one, is one useful numerical  quantity to assess the strength or predictive power of the mathematical  model.   A perfect fit in a model would yield a squared correlation  coefficient of 1.00.  In our mathematical model, we achieved squared  correlation coefficients of 0.73 for the SES and 0.75 for both the GS-14s and  GS-15s.  Thus, we were able to capture and predict three-fourths of the  variability in the rates of separation for the 5 years of separation data.   Therefore, one limitation is that our model does not predict with 100  percent accuracy the actual rates of separation, although it is uncommon in  real world applications to find such a high squared correlation as our model  achieved when dealing with behavioral data such as separating from  federal government employment.
The accuracy of our projections are also limited by the assumptions we  made.  Because the model is based on past trends, the estimates of future  separations and appointments assume that factors affecting past trends  will continue into the future.  If one or more assumptions are incorrect,  then the projections would change.  The model does not account for  possible changes in the future such as substantial pay increases, major  changes in personnel policies, substantial changes in the number of  employees, or large government reorganizations, such as creation of the  Department of Homeland Security.  For example, our past work has shown  that a major increase in SES pay reduces the rate of retirements (and thus  separations) in the first 3 years after the pay hike, followed by an increase  in subsequent years.
Many nonwork factors can influence an employee’s decision to separate  from the government.  Factors such as an individual’s health or children’s  age/college status may affect the decision of when to separate.  Data for  these other factors were not available to be included in the statistical  model.   Other nonwork factors, such as future stock market performance,  were not included.
Because we did not include transfers from one agency to another as  separations, the estimated separations for individual agencies are probably  not as precise as separations governmentwide.   Similarly, because we did  not include promotions from GS-14 to GS-15 or appointments to the SES  from GS-14 or GS-15, separations for GS-14s and GS-15s are probably  underestimated.
We asked OPM and EEOC to comment on our estimates and their  implications for diversity in the SES.  We also asked OPM and EEOC to  provide information on any efforts they had planned or under way to  address diversity, considering the magnitude of estimated SES losses.  In  addition, we visited four federal agencies—two with relatively high  proportions of women and/or racial and ethnic minorities in the SES and  two with relatively low proportions—and sought the same information  from them as we had from OPM.  Our work was performed from October  2001 through September 2002 in accordance with generally accepted  government auditing standards.
section_title: Reactions of Four Federal Agencies, OPM, and EEOC to SES Diversity Data
paragraphs: We presented to each of the four agencies we examined—the departments  of Energy, the Interior, and Veterans Affairs (VA) and the Social Security  Administration (SSA)—the results of our simulation of Senior Executive  Service (SES) losses and projections of the SES racial, ethnic, and gender  profiles at each agency if current appointment trends continue.  We also  presented our governmentwide simulation results and projections to the  Office of Personnel Management (OPM) and the Equal Employment  Opportunity Commission (EEOC).  SSA and the three departments said our  analysis of their career SES, and GS-15 and GS-14, losses and future  diversity was reasonable.  All of the agencies agreed that improvements  needed to be made in their current SES diversity in at least some minority  and gender groups.  All four also acknowledged that the composition of the  career SES that we projected if present selection trends continued would  not be acceptable and discussed efforts they had made and were planning  to take to promote diversity in general and in the career SES in particular.  These efforts have significant elements in common.  Because almost all  career SES selections come from within the agency with a relative few   selected from other agencies, agency officials generally agreed that the  most effective way to enhance SES diversity is to increase diversity of the  GS-15 and GS-14 feeder pool.  OPM officials also said that if our projections  were the actual result of SES selections through fiscal year 2007, that result  would be unacceptable from a diversity standpoint. The reactions of these  six agencies to the data and what they are doing and plan to do to address  diversity in the career SES are summarized below.
subsections: section_title: Social Security Administration
paragraphs: SSA’s goal is that its workforce at all levels, including the SES, should be at  least as diverse as the national civilian labor force.  To achieve this end,  SSA officials said that the agency would need to improve its representation  of Asian Americans and Native Americans; our analysis indicates that an  increase of Hispanic representation would also be needed.
SSA recently reinstituted an SES candidate development program, and also  has separate leadership development programs for GS-13 and GS-14 and for  GS-9 through GS-12.  Thus, most employees above entry level can apply for  management and leadership development programs.  SSA officials said that  it was agency policy to include women and minorities in the screening of  applicants and final selections for these programs.
SSA has made an effort to have line management “buy in” to diversity by  making a case that diversity is not only a good thing in itself but enhances  the agency’s ability to perform its mission.  Executives in SSA are held  accountable for diversity as an element in their performance contracts.   SSA’s Office of Human Resources provides the Commissioner with a  monthly summary of the ethnic and gender composition of each  component of the agency by grade level, and a similar summary of the  hiring done during the previous month.  The Commissioner reviews these  summaries with the deputy commissioners each month, which enables the  Commissioner to demonstrate to senior managers the agency’s  commitment to diversity and hold them accountable with their peers for  the diversity in their units.
SSA does regular entry-level recruiting at historically black colleges and  Hispanic institutions and also has co-op agreements with Native American  tribal colleges.  SSA uses the Outstanding Scholar Program to recruit  minorities and women, and makes use of authority granted by OPM to use  bilingual registers for hiring.
SSA has internal advisory councils for women, minority groups, and  persons with disabilities.  These councils, which are chartered by the SSA  Commissioner and composed of volunteers, exist at national headquarters  and at the SSA regional offices.  They provide input and advice to SSA  national and regional management on diversity issues and also join in SSA  recruiting efforts where appropriate.
section_title: Department of the Interior
paragraphs: Interior uses the relevant civilian labor force as a basis for looking at  diversity at all levels but had not yet prepared a comparison labor force for  its career SES.  Interior planned to do so in the near future.  A department  official acknowledged that the current diversity of the career SES in  Interior is unsatisfactory, and that future diversity cannot be enhanced  without additional efforts.  The official noted that diversity at the entry  level and midlevel has improved and that, with the assistance of the  candidate development program that it has had for some time, this  improvement will eventually be reflected at the SES level.
Interior officials noted that recruitment, workforce information, and  workforce planning has until very recently been left up to the components  within Interior instead of being handled at the departmental level.  Officials  of the U.S. Geological Survey, Office of Surface Mining, and Bureau of Land  Management told us that they have had ongoing efforts to recruit minorities  at educational institutions and career fairs.  The Geological Survey has  developed a job applicant database, which allows for tracking of the job  selection process through all of its stages; thus, diversity of the applicant  pool through successive screenings can be noted.  Other parts of Interior  do not have this type of process, although at least one other component  uses the Geological Survey’s process.
Interior management has recently acted to shift responsibility for  recruitment and workforce planning (and thus for diversity) from  components to the departmental level.  The Deputy Assistant Secretary for  Human Resources is developing a national recruitment initiative, under  which Interior components will collaborate in recruiting and diversity will  be included as one factor in recruiting.  The Deputy Assistant Secretary is  also preparing a human capital plan for submission to OPM, which will  associate workforce planning with the departmental mission and will target  diversity at midlevel and senior level.
section_title: Department of Energy
paragraphs: A senior official at Energy said that more progress is needed in making and  keeping the department’s career SES diverse.  The official noted that there  has been a recent significant increase in diversity at the GS-14 and 15  levels, which could be reflected in future SES selections.  Energy uses the  civilian labor force as a basis for judging diversity, and also compares itself  with other federal agencies.
Energy hosted a Human Capital Summit in 2001, which resulted in a  renewed commitment to executive succession planning.  After this summit,  Energy restarted an SES candidate development program, which had been  inactive since 1994, with its Human Resource Management office  coordinating with its Office of Civil Rights to develop a diversity  recruitment strategy for the program.  Energy had an intern program to  bring in recruits for technical positions at the GS-7/9 level and, according to  a senior official, 50 to 55 percent of the interns in that program have been  minorities, and most have stayed long enough to reach the GS-12/13 level.   A new career intern program recently began and it is too early to report its  results.  Pursuant to Executive Order 13171, dealing with Hispanic federal  employment, Energy has set up an internship program aimed specifically at  Hispanics.  Energy is also establishing a formal mentoring program, under  which GS-13 through GS-15 staff members can benefit from guidance from  SES executives.
Senior Energy officials noted that Energy does regular periodic diversity  analysis of the workforce, and may extend this analysis to job applicants in  the future.  Building diversity is one of the key leadership attributes of the  annual performance review for Energy executives.
Energy officials noted that it is especially difficult to recruit qualified  minorities for scientific and technical positions, especially considering the  competition for such candidates from the private sector and other  agencies, such as the National Aeronautics and Space Administration.   Energy uses authorities such as recruitment and retention bonuses and  relocation allowances to help in minority recruitment.  Energy could also  use dual compensation waivers for this purpose, but does not often use  this option at present because, in the opinion of a senior Energy official, it  is complicated to implement.  A senior official said that Energy is  considering applying for general waivers for certain occupational  categories.  In addition, Energy said that it uses executive search firms to  increase the cadre of minority candidates.
section_title: Department of Veterans Affairs
paragraphs: VA also said that our analysis was reasonable, and that more diversity was  needed and greater efforts would be required if diversity is to increase.   However, VA does not have an agreed-upon standard, such as the civilian  labor force used by some agencies, by which to evaluate diversity in the  career SES.
Senior VA officials told us that, like Interior, VA has until recently left issues  such as recruitment and leadership development to agency components.   Officials of the Veterans Benefits Administration (VBA) and Veterans  Health Administration (VHA) said that they were concerned about diversity  in their management ranks, and had stepped up efforts to recruit minorities  at lower levels and to prepare them for leadership.  An official of the  National Cemetery Administration said that it had made similar efforts, but  had run into difficulties with finding minority candidates with civil service  status and getting them on final selection lists.  VA said that it had recently  submitted to the Office of Management and Budget a restructuring plan  under which, among other things, it will conduct an evaluation of its  leadership development programs and develop a national recruitment and  marketing plan.
According to agency officials, both VHA and VBA have instituted  leadership development programs, with VBA having had an SES candidate  development program for some time.  VA announced an SES candidate  development program in October 2001, and training for the initial group of  participants began in November 2002.
VA also recently began to develop a plan for workforce management and  succession planning.  In addition, VA’s Office of Diversity Management and  Equal Employment Opportunity, at the request of the VA Assistant  Secretary for Human Resources and Management, is providing diversity  information on VA’s current composition and monthly hiring.  While  diversity has been an element in performance evaluation for VA executives,  this information will for the first time allow VA to fairly evaluate executives  for diversity performance, according to a VA official.
section_title: Office of Personnel Management
paragraphs: To gain a broader prospective on SES diversity issues, we met with OPM  officials to get their reaction to our work.  The officials agreed that our  methodology was reasonable.  They said that women and minorities  continued to be underrepresented in the federal executive corps.  OPM’s  strategy for increasing executive diversity is to encourage agencies to  enhance diversity at entry level and midlevel, identify individuals with  leadership ability early in their careers, and provide experience and  learning opportunities to prepare them for senior level positions.
OPM cited the following actions as among the major steps it has taken to  address diversity in the SES.
Creating an Interagency Task Force on Hispanic Employment to focus  on the continued underrepresentation of Hispanics in the federal  workforce. The Director of OPM chairs the task force.
Fostering the establishment and growth of agency candidate  development programs, which train selected GS-14 and GS-15  employees in the skills necessary for success in the career SES.
Issuing the first annual Report to the President on Hispanic  Employment in the Federal Government, concerning the state of  Hispanic employment.
Meeting with leaders from 21 different Hispanic organizations to discuss  barriers to Hispanic recruitment and retention as well as to enlist their  support in recruitment.  The organizations have goals and missions  related to five different sectors: Hispanic education, federal  employment, national advocacy, private sector, and professional  organizations.  The Director has held two meetings with the  organizations and issued guidance to federal agencies about the benefits  of utilizing the organizations' expertise.
Co-chairing the Asian American and Pacific Islanders (AAPI) Joint Task  Force with EEOC.  The task force issued its Report on AAPI Federal  Employment and Glass Ceiling Issues.
Hosting, in partnership with the Department of Labor, the first Asian  Pacific American Federal Career Advancement Summit in May 2002.   OPM conducted several workshops on diversity issues and preparing for  the SES.
Meeting with the founders of the new employee group—the African  American Federal Executive Association—which formed in 2002.  One  result from this meeting was an OPM initiative called the Executive  Diversity Roundtable.  The roundtable will be a venue for discussions  focused solely on increasing and leveraging diversity in the executive  ranks.
Replacing “Cultural Awareness” with “Leveraging Diversity” as an SES  leadership competency.  A panel of public and private sector experts  worked with OPM to revise the title and definition for the SES  leadership competency that deals with diversity.  The revised  competency embodies the values of building, managing, and  maintaining a diverse workforce; is results oriented; and stresses  accountability.
Compiling best practices that agencies can use to develop strategies to  improve the representation of minorities and women in the federal  workforce and including them in the fiscal year 2001 annual Federal  Equal Opportunity Recruitment Program (FEORP) Report to  Congress.
Issuing the first Semi-Annual Statistical Report to the President on  Hispanic Employment in Federal Agencies.  The report compared  Hispanic hiring in fiscal year 1995 with that of fiscal year 2001.  It  contained information on hiring activity both governmentwide and by  individual agency and provided information about federal agency  utilization of available hiring tools.
Issuing a guide to federal agencies, Building and Maintaining a High  Quality, Diverse Workforce.
Conducting sessions on diversity issues as part of 1-week seminars  offered to federal managers by OPM's Management Development  Centers.
During fiscal year 2001, conducting two workshops for agencies about  federal equal employment opportunity regulations and federal agency  roles and reporting requirements.
Launching a new disability Web site in June 2002, a one-stop source of  information for managers, applicants, and human resources  professionals that is designed to be both comprehensive and user- friendly.
Issuing a model plan on the employment of adults with disabilities.
Regularly presenting workshops on diversity issues at numerous  nationwide conferences of organizations with compatible goals,  including organizations representing the interests of African Americans,  Hispanics, women, Asians and Pacific Islanders, and persons with  disabilities.
Regularly providing consultation services and technical assistance to  individual agencies regarding their questions, plans, and activities on  diversity issues.  In addition, upon request, OPM provided workshops to  organizations that expressed interest in developing future leaders.   These workshops focused on the application process and understanding  the leadership competencies necessary for SES membership.  These  services were provided to about 10 federal agencies during fiscal year  2001.
section_title: Equal Employment Opportunity Commission
paragraphs: For EEOC’s reaction, see the “Agency Comments” section of the letter and  appendix V, where its comments are reprinted.
section_title: Comments from the Office of Personnel Management
section_title: Comments from the Equal Employment Opportunity Commission
section_title: Comments from the Social Security Administration
section_title: Comments from the Department of Veterans Affairs
section_title: Comments from the Department of Energy
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the individual named above, the following individuals made  significant contributions to this report:  Walter E. Reed, Jr., Steven J. Berke,  Mitchell B. Karpman and Gregory H. Wilmoth.
section_title: GAO’s Mission
paragraphs: The General Accounting Office, the investigative arm of Congress, exists to  support Congress in meeting its constitutional responsibilities and to help improve  the performance and accountability of the federal government for the American  people. GAO examines the use of public funds; evaluates federal programs and  policies; and provides analyses, recommendations, and other assistance to help  Congress make informed oversight, policy, and funding decisions. GAO’s  commitment to good government is reflected in its core values of accountability,  integrity, and reliability.
section_title: Obtaining Copies of GAO Reports and Testimony
paragraphs: The fastest and easiest way to obtain copies of GAO documents at no cost is  through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full- text files of current reports and testimony and an expanding archive of older  products. The Web site features a search engine to help you locate documents  using key words and phrases. You can print these documents in their entirety,  including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and  correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site  daily. The list contains links to the full-text document files. To have GAO e-mail this  list to you every afternoon, go to www.gao.gov and select “Subscribe to GAO  Mailing Lists” under “Order GAO Products” heading.
subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Public Affairs