Senior Executive Service: Enhanced Agency Efforts Needed to Improve Diversity as the Senior Corps Turns Over
Published: 2003-10-15T00:00:00

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 government with substantial challenges to ensuring an able management cadre and also provides opportunities to affect the composition of the SES. In a January 2003 report, GAO-03-34 , 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 gender, race, and ethnicity of the estimated losses. Specifically, GAO estimated by gender, race, and ethnicity 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 recent SES appointment trends, the only significant changes in diversity would be an increase in the number of white women and an essentially equal decrease in white men. The percentage of GS-15s and GS-14s projected to leave would be lower (47 percent and 34 percent, respectively), and we project that the number of minorities still in the GS-15 and GS-14 workforce would provide agencies sufficient opportunity to select minority members for the SES. Estimates showed substantial variation in the proportion of SES minorities leaving between 24 large agencies and in the effect on those agencies' gender, racial, and ethnic profiles. Minority representation at 10 agencies would decrease and at 12 would increase. Agencies have an opportunity to affect SES replacement trends by developing succession strategies that help achieve a diverse workforce. Along with constructive agency leadership, these strategies could generate a pool of well-prepared women and minorities to boost the diversity of the SES ranks.

section_title: Letter
paragraphs: First, in our January 2003 report, we estimated that 55 percent of the career  SES members employed by the federal government as of October 1, 2000,  will have left the service by October 1, 2007.  Our estimates for attrition  among the GS-15 and GS-14 workforce also indicate a significant number of  departures, but a lower proportion will leave because GS-15s and GS-14s  are generally younger and leave for different reasons than SES members.  We estimated that about 47 percent of the GS-15s on board as of October  2000 will leave by October 2007 and that 34 percent of the GS-14s will leave.  Estimates of attrition showed variations across 24 large agencies for both  the SES and GS-15 and GS-14 workforce but, for most agencies, with the  proportion represented by minorities generally changing very little.
Second, while the past is not necessarily prologue, if recent  governmentwide appointment trends were to continue, the only significant  change in diversity by 2007 would be an increase in the number of white  women from 19 percent to 23 percent and an essentially equal decrease in  the number of white men from 67 percent to 62 percent.  Because  minorities will be leaving at about the same rate as nonminorities, the  current proportion of racial and ethnic minorities in the SES would change  very little if agencies replace SES members who leave with the same mix of  appointments as they did during fiscal years 1995 through 2000.  Our  estimates by agencies varied.  For 10 of the 24 large agencies, future trends,  based on recent projections, show less minority representation for SES in  2007 than in 2000, while 12 agencies show increases.  At most agencies, the  diversity picture for the GS-15 and GS-14 workforce is better than that for  the SES.  Even with variations by agency, if recent promotion trends  continue for the succession pool of GS-15s and GS-14s, by October 2007,  this workforce would experience a slight increase in the percentage of  minorities governmentwide.  The increase, coupled with the residual  population left after attrition, indicate that significant numbers of minority  candidates for appointment to SES should be available.
Third, the wave of near-term retirements and other attrition will provide  the federal government with both a challenge and an opportunity.  The  challenge will be to develop succession plans based on inclusive strategies  to help ensure that sufficient numbers of senior executives are in place to  develop and implement the policies and programs of the federal  government.  The opportunity will be to use new appointments to enhance  the diversity of the SES corps and the succession pool from which SES  members are selected.  Based in part on our work on the SES corps and in  other human capital areas, we have seen a positive response on the part of  OPM, EEOC, and other agencies.  Continued leadership from OPM and  EEOC, coupled with a strong commitment on the part of agency  managers—through such actions as holding executives accountable for the  diversity in the workforces they manage—would help ensure the diversity  of senior leadership.
subsections: section_title: Over the Next Several Years the Federal Government Faces Significant Losses of Its Most Senior Executives
paragraphs: The federal government’s civilian workforce faces large losses over the  next several years, primarily through retirements.  Expected retirements in  the SES, which generally represents the most senior and experienced  segment of the workforce, are expected to be even higher than the  governmentwide rates.  In our January 2003 report, we estimated that more  than half of the government’s 6,100 career SES members on board as of  October 2000 will have left the service by October 2007.  Estimates for SES  attrition at 24 large agencies showed substantial variations in both the  proportion that would be leaving and the effect of those losses on the  gender, racial, and ethnic profile.  We estimated that most of these agencies  would lose at least half of their corps.
The key source of replacements for the SES—the GS-15 and GS-14  workforce—also showed significant attrition governmentwide and at the  24 large agencies by fiscal year 2007.  While this workforce is generally  younger, and those who leave do so for somewhat different reasons than  SES members, we estimate that almost half, 47 percent, of the GS-15s on  board as of October 2000 will have left federal employment by October  2007 and about a third, 34 percent, of the GS-14s will have left.
section_title: If Past Appointment Trends Continue, the Diversity of the SES Corps Would Remain Virtually Unchanged
paragraphs: While past appointment trends may not continue, they do present a  window into how the future might look.  In developing our estimates of future diversity of the SES corps, we analyzed appointment trends for the  federal government and at 24 large agencies to determine the gender, racial,  and ethnic representation of the SES corps in 2007 if appointment trends  that took place from fiscal years 1995 through 2000 continued.  We found that, governmentwide, the only significant change in diversity by 2007  would be an increase in the number of white women, from 19.1 to 23.1  percent, and a corresponding decrease in white men, from 67.1 to 62.1  percent.  The proportion of the SES represented by minorities would  change very little, from 13.8 to 14.5 percent.
Table 1 presents the results by gender, racial, and ethnic groups of our  simulation of SES attrition and projection of SES appointments using  recent trends.  The table also shows that the racial and ethnic profile of  those current SES members who will remain in the service through the 7- year period will be about the same as it was for all SES members in  October 2000.  This is because minorities are projected to 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 recent appointment trends  continue, the result of replacing over half of the SES will be a corps whose  racial and ethnic profile changes very little.  The outlook regarding gender  diversity is somewhat different—while the percentage represented by SES  white women is estimated to increase by 4 percentage points, the  percentage of minority women is estimated to increase by .5 percentage  point—from 4.5 to 5.0 percent.  While white men are estimated to decrease  by 5 percentage points, minority men are estimated to increase by .2  percentage point, from 9.3 to 9.5 percent.
The results of our simulation of SES attrition and our projection of  appointments to the SES over the 7-year period showed variation across  the 24 Chief Financial Officers (CFO) Act agencies, as illustrated in table 2.  However, as with the governmentwide numbers, 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.  Our estimates of SES attrition  at individual agencies by gender, racial, and ethnic groups are 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 would look like on October 1, 2007, if  recent appointment trends continue.
The gender, racial, and ethnic profiles of the career SES at the 24 CFO Act  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.
Our projection of what the SES would look like if recent appointment  trends continued through October 1, 2007, 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 Act  agencies are small, exceeding a 2 percentage point increase at only 6  agencies.
At most agencies, the diversity picture for GS-15s and GS-14s is somewhat  better than that for the SES.  To ascertain what the gender, racial, and  ethnic profile of the candidate pool for SES replacements would 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, over 90  percent of those promoted to GS-15 are from the GS-14 workforce.  Table 3  presents the results of our analysis for GS-15s, and table 4 presents the  results for GS-14s.  The results show a somewhat lower proportion of this  workforce will leave.
Minority representation among those GS-15s who remain by 2007 will be  about the same as it was at the beginning of fiscal year 2001, indicating that  whites and minorities will leave at about the same rates.  However, the  proportion of minority GS-14s would increase somewhat (by 1.5  percentage points) and the proportion of both grades represented by white  and minority women will also increase.  Moreover, if recent 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 current minority GS-15s and GS-14s will be  employed through fiscal year 2007, and coupled with our projection of  promotions, shows there will be substantial numbers of minorities at both  the GS-15 (8,957) and GS-14 (15,672) levels, meaning that a sufficient  number 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 to 22 percent and at GS-14  by 0.9 percentage point to 23.5 percent.  The proportions of minority  women will increase by 0.9 percentage point to 6.5 percent for GS-15s and  0.5 percentage point to 8.1 percent for GS-14s, while those for minority men  will increase 0.8 percentage point to 10.8 percent for GS-15s and 0.5  percentage point to 10.7 percent for GS-14s.  At 60.6 percent, white men  will represent 4.2 percentage points less of GS-15s and, at 57.5 percent, 2.1  percentage points less of GS-14s than in fiscal year 2001.  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  would look like in October 2007.
section_title: Replacing Over Half of the SES Corps Presents a Challenge and an Opportunity for Federal Government
paragraphs: During fiscal years 2001 through 2007, the wave of near-term retirements  and normal attrition for other reasons presents the federal government  with the challenge and opportunity to replace over half of its career SES  corps.  The response to this challenge and opportunity will have enormous  implications for the government’s ability to transform itself to carry out its  current and future responsibilities rather than simply to recreate the  existing organizational structures.
With respect to the challenge, the federal government and governments  around the world are faced with losses that have a direct impact on  leadership continuity, institutional knowledge, and expertise.  Focusing on  succession planning, especially at the senior levels, and developing  strategies that will help ensure that the SES corps reflects diversity will be  important.  We have gained insights about selected succession planning  and management practices used by other countries that may be  instrumental for U.S. agencies as they adopt succession planning and  management strategies. We found that leading organizations engage in  broad, integrated succession planning and management efforts that focus  on strengthening both current and future organizational capacity.  As part  of this approach, these organizations identify, develop, and select their  people to ensure an ongoing supply of successors who are the right people,  with the right skills, at the right time for leadership and other key positions.
Succession planning is also tied to the federal government’s opportunity to  change the diversity of the SES corps through new appointments.  Leading  organizations recognize that diversity can be an organizational strength  that contributes to achieving results.  By incorporating diversity program  activities and objectives into agency succession planning, agencies can  help ensure that the SES corps is staffed with the best and brightest talent  available regardless of gender, race, or ethnicity.  As stated earlier, the  succession pool of candidates from the GS-15 and GS-14 levels should have  significant numbers of minority candidates to fill new appointments to the  SES.  It will be important to identify and nurture talent from this workforce  and other levels in agencies early in their careers.  Development programs  that identify and prepare individuals for increased leadership and  managerial responsibilities will be critical in allowing these individuals to  successfully compete for admission to the candidate pool for the next level  in the organization.  Succession planning and management is starting to  receive increased attention from the Office of Management and Budget  (OMB) and OPM,  and we have also seen a positive response from these  leadership agencies in developing and implementing programs that  promote diversity.
In commenting on our January 2003 report, OPM concurred with our  findings on SES attrition and diversity and said it welcomed the attention  the report brings 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.Both OPM and EEOC  said that our analysis was an accurate reflection of the likely future  composition of the career SES if recent patterns of selection and attrition  continue.  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.  EEOC also stated 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 and SES development and mentoring programs for midlevel  employees, to ensure a diverse group of highly qualified candidates for SES  positions.  Other federal agencies told us that they also have leadership  development programs in place or are establishing agencywide human  capital planning and executive succession programs, which include  diversity as an element.  They also told us that holding executives  accountable for building a diverse workforce was an element in their  performance evaluation for agency executives.  Continued leadership from  these agencies, coupled with a strong commitment from agency  management, will go a long way toward ensuring the diversity of senior  leadership.
Chairwoman Davis and Members of the Subcommittee, this concludes my  prepared statement.  I would be pleased to answer any questions you may  have.
section_title: Contacts and Acknowledgments
paragraphs: For further information, please contact George H. Stalcup on (202) 512- 9490 or at stalcupg@gao.gov.  Individuals making key contributions to this testimony include Steven Berke, Anthony Lofaro, Belva Martin, and Walter  Reed.
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