DOD Personnel: DOD Actions Needed to Strengthen Civilian Human Capital Strategic Planning and Integration with Military Personnel and Sourcing Decisions
Published: 2003-03-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense's (DOD) civilian employees play key roles in such areas as defense policy, intelligence, finance, acquisitions, and weapon systems maintenance. Although downsized 38 percent between fiscal years 1989 and 2002, this workforce has taken on greater roles as a result of DOD's restructuring and transformation. Responding to congressional concerns about the quality and quantity of, and the strategic planning for the civilian workforce, GAO determined the following for DOD, the military services, and selected defense agencies: (1) the extent of top-level leadership involvement in civilian strategic planning; (2) whether elements in civilian strategic plans are aligned to the overall mission, focused on results, and based on current and future civilian workforce data; and (3) whether civilian and military personnel strategic plans or sourcing initiatives were integrated.
section_title: What GAO Found
paragraphs: Generally, civilian personnel issues appear to be an emerging priority among top leaders in DOD and the defense components. Although DOD began downsizing its civilian workforce more than a decade ago, it did not take action to strategically address challenges affecting the civilian workforce until it issued its civilian human capital strategic plan in April 2002. Top-level leaders in the Air Force, the Marine Corps, the Defense Contract Management Agency, and the Defense Finance Accounting Service have initiated planning efforts and are working in partnership with their civilian human capital professionals to develop and implement civilian strategic plans; such leadership, however, was increasing in the Army and not as evident in the Navy. Also, DOD has not provided guidance on how to integrate the components' plans with the department-level plan. High-level leadership is critical to directing reforms and obtaining resources for successful implementation. The human capital strategic plans GAO reviewed for the most part lacked key elements found in fully developed plans. Most of the civilian human capital goals, objectives, and initiatives were not explicitly aligned with the overarching missions of the organizations. Consequently, DOD and the components cannot be sure that strategic goals are properly focused on mission achievement. Also, none of the plans contained results-oriented performance measures to assess the impact of their civilian human capital initiatives (i.e., programs, policies, and processes). Thus, DOD and the components cannot gauge the extent to which their human capital initiatives contribute to achieving their organizations' mission. Finally, the plans did not contain data on the skills and competencies needed to successfully accomplish future missions; therefore, DOD and the components risk not being able to put the right people, in the right place, and at the right time, which can result in diminished accomplishment of the overall defense mission. Moreover, the civilian strategic plans did not address how the civilian workforce will be integrated with their military counterparts or sourcing initiatives. DOD's three human capital strategic plans--two military and one civilian--were prepared separately and were not integrated to form a seamless and comprehensive strategy and did not address how DOD plans to link its human capital initiatives with its sourcing plans, such as efforts to outsource non-core responsibilities. The components' civilian plans acknowledge a need to integrate planning for civilian and military personnel--taking into consideration contractors--but have not yet done so. Without an integrated strategy, DOD may not effectively and efficiently allocate its scarce resources for optimal readiness.

section_title: Letter
paragraphs: With almost 700,000 civilian employees on its payroll, the Department of  Defense (DOD) is the second largest federal employer of civilians in the  nation. Defense civilian personnel, among other things, develop policy,  provide intelligence, manage finances, and acquire and maintain weapon  systems. Given the global war on terrorism, the role of DOD’s civilian  workforce is expanding, such as participation in combat support functions  that free military personnel to focus on warfighting duties for which they  are uniquely qualified. Civilian personnel are also key to maintaining  DOD’s institutional knowledge because of frequent military personnel  rotations. However, since the end of the cold war, the civilian workforce  has undergone substantial change, due primarily to downsizing, base  realignments and closures, competitive sourcing initiatives, and changing  missions. For example, between fiscal years 1989 and 2002, DOD reduced  its civilian workforce by about 38 percent, with an additional reduction of  about 55,000 personnel proposed through fiscal year 2007. Some DOD  officials have expressed concern about a possible shortfall of critical skills  because downsizing has resulted in a significant imbalance in the shape,  skills, and experience of its civilian workforce and more than 50 percent of  the civilian workforce becoming eligible to retire in the next 5 years. As a  result, the orderly transfer of DOD’s institutional knowledge is at risk.
These factors, coupled with the Secretary of Defense’s significant  transformation initiatives, make it imperative for DOD to strategically  manage its civilian workforce within a total force perspective, which  includes civilian personnel as well as active duty and reserve military  personnel and contractor personnel. This strategic management approach  will enable DOD to accomplish its mission by putting the right people, in  the right place, at the right time and at a reasonable cost.
In April 2002, DOD published a strategic plan for civilian personnel. In  response to your request, we reviewed strategic planning efforts for  civilian personnel at DOD and selected defense components, including the  four military services and two defense agencies (the Defense Contract  Management Agency and the Defense Finance and Accounting Service).  Specifically, we determined (1) the extent to which top-level leadership is  involved in strategic planning for civilian personnel and (2) whether  strategic plans for civilian personnel are aligned with the overall mission,  results oriented, and based on data about the future civilian workforce. In  addition, we determined whether the strategic plans for civilian personnel  are integrated with plans for military personnel or sourcing initiatives.  (See app. I for a description of our scope and methodology.)
subsections: section_title: Background
paragraphs: DOD’s civilian workforce has undergone a sizeable reduction but remains  critical to DOD’s mission success. Strategic human capital management  provides a framework for maximizing the value added by the civilian  workforce through aligning its civilian human capital initiatives to support  DOD’s overarching mission.
subsections: section_title: Current Size, Distribution, and Changing Roles of DOD’s Civilian Workforce
paragraphs: Since the end of the cold war, DOD has undergone sizable reductions in its  civilian workforce. Between fiscal years 1989 and 2002, DOD’s civilian  workforce shrank from 1,075,437 to 670,166—about a 38 percent  reduction. DOD accomplished this downsizing without proactively  shaping the civilian workforce to have the skills and competencies needed  to accomplish future DOD missions. As a result, today’s workforce is older  and more experienced, but 58 percent will be eligible for early or regular  retirement in the next 3 years. Moreover, the President’s fiscal year 2003  budget request projects that DOD’s civilian workforce will be further  reduced by about 55,000 through fiscal year 2007. As shown in figure 1, at  the end of fiscal year 2002, the military departments employed 85 percent  of DOD’s civilians; 15 percent were employed by the other defense  organizations.
Furthermore, the 2000 Defense Science Board Task Force report  observed that the rapid downsizing during the 1990s led to major changes  in the roles of and balance between DOD’s civilian and military personnel  and contractor personnel. The roles of the civilians and private-sector  workforce are expanding, including participation in combat functions—as  a virtual presence on the battlefield—and in support duties on both the  domestic and international scenes. These changing roles call for greater  attention to shaping an effective civilian workforce to meet future  demands within a total force perspective. This perspective includes a clear  understanding of the roles and characteristics of DOD’s civilian and  military personnel and the most appropriate source of   capabilities—military, civilian, or contractor.
The Under Secretary of Defense for Personnel and Readiness is the  principal staff assistant and advisor to the Secretary and Deputy Secretary  of Defense for total force management as it relates to readiness, personnel  requirements and management, and other matters. The Under Secretary’s  office develops policies, plans, and programs for recruitment, training,  equal opportunity, compensation, recognition, discipline, and separation  of all DOD personnel, including active, reserve, and retired military and  civilian personnel. This office also analyzes the total force structure as it  relates to quantitative and qualitative military and civilian personnel  requirements. Within this office is the Office of the Deputy Under  Secretary of Defense for Civilian Personnel Policy, which formulates  plans, policies, and programs to manage the DOD civilian workforce.  Policy leadership and human resource programs and systems are provided  through the Civilian Personnel Management Service.
section_title: Strategic Human Capital Management
paragraphs: Strategic human capital management involves long-term planning that is  fact based, focused on program results and mission accomplishment, and  incorporates merit principles. Studies by several organizations, including  GAO, have shown that highly successful performance organizations in  both the public and private sectors employ effective strategic management  approaches as a means to prepare their workforce to meet present and  future mission requirements as well as achieve organizational success. In  our 2001 High-Risk Series and Performance and Accountability Series and  again in 2003, we designated strategic human capital as a high-risk area  and stated that serious human capital shortfalls are threatening the ability  of many federal agencies to economically, efficiently, and effectively  perform their missions. We noted that federal agencies, including DOD  and its components, needed to continue to improve the development of  integrated human capital strategies that support the organization’s  strategic and programmatic goals.
In March 2002, we issued an exposure draft of our model of strategic  human capital management to help federal agency leaders effectively lead  and manage their people. The model is designed to help agency leaders  effectively use their people and determine how well they integrate human  capital considerations into daily decision making and planning for the  program results they seek to achieve. Similarly, the Office of Management  and Budget (OMB) and the Office of Personnel Management (OPM) have  developed tools that are being used to assess human capital management  efforts. In October 2001, OMB developed standards for success for  strategic human capital management—one of five governmentwide reform  initiatives in the President’s Management Agenda. In December 2001, OPM  released a human capital scorecard to assist agencies in responding to the  OMB standards for success; later, in October 2002, OMB and OPM  developed—in collaboration with GAO— revised standards for success.  To assist agencies in responding to the revised standards, OPM released  the Human Capital Assessment and Accountability Framework. In April  2002, the final report of the Commercial Activities Panel, mandated by  Congress and chaired by the Comptroller General, sought to elevate  attention to human capital considerations in making sourcing decisions.  Federal organizations are increasingly concerned with sourcing issues  because they are being held accountable for addressing another  President’s Management Agenda initiative that calls for determining their  core competencies and deciding how to build internal capacity or contract  out for services.
section_title: Leadership Involvement in Strategic Planning for Civilian Personnel Not Extensive in the Past, but Is Increasing
paragraphs: Until recently, top-level leadership at the department and component  levels has not been extensively involved in strategic planning for civilian  personnel; however, it is of higher priority to top-level leadership today  than it has been in the past. With the exception of the Air Force,  leadership at the component level has not been proactive, but is becoming  more involved in responding to the need for strategic planning, providing  guidance, or supporting and working in partnership with civilian human  capital professionals.
We have previously emphasized that high-performing organizations need  senior leaders who are drivers of continuous improvement and also  stimulate and support efforts to integrate human capital approaches with  organizational goals. There is no substitute for the committed involvement  of top leadership.
subsections: section_title: Department-level Leadership Involvement in Strategic Planning for Civilian Personnel Has Increased in Recent Years
paragraphs: Strategic planning for the Department of Defense civilian workforce is  becoming a higher priority among DOD’s senior leadership, as evidenced  by direction given in 2001 in the Quadrennial Defense Review (QDR) and  the Defense Planning Guidance and by the Under Secretary of Defense for  Personnel and Readiness to develop a civilian and military human  resources strategic plan. We previously reported that a demonstrated  commitment to change by agency leaders is perhaps the most important  element of successful management reform and that leaders demonstrate  this commitment by developing and directing reform. OMB and OPM  have similarly advocated the need for top leadership to fully commit to  strategic human capital planning. The Defense Science Board reported in  2000 that senior DOD civilian and military leaders have devoted “far less”  attention to civilian personnel challenges than the challenges of  maintaining an effective military force.
In 1992, during the initial stages of downsizing, DOD officials voiced  concerns about what they perceived to be a lack of attention to identifying  and maintaining a balanced basic level of skills needed to maintain   in-house capabilities as part of the defense industrial base. In our 2000  testimony, Strategic Approach Should Guide DOD Civilian Workforce  Management, we testified that DOD’s approach to civilian force  reductions was less oriented toward shaping the makeup of the workforce  than was the approach it used to manage its military downsizing. In its  approach to civilian workforce downsizing, the department focused on  mitigating adverse effects (such as nonvoluntary reductions-in-force)  through retirements, attrition, hiring freezes, and base closures. (See   app. II for a time line of key events related to DOD’s civilian workforce  downsizing.)
DOD initiated a more strategic approach when it published its first  strategic plan for civilian personnel (Civilian Human Resources Strategic  Plan, 2002-2008) in April 2002.  In developing the departmentwide plan,  the Office of the Under Secretary of Defense for Personnel and Readiness  made efforts to work in conjunction with defense components’ civilian  human capital communities by inviting their leaders to contribute to  working groups and special meetings and reviewing the services’ civilian  human capital strategic plans. However, DOD has yet to provide guidance  on how to integrate component-level civilian human capital strategic plans  with its departmentwide civilian strategic plan. DOD officials said that full  integration would be difficult because of the wide array of human capital  services and mission support provided at the component level. However,  one of the lessons learned in our previous work on strategic planning in  the defense acquisition workforce was the need for leadership to provide  guidance for planning efforts. Without guidance, defense components  may not be able to effectively function together in support of the  departmentwide plan. For example, DOD’s goal to provide management  systems and departmentwide force planning tools may not be fully or  efficiently achieved without a coordinated effort among all defense  components. The component-level plans we reviewed included goals,  objectives, or initiatives to improve analysis or forecasting of workforce  requirements, but they did not indicate coordination with the  departmentwide effort or with one another.
Civilian human capital planning has emerged as an issue in another   DOD-related forum for top leaders. In November 2002, the Human  Resources Subcommittee of the Defense Business Practice  Implementation Board released its report to DOD’s Senior Executive  Council recommending, among other things, the establishment of a  “Human Capital Transformation Team” to help implement agreed upon  changes to transform human capital management in DOD’s civilian  workforce.
section_title: Component-level Leadership Involvement in Strategic Planning for Civilian Personnel Varies
paragraphs: Leadership participation in strategic planning varies among the defense  components we reviewed. High-level leaders in the Air Force, the Marine  Corps, the Defense Contract Management Agency (DCMA), and the  Defense Finance and Accounting Service (DFAS) have provided the  impetus for strategic planning and are partnering with civilian human  capital professionals to develop and implement their strategic plans. Such  partnership is increasing in the Army and not as evident in the Department  of the Navy.
subsections: section_title: Air Force Leadership Increasingly Proactive on Strategic Planning for Civilian Personnel
paragraphs: Since the mid-1990s, Air Force leadership has been relatively active in  strategic planning for civilian human capital. In 1999, high-level Air Force  leadership recognized the need for strategic human capital planning to  deal with the significant downsizing that had occurred over the last several  years. For the civilian workforce, this recognition culminated in the  publication in 2000 of the Civilian Personnel Management Improvement  Strategy White Paper; the Air Force produced an update of this document  in 2002. Air Force leadership also has recognized that it must further  enhance its efforts with greater attention to integrated, total force  planning. Air Force leadership has demonstrated this commitment by  incorporating civilian human capital leaders into broader Air Force  strategic planning and resource allocation processes. Air Force leaders  created a human resources board (the Air Force Personnel Board of  Directors) composed of 24 senior civilian and military leaders. The board  convenes semi-annually to address military and civilian human capital  issues in an integrated, total force context. It is fostering integrated  planning with the intent of developing an overarching strategy—holistic,  total force strategy—designed to meet Air Force workforce demands for  the present and the future and intended to encompass the needs of active,  reserve, civilian, and contractor personnel by 2004. Furthermore, the Air  Force began to allocate resources for civilian human capital initiatives in  fiscal year 2002 due to the strong support from Air Force leaders.
section_title: Strategic Planning for Civilian Personnel Is an Emerging Priority in the Marine Corps, DCMA, DFAS, and the Army
paragraphs: In recent years, strategic human capital planning has generally received  increasing top-level leadership support in the Marine Corps, DCMA, DFAS,  and the Army. A Marine Corps official told us that the Commandant of the  Marine Corps and other top Marine Corps leaders became involved with  civilian human capital strategic planning in 2001. The Commandant, in  October 2002, endorsed the civilian human capital strategic plan, which  outlines the Corps’ vision, intent, core values, expected outcomes, and  strategic goals for civilian human capital. Officials are currently  developing an implementation plan, which is expected to contain specific  objectives, milestones, points of accountability, resource requirements,  and performance measures. DCMA began strategic human capital planning  in 2000 in response to guidance from the Office of the Under Secretary of  Defense, Acquisition, Technology, and Logistics, and issued its first human  capital strategic plan in 2002. DCMA officials told us that their human  resources director is a member of DCMA’s broader executive management  board and that human capital—civilian and military—is a standing agenda  issue at the board’s monthly meetings. DFAS officials told us their director  includes human capital professionals in DFAS’s management decision- making processes. Further, human capital is a key element in the DFAS  agencywide strategic plan. DFAS initiated its human capital strategic  planning efforts in 2002, but it has not yet published its plan.
Within the Army, top-level leadership involvement in strategic planning  efforts for civilian human capital has been limited but increasing. The bulk  of such efforts has instead originated in the Army’s civilian human capital  community. The Army’s civilian human capital community recognized the  need for strategic civilian human capital planning in the mid-1990s and  developed strategic plans. The Army’s civilian human capital community  also initiated, in 2000, an assessment of the civilian workforce situation  and developed new concepts for human resource systems and workforce  planning. Since 2002, Army top-level leadership has become more  explicitly involved in their civilian human capital community’s initiatives.  For example, in January 2003, the Vice Chief of Staff of the Army formally  endorsed the Army’s human capital strategic plan. Also, in January 2003,  Army top leaders endorsed the recommendations of a study to improve  the development and training of the Army’s civilian workforce, which  followed three companion studies with similar objectives for military  personnel. Additionally, as of March 2003, Army top leaders accepted the  rationale and validated the requirement for another initiative to centrally  manage senior civilian leaders by basing selection and retention decisions  on long-term Army needs rather than on the short-term needs of local  commanders. The Army plans to establish a management office to begin  this effort in fiscal year 2004. Army officials told us that all of these efforts  have not yet been fully funded. Without the commitment and support of  Army top leaders, the Army’s civilian human capital community has  limited authority to carry out reforms on its own and limited ability to  ensure that its reforms are appropriately focused on mission  accomplishment.
In addition, Army civilian human capital officials’ contributions to broader  strategic planning efforts have been increasing. Specifically, officials told  us that while the Army’s civilian human capital community has a voice in  the Army’s resource allocation deliberations, getting civilian personnel  issues included in top-level Army planning and budgeting documents is  sometimes challenging. Within the past year, however, civilian human  resource issues have been included in the Army-wide strategic readiness  system (a balanced scorecard) and an Army well-being initiative  (balancing the demands and expectations of the Army and its people).
section_title: Navy Leadership Involvement in Strategic Planning for Civilian Personnel Is Limited
paragraphs: Within the Department of the Navy, top-level leadership involvement in  strategic planning efforts for civilian human capital has been limited.  Department of the Navy leadership invested in studies related to strategic  planning for its civilian workforce, but it has been slow to develop a  strategic plan for its civilian human capital. Two documents published in  August 2000 and May 2001 reported the results of work sponsored by a  personnel task force established by the Secretary of the Navy to examine  facets of the Department of the Navy’s human resources management.  One, a study conducted and published by the National Academy of Public  Administration’s Center for Human Resources Management, focused on  Department of the Navy civilian personnel issues; the other reported on  the rest of the findings of the task force. Department of the Navy human  capital officials told us that they have not implemented the  recommendations of those studies because (1) many require new  legislation and (2) the studies were future oriented, looking as far ahead as  2020, and it will take time to implement the recommendations. These  officials said that although the Department of the Navy had not yet  developed a strategic plan for its civilian human capital, the Navy major  commands (referred to as claimants) did their own human capital strategic  planning as necessary, adding that they believed these efforts were  sufficient. More recently, however, these officials told us that they are  developing (on their own initiative) a strategic plan for the Department of  the Navy’s civilian workforce.
In addition, the Navy has very recently undertaken other strategic planning  efforts. In July 2002, the Navy established a new organization to develop a  consolidated approach to civilian workforce management that centers on  21 core competency functional areas. Navy officials view this recent  initiative, which involves senior military and civilian leaders, as the first  step in developing a total force concept (civilian, active and reserve  military, and contract employees). In March 2003, the Department of the  Navy established (1) a new position that will provide a liaison for the Navy  and Marine Corps strategic planning processes and (2) a Force  Management Oversight Counsel, co-chaired by top Navy and Marine Corps  officials, which will develop an overarching framework for Navy and  Marine Corps strategic planning.
With the looming uncertainty of continued downsizing, anticipated  retirements, and increased competitive sourcing of non-core functions,  strategic planning for the civilian workforce will grow in importance. If  high-level leaders do not provide the committed and inspired attention to  address civilian human capital issues (that is, establish it as an  organizational priority and empower and partner with their human capital  professionals in developing strategic plans for civilian human capital),  then future decisions about the civilian workforce may not have a sound  basis.
section_title: Key Elements of Strategic Plans for DOD Civilian Personnel Not in Place
paragraphs: For the most part, the strategic plans we reviewed lacked such key  elements as mission alignment, results-oriented performance measures,  and data-driven workforce planning. Mission alignment is demonstrated  by clearly showing how the civilian workforce contributes to  accomplishing an organization’s overarching mission. It is also evident in  descriptions of how the achievement of human capital initiatives will  improve an organization’s performance in meeting its overarching mission,  goals, and objectives. Results-oriented performance measures enable an  organization to determine the effect of human capital programs and  policies on mission accomplishment. Finally, data on the needed  knowledge, skills, competencies, size, and deployment of the workforce to  pursue an organization’s missions allow it to put the right people, in the  right place, at the right time. The interrelationships of these three key  elements are shown in figure 2. Without adequate alignment, performance  measures, and workforce data, DOD and its components cannot be certain  their human capital efforts are properly focused on mission  accomplishment.
Previously, we emphasized that high-performing organizations align their  human capital initiatives with mission and goal accomplishment.  Organizations’ strategic human capital planning must also be results  oriented and data driven, including, for example, information on the  appropriate number and location of personnel needed and their key  competencies and skills. High-performing organizations also stay alert to  emerging mission demands and human capital challenges and reevaluate  their human capital initiatives through the use of valid, reliable, and  current data.
subsections: section_title: Strategic Plans for Civilian Personnel Are Not Mission Aligned and Results Oriented
paragraphs: The human capital goals and objectives contained in strategic plans for  civilian personnel were not, for the most part, explicitly aligned with the  overarching missions of the organizations we reviewed. Moreover, none of  the plans fully reflected a results-oriented approach to assessing progress  toward mission achievement. Human capital strategic plans should be  aligned with (i.e., consistent with and supportive of) an organization’s  overarching mission. Alignment between “published and approved human  capital planning documents” and an organization’s overarching mission is  advised in OPM’s Human Capital Assessment and Accountability  Framework. With regard to assessing progress, programs can be more  effectively measured if their goals and objectives are outcome-oriented  (i.e., focused on results or impact) rather than output-oriented (i.e.,  focused on activities and processes), in keeping with the principles of the  Government Performance and Results Act (GPRA). Congress anticipated  that GPRA would be institutionalized and practiced throughout the federal  government; federal agencies are expected to develop performance plans  that are consistent with the act’s approach.
Based on the above criteria, we analyzed the human capital strategic plans  that five of the seven organizations in our review have published for the  following:    Human capital goals and objectives that explicitly describe how the  civilian workforce helps achieve the overarching mission, goals, and  objectives.
Results-oriented measures that track the success of the human capital  initiatives in contributing to mission achievement.
All of the civilian human capital plans we reviewed referred to their  respective organizations’ mission; however, the human capital goals,  objectives, and initiatives did not explicitly link or describe how the  civilian workforce efforts would contribute to the organizations’  overarching mission achievement, and more importantly how the extent of  contribution to mission achievement would be measured. Aspects of  DCMA’s plan, however, demonstrate alignment by including a general  explanation of the overarching mission inclusive of human capital goals,  objectives, and initiatives that further define how its civilian workforce  contributes to achieving the overarching mission. For example:    DCMA’s overarching mission is to “Provide customer-focused  acquisition support and contract management services to ensure  warfighter readiness, 24/7, worldwide.” DCMA’s human capital plan  demonstrates the alignment of the agency’s workforce by stating that  the agency will accomplish its overarching mission by “Partner, or  strategically team with customers to develop better solutions, and  ensur warfighter success on all missions” and “Providing expertise  and knowledge throughout the acquisition life cycle, from cradle to  grave; from factory to foxhole and beyond”.
DCMA’s plan contains one human capital goal, among other agency- wide goals, directed at aligning workforce efforts with mission  accomplishment. The goal is to enable DCMA people to excel by  building and maintaining a work environment that (1) attracts,   (2) develops, and (3) sustains a quality workforce.
Several objectives and initiatives in DCMA’s plan demonstrate a link to  this human capital goal and to the overarching mission. Examples of  these initiatives include determining ways to (1) making DCMA  employment attractive, (2) establishing a professional development  framework that is integrated and competency-based as well as  developing an advanced leadership program, and (3) sustaining a  quality workforce by ensuring recognition and awards to   high-performing personnel. This alignment of DCMA’s workforce,  initiatives, and goals to the overarching mission helps DCMA ensure  that its civilian workforce has the necessary expertise and knowledge  to provide customer-focused acquisition support and contract  management services.
The other plans in our review generally did not demonstrate this degree of  alignment. For example, in the Army civilian human capital strategic plan,  four of the six human resource goals are more narrowly directed toward  the role played by the human resource community and only indirectly tie  the civilian workforce to the achievement of the Army’s overall mission.  However, two goals—“systematic planning that forecasts and achieves the  civilian work force necessary to support the Army’s mission” and  “diversity through opportunity” —link more explicitly to the Army’s  overarching mission. Also, DOD’s departmentwide civilian human capital  plan refers to the overarching mission by including broad references to  DOD’s overarching strategic plan. However, the plan is silent about what  role DOD’s civilian workforce is expected to play in achievement of the  mission. The plan recognizes the need for aligning the civilian workforce  with the overarching mission by proposing to develop a human resource  management accountability system to guarantee the effective use of  human resources in achieving DOD’s overarching mission.
Moreover, none of the plans in our review contained results-oriented goals  and measures. For example, DOD’s strategic goal to “promote focused,  well-funded recruiting to hire the best talent available” is not expressed in  measurable terms (i.e., it does not define “focused, well-funded, and best  talent available”), and the measures for this goal are process oriented   (i.e., developing or publishing a policy or strategy; reviewing programs)  rather than results oriented. DOD’s plan, however, indicates that mission  achievement measures are being developed. At the component level, the  Army, in particular, has developed metrics related to its personnel  transaction processes; although these measures are important, they are  not focused on measuring outcomes related to mission accomplishment.  Army officials recognize the importance of relating outcomes to mission  accomplishment and are presently working to develop such measures.  Without results-oriented measures, it is difficult for an organization to  assess the effectiveness of its human capital initiatives in supporting its  overarching mission, goals, and objectives.
Officials at DOD and the defense components in our review told us they  recognize the importance of alignment and results-oriented measures in  strategic human capital planning. In fact, the Air Force has recently  undertaken an initiative to develop a planning framework aligning  strategy, vision, execution, measurement, and process transformation.  Many human capital officials we spoke with noted they have only recently  begun to transition from their past role of functional experts—focused  primarily on personnel transactions—to partners with top leadership in  strategically planning for their civilian workforce. In their new role, they  expect to make improvements in strategically managing civilian personnel,  including identifying results-oriented performance measures in future  iterations of their plans. Until such elements are in place, it is difficult to  determine if the human capital programs DOD and its components are  funding are consistent with overarching missions or if they are effectively  leading to mission accomplishment.
section_title: Strategic Plans for Civilian Personnel Generally Lack Data on Workforce Needs
paragraphs: The civilian human capital strategic plans for DOD and its components  include goals focused on improving their human capital initiatives, but  only two components include workforce data that supported the need for  those particular initiatives. GAO and others have reported that it is  important to analyze future workforce needs to (1) assist organizations in  tailoring initiatives for recruiting, developing, and retaining personnel to  meet its future needs and (2) provide the rationale and justification for  obtaining resources and, if necessary, additional authority to carry out  those initiatives. We also stated that to build the right workforce to  achieve strategic goals, it is essential that organizations determine the  critical skills and competencies needed to successfully implement the  programs and processes associated with those goals. To do so, three types  of data are needed: (1) what is available—both the current workforce  characteristics and future availability, (2) what is needed—the critical  workforce characteristics needed in the future, and (3) what is the  difference between what will be available and what will be needed—the  gap. Without this information, DOD cannot structure its future workforce  to support the Secretary of Defense’s initiatives or mitigate the risk of  shortfalls in critical personnel when pending civilian retirements occur.
Of the five organizations in our review that had civilian human capital  strategic plans, two—the Air Force and DCMA—included some  information about the future workforce and indicated the gaps to be  addressed by its civilian human capital initiatives. The Air Force’s plan  includes a chart that illustrates, in terms of years of federal service, the  current workforce compared to a 1989 baseline (prior to the downsizing of  its civilian workforce) and a target workforce for fiscal year 2005. This  information was generally based on data that were readily available but  considered to be a less-than-adequate indicator for level of experience,  and it is not clear how the target workforce data were derived. According  to the Air Force, its analysis illustrated the shortfall in the number of  civilians with less than 10 years of service when compared to the Air  Force’s long-term requirements. Using this and other analyses, the Air  Force initially developed workforce-shaping activities in four   areas—accession planning, force development, retention/separation  management, and enabling activities, which included 27 separate  initiatives.
DCMA’s plan describes the agency’s workforce planning methodology,  which focuses on identifying gaps between its current and future  workforce. DCMA’s strategic workforce planning team analyzes  quantitative data on the current workforce and employs an interview  protocol to gather and analyze information from DCMA managers and  subject matter experts pertaining to future work and workforce  requirements. According to DCMA, this methodology allows it to link the  desired distribution of positions, occupational series, and skills to  organizational outcomes, processes, and customer requirements and to  DOD’s transformation guidance, goals, and initiatives. Although DCMA has  not completely identified or quantified its future workforce requirements,  it identified the following: requirements for new technical skills, especially  software acquisition and integration; upgrading general skills and  maintaining the existing skill base; correcting imbalances in geographic  locations; requirements for hiring about 990 employees per year through  2009; and obtaining additional positions to support anticipated increasing  procurements.
In contrast to the Air Force and DCMA plans, the DOD, Army, and Marine  Corps plans lack information about future workforce needs. For example,  DOD’s civilian human capital plan contains data on those civilians eligible  for retirement by grade level and by job category. However, the plan does  not address key characteristics such as skills and competencies that will  be needed in the future workforce to support changes being undertaken by  DOD. Without this information and a methodology to analyze and identify  the gaps that exist between what will be available and what will be  needed, it is not clear that the human capital initiatives in DOD’s plan will  result in the desired future workforce.
All of the plans we reviewed acknowledge strategic workforce planning  shortfalls by setting goals or initiatives to improve in this area. For  example, DOD’s plan includes a goal to obtain management systems and  tools that support total force planning and informed decision making.  DOD has begun adopting the Army’s Civilian Forecasting System and the  Workforce Analysis Support System for departmentwide use, which will  enable it to project the future workforce by occupational series and grade  structure. However, the systems (which are based on a regression analysis  of historical data) are not capable of determining the size and skill  competencies of the civilian workforce needed in the future. Also, DOD  has not yet determined specifically how this new analytic capability will be  integrated into programmatic decision-making processes. DOD officials  stated that its first step was to purchase the equipment and software,  which was accomplished in 2002. DOD is now analyzing users’ needs. As  of December 2002, DOD officials were testing the systems, but they  expressed concerns that the Army systems may not serve the needs of a  complex and diverse organization such as DOD.
section_title: Strategic Plans for Civilian Personnel Not Yet Integrated with Plans for Military Personnel or Sourcing Initiatives
paragraphs: The civilian human capital strategic plans we reviewed did not address  how the civilian workforce would be integrated with their military  counterparts or sourcing initiatives to accomplish DOD’s mission. The  2001 QDR states that future operations will not only be joint but also  depend upon the total force—including civilian personnel as well as active  duty and reserve personnel. The QDR also emphasizes that DOD will focus  its “owned” resources in areas that contribute directly to warfighting and  that it would continue to take steps to outsource and shed its non-core  responsibilities. The 2000 Defense Science Board Task Force report states  that DOD needs to undertake deliberate and integrated force shaping of  the civilian and military forces, address human capital challenges from a  total force perspective, and base decisions to convert functions from  military to civilian or to outsource functions to contractors on an  integrated human resource plan. In addition, the National Academy of  Public Administration, in its report on the Navy civilian workforce 2020,  notes that as more work is privatized and more traditionally military tasks  require support of civilian or contractor personnel, a more unified  approach to force planning and management will be necessary; serious  shortfalls in any one of the force elements will damage mission  accomplishment. The Academy’s report also states that the trend towards  greater reliance on contractors necessitates a critical mass of civilian  personnel expertise to protect the government’s interest and ensure  effective oversight of contractors’ work. Further, the 2002 Commercial  Activities Panel final report indicates that sourcing and human capital  policies should be inextricably linked together, and it calls for federal  sourcing policies to be “consistent with human capital practices designed  to attract motivate, retain, and reward a high performing workforce.”
DOD’s overall human capital strategy, however, consists of three separate  plans: one for civilians, one for military personnel, and one for quality of  life issues for servicemembers and their families. DOD has not integrated  the contractor workforce into these plans. Although DOD officials  maintain that these plans are intended to complement each other, the  plans are not integrated to form a seamless and comprehensive strategy.  The civilian plan was prepared separately from the other two military  plans with little direct involvement of key stakeholders, such as  representatives from military personnel and manpower requirements  communities.
Although not reflected in its departmentwide civilian human capital  strategic plan, DOD acknowledged—in its response to the President’s  Management Agenda to accomplish workforce restructuring,  reorganizations, delayering, outsourcing, and reengineered and  streamlined processes—that these efforts could only be accomplished  through coordinating and integrating civilian and military components.  The departmentwide civilian plan includes a longer-term objective to  assess the need for and the capabilities of automated information  management tools to primarily integrate civilian and military personnel  and transaction data. We believe these tools can also provide information  for planning and analysis, but they may not provide DOD with the  information needed to proactively shape the total DOD workforce in  response to current changes (i.e., the Secretary’s transformation of the  department, increasing joint operations, and competitive sourcing  initiatives) because (1) contractor data are not included and (2) the  projected date for accomplishing this objective, September 2008, may be  too late to effect near-term decisions. In addition, officials in the Office of  the Under Secretary of Defense for Personnel and Readiness recognize  that integration of the military and civilian plans is important and are  developing an umbrella document that will encompass all three  components of the human capital strategy, but it has not established a  time frame for completion.
Furthermore, DOD’s civilian human capital strategic plan does not address  the role of civilian vis-à-vis contractor personnel or how DOD plans to link  its human capital initiatives with its sourcing plans, such as efforts to  outsource non-core responsibilities. The plan notes that contractors are  part of the unique mix of DOD resources, but none of the goals and  objectives discusses how DOD will shape its future workforce in a total  force (civilian, military, and contractor) context. We believe that effective  civilian workforce planning cannot be accomplished in isolation from  planning for military personnel or sourcing initiatives. As the Commercial  Activities Panel report notes, it is particularly important that sourcing  strategies support, not inhibit, the government organization’s efforts to  recruit and retain a high-performing in-house workforce. We also noted in  our High Risk report that careful and thoughtful workforce planning  efforts are critical to making intelligent competitive sourcing decisions.
At the service level, the Air Force’s strategic plans for civilian personnel  were not initially developed in a total force context, but the current plans  acknowledge the need to integrate strategic planning for civilians with  their military counterparts, as well as taking into account contractors. For  example, the Air Force has set a goal and taken steps to integrate planning  for active, reserve, civilian, and contractor personnel by 2004. Air Force  officials stated concerns about the significant budgetary consequences  when planning does not take place in a total force context. For example,  when civilian or contractor personnel perform functions previously  conducted by military personnel, the defense component involved must  obtain additional funds because payment for civilians and contractors  cannot come from military personnel funds. The Air Force estimates that  these costs could be $10 billion to $15 billion over the next 5 years.
Although a proposed time frame is not provided, the Marine Corps’ civilian  plan states the need to forecast military and civilian levels and workforce  requirements based on strategic mission drivers, stratified workload  demand, and business process changes; the requirements for its civilian  marines will take into account the appropriate redistribution of work  among the military, civilian, and contractor communities. The Army’s  civilian human capital plan states that it will have to acquire, train, and  retain its total force in an operational environment that will place different  demands on human capital management. The Army’s human capital  community has an objective to support the Army-wide “Third Wave”  initiative, which focuses on privatization of non-core functions to better  allocate scarce resources to core functions. (The Department of the Navy  does not yet have a civilian human capital strategic plan.)
The defense agencies we reviewed, which have relatively few military  personnel compared to the military services, are taking or plan to take an  integrated approach to strategic planning for their civilian and military  workforces, but they do not indicate how they will integrate these efforts  with their sourcing initiatives. DCMA’s human capital strategic plan  includes both civilian and military personnel. For example, the plan  includes a goal to address the underassignment of military personnel,  because their absence further compounds the difficulties caused by the  downsizing of civilian positions and the increasing workload. DFAS is  planning to include both civilian and military personnel in the human  capital strategic plan that it is developing. Like DCMA, military personnel  are a small but important part of the overall DFAS workforce, but they are  projected to be less available in the future. For example, the Air Force has  announced that it is reducing its military personnel presence at DFAS over  the next several years.
Without integrated planning, goals for shaping and deploying military,  civilian, and contractor personnel may not be consistent with and support  each other. Consequently, DOD may not have the workforce it needs to  accomplish tasks critical to readiness and mission success.
section_title: Conclusions
paragraphs: DOD has made progress in establishing a foundation for strategically  addressing civilian human capital issues by developing its departmentwide  civilian human capital strategic plan. However, the alignment of human  capital goals with the overarching mission is unclear in DOD’s and the  components’ strategic plans for civilian human capital, and results- oriented performance measures linked to mission accomplishment are  lacking. Without these key elements, DOD and its components may miss  opportunities to more effectively and efficiently increase workforce  productivity. Also, without greater commitment from and the support of  top leaders, civilian human capital professionals in DOD and the defense  components may design strategic planning efforts that are not  appropriately focused on mission accomplishment and that do not have  adequate support to carry out.
Moreover, DOD top leadership has not provided its components with  guidance on how to align component-level strategic plans with the  departmentwide plan. Without this alignment, DOD’s and its components’  planning may lack the focus and coordination needed (1) to carry out the  Secretary of Defense’s transformation initiatives in an effective manner  and (2) to mitigate risks of not having human capital ready to respond to  national security events at home and abroad.
Although DOD and component officials recognize the critical need for  ensuring that the future workforce be efficiently deployed across their  organizations and have the right skills and competencies needed to  accomplish their missions, their strategic plans lack the information  needed to identify gaps in skills and competencies. As a result, DOD and  its components may not have a sound basis for funding decisions related  to human capital initiatives and may not be able to put the right people in  the right place at the right time to achieve the mission.
Furthermore, as personnel reductions continue and DOD carries out its  transformation initiatives, integrating planning in a total force context—as  mentioned in the QDR—becomes imperative to ensure that scarce  resources are most effectively used. However, military and civilian human  capital strategic plans—both DOD’s and the components’—have yet to be  integrated with each other. Furthermore, the civilian plans do not address  how human capital policies will complement, not conflict with, the  department-level or component-level sourcing plans, such as competitive  sourcing efforts.
section_title: Recommendations for Executive Action
paragraphs: To improve human capital strategic planning for the DOD civilian  workforce, we recommend that the Secretary of Defense direct the Under  Secretary of Defense for Personnel and Readiness, to undertake the  following:  Improve future revisions and updates to the DOD departmentwide  strategic human capital plan by more explicitly aligning with DOD’s  overarching mission, including results-oriented performance measures,  and focusing on future workforce needs. To accomplish this, the  revisions and updates should be developed in collaboration with top  DOD and component officials and civilian and military human capital  leaders.
Direct the military services and the defense agencies to align their  strategic human capital plans with the mission, goals, objectives, and  measures included in the departmentwide strategic human capital plan  and provide guidance to these components on this alignment.
Define the future civilian workforce, identifying the characteristics  (i.e., the skills and competencies, number, deployment, etc.) of  personnel needed in the context of the total force and determine the  workforce gaps that need to be addressed through human capital  initiatives.
Assign a high priority to and set a target date for developing a  departmentwide human capital strategic plan that integrates both  military and civilian workforces and takes into account contractor  roles and sourcing initiatives.
section_title: Agency Comments
paragraphs: We received comments from the Department of Defense too late to  include them in the final report.  These comments and our evaluation of  them, however, were incorporated into a subsequent report (DOD  Personnel: DOD Comments on GAO’s Report on DOD’s Civilian Human  Capital Strategic Planning, GAO-03-690R).
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; the Secretaries of the Air Force,  Army, and Navy; the Commandant of the Marine Corps; and the Directors  of DCMA and DFAS. We will also make copies available to others upon  request. In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.
Please contact me at (202) 512-5559 if you or your staff have any questions  concerning this report. Key contributors are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: As requested by the Ranking Minority Member of the House Committee on  Armed Services, Subcommittee on Readiness, we reviewed civilian human  capital strategic planning in the Department of Defense (DOD).  Specifically, the objectives of this report were to assess (1) the extent to  which top-level leadership is involved in strategic planning for civilian  personnel and (2) whether strategic plans for civilian personnel are  aligned with the overall mission, results oriented, and based on data about  the future civilian workforce. We also determined whether the strategic  plans for civilian personnel are integrated with plans for military  personnel or sourcing initiatives. We focused primarily on civilian human  capital strategic planning undertaken since 1988, when DOD began  downsizing its civilian workforce. Our analyses were based on the  documents that each organization identified as its civilian human capital  strategic planning documents. Several documents had been published or  updated either just prior to or during the time of our review (May 2002 to  March 2003). Also, DOD and component strategic planning for civilian  personnel is a continuous process and involves ongoing efforts. We did not  review the implementation of the human capital strategic plans because  most plans were too recent for this action to be completed.
The scope of our review included examining the civilian human capital  strategic planning efforts undertaken by DOD, its four military services,  and two of its other defense organizations—the Defense Finance and  Accounting Service (DFAS) and the Defense Contract Management  Agency (DCMA). We selected the military services since they account for  about 85 percent of the civilian personnel in DOD. To understand how  civilian human capital strategic planning is being undertaken by other  defense organizations, which account for the other 15 percent of the DOD  civilian workforce, we determined the status of the human capital  strategic planning efforts of 21 other defense organizations through a  telephone survey. We judgmentally selected two defense agencies, DFAS  and DCMA, because of their large size and because they perform different  functions; therefore, they could offer different perspectives on strategic  planning for civilians. DFAS and DCMA account for about 26 percent of  the civilian personnel in other defense organizations. DFAS has about  15,274 civilian employees and more than 1,000 military personnel,  performs finance and accounting activities, and does not have a civilian  human capital strategic plan, although it does have an overall agency  strategic plan that includes human capital as a key element. DCMA has  about 11,770 civilian employees and about 480 military personnel,  performs acquisition functions, and has a civilian human capital strategic  plan.
To assess the extent to which top-level leadership is involved in strategic  planning for civilian personnel, we reviewed the civilian human capital  strategic plans for discussions of the methodology used in developing  them that indicated leadership involvement. Further, we compared the  civilian human capital strategic plans publication dates to key events, such  as the issuance of the President’s Management Agenda, which advocates  strategic human capital planning. We discussed top leadership  involvement in the development of human capital strategic plans with the  applicable civilian human capital planning officials. These officials  included representatives from the following offices:    Department of Defense: Under Secretary of Defense for Personnel and  Readiness, including Deputy Under Secretary of Defense for Civilian  Personnel Policy and Director, Civilian Personnel Management Service.
Department of Air Force: Assistant Secretary of the Air Force for  Manpower and Reserve Affairs; Assistant Deputy Chief of Staff for  Personnel Headquarters; Director of Strategic Plans and Future  Systems, and Director, Air Force Personnel Operations Agency, Deputy  Chief of Staff for Personnel; and Directorate of Personnel, Air Force  Materiel Command.
Department of the Army: Deputy Chief of Staff, G-1.    Department of the Navy: Deputy Assistant Secretary of the Navy for  Civilian Personnel Policy and Equal Employment Opportunity; Deputy  Chief of Naval Operations for Manpower and Personnel; and Deputy  Commandant of the Marine Corps for Manpower and Reserve Affairs.
Defense Contract Management Agency: Executive Director, Human  Resources; and Director, Strategic Planning, Programming, and  Analysis.
Defense Finance and Accounting Service: Human Resources  Directorate and Resource Management Directorate.
To assess whether strategic plans for civilian personnel are aligned with  the overall mission, results oriented, and contained data about the future  civilian workforce, we compared each plan with the concepts articulated  in our model for strategically managing human capital and similar  guidance provided by the Office of Budget and Management and the Office  of Personnel Management (which are discussed in greater detail in the  Background section of this report). Among the numerous sources we  reviewed, we used the criteria described in our reports on Exposure Draft:  A Model of Strategic Human Capital Management; Human Capital: A  Self-Assessment Checklist for Agency Leaders; High-Risk Series: An  Update; and Performance and Accountability Series – Major  Management Challenges and Program Risks. Specifically, we looked for  (1) the alignment of human capital approaches to meet organizational  goals, (2) the presence of results-oriented performance measures, and   (3) the references to use of workforce planning data to justify human  capital initiatives (i.e., policies and programs). To ensure consistency with  our application of the criteria in other GAO engagements, we also  reviewed approximately 100 of our reports that addressed their  application within DOD and other federal agencies. Also, to better  understand the existing human capital framework and its relationship to  the strategic planning efforts, we gathered information about policies,  programs, and procedures. Finally, we validated the results of our analyses  of the plans with appropriate agency officials.
To assess whether the strategic plans for civilian personnel are integrated  with plans for military personnel or sourcing initiatives, we analyzed the  civilian human capital strategic plans for (1) references to military  personnel or a total force perspective and (2) discussions about  competitive and strategic sourcing efforts being undertaken in a total force  context. We also collaborated with other GAO staff who reviewed   (1) DOD’s strategic plans for military personnel and quality of life issues  for servicemembers and their families, (2) sourcing initiatives, and   (3) DOD’s acquisition workforce. In addition, we discussed integration  between civilian and military personnel plans with the applicable civilian  human capital planning officials previously mentioned.
We conducted our review from May 2002 to March 2003 in accordance  with generally accepted government auditing standards.
section_title: Appendix II: Key Events Related to Strategic Planning for DOD Civilian Personnel
paragraphs: Figure 3 provides a time line of several key events and dates that affected  DOD’s civilian workforce between 1988 and 2002. It also shows when DOD  and its components published their human capital strategic plans.
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the name above, Daniel Chen, Joel Christenson, Barbara  Joyce, Janet Keller, Shvetal Khanna, Dan Omahen, Gerald Winterlin, Dale  Wineholt, and Susan Woodward made key contributions to this report.