Human Capital: Diversity in the Federal SES and Processes for Selecting New Executives
Released: 2008-11-26T00:00:00

Letter

Background

OPM and the Equal Employment Opportunity Commission (EEOC) each play important roles in ensuring equal employment opportunity (EEO) in the federal workplace through their leadership and oversight of federal agencies. In their oversight roles, OPM and EEOC require federal agencies to analyze their workforces, and both agencies also report on governmentwide representation levels. Under OPM’s regulations implementing the Federal Equal Opportunity Recruitment Program (FEORP), agencies are required to determine where representation levels for covered groups are lower than in the civilian labor force and take steps to address those differences. Agencies are also required to submit annual FEORP reports to OPM in the form prescribed by OPM. EEOC’s Management Directive 715 (MD-715) provides guidance and standards to federal agencies for establishing and maintaining effective equal employment opportunity programs, including a framework for executive branch agencies to help ensure effective management, accountability, and self-analysis to determine whether barriers to equal employment opportunity exist and to identify and develop strategies to mitigate or eliminate the barriers to participation. Specifically, EEOC’s MD-715 states that agency personnel programs and policies should be evaluated regularly to ascertain whether such programs have any barriers that tend to limit or restrict equitable opportunities for open competition in the workplace. The initial step is for agencies to analyze their workforce data with designated benchmarks, including the civilian labor force. If analyse of their workforce profiles identify potential barriers, agencies are to examine all related policies, procedures, and practices to determine whether an actual barrier exists. EEOC requires agencies to report the results of their analyses annually. In addition, EEOC recently issued a report on the participation of individuals who reported targeted disabilities in the federal workforce. Targeted disabilities are those disabilities that the federal government, as a matter of policy, has identified for special emphasis. The targeted disabilities are deafness, blindness, missing extremities, partial paralysis, complete paralysis, convulsive disorders, mental retardation, mental illness, and distortion of limb and/or spine.

Women and Minorities in the Career SES and the SES Developmental Pool Increased Governmentwide between 2000 and 2007, and Their Representation in the SES Increased in More Than Half of the Agencies

The data that we are reporting provide a demographic snapshot of the career SES as well as the levels that serve as the SES developmental pool for October 2000 and September 2007. Table 1 shows that governmentwide, the number and percentage of women and minorities in the career SES and SES developmental pool increased between October 2000 and September 2007.

As shown in table 2, the percentage of both women and minorities in the SES increased in 15 of the 24 CFO Act agencies by 2007. For the remaining CFO Act agencies, most experienced an increase in either the percentage of women or minorities between October 2000 and September 2007.

As we reported in 2003, the gender, racial, and ethnic profiles of the career SES at the 24 CFO Act agencies varied significantly in October 2000. The representation of women ranged from 13.7 percent to 41.7 percent, with half of the agencies having 27 percent or fewer women in the career SES. 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 career SES. In 2007, the representation of women and minorities, both overall and in more than half of the individual agencies, was higher than it was in October 2000. The representation of women ranged from 19.9 percent to 45.5 percent with more than half of the agencies having 30 percent or more women. For minority representation, rates ranged from 6.1 percent to 43.8 percent, with more than half of the agencies having over 16 percent minority representation, and more than 90 percent of the agencies having more than 13 percent minority representation in the career SES.

For this report, we did not analyze the factors that contributed to the changes in representation from October 2000 through September 2007. As we said previously, OPM and EEOC, in their oversight roles, require federal agencies to analyze their workforces and both agencies also report on governmentwide representation levels.

In our 2003 report, we (1) reviewed actual appointment trends from fiscal years 1995 to 2000 and actual separation experience from fiscal years 1996 to 2000; (2) estimated by race, ethnicity, and gender the number of career SES who would leave government service from October 1, 2000, through October 1, 2007; and (3) projected what the profile of the SES would be if appointment and separation trends did not change. We estimated that more than half of the career SES members employed on October 1, 2000, will have left service by October 1, 2007. Assuming then-current career SES appointment trends, we projected that (1) the only significant changes in diversity would be an increase in the number of white women with an essentially equal decrease in white men and (2) the proportions of minority women and men would remain virtually unchanged in the SES corps, although we projected slight increases among most racial and ethnic minorities.

Table 3 shows career SES representation as of October 1, 2000, our 2003 projections of what representation would be at the end of fiscal year 2007, and actual fiscal year 2007 data. We projected increases in representation among both minorities and women. Fiscal year 2007 data show that increases did take place among those groups and that those increases generally exceeded the increases we projected. The only decrease among minorities occurred in African American men, whose representation declined from 5.5 percent in 2000 to 5.0 percent at the end of fiscal year 2007.

Table 4 shows SES developmental pool representation as of October 1, 2000, our 2003 projections of what representation would be at the end of fiscal year 2007, and actual fiscal year 2007 data. We projected increases in representation among both minorities and women. Fiscal year 2007 data show that increases did generally take place among those groups. The representation of American Indian/Alaska Native men remained unchanged from the October 2000 baseline.

As stated previously, we have not analyzed the factors contributing to changes in representation; therefore, care must be taken when comparing changes in demographic data since fiscal year 2000 to the projections we made in 2003, and to the 2007 actual data we present in both tables 3 and 4. For example, we have not determined whether estimated retirement trends materialized or appointment and separation trends used in our projections continued and the impact these factors may have had on the diversity of the SES and its developmental pool.

Considering retirement eligibility and actual retirement rates of the SES is important because individuals normally do not enter the SES until well into their careers; thus, SES retirement eligibility is much higher than the workforce in general. As we have said in previous reports, as part of a strategic human capital planning approach, agencies need to develop long- term strategies for acquiring, developing, motivating, and retaining staff. An agency’s human capital plan should address the demographic trends that the agency faces with its workforce, especially retirements. In 2006, OPM reported that approximately 60 percent of the executive branch’s 1.6 million white-collar employees and 90 percent of about 6,000 federal executives will be eligible for retirement over the next 10 years. If a significant number of SES members were to retire, it could result in a loss of leadership continuity, institutional knowledge, and expertise among the SES corps, with the degree of loss varying among agencies and occupations. This has important implications for government management and emphasizes the need for good succession planning for this leadership group. Rather than simply recreating the existing organization, effective succession planning and management, linked to the strategic human capital plan, can help an organization become what it needs to be. Leading organizations go beyond a “replacement” approach that focuses on identifying particular individuals as possible successors for specific top- ranking positions. Rather, they typically engage in broad, integrated succession planning and management efforts that focus on strengthening both current and future capacity, anticipating the need for leaders and other key employees with the necessary competencies to successfully meet the complex challenges of the 21st century.

Succession planning also is tied to the federal government’s opportunity to affect the diversity of the executive corps through new appointments. In September 2003, we reported that agencies in other countries use succession planning and management to achieve a more diverse workforce, maintain their leadership capacity, and increase the retention of high-potential staff. Racial, ethnic, and gender diversity in the SES is an important component for the effective operation of the government.

Minimal Changes Occurred in the Average Age at Appointment to and Retirement from the Career SES and in Targeted Disabilities among the Career SES between 2000 and 2007

Individuals do not typically enter the career SES until well into their careers. As of the end of fiscal years 2000 and 2007, the average age of women and minorities at the time of their appointment to the SES was about age 50 and did not change dramatically over this 7-year period except for certain groups, as shown in table 5. The average age at appointment for American Indian/Alaska Native women declined from age 48 in 2000 to age 42 in 2007 and increased during this time for both American Indian/Alaska Native men (from age 50 in 2000 to 53 in 2007) and white women (from age 47 in 2000 to 49 in 2007).

Similarly, the average age of women and minorities at the time of retirement from the career SES did not change much between 2000 and 2007. As shown in table 6, all of those who retired did so, on average, at around age 60, with the exception of Asian/Pacific Islander men, whose average retirement age in 2007 was 64; Hispanic men, whose average retirement age in 2000 was 57 and in 2007 was 58; and African American men, whose average retirement age in 2000 was 62 and 59 in 2007.

In addition to examining the average age of individuals at the time of their appointment to and retirement from the career SES, we analyzed the length of time that a cohort of individuals served in the SES and differences in length of service. We reviewed data on the 625 individuals appointed to the career SES in fiscal year 1990. Because of questions with the records of 11 individuals, we excluded them from our analysis and analyzed the records of the remaining 614 individuals appointed to the SES in fiscal year 1990 and followed them through September 2007. We found that 432 of the 614 had left the SES by that date—338 had retired voluntarily, 66 had resigned, and 28 had left for other reasons, such as disability or mandatory retirement. Those individuals who had voluntarily retired served in the SES an average of 9.2 years, as shown in table 7. Table 7 also shows that women stayed in the SES longer than men; women who voluntarily retired stayed, on average, for 11.4 years, and men who voluntarily retired stayed, on average, for 8.8 years. The average length of service among minorities ranged from 4.1 years for Asian/Pacific Islander women to 12 years for American Indian/Alaska Native men.

The average number of years in the SES does not include those appointed to the SES in 1990 who, as of September 30, 2007, died (10); took other types of retirement, such as disability or mandatory retirement (17); or were terminated (1).

As shown in table 8, as of September 2007, about one-third of the 614 individuals we identified who were appointed to the career SES in 1990 remained in the SES. More women from the original cohort remained than men.

We also reviewed the representation of career SES members who reported having targeted disabilities. EEOC reported that it first officially recognized the term targeted disabilities in its Management Directive 703, which was approved on December 6, 1979. In its report, EEOC stated that some individuals with disabilities are reluctant to self-identify their disability status because they are concerned that (1) such disclosure will preclude them from employment or advancement or subject them to discrimination and (2) their disability status will not remain confidential. It is not clear the extent to which individuals with disabilities do not identify or report them.

Governmentwide, the representation of career SES members reporting targeted disabilities declined from 0.52 in fiscal year 2000 to 0.44 in fiscal year 2007. Table 9 shows the representation of SES members with targeted disabilities governmentwide and within the CFO Act agencies.

In both 2000 and 2007, half of the CFO Act agencies (12) did not employ any SES members with targeted disabilities.

Processes Used for Selecting Career SES Members Are to Follow Competitive Merit Staffing Requirements

Executive branch agencies have processes for selecting members into the career SES and developmental programs that are designed to create pools of candidates for senior positions. Federal executive agencies are to follow competitive merit staffing requirements for initial career appointments to the SES or for appointment to formal SES candidate development programs, which are competitive programs designed to create pools of candidates for SES positions. Each agency head is to appoint one or more Executive Resources Boards (ERB) to conduct the merit staffing process for initial SES career appointments. ERBs review the executive and technical qualifications of each eligible candidate and make written recommendations to the appointing official concerning the candidates. The appointing official selects from among those candidates identified by the ERB as best qualified and certifies the executive and technical qualifications of those candidates selected. Candidates who are selected must have their executive qualifications certified by an OPM- administered Qualifications Review Board (QRB) before being appointed to the SES.

According to OPM, it convenes weekly QRBs to review the applications of candidates for initial career appointment to the SES. QRBs are independent boards of three senior executives that assess the executive qualifications of all new SES candidates. At least two of the three QRB members must be career appointees. In addition, OPM guidance states that QRB members cannot review candidates from their own agencies. An OPM official stated that an OPM official acts as administrator, attending each QRB to answer questions, moderate, and offer technical guidance but does not vote or influence voting. OPM guidance states that the QRB does not rate, rank, or compare a candidate’s qualifications against those of other candidates. Instead, QRB members judge the overall scope, quality, and depth of a candidate’s executive qualifications within the context of five executive core qualifications—leading change, leading people, results driven, business acumen, and building coalitions—to certify that the candidate’s demonstrated experience meets the executive core qualifications.

To staff QRBs, an OPM official said that OPM sends a quarterly letter to the heads of agencies’ human capital offices seeking volunteers for specific QRBs and encourages agencies to identify women and minority participants. Agencies then inform OPM of scheduled QRB participants, without a stipulation as to the profession of the participants. OPM solicits agencies once a year for an assigned quarter and requests QRB members on a proportional basis. The OPM official said that OPM uses a rotating schedule, so that the same agencies are not contacted each quarter. Although QRBs generally meet weekly, an OPM official said that QRBs can meet more than once a week, depending on case loads. The official said that because of the case load of recruitment for SES positions recently, OPM had been convening a second “ad hoc” QRB. According to another OPM official, after QRB certification, candidates are officially approved and can be placed.

In addition to certification based on demonstrated executive experience and another form of certification based on special or unique qualities, OPM regulations permit the certification of the executive qualifications of graduates of candidate development programs by a QRB and selection for the SES without further competition. OPM regulations state that for agency candidate development programs, agencies must have a written policy describing how their programs will operate and must have OPM approval before conducting them. According to OPM, candidate development programs typically run from 18 to 24 months and are open to GS-15s and GS-14s or employees at equivalent levels from within or outside the federal government. Agencies are to use merit staffing procedures to select participants for their programs, and most program vacancies are announced governmentwide or to all sources. OPM regulations provide that candidates who compete governmentwide for participation in a candidate development program, successfully complete the program, and obtain QRB certification are eligible for noncompetitive appointment to the SES. OPM guidance states that candidate development program graduates are not guaranteed placement in the SES. Agencies’ ERB chairs must certify that candidates have successfully completed all program activities, and OPM staff review candidate packages to verify that regulatory requirements have been met. An “ad hoc” QRB then reviews the candidates’ training and development and work experiences to ensure he or she possesses the required executive qualifications.

OPM also periodically sponsors a centrally administered federal candidate development program. According to an OPM official, the OPM-sponsored federal candidate development program can be attractive to smaller agencies that may not have their own candidate development program, and OPM administers the federal program for them. According to OPM officials, from the first OPM-sponsored federal candidate development program, 12 graduated in September 2006. Of those, 9 individuals were placed in SES positions within 1 year of graduating from the program. In January 2008, OPM advertised the second OPM-sponsored federal candidate development program but subsequently suspended the program. In June 2008, OPM re-advertised the second OPM-sponsored federal candidate development program, and 18 candidates were selected for the program and have started their 12-month training and development program.

Agency Comments and Our Evaluation

We provided the Acting Director of OPM and the Chair of EEOC with a draft of this report for their review and comment. OPM provided technical comments via e-mail, which we incorporated as appropriate, but did not otherwise comment on the report. In an e-mail, EEOC said it had no comments.

We are sending copies of this report to the Acting Director of OPM, the Chair of EEOC, and other interested congressional parties. We also make copies available to others upon request. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov.

If you or your staffs have questions about this report, please contact me at (202) 512-9490 or stalcupg@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix II.

Appendix I: Demographic Profiles of Career SES, GS-15, and GS-14 Employees Governmentwide and at the 24 Chief Financial Officers Act Agencies

Appendix I: Demographic Profiles of Career SES, GS-15, and GS-14 Employees Governmentwide and at the 24 Chief Financial Officers Act Agencies Equal employment opportunity (EEO) group 5.8 2.8 1.3 56.5 22.9 0.1 100.0 20.5 68.6 12.1 We included GS-15, GS-14, and equivalent employees. GS-equivalent employees are those in equivalent grades under other pay plans that follow the GS grade structure and job evaluation methodology or are equivalent by statute.

Data on the SES and the SES developmental pool for 2000 in this report differ from prior GAO products. We first identified SES and SES developmental pool data for 2000 in our 2003 report (GAO-03-34), in which we excluded the FBI from the SES and the SES developmental pool because that report contained projected SES and the SES developmental pool levels for the end of fiscal year 2007 based on separation and appointment data, and the FBI did not submit separation and appointment data to the CPDF for 2000. We subsequently cited data on the SES and SES developmental pool for 2000 from that report in four additional products (GAO-04-123T, GAO-07-838T, GAO-08-609T, and GAO-08-725T). Data on the SES and the SES developmental pool for 2007 include the FBI. 5.7 2.9 0.6 63.4 19.7 0.0 100.0 16.9 75.0 11.6 9.3 22.7 3.0 0.9 52.6 28.6 0.0 100.0 18.8 62.0 9.4 19.4 5.0 1.8 0.9 59.8 20.0 0.0 100.0 20.2 72.9 13.1 11.7 2.8 2.1 0.5 73.7 14.6 0.1 100.00 11.7 82.5 8.8 5.4 9.1 1.5 1.1 39.5 37.3 0.0 100.0 23.2 49.4 9.9 22.8 4.8 2.1 1.1 62.3 21.2 0.1 100.0 16.5 72.9 10.5 9.9 6.5 2.0 1.7 52.2 31.4 0.4 100.0 16.0 59.4 6.9 13.1 .8 1.6 1.1 51.1 28.2 0.5 100.0 20.3 60.6 9.0 15.0 9.6 1.7 1.3 43.0 36.7 0.2 100.0 20.2 53.0 10.0 16.1 3.1 The Department of Homeland Security did not exist before March 2003. Its creation united 22 agencies or parts of agencies, including the U.S. Customs Service, which was formerly located in the Department of the Treasury; the Federal Emergency Management Agency; and the Coast Guard. 24.7 3.0 2.2 38.6 20.3 0.2 100.0 40.9 57.0 18.4 28.1 9.0 1.5 0.4 62.7 21.1 0.3 100.0 16.0 72.7 9.8 8.6 4.0 3.6 1.5 54.3 27.7 0.1 100.0 17.9 64.7 10.3 The data on Justice for 2000 in this report differ from such data in prior GAO products. We first identified Justice SES and GS-15 and GS-14 data for 2000 in our 2003 report (GAO-03-34), in which we excluded the FBI from Justice data because that report contained projected SES and SES developmental pool levels for the end of fiscal year 2007 based on separation and appointment data, and the FBI did not submit separation and appointment data to the CPDF for 2000. We subsequently cited 2000 data from that report in four additional products (GAO-04-123T, GAO-07-838T, GAO-08-609T, GAO-08-725T).

The data on Justice for 2007 include the FBI. 9.8 2.0 1.5 51.3 30.2 0.0 100.0 18.5 60.4 9.1 15.7 5.3 3.6 0.9 65.4 17.2 0.2 100.0 17.2 78.1 12.5 6.9 4.1 1.9 0.3 60.6 18.5 0.0 100.0 20.9 76.3 15.8 9.3 .1 0.0 0.0 40.2 41.5 0.0 100.0 18.3 46.3 6.1 14.8 .1 2.6 2.0 47.4 29.6 0.0 100.0 23.0 59.2 11.8 25.9 11.1 5.7 3.1 49.7 18.1 0.0 100.0 32.1 66.3 16.6 20.7 13.4 3.4 1.4 42.2 31.5 0.0 100.0 26.3 52.6 10.4 19.0 .9 1.0 1.2 52.3 32.6 0.9 100.0 14.2 58.7 5.8 The number of GS-15s, GS-14s and equivalents decreased because the Department of State stopped reporting data on Foreign Service employees to the Office of Personnel Management’s Central Personnel Data File in fiscal year 2006.

Appendix II: GAO Contact and Staff Acknowledgments

Acknowledgments

In addition to the individual named above, Kiki Theodoropoulos, Assistant Director; Clifton Douglas, Jr.; Jessica Drucker; Karin Fangman; Kirsten B. Lauber; Mary Martin; Michael R. Volpe; and Gregory H. Wilmoth made key contributions to this report.