Social Security Administration: Strategic Workforce Planning Needed to Address Human Capital Challenges Facing the Disability Determination Services
Released: 2004-01-27T00:00:00

Letter

Background

The DI and SSI programs are the two largest federal programs providing cash assistance to people with disabilities. The DI program, established in 1956 by the Social Security Act, provides monthly cash benefits to workers with disabilities (and their dependents and survivors) whose employment history qualifies them for disability benefits. In 2002, SSA paid about $55.5 billion in DI benefits to 5.5 million workers with disabilities (age 18 to 64). SSI is a means-tested income assistance program created in 1972 that provides a financial safety net for individuals who are aged or blind or have other disabilities and who have low income and limited resources. Unlike the DI program, SSI has no prior work requirement. In 2002, SSA paid about $18.6 billion in SSI federal benefits to about 3.8 million people with disabilities (age 18 to 64).

SSA’s Disability Determination Process

To be considered eligible for benefits for either SSI or DI as an adult, a person must be unable to perform any substantial gainful activity by reason of a medically determinable physical or mental impairment that is expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months. Work activity is generally considered to be substantial and gainful if the person’s earnings exceed a particular level established by statute and regulations.

To obtain disability benefits, a claimant must file an application online, by phone or mail, or in person at any of SSA’s field offices. If the claimant meets the non-medical eligibility criteria, the field office staff forwards the claim to the appropriate DDS office. DDS staff—generally a team composed of disability examiners and medical consultants—obtains and reviews medical and other evidence as needed to assess whether the claimant satisfies program requirements, and makes the initial disability determination. If the claimant is not satisfied with the decision, the claimant may ask the DDS to reconsider its finding. If the claimant is not satisfied with the reconsideration, the claimant may request a hearing before one of SSA’s federal administrative law judges in an SSA hearing office. If the claimant is still dissatisfied with the decision, the claimant may request a review by SSA’s Appeals Council.

The Federal-State Relationship

The 1954 amendments to the Social Security Act specified that disability determinations would be made by state agencies under individual contractual agreements with SSA. Under these agreements, SSA’s primary role was to fund the states’ disability operations. However, following criticism from GAO and others about the quality and uniformity of the disability determination process, Congress amended the Social Security Act in 1980 to strengthen SSA management of the disability programs and allow greater SSA control and oversight of the DDSs. The 1980 amendments directed SSA to issue regulations specifying performance standards and administrative requirements to be followed to assure effective and uniform administration of disability determinations across the nation.

The regulations issued by SSA, which established the current federal-state relationship, allow SSA to remove the disability determination function from a state if the DDS fails to make determinations that meet thresholds for performance accuracy and processing time. SSA’s regulations give DDSs maximum managerial flexibility in meeting the performance standards, allowing them to retain substantial independence in how they manage their workforce. For example, under the regulations, the DDSs are to follow state personnel standards in selection, tenure, and compensation of DDS employees.

As employees of the state, DDS staff are subject to the rules and regulations of each state’s individual personnel classification system. Classification systems generally categorize positions on the basis of job responsibilities and the knowledge, skills, and competencies required to perform them. Within a classification system, a group of positions that have sufficiently similar responsibilities are put in the same class. Arranging positions in classes with common levels of difficulty and responsibility makes it possible to set ranges of compensation for whole classes of jobs across multiple state agencies. Specifying the responsibilities of each position also allows the state to identify and develop effective hiring qualifications, promotion criteria, and training requirements. The development and operation of such a classification system depend upon the adequacy of information about individual positions.

Description of the DDSs and the Disability Examiner Position

Within the federal-state relationship, each DDS reports to its own state government, usually to a parent agency such as the state vocational rehabilitation agency. DDS staff generally include a variety of positions, such as medical consultants, vocational specialists, quality assurance personnel, as well as disability examiners. The number of disability examiners varies substantially among the DDSs. Data from our survey show that the number of full-time permanent examiners in each DDS ranged from 9 to 529 at the end of fiscal year 2002. Our prior work has found that the examiner’s job—which involves working with medical consultants to determine impairment severity, ability to function, and disability benefit eligibility—requires considerable expertise and knowledge of complex regulations and policies. And according to the Social Security Advisory Board, changes in agency rules and in the types of disability claims received by the DDSs have made disability decision-making more subjective and difficult. In addition, as part of its efforts to reduce claims-processing times, SSA has been testing a new disability examiner position called the single decision-maker (SDM), which would expand an examiner’s authority to independently decide claimants’ eligibility for benefits. 20 DDSs are testing this new position.

Qualification requirements for new examiner hires vary substantially among the states. While five DDSs require a master’s or a registered nursing degree for certain new examiner hires, figure 1 shows that over one-third of all DDSs can hire new examiners with either a high school diploma or less. In addition, data show that examiners in nearly one-half of all DDSs are covered by union agreements, and issues related to compensation levels, hiring and promotion procedures, and weekly hours worked are open to union negotiation in the majority of these DDSs.

To enhance the skills of both new and experienced examiners, SSA provides a number of optional training tools to the DDSs, including written materials covering new examiner basic training, interactive video programs supplementing basic training and providing refresher training and updates on policy changes, and materials and presentations provided by the regional offices and SSA headquarters. However, states have primary responsibility for training examiners, and many DDSs adapt or supplement SSA’s training to meet their examiners’ training needs. DDSs generally provide new examiners with SSA’s basic examiner training, followed by extensive on-the-job training, including mentoring by experienced examiners who guide the less experienced examiners in becoming more proficient in the disability claims process. New hires generally are not considered fully proficient until after one to two years of experience.

The DDSs’ ability to hire examiners is affected by both SSA and state government funding decisions and hiring policies. SSA determines the funding available for each DDS and advises the DDSs about the number of full-time equivalent staff supported by this funding, and SSA adjusts these levels throughout the fiscal year based on workload fluctuations and funding availability. Normally SSA allows DDSs to replace staff who leave the DDS as long as they remain within authorized staffing levels, but for over half of fiscal year 2003, SSA froze DDS hiring, preventing DDSs from hiring new examiners or replacing those who had left. SSA officials told us that the temporary freeze was necessary to ensure that SSA’s expenditures did not exceed authorized levels and to avoid future layoffs of DDS staff.

DDSs also have experienced state government hiring restrictions in recent years. Despite full federal funding, under the current federal-state relationship, DDSs generally cannot spend funds for new personnel without the approval of their state governments. States currently are facing severe budget crises, causing them to cut their payrolls for most state government functions. When states use methods such as hiring freezes, reductions in force, and early retirement incentives to limit spending on state employee payrolls, these policies sometimes prevent DDSs from hiring and retaining examiners at levels authorized by SSA.

Modernizing Federal Disability Programs Designated as a High-Risk Area

In earlier reports, we have noted that SSA’s disability determination process is mired in concepts from the past and needs to be brought into line with the current state of science, medicine, technology, and labor market conditions. With other federal disability programs similarly structured around outmoded concepts, we designated modernizing federal disability programs—including SSA’s DI and SSI disability programs—as a high-risk area in 2003. (See appendix III for a list of GAO reports on modernizing federal disability programs.) We made this designation owing in part to SSA’s (1) outmoded concepts of disability, (2) lengthy processing times, and (3) decisional inconsistencies: SSA’s outmoded concepts of disability. While technological and medical advances and societal changes have increased the potential for some people with disabilities to participate in the labor force, few DI and SSI beneficiaries leave the disability rolls to work. Our prior work shows that, unlike some private sector disability insurers and social insurance systems in other countries, SSA does not incorporate into its disability eligibility assessment process an evaluation of what is needed for an individual to return to work. These private insurers and other social insurance systems have access to staff with a wide range of expertise to apply, not only in making eligibility decisions, but also in providing return- to-work assistance. We have recommended that SSA develop a comprehensive return-to-work strategy that integrates earlier identification of work capacities and the expansion of such capacities by providing return-to-work assistance for applicants and beneficiaries. Adopting such a strategy is likely to require fundamental changes to the disability determination process, as well as changes to staff skill mixes and areas of expertise.

Lengthy processing times for disability claims. The disability claims process can be lengthy, with many individuals who appeal SSA’s initial decision waiting a year or longer for final decisions on their benefit claims. According to SSA, a claimant can wait as long as 1,153 days from initial claim through a decision from the Appeals Council. As one means of reducing its claims-processing time, SSA aims to eliminate backlogs for initial disability claims, hearings, and appeals by 2008. Nevertheless, growth in the disability claims workload is likely to exacerbate SSA’s claims-processing challenges: SSA expects the DI rolls to grow by 35 percent between 2002 and 2012.

Inconsistencies in disability decisions. SSA has had difficulty ensuring that decisions regarding a claimant’s eligibility for disability benefits are accurate and consistent across adjudicative levels and locations, raising questions about the fairness, integrity, and cost of these programs. For example, the Social Security Advisory Board has shown wide variances among the DDSs in rates of allowances and denials of disability benefits. The Advisory Board has cited differences in state-established personnel policies such as salaries, training, and qualifications of disability examiners across the DDSs, along with state economic and demographic differences, as some of the key factors that may affect the consistency of disability decision-making.

SSA’s New Long-Term Strategy for Improving Its Disability Programs

The Commissioner’s September 2003 testimony sets forth her long-term strategy for improving the timeliness and accuracy of the disability claims process and fostering return to work for people with disabilities. For example, to speed decisions for some claimants, the Commissioner intends to initiate an expedited decision for claimants with more easily identifiable disabilities, such as aggressive cancers. Under this new approach, special units located primarily in SSA’s regional offices would handle the expedited claims, leaving DDS examiners responsible for evaluating the more complex claims. The Commissioner’s strategy also aims to increase decisional accuracy by, among other approaches, requiring DDS examiners to develop more complete documentation of their disability determinations, including explaining the basis for their decisions. Beyond steps to improve the timeliness and accuracy of the process, the Commissioner also plans to conduct several demonstrations aimed at helping people with disabilities return to work by providing work incentives and opportunities earlier in the disability process.

In addition, to improve the disability decision process, the Commissioner has implemented some shorter-term remedies while developing her longer-range strategies. For example, SSA is accelerating its transition to an electronic disability claims folder, through which the DDSs, the field offices, and the Office of Hearings and Appeals are to be linked to one another. The folder is being designed to transmit case file data electronically from one claims-processing location to another and to serve as a data repository—storing documents that are keyed in, scanned, or faxed. According to the Commissioner, successful implementation of the electronic folder is essential for improving the disability process. In our prior work, we have cautioned SSA to ensure that it has the right mix of skills and capabilities to support this major technological transition.

Strategic Human Capital Management Designated a High-Risk Area

Recognizing the importance of people to the success of any organization in managing for results, GAO designated strategic human capital management a government-wide high-risk area in 2001. In prior reports on this high-risk area, we identified strategic workforce planning as essential to effective performance and stated that it should be a priority of agency leaders. We also noted that effective workforce planning must be fully integrated with an agency’s mission and program goals and be based on accurate and comprehensive workforce data. We recently identified a few key principles for strategic workforce planning. These principles include involving top management, employees, and other key stakeholders in developing, communicating, and implementing the workforce plan; determining the critical skills and competencies needed to achieve current and future program goals, and developing strategies to fill identified gaps; building the capability necessary to address administrative, educational, or other requirements to support the workforce strategies; and monitoring and evaluating progress in meeting workforce goals and how well the workforce plan has contributed to reaching overall program goals.

Congress has additionally recognized the importance of workforce planning and, in 2002, added to the Government Performance and Results Act a provision requiring agencies to include human capital strategies needed to meet their strategic goals in their annual performance plans. We have found that high-performing organizations use workforce planning as a management tool to develop a compelling case for human capital investments and to anticipate and prepare for upcoming human capital issues that could jeopardize accomplishment of the organizations’ goals. (See appendix III for a list of GAO reports on human capital management.)

DDSs Face High Turnover, Recruiting and Hiring Difficulties, and Gaps in Key Knowledge and Skill Areas

The DDSs face several key challenges in retaining disability examiners and enhancing their expertise: high turnover, difficulties in recruiting and hiring, and gaps in key knowledge and skill areas. The DDSs are experiencing high and costly turnover of examiners, which data from our survey show is fostered in part by stressful workloads and noncompetitive salaries. DDSs need to recruit and hire sufficient numbers of qualified new examiners to fill the vacancies resulting from the high turnover. Yet more than three-quarters of DDS directors reported recruiting and hiring difficulties. Directors said such difficulties were due in part to state- imposed personnel restrictions, such as state limits on examiner salaries and hiring. Finally, directors reported that many examiners need additional training in key analytical areas that are critical to disability decision-making, including assessing credibility of medical information, evaluating applicants’ symptoms, and analyzing applicants’ ability to function.

DDSs Face High and Costly Turnover Fostered by Stressful Workloads and Noncompetitive Salaries

Over half of all DDS directors responding to our survey said that examiner turnover in their offices was too high. Our analysis of data from our survey and from federal agencies shows that, over fiscal years 2000 through 2002, DDS examiner turnover was about twice that of Veterans Benefits Administration (VBA) disability examiners with responsibilities similar to those of DDS examiners. For example, DDS examiner turnover averaged 13 percent over fiscal years 2000 to 2002, compared with 6 percent for VBA disability examiners. (See table 1.) In addition, during the same period, the turnover rate of DDS examiners was substantially greater than that of all SSA employees as well as that of all federal government employees. DDS examiner turnover has been even higher among new hires: turnover of examiners hired in fiscal year 2001 was 25 percent, compared with 14 percent among all DDS examiners. Moreover, while it is typical for new hires to leave at higher rates than other employees, turnover of new DDS examiners was considerably higher than that of new VBA examiners, new SSA employees, and all new federal government employees in fiscal years 2000 and 2001.

Our survey results also show that examiner turnover is particularly high in some DDSs. An examination of three-year averages (fiscal years 2000 to 2002) of DDS turnover rates showed that one DDS had a turnover rate of 43 percent, and a quarter of the DDSs had turnover rates of 20 percent or greater. (See fig. 2.)

When we asked DDS directors in our survey about the consequences of turnover, they told us that examiner turnover increased hiring and training costs and hindered claims processing by decreasing overall examiner skill levels, and increasing examiner caseloads, claims-processing times, and backlogs, as follows: Increased hiring and training costs. Nearly two-thirds of all DDS directors reported in our survey that turnover had increased SSA’s recruiting, hiring, or training costs. Directors and other DDS officials explained in interviews why these costs had increased as a result of turnover. Some DDS directors said that they must invest time in reviewing applications, interviewing candidates, and making hiring decisions. They also said they have to provide inexperienced new hires with 12 to 18 months of extensive training and mentoring. SSA estimates the cost of turnover of its own employees at 1.5 times average annual salary. Using this rate, we estimate that the cost of DDS examiner turnover in fiscal year 2002 was in the tens of millions of dollars.

Decreased overall examiner skill levels. Two-thirds of all DDS directors reported that losses of experienced staff due to turnover have decreased overall examiner skill levels. While SSA officials told us that one to two years of experience is generally required to become proficient in the examiner role, our survey data show that, in two-thirds of the DDSs, at least a quarter of examiners had two years or less experience at the end of fiscal year 2002.

Increased examiner caseloads. Nearly two-thirds of all DDS directors we surveyed said turnover had increased examiner caseload levels. DDS directors and SSA officials explained in interviews and survey comments that the caseloads of examiners who leave the DDS have to be redistributed among those who remain. Some directors told us that these higher caseloads created a more stressful work environment for the remaining employees.

Increased claims-processing times and backlogs. Our survey results showed that over one-half of all directors said that turnover had increased DDS claims-processing times and backlogs. DDS directors and SSA officials we spoke with explained that turnover increased claims- processing times because new examiners hired to fill vacancies are less productive due to their inexperience and time spent in training. These officials also told us that the productivity of experienced staff is lowered while they are training and mentoring the new examiners. SSA itself acknowledged the potential impact on service in a 2001 internal document. This document noted that the need to replace retiring managers, by drawing from an examiner pool already diminished by turnover, would further reduce the examiner ranks and exacerbate the challenge of processing the growing claims workload. In addition, we noted in a prior report that a majority of DDS directors expressed the view that examiner turnover is likely to jeopardize their ability to complete periodic reviews of beneficiaries’ disability status, known as continuing disability reviews, potentially contributing to backlogs of these reviews. When we asked DDS directors about causes of examiner turnover, more than two-thirds identified each of the following as contributing factors: (1) large examiner caseloads along with workplace stress, high production expectations, and highly complex work and (2) noncompetitive pay.

High caseloads, stress, production expectations, and highly complex work. Over two-thirds of all DDS directors identified large examiner caseloads, a stressful workplace, high production expectations for the number of cases completed, and the highly complex nature of the work as factors contributing to examiner turnover. DDS directors explained in interviews that the combination of growth in the claims workloads and increasingly complex examiner responsibilities is making the examiner position more challenging and stressful. DDS directors also noted in our survey and in interviews that insufficient staffing had increased the caseloads and stress levels of their examiners. Nearly 9 out of 10 DDS directors surveyed reported that the number of examiners in their DDSs had not been sufficient for their workload in at least one of the past three fiscal years, and nearly all of these directors said that this understaffing had resulted in a more stressful work environment.

Noncompetitive pay. Two-thirds of all directors stated that noncompetitive pay had contributed to examiner turnover. Our survey data showed that many state DDS examiners were paid substantially less than examiners employed by the federal DDS in 2002 despite comparable skills and experience. Specifically, all of the state DDSs for which we have data have average examiner salaries that are less than the federal DDS average salary, and over half of the DDSs (31) have an average examiner salary that is less than two-thirds of the federal DDS average salary. In addition, we found that DDS examiner salaries are substantially lower than those of VBA examiners nationwide. For example, the average salary for DDS examiners was $40,464 in 2002, compared with $49,684 for VBA examiners. Specifically, we found that average DDS examiner salaries are less than those of VBA examiners in 47 states. (See fig. 3.) Several DDS directors told us in interviews that examiners have left some DDSs to accept higher salaries in federal agencies, particularly in SSA offices. For example, our analysis of selected case data provided by two DDS directors showed that, between 2000 and 2003, 13 former examiners received pay increases ranging from 9 to 48 percent when they moved from their DDSs to positions in SSA offices.

DDSs Face Difficulties in Recruiting and Hiring Partly Due to State- Imposed Personnel Restrictions

In addition to facing high turnover and growing caseloads, more than three-quarters of all DDS directors (43) reported experiencing difficulties over a three-year period in recruiting and hiring enough people who could become successful examiners. Of these directors, more than three- quarters said that such difficulties contributed to decreased accuracy in disability decisions or to increases in job stress, claims-processing times, examiner caseloads, backlogs, or turnover. For example, one SSA official explained that, because of state-imposed hiring restrictions, one DDS developed a large backlog of cases that negatively affected its productivity.

When we asked DDS directors what made it difficult for their DDSs to recruit and hire, they said that the following factors, many of which were related to state personnel restrictions, made it moderately to much more difficult than it would be otherwise to recruit and hire: state limits on examiner salaries and other forms of compensation, restrictive job classification system for state employees, state-imposed hiring limitations or hiring freezes and lengthy time periods for the state to hire DDS examiners, and SSA-imposed hiring restrictions and budget allocations limiting DDS staffing levels.

State limits on examiner salaries and other forms of compensation. More than two-thirds of all directors reported that state limits on examiner salaries hindered recruiting and hiring, and the same proportion reported that noncompetitive salaries were insufficient to recruit or retain staff with the skills necessary to assume enhanced examiner responsibilities. One DDS director noted in survey comments that the low entry-level salary for examiners in that particular state no longer attracted “…the caliber of employees needed to perform the increasingly complex job.” Another commented that, owing to noncompetitive salaries, job candidates “…who have the requisite combination of skills needed as a will find better offers of employment, either better pay or less workload stress.” And officials we spoke with in an SSA regional office said that low examiner salaries in still another DDS have meant that this DDS has been unable to recruit candidates with strong analytical skills. They noted that the DDS has, therefore, had difficulty training its new examiners in such challenging tasks as weighing the credibility of medical and other evidence. In addition to citing limits on salaries, more than half of all directors reported that state limits on other forms of compensation, such as performance-based pay and hiring bonuses, also contributed to recruiting and hiring difficulties.

Restrictive job classification system. Nearly one-half of all DDS directors attributed difficulties in recruiting and hiring examiners to their restrictive state job classification systems. Close to a third of all states place disability examiners in the same classification as other positions— such as a vocational rehabilitation specialist—and some DDS officials we interviewed said this made it difficult to attract people with skills appropriate to the disability examiner position.

State-imposed hiring limitations and lengthy time for hiring. Nearly one-half of all DDS directors cited state hiring limitations or hiring freezes—and more than one-third reported lengthy hiring processes—as impediments to acquiring qualified examiners. For instance, officials we interviewed in one DDS explained that their state government had capped the number of staff the DDS could hire. These officials noted that, while SSA was willing to fund hiring above that level, it could take three years to obtain the state legislature’s approval to increase the DDS staffing level. SSA officials told us that another DDS could only hire individuals who have taken a required state test. They explained that, because the state administers the test only two times a year, the requirement hampers DDS hiring efforts.

SSA-imposed hiring restrictions and budget allocations. Close to two-thirds of all DDS directors said that, over the past three fiscal years, SSA-imposed hiring restrictions and budget allocations that limit DDS staffing levels have presented recruiting and hiring challenges for the DDSs. DDS managers explained in interviews and in survey comments that, given the one to two years it takes for an examiner to become fully trained, DDSs that are restricted from quickly replacing staff lost to attrition will not have sufficient numbers of experienced examiners to process future claims.

Many Examiners Need Additional Training in Key Analytical Areas

In addition to high turnover and difficulties in recruiting and hiring, the DDSs are also experiencing gaps in key knowledge and skills areas. When we surveyed all DDS directors about specific knowledge and skill needs, nearly one-half said that at least a quarter of their examiners needed additional training or mentoring in each of the following areas to successfully assume expanded responsibilities under an enhanced examiner position in either the present or the future: assessment of an applicant’s symptoms and evaluation of the credibility of medical and other evidence, evaluation of the weight to be given to medical evidence from a treating assessment and documentation of an applicant’s ability to function, assessment of vocational factors, updates on policies and procedures, and assessment of childhood disabilities.

Even for those 19 DDSs in our survey that were testing the enhanced examiner position at the time of our study, over half (11 DDSs) reported that at least a quarter of the examiners with expanded responsibilities needed additional training or mentoring in two or more of these same knowledge and skill areas, and eight of these directors reported needs in four or more of these areas.

But regardless of whether a DDS was testing this enhanced position, these areas are critical to the examiner’s task of disability decision-making in general. Indeed, one DDS director explained in an interview that, while that DDS was not officially testing this position, over the last several years it had hired examiners who were able to function in a manner that was increasingly independent of the medical consultant. This director noted that, as a result, it was becoming more difficult to distinguish the responsibilities of the disability examiner from those of an examiner with enhanced authority. Moreover, under SSA’s new approach for improving the disability determination process, these same knowledge and skill areas will be even more critical as DDS examiners take responsibility for evaluating only the more complex claims and as they are required to fully document and explain the basis for their decision.

DDS directors cited several obstacles to examiners receiving needed training or mentoring. These obstacles primarily involved high workload levels that limited the time available to either provide or receive training or mentoring. Specifically, more than 70 percent of all DDS directors reported that work demands impeded mentors from providing examiners with needed on-the-job training. In addition, about two-thirds of all DDS directors reported that either the large size of examiners’ caseloads or high expectations for completing those cases did not allow examiners enough time to attend training. And more than half of all directors cited high work levels as a barrier to examiners seeking mentoring assistance.

The Majority of DDSs Do Not Conduct Long- Term, Comprehensive Workforce Planning, and DDSs Cite Numerous Obstacles to Doing So

Despite the workforce challenges facing them, a majority of DDSs do not conduct long-term, comprehensive workforce planning. Of the DDSs that engage in workforce planning that is longer-term, a majority have plans that lack key workforce planning strategies, such as those for recruiting, retention, or succession planning. Directors identified numerous obstacles to long-term workforce planning, such as a lengthy state process to approve DDS human capital changes.

The Majority of DDSs Do Not Conduct Long-Term, Comprehensive Workforce Planning

The majority of DDSs do not conduct long-term, comprehensive workforce planning. As figure 4 shows, more than half of all the DDSs have workforce planning time horizons of less than two years, and almost one-half have a time horizon of no longer than a year (the time horizon of SSA’s annual budget process for the DDSs).

DDS directors who reported that their workforce planning time horizons are no longer than a year mainly rely on SSA’s annual budget process for the DDSs for their workforce planning. However, SSA officials told us in interviews that their budget process is not designed to serve as a long-term strategic workforce planning process. These officials said that the following strategies of comprehensive, long-term workforce planning are generally not part of the budget process but rather are left to the states: recruiting strategies, retention strategies, training and professional development strategies, compensation strategies, performance expectation and evaluation strategies, employee-friendly workplace strategies, succession planning and strategies for maintaining expertise in the long contingency plans, in the event that resource levels do not meet expectations.

In addition, even among the 28 DDSs that engage in workforce planning that is longer-term than one year, the majority (18) lack one or more of these key workforce planning strategies.

Furthermore, many DDSs do not collect the data needed to develop effective workforce plans. Although DDSs face high turnover and are expected by SSA to experience a retirement wave in the next decade, over half of all DDS directors said they had not made projections of expected retirements and other separations for examiners and related staff within the last two fiscal years.

Although the majority of DDSs do not conduct comprehensive, long-term workforce planning, some state governments do engage in strategic workforce planning efforts that encompass DDS employees. For example, the state parent agency of one DDS has produced reports identifying the workforce risks faced by the DDS (such as a coming retirement wave) and has assisted the director with succession planning. However, ongoing studies of state government workforce planning efforts have found that formal strategic workforce planning is not taking place in all states. During an interview with several DDS directors, we were told that even states with sophisticated long-term workforce planning efforts are not necessarily focusing on ensuring that their DDSs have the workforces needed to accomplish SSA goals, such as reducing claims-processing times.

DDS Directors Cited Numerous Obstacles to Long-term Workforce Planning

DDS directors noted in interviews that they face unique challenges related to the federal-state relationship that compound the difficulties of planning for future workforce needs. We asked DDS directors in our survey to what extent they had experienced various factors that might make workforce planning more difficult than it would be otherwise. Directors identified the following as major obstacles to long-term workforce planning: Lengthy state processes to approve DDS human capital changes.

Over half of all DDS directors said that lengthy state processes to approve DDS human capital changes made statewide DDS long-term workforce planning more difficult. For example, an SSA official said it took over a year to obtain approval to hire seven DDS staff due to a state hiring freeze. In addition, a 2001 audit by SSA’s Office of the Inspector General found that the parent agency of one DDS had failed to provide sufficient staffing resources, such as timely permission to fill vacancies, for the DDS to efficiently process its disability workload.

Inconsistencies between state and SSA human capital policies.

Two-thirds of all DDS directors reported that long-term planning is made more difficult than it would be otherwise due to inconsistencies between state and SSA human capital policies, such as those related to staffing levels. For example, a former DDS director we spoke with explained that directors have had difficulties planning for future needs because of discrepancies between hiring levels authorized by SSA and those approved by their states. One DDS director told us that after working for two years to obtain state approval to hire additional examiners initially authorized by SSA, the DDS lost permission from SSA to fill the positions.

Directors’ concern that SSA does not incorporate DDS workforce plans when making resource decisions. When asked in our survey what makes long-term planning more difficult, over two-thirds of DDS directors reported their concern that SSA does not incorporate the DDSs’ workforce plans when making resource decisions. Moreover, 45 DDS directors responded that they had only some or no opportunity to factor future DDS human capital needs into SSA’s spending projections beyond the upcoming fiscal year. Several DDS officials explained in interviews that long-term planning seemed futile if SSA was not going to use the results of the DDS planning efforts when making resource decisions. SSA officials, however, told us that they consider input from the DDSs related to funding decisions on a regular basis. SSA officials explained that the agency must disperse funds within its own overall budget allocation, and this often does not allow for meeting all DDS funding requests.

Uncertainty about future resource levels from SSA and state- imposed hiring restrictions or separation incentives. Over three- quarters of all DDS directors we surveyed reported that long-term planning is made more difficult by uncertainty about future resource levels from SSA, as well as uncertainty about resources needed to implement major changes in SSA policies, procedures, and systems. In addition, one- half of DDS directors surveyed said that DDS long-term workforce planning was made more difficult by uncertainty about state-imposed hiring restrictions or separation incentives.

Insufficient time to attend to future problems and insufficient data for workforce planning. Three-quarters of all directors surveyed said that they had insufficient time to attend to future problems because of the need to focus on current human capital challenges. One DDS director said in an interview that the day-to-day demands of directors’ jobs, such as managing high caseloads and hiring and training new examiners, often prevent them from planning for future workforce needs. Other DDS directors and officials told us that, when planning does take place, it is generally crisis-driven and reactive rather than long-term and strategic. In addition, over half of the directors reported in our survey that insufficient data for workforce planning makes DDS long-term workforce planning more difficult. Moreover, DDSs that do not engage in workforce planning longer-term than one year were more likely than other DDSs surveyed to cite insufficient data and planning tools, such as statistical software and information technology systems, as challenges that make long-term workforce planning more difficult.

SSA’s Workforce Efforts Have Not Sufficiently Addressed Present and Future Human Capital Challenges in the DDSs

SSA’s workforce efforts have not sufficiently addressed both present and future DDS workforce challenges. Neither SSA’s strategic plan, nor its annual performance plan, nor its workforce plan adequately addresses the human capital challenges facing the DDSs. In addition, in our survey, DDS directors reported being dissatisfied with the adequacy of the training that SSA provides to the DDSs. Beyond training, SSA has not consistently provided other human capital assistance across the DDSs and faces difficulties negotiating human capital changes, such as increases in examiner salaries, with state governments. Finally, SSA has not used the statutory authority it has to set standards for the DDS workforce.

SSA’s Strategic and Workforce Plans Do Not Adequately Address DDS Human Capital Challenges

SSA has not developed a nationwide strategic workforce plan that addresses present and future human capital challenges in the DDSs. As shown in figure 5, SSA does recognize a need to have higher-skilled and better-compensated DDS employees. In addition, SSA’s strategic plan for 2003-2008 places a high priority on improving the accuracy and the timeliness of the disability decision-making process. While accomplishment of this objective depends to a great extent on the DDS workforce, the plan cautions that the DDSs, like SSA, will face a continuing challenge of hiring and retaining a highly skilled workforce in a competitive job market. Nevertheless, SSA’s strategic plan, as well as the agency’s annual performance plan and workforce plan, are all largely silent on the means and strategies the agency will use to recruit, develop, and retain a high-performing DDS workforce, even though the Government Performance and Results Act now requires agencies to include in their annual performance plans a description of the human capital strategies needed to meet their strategic goals. “The Agency’s focus on the front-end of the disability processes…required a corresponding investment in the SSA and DDS employees involved in those processes; both workforces needed to be higher skilled and compensated.”

To deliver high-quality, citizen-centered service.

To strategically manage and align staff to support SSA’s mission. “One of SSA’s highest priorities is to improve service to the public in the disability programs from the initial claim through the final... appeal... The length of time it takes to process these claims is unacceptable.” “SSA and the State DDSs will be faced with the continuing challenge of hiring and retaining a highly skilled and diverse workforce in what is expected to be a very competitive job market.”

SSA’s Future Workforce Transition Plan

“SSA’s Future Workforce Transition Plan was created…as a requirement of SSA’s strategic plan to outline how SSA will transition from the workforce we have today to the workforce we will need in the future.”

SSA officials said in interviews that SSA is no longer pursuing two proposed strategies for improving training for disability examiners.

Absent any strategic workforce plan addressing DDS employees, SSA does not use data that it collects on the DDS workforces in a strategic manner.

While SSA routinely gathers certain DDS employee data—such as salaries, turnover rates, and the number of new hires and experienced disability examiners—the agency primarily uses these data in connection with its annual budget process. Moreover, SSA does not regularly collect many other key indicators of DDS human capital performance, such as gaps in basic skills relative to specific competencies, despite SSA’s acknowledging the importance of investing in and retaining a skilled DDS workforce in the face of an anticipated retirement wave.

When we asked SSA officials how workforce planning for the DDSs was conducted, they said that they consider DDS workforce matters to be, in general, a state government and DDS responsibility, particularly in light of the variations in state personnel systems and political concerns. One of these officials explained that SSA takes DDS workforce needs into account within SSA’s annual budget process and through the consultation that occurs between the DDSs and SSA’s regional offices. The regional office staff—and in particular, the disability program administrators assigned as SSA’s liaisons with each DDS—are responsible for providing human capital assistance to the DDSs as needed. However, as noted earlier, SSA’s annual budget process lacks key components of comprehensive, long-term workforce planning. In addition, officials we interviewed in one regional office said that they lacked the tools and the time to assist the DDSs with long-term strategic workforce planning, and SSA officials we spoke with questioned whether disability program administrators were sufficiently trained in strategic workforce planning techniques.

Several regional office and former and current DDS officials we spoke with expressed a desire for greater SSA leadership in terms of long-term strategic workforce planning focusing on DDS human capital challenges. One of these officials observed that SSA is already active in a variety of DDS human capital areas—such as determining appropriate DDS staffing levels, imposing a nationwide DDS hiring freeze, and providing national human capital guidance for implementing the electronic disability initiative—and could appropriately assist with strategic workforce planning.

Directors Expressed Dissatisfaction with the Adequacy of SSA’s Training for the DDSs

DDS directors are dissatisfied with the adequacy of SSA-provided training. Specifically, when we asked DDS directors whether they found SSA’s training to be adequate to prepare examiners to be proficient in the claims process, half or more of the directors responded that they were dissatisfied with the adequacy of SSA’s training in each of the following knowledge and skill areas: medical knowledge about body systems (32 DDSs), specific knowledge about the disability program (30 DDSs), assessment of vocational factors (29 DDSs), basic claim development techniques (29 DDSs), evaluation of the weight to be given to medical evidence from a treating physician (28 DDSs), updates on policies and procedures (28 DDSs), assessment of childhood disabilities (28 DDSs), assessment of an applicant’s symptoms and evaluation of the credibility of medical and other evidence (27 DDSs), and use of computers and technologies (26 DDSs).

Moreover, nearly half of the directors (25 DDSs) reported that they were dissatisfied with SSA’s basic training materials for new disability examiners, and over one-third (19 DDSs) reported dissatisfaction with training on the assessment and documentation of an applicant’s ability to function.

In addition, nearly all DDS directors (49) reported that they had adapted (or wanted to adapt) SSA’s training in one or more of these knowledge and skill areas to make it adequate. When we asked these DDS directors why they had adapted or wanted to adapt SSA’s training, more than half cited each of the following reasons pertaining to the quality, completeness, and timeliness of SSA’s training approach as contributing factors: Training is too conceptual and not sufficiently linked to day-to-day case processing (44 DDSs).

Training provides insufficient opportunity to interact with the trainer (40 DDSs).

Training provides insufficient opportunity to practice skills taught (38 DDSs).

Certain types of training over-rely on the interactive video training technology (37 DDSs).

Training content is incomplete (32 DDSs). Training presenters lack effective presentation skills (31 DDSs). Training lacks sufficient written materials, such as handouts and desk aids (30 DDSs).

Training is delivered too early or too late (28 DDSs).

In interviews, DDS officials expressed some particular concerns about video training. Some DDS officials told us that, because presenters lack sufficient hands-on case-processing experience, the training that SSA provided through its video training technology was too theoretical. In addition, other DDS officials described SSA’s video training technology as not allowing sufficient opportunity for clarification and follow-up with the presenter. Some officials explained that technical problems with the technology impeded interaction with the trainers. For example, they told us that, while staff are supposed to be able to use a keypad to call in and question the presenters during a class broadcast, it is often difficult to obtain access to the presenters. Further, some former DDS officials said that SSA applies its video training technology to many types of instructional needs for which it may not be appropriate. Yet, in our prior work, we have noted that, to be effective, the training method used needs to be tailored to the nature of the training content.

We asked SSA officials we spoke with to comment on the DDS directors’ views on the quality of SSA-provided training. While an SSA official explained that the video training technology helps SSA to provide consistent training across the entire country quickly, she acknowledged that the training is sometimes too general and explained that SSA is attempting to improve the presentations. SSA officials also told us that they tap the expertise of the DDS community, among other agency components, to help develop and improve training materials and identify training needs.

However, despite such efforts, nearly 85 percent of all DDS directors reported in our survey that they would be able to spend fewer resources adapting SSA’s training for use in their individual DDSs if SSA were to improve the quality, completeness, and timeliness of its training. Our survey data show that, in fiscal year 2002, the 52 DDSs used, in total, the equivalent of nearly 150 full-time DDS employees in preparing and delivering examiner training related to disability claims processing. Moreover, staff resources devoted to training may constitute a significant portion of total examiner staff in some DDSs. To illustrate, the director of one DDS with 83 disability examiners reported in our survey using the equivalent of about 12 full-time employees in fiscal year 2002 to prepare and deliver examiner training. SSA and DDS officials explained in interviews that, while some larger DDSs have staff who are dedicated solely to training, smaller DDSs generally use their most experienced, and hence most productive, examiners to prepare training and deliver it to their staff.

SSA Has Not Consistently Provided Other Human Capital Assistance across the DDSs and Faces Difficulties Negotiating Key Human Capital Issues with State Governments

Beyond training, information from our survey and interviews shows that SSA has not consistently provided other human capital assistance across the DDSs and faces difficulties negotiating human capital changes, such as increases in examiner salaries, with state governments. SSA provides many types of human capital assistance to the DDSs through its regional offices and its headquarters. For example, SSA regional office officials we interviewed explained that they have attempted to persuade state governments to exempt examiners from state hiring restrictions and to reclassify DDS examiner positions and increase examiner salaries in light of new responsibilities. In addition to the assistance provided by regional offices, SSA officials said that SSA headquarters has provided human capital assistance to the DDSs, such as sponsoring a study that identified the knowledge, skills, and abilities required for the disability examiner position, among other positions.

But in our survey of the DDS directors who said they wanted particular types of human capital assistance from SSA headquarters and its regions, more than half said that they had not received assistance in each of the following areas: help with regular nationwide surveys of examiners’ issues and concerns (32 out of 36 DDSs), help in negotiating increases in examiner salaries with state government officials (24 out of 36 DDSs), guidance on roles and responsibilities for examiners with enhanced responsibilities (22 out of 42 DDSs), help in designing training and developing training materials for examiners with enhanced responsibilities and the staff who will be supporting them (22 out of 42 DDSs), help with workforce planning, including projecting turnover and developing succession plans (21 out of 31 DDSs), guidance on how to determine which examiners have sufficient skills to take on enhanced examiner responsibilities (15 out of 20 DDSs), and help in identifying gaps in examiner skills (15 out of 21 DDSs).

In interviews, some DDS directors specifically cited surveys of examiners’ issues and concerns as an area with which they wanted assistance. They explained that such surveys could be used to identify and share DDS best practices in managing staff, including how different DDSs manage examiner caseloads and train examiners. One director noted that information on DDS best practices in human capital management is not currently available and that only SSA can “survey the landscape nationally.” Moreover, a former DDS director explained that directors view nationwide surveys as a means for communicating to SSA their human capital challenges.

We also asked DDS directors about the effectiveness of various types of human capital assistance that they did receive from SSA and its regional offices, including assistance in negotiating human capital changes with state governments. We found that more than half of the DDS directors who received assistance said that such assistance was of limited effectiveness in each of the following areas: helping project trends in the nature of the disability workload (24 out of 34 assisting in negotiating easing of state restrictions (e.g., on hiring and travel) with the state government (19 out of 24 DDSs); providing guidance on roles and responsibilities for examiners with enhanced responsibilities (18 out of 26 DDSs); helping to design training and developing training materials for examiners with enhanced responsibilities and the staff who will be supporting them (16 out of 22 DDSs); assisting in allowing DDSs to reduce the total caseload level for examiners taking on enhanced responsibilities (13 out of 24 DDSs); helping in assessing readiness for transition to an examiner role with enhanced responsibilities (12 out of 14 DDSs); helping with workforce planning, including projecting separations and developing succession plans (11 out of 13 DDSs); and providing help in negotiating increases in examiner salaries with the state government (11 out of 16 DDSs).

Regional office officials and DDS directors explained in interviews that the effectiveness of SSA and its regional offices in helping the DDSs negotiate human capital changes with the states can be limited by such factors as state budget problems, political concerns, and personnel rules. For example, some officials said in interviews that state budget crises had created political pressure to limit or prevent increases in state employee salaries. Other DDS directors told us that state officials were concerned that raising examiner salaries would prompt increases in the salaries of other state employees, such as employees within the same job classification. In addition, although 19 DDS directors reported in our survey that DDS salary levels are open to negotiation with unions, some regional office officials said in interviews that obtaining salary increases for disability examiners apart from other state employees covered by union contracts could be difficult.

In light of such difficulties in negotiating human capital changes with the states, one key regional office official we spoke to said that “all the regional office can do is cajole” the state governments about DDS human capital issues, since under the regulations the authority in this arena generally remains with the states. Similarly, another top regional official cautioned that, while the regional office tries to help the DDSs address the human capital challenges they face, it is difficult to do so. This official stated that the federal-state relationship is “unwieldy,” explaining that it is easier for state governments to apply state human capital policies—such as hiring freezes—to all state personnel than to make exceptions for DDS employees, despite SSA’s full reimbursement of DDS expenses. The official said that, because the regional office must continually educate and explain to each newly elected state governor’s administration that the DDS is federally funded, the regional office is seeking ways to make such education more effective and less labor-intensive. Indeed, current and former DDS directors we spoke with said that outreach from SSA to state governors through such national groups as the National Governors Association (NGA) is needed to foster an appreciation of the importance of a highly qualified DDS workforce to improving service to disability claimants.

SSA Has Not Used Its Statutory Authority to Address DDS Workforce Needs

SSA has not used the statutory authority it has to set standards for the DDS workforce. Although amendments to the Social Security Act in 1980 granted SSA the authority to issue regulations to ensure effective and uniform administration of the national disability programs, SSA has not used this authority to address wide variations in staff salaries, entry-level qualification requirements, and training for different DDSs. The Social Security Advisory Board, in 2001, called these variations potential contributors to inconsistencies in SSA’s disability decisions. Emphasizing that the disability programs are national in scope and that equal treatment for all claimants wherever they reside is essential, the Advisory Board recommended that SSA revise its regulations to establish guidelines for salaries, entry-level qualification requirements, training, and other factors affecting the ability of DDS staff to make quality and timely decisions. SSA has not acted on the Advisory Board’s recommendations, however.

While SSA officials acknowledged in interviews that the agency has the authority to establish uniform minimum human capital standards, they told us that the agency has chosen not to exercise this authority because of concerns about the difficulties such actions could raise in terms of the federal-state relationship. For example, they explained that requiring uniform human capital standards might be perceived by some states as unwelcome federal interference in state operations and could raise the prospect of states withdrawing their participation in making disability determinations for the disability programs. Indeed, in a prior report, we noted that, in the late 1970s, SSA could get only 21 of the 54 DDSs to revise their operating agreements with SSA, partly because the states regarded the revisions as infringements on their traditional prerogatives. The revised agreements required DDSs to comply with guidelines issued by SSA with regard to personnel matters, among other administrative requirements.

Many DDS and SSA officials we spoke with acknowledged the difficulties that would be involved with implementing uniform standards for DDS personnel. Nevertheless, the National Council of Disability Determination Directors and several DDS and SSA officials we interviewed (including some top regional office officials) expressed the view that uniform standards for DDS employees could help address the human capital challenges confronting the DDSs. Some referred to the vocational rehabilitation program administered by the Department of Education’s Rehabilitation Services Administration in partnership with the states as an example of a federal-state program that has set qualification standards for state employees.

Conclusions

DDS disability examiners are essential to SSA’s meeting its strategic goal for better serving disability claimants by making the right decision in the disability process as early as possible. Yet SSA has not developed a nationwide strategic workforce plan to address the very personnel who will be crucial to meeting that goal. The immediate challenges that DDS directors face today in maintaining and improving the examiner workforce are unlikely to lessen with time and will likely have even more severe consequences as the DDSs confront increasing numbers of applicants for disability benefits. The critical task of making disability decisions is complex, requiring strong analytical skills and considerable expertise, and it will become even more demanding with the implementation of the Commissioner’s new long-term improvement strategy and the projected growth in workload. Moreover, because SSA has not set uniform minimum qualifications for examiners, some DDSs may find it difficult to justify an appropriate job classification and level of compensation needed to recruit and retain these critical employees.

Without a plan to develop and maintain a skilled workforce—as well as measures to establish uniform minimum qualifications for examiners, close critical skill gaps, and improve training—SSA’s ability to provide high-quality service to disability claimants could be further weakened by gaps in critical competency areas and the loss of experienced DDS examiners due to high turnover. As vacancies are filled by new hires and trainees who need one to two years to become fully productive, the DDSs will likely have difficulty maintaining skill levels and successfully coping with expected high growth in workloads. The combination of decreased overall skill levels and increased workload could make the work environment even more stressful, further increasing turnover. This spiraling effect, if not addressed, could undermine the agency’s efforts to ensure that disability decisions are made accurately, consistently, and in a timely manner.

A strategic workforce plan is even more critical to the Commissioner’s long-term strategy for improving the disability claims process and her ability to bring SSA’s approach to disability decision-making in line with the current state of science, medicine, technology, and labor market conditions. Failure to look ahead and plan to ensure that the appropriate mix of skills and capabilities are available when and where needed could obstruct SSA’s progress as it seeks to fundamentally restructure its disability programs to improve the accuracy and timeliness of decisions and focus on identifying and enhancing claimants’ productive capacities. Given such a profound transition in an environment of constrained resources, SSA must be able to plan effectively if it is to anticipate how its requirements for DDS staff will change and be convincing about the need for increased human capital investments.

It will not be simple to implement a nationwide strategic workforce plan for a program that is administered in partnership with the states. Negotiating changes in state human capital policies, such as restrictive job classifications or hiring limitations, will be difficult. Improving the content and delivery of SSA-provided training and closing gaps in examiner skills across the DDSs will be challenging and potentially costly. Establishing uniform minimum qualifications for examiners throughout the DDSs will also be a difficult task, requiring delicate and time-consuming discussions with some state governments. However, despite the acknowledged difficulties, SSA cannot afford to forgo developing an overarching, guiding framework to use as a basis for making short- and long-term human capital decisions for the DDSs. As an agency with fiduciary responsibility for administering multibillion dollar disability programs that are nationwide in scope, SSA has an obligation to take a leadership role in planning— together with its state partners—to address both the immediate and future workforce needs in the DDSs.

Recommendations to the Commissioner of SSA

We recommend that SSA take the following actions: 1. Develop a nationwide strategic workforce plan that addresses present and future human capital challenges in the DDSs. This plan should enable SSA to identify the key actions needed to deal with immediate DDS problems with recruiting and hiring, training, retention, and succession planning in support of SSA’s strategic plan. It should additionally enable SSA to anticipate and plan for the future workforce that will be needed as SSA modernizes and fundamentally transforms its approach to disability decision-making. To develop and implement this comprehensive workforce plan, SSA should work in partnership with the DDSs and their parent agencies. As part of the planning process, SSA should: a. Identify a small number of key DDS indicators of human capital performance, including recruiting and hiring measures, level of stress in the workplace, training needs, and turnover. SSA should establish standards for acceptable performance on these indicators, routinely collect and analyze the data to identify trends, and use this information to guide decisions regarding future DDS workforce needs and the strategies to meet them. b. Provide necessary tools and technical assistance to the DDSs to enable them to conduct long-term workforce planning. SSA should ensure that SSA staff responsible for providing this assistance are well trained in the tenets of workforce planning. c. Require each DDS to develop its own long-term workforce plan that is linked to the nationwide long-term DDS workforce plan. SSA should work in partnership with the DDSs and their parent agencies to develop these plans. d. Establish an ongoing program of outreach from SSA’s leadership to state governors and national associations of state government officials to discuss the benefits and challenges of the federal-state relationship and encourage them to address human capital challenges identified by DDS directors, such as salary limits and hiring freezes. e. Link performance expectations of appropriate SSA executives to their efforts in accomplishing goals and objectives of the workforce plan. 2. Issue regulations that establish uniform minimum qualifications for new disability examiners. The minimum qualifications should be based on an analysis of the position that identifies the examiner’s responsibilities and the minimum knowledge, skills, and competencies necessary to adequately perform them. The minimum qualifications for the examiner’s position should take into account any changes in the complexity of the tasks required for this position stemming from the Commissioner’s new long-term strategy. 3. Work with DDSs to close the gaps between current examiner skills and required job skills. To do so, SSA should work with the DDSs to: a. analyze examiner training needs, using as a foundation the analysis of job responsibilities and related minimum knowledge, skills, and competencies recommended above; b. improve training content and delivery to meet these needs, basing such efforts on analyses of training content and appropriateness of training delivery methods; and c. develop performance measures to track effectiveness of these improvements to training.

Agency Comments and Our Evaluation

We provided a draft of this report to SSA for comment. SSA generally agreed with the intent of the recommendations in the report but stated that the report does not fairly address or adequately discuss the many sides of the DDS human capital management issues. In particular, SSA criticized some of our study’s methods and expressed concern that we did not sufficiently acknowledge the difficulties involved in making changes to the federal-state relationship. We continue to believe, however, that the report presents a fair and balanced portrayal of the multifaceted issue of human capital management in the DDSs.

Generally agreeing with the intent of our recommendations, SSA said it would consider incorporating a nationwide strategic workforce plan for the DDSs into its current strategy to improve the disability determination process. To do so will be essential, since the Government Performance and Results Act now requires agencies to report annually, as we noted in our report, on human capital strategies needed to meet their strategic goals. Regarding our recommendation on improving training, SSA said that it would continue ongoing efforts to improve examiner job skills. Results from our survey of DDS directors, however, revealed gaps in critical examiner knowledge and skills and a large proportion of DDS directors who would be able to spend fewer resources on adapting SSA’s training if SSA were to improve the quality, completeness, and timeliness of its training. Given such results, our report recommended that SSA go beyond its current efforts and base its training improvement initiatives on a systematic assessment of the examiner’s job responsibilities and related knowledge, skills, and competencies. In terms of our recommendation on outreach, SSA said that it is already conducting an outreach program to state officials and that it intends to engage in discussions with the NGA on DDS issues. While we noted efforts on the part of SSA’s regional offices to negotiate human capital changes with state governments, we maintain that SSA’s outreach program requires the sustained attention of SSA’s leadership at the national level. SSA’s expressed intent to pursue such discussions with the NGA is therefore a step in the right direction.

SSA criticized some of our study methods, saying that we relied heavily on opinions of DDS directors and used rather leading and ambiguous survey questions. In terms of survey design, we surveyed DDS directors because their first-hand experiences make them some of the most knowledgeable respondents about human capital challenges experienced in their organizations. In addition, our survey was developed in accordance with GAO’s guidance on survey design and development, including extensive pretesting with current and former DDS directors to identify potential question bias and to clarify wording. We also gave SSA disability program officials, on two occasions, the opportunity to review and comment on the survey. Following the second review, the SSA official coordinating the review said that, while some of the questions might be difficult for the DDS directors to answer, we should go ahead with the survey as it stood. The official did not refer to any bias in the survey questions. SSA also was concerned that we administered the survey at a time of budget constraint that SSA said influenced some of the directors’ responses. Our survey, however, reflects ongoing challenges facing the DDSs and was not limited to the particular circumstances of 2003. Further, our study findings did not rest solely on the opinions expressed in our survey of DDS directors. In addition to the survey, we gathered information through interviews with several other sources as well, including officials at two DDSs, three SSA regional offices, and SSA headquarters; officials of the National Council of Disability Determination Directors and the National Association of Disability Examiners; and staff of the Social Security Advisory Board. We also reviewed pertinent laws, regulations, and procedures, and obtained and analyzed human capital data from several sources.

SSA was also concerned that we did not sufficiently acknowledge the attitudes of the states toward modifying federal regulations to establish uniform human capital standards and the complexities involved in such regulatory changes, such as the problems that SSA says it would face if a large state declined to make disability determinations and transferred these responsibilities to the federal government. We acknowledged in our report the difficulties SSA has encountered in convincing the DDSs to comply with SSA guidelines on personnel issues, due in part to the states’ perceptions of infringements on traditional state responsibilities. We also stressed that establishing uniform minimum qualifications for examiners will be difficult, requiring delicate and time-consuming discussions with some state governments. But we maintain that, despite the difficulties, SSA is obligated to address the human capital challenges facing the DDSs. An outreach program involving SSA’s leadership and a close working partnership among SSA, the DDSs, and their state parent agencies will be vital to help ensure the success of SSA’s efforts.

In addition, SSA expressed a number of other concerns about the draft report. These concerns, as well as our comments on them, are provided in full in appendix IV.

Copies of this report are being sent to the Commissioner of SSA, appropriate congressional committees, and other interested parties. The report is also available at no charge on GAO’s Web site at http://www.gao.gov. If you have any questions about this report, please contact me at (202) 512-7215. Other contacts and staff acknowledgments are listed in appendix V.

Appendix I: Scope and Methods

The following describes the methods we used to survey Disability Determination Service (DDS) offices as well as the methods we used to compare some of our survey data with data from other sources.

Survey of Disability Determination Service Offices

We surveyed all state DDS directors as well as the DDS directors in the District of Columbia, Puerto Rico, and the federal DDS office. We did not survey directors in Guam and the South Carolina Office for the Blind because these offices each had only one disability examiner. We mailed surveys to 53 DDS directors and received responses from all of them. However, because most of the questions in our survey do not apply to the federal DDS, we reported results for 52 DDSs. Our survey included questions about long-term workforce planning, recruiting and hiring, compensation, training and development, and retention of disability examiners. The survey results in this report represent the views of the DDS directors and do not necessarily represent the views of examiners or other DDS staff or the views of Social Security Administration (SSA) officials.

The practical difficulties of conducting any survey introduce various types of errors related to survey responses. For example, differences in how a particular question is interpreted and differences in the sources of information available to respondents can be sources of error. In addition, respondents might not be uniformly conscientious in expressing their views or they may be influenced by concerns about how their answers might be viewed by GAO, SSA, or the public. We included steps in both the data collection and analysis stages for the purpose of minimizing such errors. For example, to address differences in how questions were interpreted, we asked two members of the Social Security Advisory Board, as well as current and past officers of the National Council of Disability Determination Directors and the National Association of Disability Examiners, to review and critique the survey questions before pretesting. SSA disability program officials also reviewed our survey on two occasions. In addition, we pretested the survey with four former DDS directors and four current DDS directors. We modified the survey questions based on the results of these pretests.

Because we conducted our survey while 20 DDSs were testing the feasibility of implementing an examiner position with enhanced responsibilities, we tailored a few of the survey questions to be relevant for those DDSs testing these enhanced positions as well as for those not testing such positions. We also tailored questions for California’s survey, which had separate offices testing and not testing the enhanced examiner position. In addition, we tailored questions for the survey that went to the federal DDS.

To address possible director concerns about how their answers might be viewed, we stated in the introduction to the survey that their responses would be reported in summary form only, without being individually identified, and that their responses would not be released unless requested by a member of Congress (see appendix II for a copy of our survey).

Analysis of Data from Our Survey and Other Sources

When we analyzed the data from our survey, where possible, we checked survey answers involving numbers and percentages to ensure they summed correctly. When we identified a discrepancy, we contacted the relevant DDS director to resolve the discrepancy.

We wanted to determine how turnover rates (overall and for new hires) for DDS examiners compared with those for selected groups of federal employees. To do this, we compared the turnover rate of DDS examiners with that of Veterans Benefits Administration (VBA) examiners, SSA employees, and all federal employees. VBA examiners were selected because they perform duties similar to DDS examiners, such as developing claims using medical and disability program knowledge. We compared DDS examiner turnover rates with SSA turnover rates because SSA fully funds the DDSs to achieve its disability program mission. The federal employee turnover rate was selected as a general baseline.

We used data from the Office of Personnel Management’s (OPM) Central Personnel Data File (CPDF) to calculate turnover rates for VBA examiners, SSA employees, and all federal employees. We counted how many permanent employees in each group left their position in each of fiscal years 2000, 2001, and 2002. For VBA examiners and SSA employees, transfers to other agencies were counted as separations. For all federal employees, only separations from federal service were counted as separations. To calculate overall turnover, we divided the number separated each year by the average of the number of staff (which we obtained by averaging the number of staff at the beginning of the fiscal year and the number of staff at the end of the fiscal year).

We also calculated a new hire turnover rate. We defined a new hire separation as a separation of an employee hired in one fiscal year who left before the end of the following fiscal year (for example, hired in fiscal year 2000 and left before the end of fiscal year 2001). To determine the turnover rate for new hires, we counted all career and career conditional appointments for each fiscal year 2000 and 2001. We then determined how many of these separated before the end of the following fiscal year and divided this by the number of new hires in the prior fiscal year. We also calculated turnover rates for DDS examiners using the same formulas.

We also compared DDS examiner salaries with VBA examiner salaries. We analyzed data from OPM’s CPDF to calculate the average base salary, including locality adjustments, for VBA examiners state by state. We divided each DDS’s average examiner salary by the average VBA examiner salary for each state, the District of Columbia, and Puerto Rico. This resulted in a measure of DDS average salary relative to average VBA examiner salaries for each location.

When we analyzed salaries of examiners who left DDSs to accept higher salaries in federal agencies, directors of two DDSs provided information on both the salaries of these examiners while they were employed by the DDSs, and on the federal General Schedule (GS) grade levels for their new SSA positions. To determine SSA salaries, we used the 2002 federal government GS pay scale, including locality adjustments. For cases in which the directors provided us with two possible SSA grade levels, we used the first step of the lower grade in our analysis. Three of these disability examiners also served as quality assurance reviewers, hearing officers, or trainers while employed in their DDS. Positions accepted at SSA by the departing examiners included regional office disability quality branch analyst, regional office program specialist, and field office claims representative, as well as posts in the federal DDS.

Appendix II: Survey of DDS Directors’ Views on Human Capital Challenges

Appendix III: Related GAO Reports

Modernizing Federal Disability Programs

Social Security Disability: Reviews of Beneficiaries’ Disability Status Require Continued Attention to Achieve Timeliness and Cost- Effectiveness. GAO-03-662. Washington, D.C.: July 24, 2003.

High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 1, 2003.

SSA Disability: Other Programs May Provide Lessons for Improving Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001.

Social Security Disability Insurance: Multiple Factors Affect Beneficiaries’ Ability to Return to Work. GAO/HEHS-98-39. Washington, D.C.: January 12, 1998.

SSA Disability: Return-to-Work Strategies from Other Systems May Improve Federal Programs. GAO/HEHS-96-133. Washington, D.C.: July 11, 1996.

SSA Disability: Program Redesign Necessary to Encourage Return to Work. GAO/HEHS-96-62. Washington, D.C.: April 24, 1996.

General Human Capital Management

Human Capital: Opportunities to Improve Executive Agencies’ Hiring Processes. GAO-03-450. Washington, D.C.: May 30, 2003.

Results-Oriented Cultures: Creating a Clear Linkage between Individual Performance and Organizational Success. GAO-03-488. Washington, D.C.: March 14, 2003.

High-Risk Series: Strategic Human Capital Management. GAO-03-120. Washington, D.C.: January 2003.

A Model of Strategic Human Capital Management. GAO-02-373SP. Washington, D.C.: March 15, 2002.

Human Capital: A Self-Assessment Checklist for Agency Leaders. GAO/OCG-00-14G. Washington, D.C.: September 2000.

Strategic Workforce Planning

Human Capital: Key Principles for Effective Strategic Workforce Planning. GAO-04-39. Washington, D.C.: December 11, 2003.

Foreign Assistance: Strategic Workforce Planning Can Help USAID Address Current and Future Challenges. GAO-03-946. Washington, D.C.: August 22, 2003.

Tax Administration: Workforce Planning Needs Further Development for IRS’s Taxpayer Education and Communication Unit. GAO-03-711. Washington, D.C.: May 30, 2003.

Human Capital Management: FAA’s Reform Effort Requires a More Strategic Approach. GAO-03-156. Washington, D.C.: February 3, 2003.

HUD Human Capital Management: Comprehensive Strategic Workforce Planning Needed. GAO-02-839. Washington, D.C.: July 24, 2002.

NASA Management Challenges: Human Capital and Other Critical Areas Need to be Addressed. GAO-02-945T. Washington, D.C.: July 18, 2002.

Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.

Securities and Exchange Commission: Human Capital Challenges Require Management Attention. GAO-01-947. Washington, D.C.: September 17, 2001.

Human Capital: Implementing an Effective Workforce Strategy Would Help EPA to Achieve its Strategic Goals. GAO-01-812. Washington, D.C.: July 31, 2001.

Single Family Housing: Better Strategic Human Capital Management Needed at HUD’s Homeownership Centers. GAO-01-590. Washington, D.C.: July 26, 2001.

Organizational Transformation

Results-Oriented Cultures: Implementation Steps to Assist Mergers and Organizational Transformations. GAO-03-669. Washington, D.C.: July 2, 2003.

Homeland Security: Management Challenges Facing Federal Leadership. GAO-03-260. Washington, D.C.: December 20, 2002.

Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned for a Department of Homeland Security and Other Federal Agencies. GAO-03-293SP. Washington, D.C.: November 14, 2002.

Managing for Results: Using Strategic Human Capital Management to Drive Transformational Change. GAO-02-940T. Washington, D.C.: July 15, 2002.

FBI Reorganization: Initial Steps Encouraging but Broad Transformation Needed. GAO-02-865T. Washington, D.C.: June 21, 2002.

Training and Development

Human Capital: A Guide for Assessing Strategic Training and Development Efforts in the Federal Government. GAO-03-893G. Washington, D.C.: July 1, 2003.

Foreign Languages: Human Capital Approach Needed to Correct Staffing and Proficiency Shortfalls. GAO-02-375. Washington, D.C.: January 31, 2002.

Human Capital: Design, Implementation, and Evaluation of Training at Selected Agencies. GAO/T-GGD-00-131. Washington, D.C.: May 18, 2000.

Appendix IV: Comments from the Social Security Administration

GAO Comments

1. We believe that the report presents a fair and balanced portrayal of the multifaceted issue of human capital management in the DDSs. We designed the survey to obtain DDS directors’ opinions about the extent to which, if any, a DDS had experienced certain human capital challenges and the likely factors and consequences involved. Moreover, the opinions were obtained from directors whose first-hand experiences make them some of the most knowledgeable sources of information about such issues in their organizations. But in addition to our survey, our overall study methods relied on information and data from several other sources as well. For example, we interviewed disability examiners and their managers at two DDSs, officials responsible for DDS management assistance at three of SSA’s regional offices, SSA officials at headquarters, officials of the National Council of Disability Determination Directors and the National Association of Disability Examiners, and staff of the Social Security Advisory Board. We also reviewed pertinent laws, regulations, and procedures, and obtained and analyzed human capital data from the DDSs, SSA, and other federal agencies.

Our survey was developed in accordance with GAO's guidance on survey design and development. To avoid the potential for questions to be leading, on every question in which we asked for directors’ opinions, we gave them the opportunity to say that they did not experience that particular challenge, contributing factor, or consequence. To this end, we constructed the questions so that the first response choice was “no extent” or equivalent wording. In addition, each question was specifically assessed for possible bias or problematic wording during extensive survey pretesting. We pretested the survey eight times—with four former DDS directors and four current directors. On the basis of these pretests, we modified the questions until pretesters raised no further issues.

We also gave SSA disability program officials the opportunity, on two occasions, to review and comment on the survey. SSA officials first reviewed the survey prior to its pretesting. Among other suggestions, they noted that some survey questions were leading in nature and that, in addition, we should develop scaled responses to provide respondents with the opportunity to modulate their answers (e.g., from “no extent” to “very great extent”). We modified the survey on the basis of their comments, including revising or eliminating questions that they thought were leading and constructing scaled responses as suggested. After additionally incorporating comments of several pretesters, we provided SSA with the chance to review a revised version of the survey. The official coordinating SSA’s second review e- mailed us in reply, saying that, while some of the survey questions might be difficult for the DDS directors to answer, we should go ahead with the survey as revised. The official did not refer to any bias in the revised questions.

Our survey questions and our findings reflect ongoing human capital challenges facing the DDSs and were not limited to the particular circumstances of fiscal year 2003. The survey questions themselves were generally not limited to the most recent year, and several explicitly asked for data for the past two or three fiscal years or for the future. While the impact of the continuing resolution and the related SSA hiring freeze that was in place throughout much of fiscal year 2003 may have affected DDS directors’ responses, DDS and SSA officials have told us that resource constraints and budget uncertainties have been ongoing challenges for a number of years. Furthermore, certain aspects of the time period in which the survey was conducted likely downplayed some of the human capital challenges facing the DDSs. For example, DDS officials said in interviews that they expected examiner turnover to increase as economic conditions improved in the future. 2. Our report acknowledges the efforts made by SSA regional offices to persuade state governments to increase examiner salaries in light of their new responsibilities. Our report, however, does not assert that 24 DDSs were refused assistance with negotiating salary increases for examiners after they had requested it. Rather, we said that, of the DDS directors who reported wanting help from SSA with negotiating salary increases, more than half (24 DDSs) said they had not received this kind of help. (SSA interpreted wanting help and not receiving it as having requested help and been refused such assistance.) But regardless of whether directors have specifically requested this or another type of human capital assistance, they reported in their survey responses that they want active support from SSA on this and a number of other issues involving human capital management. 3. Our report acknowledges that some states have strategic workforce planning initiatives that consider their DDS employees. However, the issue relevant to our study was not whether statewide human capital management offices were generally effective, as SSA suggests, but whether there were any workforce planning efforts by SSA or the DDSs that were integral to and supportive of SSA’s mission and goals. As we noted in the report, even sophisticated statewide workforce planning efforts are not necessarily focused on ensuring that the DDSs have the workforces needed to accomplish such SSA goals as reducing claims-processing times. 4. Our report acknowledges SSA’s current efforts at outreach to state officials. For example, our report describes efforts on the part of regional office officials to persuade state governments to exempt examiners from state hiring restrictions, reclassify DDS examiner positions, and increase examiner salaries. We also emphasize that SSA and its regional offices can be limited in their ability to help the DDSs negotiate changes by such factors as state political and budget concerns, as well as state personnel rules. However, as noted in our report, we found no record to date of any discussions with the National Governors Association (NGA) or of NGA focusing on this topic. Our recommendation that SSA reach out to national associations such as the NGA is an acknowledgment that the DDSs and SSA’s regional offices cannot successfully confront these difficult human capital challenges without the sustained attention of SSA’s leadership at the national level. For clarity, we have emphasized this point in the text of our recommendation. SSA’s expressed intent to pursue discussions on a national level with NGA is a step in the right direction. 5. We recounted in our report the view of SSA officials that requiring uniform human capital standards might be perceived by some states as unwelcome federal interference and could raise the prospect of states withdrawing their participation in making disability determinations. We also noted the difficulties SSA has encountered in the past in convincing the DDSs to comply with SSA guidelines on personnel issues, due in part to the states’ perceptions of infringements on traditional prerogatives. Accordingly, we stressed in our report that establishing uniform minimum qualifications for examiners throughout the DDSs will be difficult, requiring delicate and time-consuming discussions with some state governments. However, establishing such qualifications will also be worthwhile, helping some DDSs justify an appropriate job classification and level of compensation needed to recruit and retain qualified disability examiners. As an agency with fiduciary responsibility for administering disability programs that are nationwide in scope, SSA has an obligation to do no less than take firm steps to address the human capital challenges facing the DDSs. We understand SSA’s concern about the difficulties it would face if states opted out of the disability program and transferred these responsibilities to the federal government. To help ensure the success of SSA’s efforts, outreach from SSA’s leadership to the state governors will be vital. Also essential will be a close working partnership among the immediate stakeholders—SSA, the DDSs, and their state parent agencies—in developing a nationwide strategic workforce plan. 6. We did not examine the accuracy and timeliness of claims processing.

Nevertheless, even had these measures of performance improved, the Commissioner noted in her September 25, 2003, testimony that SSA still has “a long way to go” in its efforts to be more timely and accurate, despite positive strides in the short term. Moreover, SSA’s own published strategic plan for 2003 to 2008 warns that “the length of time it takes to process these claims is unacceptable.” Results from our survey of DDS directors demonstrate the need to address such DDS human capital issues as high turnover and recruiting and hiring difficulties in order to improve the timeliness and accuracy of claims processing. Of the directors (43) who reported experiencing difficulties in recruiting and hiring enough people who could become successful examiners, more than three-quarters said that such difficulties contributed to decreased accuracy in disability decisions or to increases in claims-processing times. Moreover, over one-half of all directors reported that turnover had increased claims-processing times. 7. Our report neither states nor assumes that higher salaries alone guarantee improved DDS performance. Rather, it states that, according to more than two-thirds of all DDS directors, noncompetitive pay was one of several factors contributing to examiner turnover. Moreover, our report emphasized the costly consequences of such turnover, noting that the estimated cost of examiner turnover in fiscal year 2002 was in the tens of millions of dollars. (Our estimates show that this would be the case, regardless of whether the calculation is based on total turnover or turnover that is above that of the federal government as a whole.) SSA itself has been attempting to persuade state governments to increase examiner salaries to reflect new job responsibilities. Although increased compensation may increase costs, the turnover that can result from not addressing human capital management concerns, such as not compensating employees appropriately, can be costly as well, as we note in the report.

We agree with SSA that some attrition is desirable. But over half of all DDS directors told us in our survey that examiner turnover in their offices was too high, and we found that examiner turnover was about twice that of federal employees performing similar work. Because turnover is costly, we emphasize the importance of using data to identify current and future human capital needs. We have found in prior work that high-performing organizations analyze who is leaving, what skill gaps result, and how much turnover is desirable or acceptable. Organizations that fail to effectively manage their turnover risk not having the capacity to achieve their goals. A balance needs to be achieved between bringing in new employees with fresh and vibrant perspectives and retaining experienced employees whose institutional knowledge can maintain goals and help train others. 8. We cited the Department of Education’s experience to show that establishing federal qualifications requirements for state employees, as we recommended that SSA do, can and has been done. While we have not studied federal experiences with workforce planning in an intergovernmental arena, the GAO reports we provide in appendix III highlight an array of initiatives on the part of federal agencies to embrace workforce planning, including SSA’s planning models for its own employees. SSA has been willing to take the lead and develop models in workforce planning for its own employees. It should therefore build on its own internal expertise and lessons learned in this field to develop models of workforce planning in the demanding intergovernmental context as well. Lack of an existing model for the range of changes we recommend may make implementation more challenging, but it is not a convincing argument for inaction. 9. We support SSA’s leadership in its efforts to improve the disability determination process and to help people with disabilities remain in or return to the workforce. SSA said that it generally agreed with the intent of our recommendations and would consider incorporating a nationwide strategic workforce plan for the DDSs into its current strategy to improve disability determinations. To do so will be essential, since the Government Performance and Results Act now requires agencies to report annually, as we noted in our report, on human capital strategies needed to meet their strategic goals. While we did not provide an exhaustive treatment of states’ reactions to proposals for increased federal control, our report did note past opposition of some states to federal guidelines on personnel matters.

In addition, we have added further detail in the report about the regulatory development process. We acknowledge the complexities involved in pursuing regulatory change. But despite these difficulties, we maintain that SSA has an obligation to address DDS workforce needs. 10. SSA said that it would continue ongoing efforts to improve examiner job skills. Results from our survey of DDS directors, however, revealed gaps in critical examiner knowledge and skills. Moreover, a large proportion of directors said they would be able to spend fewer resources on adapting SSA’s training if SSA were to improve the quality, completeness, and timeliness of this training. Given such results, our report recommended that SSA go beyond its current efforts and base its training improvement initiatives on a systematic assessment of the examiner’s job responsibilities and related knowledge, skills, and competencies.

Appendix V: GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

In addition to those named above, the following individuals made significant contributions to this report: Barbara Bordelon, Marissa Jones, Suit Chan, and Beverly Crawford, Education, Workforce, and Income Security Issues; Ellen Rubin, Strategic Issues; Gregory Wilmoth, Applied Research and Methods; and B. Behn Miller, General Counsel.