Over time, federal surveys have consistently found that DHS employees are less satisfied with their jobs than the governmentwide average. Shortly after DHS was formed, 2004 federal survey data indicated a disparity between DHS and governmentwide averages in job satisfaction. At that time, 56 percent of DHS employees responded that they were satisfied with their jobs, compared to the 68 percent governmentwide.subsequent years when comparative data were available using the job satisfaction index, the disparity continued—ranging from a difference of 8 percentage points in 2006 to a 4 percentage point difference in 2008, 2010, and 2011. In 2011, DHS employees also consistently indicated less satisfaction on key items in OPM’s 2011 FEVS than employees in the rest of the federal government. On the basis of its analysis of its FEVS, OPM determined that responses to these items—called impact items— make a difference in whether people want to come, stay, and contribute their fullest to an agency. Specifically, DHS employees were less positive on 14 of the 16 impact items. In some key areas, DHS’s percentage of positive responses was lower than the rest of the federal government averages. For example: Slightly less than half of the DHS employees surveyed reported positive responses to the statement “My talents are used well in the workplace,” nearly 12 percentage points less than the rest of the federal government average of 61.6 percent. DHS employees had nearly 10 percentage points fewer positive responses to the statements “I am given a real opportunity to improve my skills in my organization” and “Managers communicate the goals and priorities of the organization” than the rest of the federal government averages of 66.0 and 65.3 percent respectively. In two areas, DHS’s percentage of positive responses was nearly the same or higher than the rest of the federal government average. Specifically: DHS’s percentage of positive responses to the statement “Considering everything, how satisfied are you with your pay?” was not statistically different than the rest of the federal government average, with responses of 62 percent for DHS and 63 percent for the rest of the federal government. DHS was nearly 2 percentage points higher than the rest of the federal government average for the statement “My workload is reasonable.” The percentage of DHS respondents with positive responses on each of 16 impact items and the difference between DHS and the rest of the federal government appear in appendix I. OPM calls for federal leaders to pay attention to the 16 impact items as key indicators of engagement and commitment to continued service. While improvement in any of the impact items that OPM identified could help DHS improve its attractiveness as an employer of choice, the items for which DHS is farthest behind the rest of the federal government could provide a focus for targeting improvement efforts. The 2011 job satisfaction data also indicate that satisfaction levels vary across components within DHS. For example, as shown in table 1, job satisfaction index results for the 2011 FEVS show the Transportation Security Administration (TSA) as 11 percentage points below governmentwide averages while other large components, such as U.S. Customs and Border Protection (CBP) and the U.S. Coast Guard (Coast Guard), posted above average results. Identifying this variation across components could help target efforts to improve employee satisfaction. TSA performed analysis of its 2011 FEVS results to gain a better understanding of whether employee satisfaction varies across location, program office, or level. This analysis identified variation in job satisfaction within the component; specifically, with Federal Security Director staff at airports providing more positive responses for job satisfaction (69 percent positive) than the airport screening workforce (54 percent positive), as shown in figure 1. DHS has taken steps to identify where it has the most significant employee satisfaction problems and has developed plans for addressing those problem areas. DHS has conducted some analysis of employee survey results and developed action plans to address some employee satisfaction problems, but it has not yet addressed the key goals related to job satisfaction—to improve DHS’s scores on OPM’s job satisfaction index, among other indexes, and to improve its ranking on the Partnership’s Best Places to Work in the Federal Government. The results from our prior work at DHS and other departments identify a wide variety of issues that can lead to employee morale problems. Thus, conducting an analysis of the root causes of employee satisfaction problems and developing plans to address them are important. DHS’s job satisfaction scores could pose challenges to DHS in recruiting, motivating, and retaining talented employees that DHS needs to meet its mission requirements. Specifically, an agency’s reputation is a key factor in recruiting and hiring applicants. A Partnership for Public Service report published in 2010 noted that a good reputation is the most frequently mentioned factor in choosing potential employers, and agencies with high satisfaction and engagement scores were seen as desirable by college graduates seeking employment. Similarly, the Merit Systems Protection Board (MSPB) reported that employees’ willingness to recommend the federal government or their agency as a place to work can directly affect an agency’s recruitment efforts, the quality of the resulting applicant pool, and the acceptance of employment offers. In addition, MSPB noted that prospective employees would rather work for an agency billed as one of the best places to work compared to an agency at the bottom of the list. DHS has taken or has a variety of actions under way or planned to address employee satisfaction problems, including analyzing the results of employee surveys and developing action plans to improve employee satisfaction. Components and DHS have used a variety of approaches to analyze survey results to gain insight about employee satisfaction. As part of our ongoing work on employee morale, we reviewed survey analyses conducted by DHS’s Office of the Chief Human Capital Officer, TSA, and U.S. Immigration and Customs Enforcement (ICE). DHS. DHS completed an evaluation of the 2008 Federal Human Capital Survey results to determine root causes of job satisfaction departmentwide, according to DHS officials. In that analysis, DHS determined that the drivers of employee satisfaction across DHS included the DHS mission, senior leadership effectiveness, and supervisor support. According to DHS officials, DHS is currently working with a contractor on a departmentwide analysis of root causes of employee morale. As of March 2012, this analysis was not complete. TSA. TSA’s analysis focused on areas of difficulty across groups, such as pay and performance appraisal concerns, and also provides insight on which employee groups within TSA may be more dissatisfied with their jobs than others. The analysis results are descriptive, showing where job satisfaction problem areas may exist, and do not identify the causes of dissatisfaction within employee groups. For the 2011 FEVS, TSA benchmarked its results against CBP results, as well as against DHS and governmentwide results. When comparing CBP and TSA scores, TSA found that the greatest differences in scores were on questions related to satisfaction with pay and with whether performance appraisals were a fair reflection of performance. TSA scored 40 percentage points lower on pay satisfaction and 25 percentage points lower on performance appraisal satisfaction. In comparing TSA results to DHS and governmentwide results, TSA found that TSA was below the averages for all FEVS dimensions. TSA also evaluated FEVS results across employee groups by comparing dimension scores for headquarters staff, the Federal Air Marshals, Federal Security Director staff, and the screening workforce. TSA found that the screening workforce scored at or below scores for all other groups across all of the dimensions. ICE. ICE analyzed the 2011 FEVS results by identifying ICE’s top FEVS questions with high positive and negative responses. ICE found that its top strength was employees’ willingness to put in the extra effort to get a job done. ICE’s top negative result was employees’ perception that pay raises did not depend on how well employees perform their jobs. ICE did not perform demographic analysis of the survey results or identify the roots causes of employee satisfaction problems, but did benchmark its results against DHS and governmentwide results, identifying those questions and Human Capital Assessment and Accountability Framework ICE (HCAAF) indices where ICE led or trailed DHS and the government. found, among other things, that employee views on the fairness of its performance appraisals were above DHS’s average but that views on employee preparation for potential security threats were lower. When comparing ICE’s results with governmentwide figures, ICE found, among other things, that ICE was lower on all of the HCAAF indices, including job satisfaction. The HCAAF indices provide metrics for measuring progress toward OPM goals for federal agencies, which include employee job satisfaction, leadership effectiveness and knowledge management, a results-oriented performance culture, and effective talent management. DHS and the components are taking actions that could improve employee satisfaction, with a focus on improving components’ positive responses to selected survey items. DHS’s Integrated Strategy for High Risk Management. In December 2011, DHS provided us with its updated Integrated Strategy for High Risk Management (Integrated Strategy), which summarized the department’s plans for addressing its implementation and transformation high-risk designation. In the Integrated Strategy, DHS identified corrective actions to improve employee job satisfaction scores, among other things. The corrective actions include the Secretary issuing guidance to component heads to address gaps in the 2011 FEVS results; launch of an Employee Engagement Executive Steering Committee, which held its first meeting in February 2012; implementation in June 2009 of an online reporting and action planning tool for components; and execution of a DHS-wide exit survey in January 2011 for departing employees to gain additional insight into why employees are leaving the department. According to the Integrated Strategy, DHS has begun implementing corrective actions but has not yet achieved its key outcome related to job satisfaction—to improve DHS’s scores on OPM’s job satisfaction index, among other indexes, and to improve its ranking on the Partnership’s Best Places to Work in the Federal Government. According to the Integrated Strategy, FEVS index scores did not improve appreciably relative to governmentwide averages from 2010 to 2011. DHS’s Partnership ranking also remains near last among federal agencies. Within the Integrated Strategy action plan for improving job satisfaction scores, DHS reported that three of six efforts were hindered by a lack of resources. For example, fewer resources were available than anticipated for DHS’s Office of the Chief Human Capital Officer to consult with components in developing action plans in response to 2011 FEVS results. Similarly, fewer resources were available than planned to deploy online focus discussions on job satisfaction-related issues. Sufficient resource planning to address the key high-risk human capital outcome of enhanced employee satisfaction scores is essential as DHS works to transform itself into a high-performing department. DHS and component action plans. We reviewed the most recent DHS action plans to address 2011 FEVS outcomes departmentwide as well as component plans for TSA, the Coast Guard, CBP, and ICE. The plans state objectives and identify actions to be taken, among other things. Examples of initiatives from the plans are listed in table 2. As part of our ongoing work, we are comparing DHS and component action plans with OPM guidance for action planning and will report on our results in September 2012. Our prior work at DHS and other departments and agencies illustrates the variety of issues that can lead to morale problems. In July 2009, we reported that the funding challenges FPS faced in fiscal year 2008 and its cost savings actions to address them resulted in adverse implications for its workforce, primarily low morale among staff and increase attrition. In June 2011, we reported that the Federal Emergency Management Agency’s (FEMA) human capital plan did not have strategies to address retention challenges, among other things.experienced frequent turnover in key positions and divisions that could result in lost productivity, a decline in institutional knowledge, and a lack of continuity for remaining staff. We recommended that FEMA develop a comprehensive workforce plan that addressed retention issues, among other things. FEMA concurred with the recommendation and noted that a contractor had begun work on a new human capital plan. In August 2011, we reported that the Forest Service’s centralization of human resources management and information technology services contributed to several agencywide improvements, but it has also had widespread, largely negative effects on field-unit employees. Under centralization, the agency relies on a self-service approach whereby employees are generally responsible for independently initiating or carrying out many related business service tasks. Field-unit employees consistently told us that these increased administrative responsibilities, coupled with problems with automated systems and customer support, have negatively affected their ability to carry out their mission work and have led to lower employee morale. In June 2009, we reported that employees from a number of different agencies and pay systems worked overseas in proximity to one another. Each of these pay systems was authorized by a separate statute that outlines the compensation to which employees under that system are entitled, certain elements of which are set without regard to the location in which the employees are working. We reported that when these employees are assigned overseas and serve side by side, the differences in pay systems may become more apparent and may adversely affect morale. In September 2008, we reported that the 2004 and 2006 employee survey results for the Small Business Administration (SBA) showed a lack of respect for and trust in SBA leadership and a concern about training opportunities. The SBA Administrator’s efforts to address the survey results included soliciting information from employees and visiting field locations to obtain their input on how to improve agency operations and morale. The variation in potential issues that can result in morale problems underscores the importance of looking beyond survey scores to understand where problems, such as low employee satisfaction, are taking place within the organization, along with the root causes of those problems. Effective root cause analysis can help agencies better target efforts to develop action plans and programs to address the key drivers of employee satisfaction. Given the critical nature of DHS’s mission to protect the security and economy of our nation, it is important that DHS employees are satisfied with their jobs so that DHS can retain and attract the talent required to complete its work. We will continue to monitor and assess DHS’s efforts to address employee job satisfaction through our ongoing work and expect to issue a report on our final results in September 2012. Chairman McCaul, Ranking Member Keating, and Members of the Subcommittee, this concludes my prepared statement. I would be pleased to respond to any questions that you may have at this time. For questions about this statement, please contact David C. Maurer at (202) 512-9627 or maurerd@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals making key contributions to this statement include Sandra Burrell, Assistant Director; Ben Atwater, Analyst-in- Charge; and Jean Orland. Other contributors include Alice Feldesman, Tracey King, Kirsten Lauber, Margaret McKenna, Lara Miklozek, and Jeff Tessin. Key contributors for the previous work that this testimony is based on are listed in each product. Survey question My talents are used well in the workplace. I am given a real opportunity to improve my skills in my organization. Managers communicate the goals and priorities of the organization. Employees have a feeling of personal empowerment with respect to work processes. How satisfied are you with your involvement in decisions that affect your work? How satisfied are you with the policies and practices of your senior leaders? My work gives me a feeling of personal accomplishment. How satisfied are you with the information you receive from management on what’s going on in your organization? How satisfied are you with the recognition you receive for doing a good job? I have a high level of respect for my organization’s senior leaders. How satisfied are you with your opportunity to get a better job in your organization? How satisfied are you with the training you receive for your present job? Overall, how good a job do you feel is being done by your immediate supervisor/team leader? Considering everything, how satisfied are you with your pay? Department of Homeland Security: Continued Progress Made Improving and Integrating Management Areas, but More Work Remains. GAO-12-365T. Washington, D.C.: March 1, 2012. Forest Service Business Services: Further Actions Needed to Re- examine Centralization Approach and to Better Document Associated Costs. GAO-11-769. Washington, D.C.: August 25, 2011. FEMA: Action Needed to Improve Administration of the National Flood Insurance Program. GAO-11-297. Washington, D.C.: June 9, 2011. High-Risk Series: An Update. GAO-11-278. .Washington, D.C.: February 2011. Department of Homeland Security: Progress Made in Implementation and Transformation of Management Functions, but More Work Remains. GAO-10-911T. Washington, D.C.: September 30, 2010. Homeland Security: Preliminary Observations on the Federal Protective Service’s Workforce Analysis and Planning Efforts. GAO-10-802R. Washington, D.C.: June 14, 2010. Homeland Security: Federal Protective Service Should Improve Human Capital Planning and Better Communicate with Tenants. GAO-09-749. Washington, D.C.: July 30, 2009. Human Capital: Actions Needed to Better Track and Provide Timely and Accurate Compensation and Medical Benefits to Deployed Federal Civilians. GAO-09-562. Washington, D.C.: June 26, 2009. Small Business Administration: Opportunities Exist to Build on Leadership’s Efforts to Improve Agency Performance and Employee Morale. GAO-08-995. Washington, D.C.: September 24, 2008. High-Risk Series: Strategic Human Capital Management. GAO-03-120. Washington, D.C.: January 2003. High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 2003. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary: DHS is the third largest cabinet-level agency in the federal government, employing more than 200,000 employees in a broad range of jobs. Since its creation in 2003, DHS has faced challenges implementing its human capital functions, and its employees have reported having low job satisfaction. GAO designated the implementation and transformation of DHS as high risk because it represented an enormous and complex undertaking that would require time to achieve in an effective and efficient manner. This testimony presents preliminary observations regarding: (1) how DHSs employees workforce satisfaction compares with that of other federal government employees, and (2) the extent to which DHS is taking steps to improve employee job satisfaction. GAOs comments are based on ongoing work on DHSs employee job satisfaction survey results and its actions and plans to improve them, as well as reports issued from January 2003 through February 2012 on high-risk and morale issues in the federal government and at DHS. To conduct its ongoing work, GAO analyzed DHS and component planning documents, interviewed relevant DHS officials about employee morale, and analyzed 2011 federal employee job satisfaction survey results. Over time, federal surveys have consistently found that Department of Homeland Security (DHS) employees are less satisfied with their jobs than the government-wide average. In the 2004 Office of Personnel Managements federal employee surveya tool that measures employees perceptions of whether and to what extent conditions characterizing successful organizations are present in their agency56 percent of DHS employees responded that they were satisfied with their jobs, compared to 68 percent government-wide. In subsequent years, the disparity continuedranging from a difference of 8 percentage points in 2006 to a 4 percentage point difference in 2008, 2010, and 2011. In 2011, DHSs percentage of positive responses was lower than the averages for the rest of the federal government. For example, slightly less than half of the DHS employees surveyed reported positive responses to the statement My talents are used well in the workplace, nearly 12 percentage points less than the rest of the federal government average. In two areas, DHSs percentage of positive responses was nearly the same or higher than the rest of the federal government average. For example, DHSs percentage of positive responses to the statement Considering everything, how satisfied are you with your pay? was not statistically different than the rest of the federal government average. Job satisfaction data for 2011 show that satisfaction levels vary across DHS components. For example, job satisfaction index results show the Transportation Security Administration as 11 percentage points below government-wide averages while other components, such as U.S. Customs and Border Protection, posted above average results. DHS has taken steps to identify where it has the most significant employee satisfaction problems and developed plans to address those problems, but has not yet improved DHS employee satisfaction survey results. For example, to determine root causes of job satisfaction department-wide, DHS conducted an evaluation of the 2008 Federal Human Capital Survey results, according to DHS officials. In that analysis, DHS determined that the drivers of employee satisfaction across DHS included the DHS mission, senior leadership effectiveness, and supervisor support. According to DHS officials, DHS is working with a contractor on a new department-wide analysis of root causes of employee morale. As of March 2012, this analysis was not complete. DHS and its components are also taking steps to improve components positive response rates to selected survey items. For example, DHSs Integrated Strategy for High Risk Management identified corrective actions to improve employee job satisfaction scores, such as the launch of the Employee Engagement Executive Steering Committee. GAO has previously reported on a variety of issues, including concerns about pay and a lack of trust in leadership that can lead to morale problems. This variation in potential issues that can result in morale problems underscores the importance of looking beyond survey scores to understand the root causes of those problems and developing plans to address them. Given the critical nature of DHSs mission to protect the security and economy of the United States, it is important that DHS employees are satisfied with their jobs so that DHS can attract and retain the talent required to complete its work. GAO will continue to assess DHSs efforts to address employee job satisfaction and expects to issue a report on its results in September 2012.