Federal civil service employees, other than those in the Senior Executive Service, are employed in either the competitive service or the excepted service. The competitive service examination process is one of the processes intended to ensure that agencies' hiring activities comply with merit principles. In January 1996, OPM delegated examining authority to federal agencies for virtually all positions in the competitive service. Under delegated examining authority, agencies conduct competitive examinations that comply with merit system principles, other personnel-related laws, and regulations as set forth in OPM’s Delegated Examining Operations Handbook. OPM is responsible for ensuring that the personnel management functions it delegates to agencies are conducted in accordance with merit principles and the standards it has established for conducting those functions. The federal hiring process involves notifying the public that the government will accept applications for a job, screening applications against minimum qualification standards, and assessing applicants' relative competencies or knowledge, skills, and abilities against job-related criteria to identify the most qualified applicants. Federal agencies typically examine or assess candidates by rating and ranking them based on of their experience, training, and education, rather than by testing them. Figure 1 shows the typical steps for filling vacancies through the competitive examining process. The Homeland Security Act of 2002 contained new hiring flexibilities that could help agencies in expediting and controlling their hiring processes— category rating and direct-hire authority. Category rating is an alternative rating and selection procedure that can expand the pool of qualified job candidates from which agency managers may select. Under this procedure, an agency manager can select any job candidate placed in a best-qualified category rather than being limited to three candidates under the “rule of three.” Direct-hire authority allows an agency to appoint individuals to positions without adherence to certain competitive examination requirements when OPM determines that there is a severe shortage of candidates or a critical hiring need. Specifically, when making appointments under the newly authorized direct-hire authority, agencies still are required to provide public notice of the job vacancies and screen all applicants to ensure that they meet the basic qualification requirements of the position; however, agencies are not required to numerically rate and rank candidates nor apply the rule of three or veterans’ preference. The act also established a CHCO position in 24 federal agencies to advise and assist the head of each agency and other agency officials in their strategic human capital management efforts. Additionally, the act created a CHCO Council to advise and coordinate these activities among the agencies. In accordance with the act, members of the CHCO Council include the Director of OPM, the Deputy Director for Management at the Office of Management and Budget (OMB), the CHCOs from executive departments, and additional agency members designated by the OPM Director. The functions of the CHCO Council are to offer advice and coordinate agencies’ activities concerning modernization of human resources systems, improving the quality of human resources information, and giving concerted attention to legislation affecting human resources operations. The CHCO Council currently has five subcommittees that help carry out its work, including a subcommittee on the hiring process. The purpose of the hiring subcommittee is to identify actions it or the CHCO Council could take to improve recruiting and hiring in the federal government. Since the mid-1990s, the number of new federal hires increased considerably—increasing from about 50,000 employees in 1996 to over 143,000 employees in 2002. Federal hiring in the mid-1990s declined because many agencies were downsizing and did not need to fill positions. Increasingly, agencies began hiring new employees, particularly because of a slowdown in downsizing and growing numbers of employees retiring. In fiscal year 2003, the largest federal hirer was DOD, which brought on board more than one-third of all hires. The number of federal hires decreased in 2003 over 2002, which was primarily because of the hiring of nearly 35,000 airport screeners in 2002 into the newly created Transportation Security Administration. Table 1 shows the number of new federal hires by department or agency for fiscal year 2003. Within government and the private sector, it has been widely recognized that the federal hiring process is lengthy and cumbersome and hampers agencies' ability to hire the high-quality people they need to achieve their agency goals and missions. Numerous studies and research over the past decade by OPM, the Merit Systems Protection Board (MSPB), the National Academy of Public Administration (NAPA), the Partnership for Public Service, the National Commission on the Public Service, and GAO have noted concerns and problems with the federal hiring process, as the following examples illustrate. In October 2001, the Partnership for Public Service released the results of a poll it had commissioned that found “many people view the process of seeking federal employment as a daunting one. Three-quarters of non-federal workers say making the application process quicker and simpler would be an effective way of attracting talented workers to government.” In July 2002, NAPA reported that federal “hiring remains a slow and tedious process.” The report noted that “Many managers are attempting to rebuild a pipeline of entry level employees in this very competitive labor market, yet current hiring methods do not keep pace with the private sector.” In September 2002, MSPB said that the federal hiring process has a number of key problems including “overly complex and ineffective hiring authorities” and “inadequate, time-consuming assessment procedures.” In November 2002, OPM in its strategic plan for 2002 through 2007 stated, “There is a general perception that our hiring process takes too long and may not provide well-qualified candidates.” In January 2003, the National Commission on the Public Service said, “Recruitment to federal jobs is heavily burdened by ancient and illogical procedures that vastly complicate the application process and limit the hiring flexibility of individual managers.” Our May 2003 report on federal hiring summarized these concerns and added further evidence to confirm many of the problems and issues that have been identified over the past decade. As many of these and other studies have noted, and as many human resources directors pointed out in our prior interviews, nearly all parts of the competitive hiring process hamper effective and efficient federal hiring. Key problem areas identified in our May 2003 report included the following. Outdated and cumbersome procedures to define a job and set the pay are not applicable to the jobs and work of today. Unclear, unfriendly job announcements cause confusion, delay hiring, and serve as poor recruiting tools. A key assessment tool and hiring programs used for several entry-level positions are ineffective. Convening panels and the manual rating and ranking of applicants to determine best-qualified applicants is time-consuming. Numerical rating and ranking and the "rule of three" limit the choice of applicants and are viewed as ineffective. As noted previously, our prior work surveying human resources directors, along with the work of others, indicated that the time-to-hire is too long for most federal hires. Comprehensive department or governmentwide data on time-to-hire are often not available; however, in fiscal year 2002, OPM compiled and analyzed data on time-to-hire and found that it typically took on average about 102 days for agencies to fill a vacancy using the competitive process. At that time, OPM measured time-to-hire from the period between when the request to hire or fill a position was received in the human resources office to the appointment of an applicant to the position. Additional time might be needed for a manager to obtain approval for the requested hiring action at the beginning of the process or for the new employee to receive a security clearance at the end of the process. OPM officials told us that better data are not available on time-to- hire and that they are surveying federal agencies to assess how to gather systematic data on time-to-hire. OPM and agencies are continuing to focus on the problems with the federal hiring process we identified in our May 2003 report. OPM has taken actions to address federal hiring across the board and for specific parts of the hiring process. For example, in February of this year, the Director of OPM issued a memorandum to the CHCOs of federal agencies offering 10 ways that agencies can immediately improve their hiring processes using authorities they already possess. Steps outlined in this memo include fully engaging the agency’s human resources staff and offering recruiting incentives such as recruitment bonuses, relocation expenses, and student loan repayments. In addition, to encourage agencies to improve their hiring processes, OPM is urging agencies to implement a new 45-day hiring model, which measures the time-to-hire period from the date the vacancy announcement closes to the date a job offer is extended. OPM officials said they would work closely with agencies to deploy all appropriate flexibilities to meet this goal. According to OPM, agencies will be scored under the Human Capital Initiative of the President's Management Agenda on their progress toward reducing time-to-hire. In addition, OPM is administering a survey of CHCOs on agency hiring practices to identify opportunities to use the flexibilities strategically, eliminate remaining outmoded practices, and generally expedite the hiring process. OPM and agencies have also taken actions to address various key parts of the federal hiring process. These parts, which are discussed in this section, include reforming the classification system, improving job announcements and Web postings, automating hiring processes, and improving candidate assessment tools. Our May 2003 report on federal hiring outlined recommendations to OPM dealing with these key parts of the hiring process. While OPM has placed concerted attention on three of these key parts of the hiring process, focused attention and action by OPM to improve assessment tools, as we recommended in our May 2003 report, could further help agencies in identifying the best candidates for federal jobs. We previously reported the conclusion of many that the standards and process for defining a job and determining pay in the federal government are a key hiring problem because they are inflexible, outdated, and not applicable to the jobs of today.