Beating The System

ou pay a price for living and working in the sun-baked, oceanside entertainment capital of the world, particularly if you're a federal manager.

On top of your own worries about making ends meet on a federal salary in one of the nation's most expensive cities, you also have to worry about the steady stream of good workers who are tempted to leave government by the promise of better salaries in the private sector, or who are pushed by the high cost of living in Los Angeles to stay in the government but to leave L.A. And then when you have job openings, you struggle to bring in applicants.

Federal managers in Los Angeles are quick to tell you of their human resources woes. The Los Angeles passport agency has had a vacancy for a front-line supervisor job for more than a year. Guards at the federal prison in downtown L.A. commute more than 100 miles each way because they can't afford to live closer, leaving them with an itch to apply for every outside law enforcement job they can find. When the IRS hired hundreds of accountants nationwide last year, they fell short in only one location: Southern California. Lynore Brekke, regional executive manager for the FAA in Los Angeles, cringes every time she sees one of her highly skilled workers head over to a nearby contractor's building for lunch. "They meet people," Brekke says. "And then we never see them again."

The government's comparatively low pay rates are exacerbated by the poor federal personnel policies that emanate from Washington, managers say. Government Executive sat down recently for a roundtable discussion on personnel issues with executives from the Los Angeles offices of the Small Business Administration, the Defense Contract Management Agency, the IRS, the FAA, the U.S. Courts, the Equal Employment Opportunity Commission and the Air Force. We also interviewed executives and managers at the FBI, the State Department's Passport Agency, the Immigration and Naturalization Service and the Bureau of Prisons. The executives were sharply critical of the federal pay and personnel system. But they also reported that they're finding ways to beat the system and recruit and retain the employees they need to fulfill their missions.

CHRONIC VACANCIES

The government's rules make it tough to hire good people. When the FBI office in Los Angeles recently advertised for a nurse, Special Agent in Charge for Administration Gerald Mack says only 10 people responded. Two of the 10 didn't survive the initial review of qualifications. Two more failed the drug test. Four didn't make it through the background investigation. The last two failed a polygraph examination. "None of them made it through," Mack says.

Managers in other Los Angeles agencies find themselves with chronic vacancies as well. A survey conducted by the Los Angeles Federal Executive Board found that 73 percent of federal agencies were having severe recruitment problems. Sixty-seven percent reported serious retention problems.

Federal managers attribute their staffing problems mainly to the pay gap between private sector employers and federal agencies. The gaps are a bigger problem in recruiting and retaining professionals such as lawyers, accountants, engineers and managers than in hiring and keeping secretaries, clerical staff and other support personnel.

Two compensation policies hurt the L.A. agencies' efforts. First is the government's rigid classification system, which forces agencies to hire people at low entry-level wages. At the EEOC in Los Angeles, lawyers work at the agency for a year and then leave because they get better salary offers from private firms, says Douglas Hermosa, the agency's alternative dispute resolution program manager. The young attorneys are unwilling to wait around for higher salaries. During career days at local colleges, Defense Contract Management Agency representatives see a steady stream of students whose interest deflates when they hear about the entry-level pay. "They take our goodies and go to the next booth," says Personnel Management Specialist Rosalie Colmenares.

The second problem is the government's failure to adjust federal salaries to compete with private firms. The 1990 Federal Employees Pay Comparability Act, which based a portion of federal salaries on the different local costs of labor in metropolitan areas, has helped draw salaries closer, but double-digit differences in many occupations remain. The law was intended to close the gap to within 5 percent by now, but has fallen far short of that aim.

In some occupations, the government just can't compete on salary, and federal managers say they get mediocre candidates for jobs in the Los Angeles area-the "worst and dimmest" instead of the "best and brightest," as one engineer puts it. Even good workers lured to government service by the opportunities to take on meaningful work find themselves struggling. A Defense Contract Management Agency manager says an engineer she hired recently couldn't afford to both pay his rent and buy a car. He takes mass transit to get around. Executives in Los Angeles say they feel the constant tug of private sector job offers that would double their salaries overnight. They stay in government out of a sense of duty and because of its good retirement package. Still, "you begin to feel like a volunteer once you reach retirement eligibility," the FBI's Mack says.

On top of the pay problems, some federal rules make hiring even tougher, managers say. The most complained-about rule among Los Angeles managers is the "rule of three," a law that applies throughout the government and that requires managers to choose one of three pre-screened candidates for job openings. Selecting the best workers is a primary duty of managers in any organization. But federal managers in L.A. say the rule of three prevents them from finding the best employees, because the underlying procedures for assessing candidates for federal jobs don't float the best three candidates to the top the list. Assessment procedures reward years of experience rather than accomplishments, so people who have drifted among numerous jobs performing poorly will make the list, while people closer to entry level age with strong performance won't. "The predictive value for job success of the rule of three is minute," says Mike Sappingfield, chief of the personnel branch at the IRS' Laguna Niguel office.

In addition, managers find that most candidates who make it to the rule-of-three list are in their early 40s, and that many come from elsewhere in government. Rarely are they recent college graduates new to the government-the demographic agencies are trying to target to bring youth to their aging workforces. For example, managers aren't getting a good list for the chronically vacant supervisor's job at the Passport Agency. "We're not getting a fresh crop of candidates," says Thomas Reid, the agency's regional director.

FINDING A WAY

The base is about to undertake the largest real estate deal in the Los Angeles area: transferring its current land and buildings to private developers in exchange for more modern facilities at another location. To make that happen, Salem needed a top-notch real estate specialist. He found one, but the salary for the position wasn't going to cut it for the candidate. So Salem offered the employee a recruitment bonus and what is known in federal personnel jargon as an "advanced in-hire rate"-a starting salary above the first step of a pay grade (pay grades have 10 steps). The candidate took the job. For other positions at the base, executives have offered relocation and recruitment bonuses, advanced in-hire rates, training programs that expose participants to numerous kinds of work, compressed work schedules, mentoring programs, free use of the gym and on-site child care. "We have to use everything in our toolbox," Salem says. "To a lot of folks, it's the small things that often make the difference." A key reason that the base is getting new facilities is to improve the conditions-the physical space-that surround base employees day in and day out.

In the last three months of 2001, the Los Angeles Air Force Base hired 20 new people after several years of recruitment difficulties. Salem and the base's human resources chief, Sandra Semrod, tackled their chronic vacancies with the special pay authorities and an emphasis on nonmonetary rewards during recruitment. Semrod worked with the Office of Personnel Management to develop a glossy recruitment brochure with the tagline: "Launch your federal career with the space program." The brochure highlighted the work and training opportunities at the base, plus the advantages of living in Los Angeles.

For Salem and other effective managers in L.A., better pay and more flexible rules would help them in the war for talent. But their absence isn't stopping them from achieving their missions. Managers at the base were able to address their recruitment and retention problem when they realized they couldn't wait around for Washington or OPM or Air Force headquarters to act.

"No one was going to solve it for us," Salem says.