The State of the Civil Service
n January 2001, when the General Accounting Office placed the management of the federal workforce on its list of high-risk areas, the message was clear: The state of the civil service was not good. "Serious management challenges across a wide range of federal agencies, covering programs that involve billions of federal expenditures, can be attributed to shortcomings in how agencies manage their human capital," GAO noted.
Three years later, the civil service is still facing huge challenges, the consequences of a decade of downsizing in which little thought was given to how to ensure that the government kept the employees with the skills it most needs. Most agencies find themselves with aging workforces. Fully 50 percent of all federal workers will become eligible to retire within the next five years.
Even so, the state of the civil service is better than it was three years ago. Agencies, prodded by GAO, the Office of Personnel Management and the Office of Management and Budget, have made steady strides in improving recruiting and workforce management. At the same time, Congress has embarked on a wave of civil service reforms not seen since 1978. The Homeland Security Department and the Defense Department have won the authority to rewrite personnel rules for nearly 1 million civil servants. The Homeland Security bill simplified hiring procedures governmentwide, while the Defense bill created a personnel system for the nearly 7,000 members of the Senior Executive Service. OMB, OPM and GAO have set up incentives for all agencies to undertake personnel reforms, and created mechanisms for evaluating progress.
OPM Director Kay Coles James says the changes are aimed at eliminating rules that hinder managers, not altering the core values of the civil service. "Most people equate the civil service with the outdated, outmoded, antiquated, burdensome, overly bureaucratic processes that, I agree, are in dire need of reform. But I see the civil service as those core values and principles that make us the envy of every other nation."
To be sure, several challenges lie ahead on the road to improving the state of the civil service, but many agencies at least have recognized the problems and have taken steps to correct them. Even before passage of the Defense personnel legislation in November, GAO Comptroller General David Walker told Congress that the federal government had "made more progress in addressing the government's long-standing human capital challenges in the last two years than in the last 20."
A NEW CIVIL SERVICE
It's clear that this progress has meant remaking the civil service in a way that will ultimately render it barely recognizable. Indeed, when Congress created the National Security Personnel System in November, allowing the Pentagon to set up a new human resources structure for up to 700,000 civilian employees, Elaine Kamarck, a lecturer at Harvard's John F. Kennedy School of Government and former adviser to President Clinton, told Government Executive: "It's the end of the civil service as we know it." And she was pleased. Kamarck and others say the Defense legislation, along with the Homeland Security law, will enable the federal government to replace the outmoded General Schedule with pay-for-performance systems that will help attract a new generation of ambitious, talented employees. And with Defense and Homeland Security now freed of the strictures of Title 5 of the U.S. Code, which governs the civil service, less than a quarter of federal workers will remain under the old system.
For others who care deeply about the civil service and the merit principles that sustain it, the rapid-fire reforms have caused some consternation. "I don't think there has been much of a conversation about the meaning of civil service," says Diane Disney, who formerly oversaw Defense's civilian employees and is now a dean at Pennsylvania State University. Disney says "there is a danger in letting 1,000 flowers bloom" in the personnel arena. Indeed, she says, myriad agency systems could eliminate the "ethos that is the civil service."
And there's no guarantee that the reforms at Homeland Security and Defense will work, notes Robert Tobias, an American University professor and former president of the National Treasury Employees Union. "I have long thought that a centralized personnel system in the federal government was antithetical to holding agency leaders responsible for agency results," he says. But, the Defense and Homeland Security reforms are "just theoretical approaches to problems that have been identified. They don't automatically solve the problems."
The most vehement opposition to the reforms has come from federal labor unions, led by the American Federation of Government Employees and the NTEU. They argue that the flexibilities granted by Congress will allow the Bush administration to pursue further downsizing of the civil service, place greater reliance on contractors and politicize the federal workforce. These concerns aren't just sour grapes. Even GAO's Walker is worried about the route Congress took in the Defense measure. He thinks the bill gives too much authority to the Defense secretary and provides too few safeguards to ensure the preservation of merit principles. "We want DoD to have reasonable management flexibility, but we want them to do it the right way," he says.
Still, a string of bipartisan blue-ribbon commissions-most recently the National Commission on the Public Service, chaired by former Federal Reserve Chairman Paul Volcker-have supported the notion that the civil service is in need of dramatic reshaping.
PROBLEMS AND SOLUTIONS
Many civil servants are nearing retirement age and have skills that are no longer in line with agency needs. But the problem with today's civil service, the Volcker commission reported last year, runs much deeper. The entire nature of federal work has shifted over the last half-century, when the general schedule classification system was established. A government of clerks has become a highly skilled, highly educated workforce of technicians and managers. In seeking these 21st century workers, the government must compete for talent with the biggest, best-paying companies in America.
To be sure, the problems identified by GAO in 2001 have not been resolved yet. The workforce continues to age. According to OPM's most recent statistics, the average federal worker is now 45.6 years old, more than three years older than the average 15 years ago. Numerous agencies-and entire cabinet departments-report that more than 50 percent of their workers will be eligible to retire over the next five years. And while the number of actual retirees is expected to be lower than the eligibility rate would indicate, retirement numbers began to accelerate in 2003. After years of overestimates, OPM actually underestimated by about 10 percent the number of retirements in 2003. Among supervisors, it missed by an even greater margin: Nearly 40 percent more managers retired than the agency had predicted.
Turnover, while low overall, is high among some skilled professions and among the youngest and newest federal employees. Employees in the prestigious Presidential Management Internship program, set up by President Carter "to attract to federal service men and women of exceptional management potential," are leaving the government just as quickly as anyone else. According to a study by the Merit Systems Protection Board, about half of PMIs leave government service within five years. Last November, President Bush issued an executive order creating the Presidential Management Fellows Program to replace the internship program. OPM is working out the details of the revised program, which may be expanded beyond the internship's two years.
Not everything, however, is bleak. Bright spots are beginning to emerge. In OPM's most recent human capital survey, for example, more than 90 percent of federal employees said they believe their work is important and that their efforts contribute to their agency's mission.
As Brian Friel pointed out in the May 2003 Government Executive, the federal workforce remains much more stable than that of private industry. Only 1.7 percent of federal workers quit in 2002, a rate less than half that of the private sector. At the same time, when government agencies have set their minds to it, they've been able to attract a large number of job candidates. GAO reports that it has about 15 applicants for every analyst opening. When the Transportation Security Administration sought to hire 62,000 screeners in 2002, 1.7 million people applied. When the Customs Service went looking for 2,300 new law enforcement officers that year, it had 40,000 applicants to choose from.
According to a Brookings Institution survey, almost two-thirds of college seniors say they have seriously considered a job in public service. And that interest is-slowly-changing the demographics of the workforce. The percentage of employees in the 20 to 24-year-old range, for example, grew by about 1 percent over the last five years. To be sure, the biggest percentage gains were among the oldest workers, those over 50, but the youngest twenty-somethings outpaced all other age groups between 25 and 50. At the same time, the workforce is getting more diverse. Female employees have grown from 42 percent to 45 percent of the workforce during the past 15 years, while the share of jobs held by minorities has grown from 26.9 to 31.1 percent. Women and minorities also are making strides in the Senior Executive Service. By 2006, the percentage of SES members who are minorities is expected to rise from 13.8 percent to 14.6 percent. The percentage of white men in the SES is projected to decline from 67 percent to 62 percent, while the percentage of white women is expected to increase from 19 percent to 23 percent.
The pressure to remake the federal workforce and restructure the system that governs it is yielding progress across government. The 24 largest agencies have all hired chief human capital officers whose sole responsibility is to ensure that managers hire, train and develop employees. Under OPM supervision, agencies have begun to offer voluntary separation incentive pay and early retirement buyouts to reshape their staffs.
Other agencies have taken specific steps to improve their personnel management. The Energy and Labor departments, for example, are among those that have successfully linked performance expectations to agency strategic plans and mission objectives, according to OPM Deputy Director Dan Blair. NASA has impressed OPM by developing an automated competency management system that will allow supervisors to study the particular skills of individual employees, teams and the agency as a whole.
More far-reaching reforms are still under debate in Congress. The proposed Federal Workforce Flexibility Act, for example, would allow agencies to spend more on recruitment and retention bonuses, and would allow agencies to offer new mid- and senior-level employees more vacation time. The bill, sponsored by Sen. George Voinovich, R-Ohio, and Rep. Jo Ann Davis, R-Va., would also allow OPM to authorize 10-year personnel demonstration projects involving up to 10,000 employees. Currently, under authority granted in the 1978 Civil Service Reform Act, OPM can only authorize projects involving up to 5,000 employees and lasting no longer than five years.
Still, even with all the recent legislation and proposals for further reform, one big question remains: Will Congress and agencies stay the course when budgets grow tighter, as they assuredly will? Thus far, the signs are not good. For example, President Bush last year asked Congress to authorize $500 million to set up a fund to award bonuses to top performers, but the House and Senate only appropriated $2.5 million.
Despite the increased attention to workforce development, Tobias still believes that "the development of human capital in the federal government is not an institutionalized process." In other words, it may be the first thing to go when budgets are slashed.