Overload

Worse, the workload will surge just as the agency is facing a retirement wave of its own. The average Social Security employee is about 47 years old and has about 20 years of service. By 2010, 28,000 of its current 65,000 workers will be eligible to retire. Take away another 10,000 expected to leave in the next nine years for other reasons, and the agency may have to replace more than half its workforce just as it is gearing up for the increase in workload and incorporating new technologies to process applications, deliver payments and follow up on beneficiaries.

Although the two retirement surges remain several years in the future, questions already are being asked on Capitol Hill, among outside experts and even within SSA about the agency's ability to cope with these twin demands. And there's even more trouble on the horizon: Within 15 years, SSA will be paying out more in retirement benefits than the payroll taxes it takes in. In about 40 years, the old age and survivors insurance trust fund will be depleted. By 2075, the agency will be taking in only enough to cover two-thirds of the benefits now promised, and that proportion will continue to decline. The gap between payroll taxes collected and benefits paid underlies numerous Social Security reform initiatives, including the presidential commission that is to make its proposals later this year. In the meantime, observers are warning that SSA customer service is declining and that improvements in technology might not deliver the efficiencies the agency is counting on to help it over the twin retirement peaks looming ahead.

The Social Security Advisory Board, a bipartisan oversight body that advises Congress and the White House on issues involving the agency, "is trying to sound some alarm bells," says chairman Stanford G. Ross, a former Social Security commissioner. "We think there's a very serious problem currently of service delivery. The lines are too long in many offices, the 800 number is not what it ought to be, there's too long a wait for hearings. There's a whole host of problems that need addressing now.

"If you then project out the coming workloads and the ever-increasing complexity of the program and the lag time between getting appropriations for resources to meet these challenges, I think this is a major problem," he says. "There's a service delivery gap that's as serious as the financing gap."

Boomer Boom

The aging of the baby boom generation-the 500-pound gorilla of American demographic trends-has been on SSA's radar screen for decades. But only recently has the government paid much attention to that trend's effects on its own workforce. The General Accounting Office, personnel experts and legislators have joined in a chorus calling on agencies to plan now to replace the one-third of all federal employees who will be eligible to retire over the next five years.

SSA was ahead of most agencies in realizing the potential impact of upcoming retirements on its workforce, completing a study three years ago that analyzed not just retirement eligibility but also likely retirement dates by occupation and agency component. SSA projects, for example, that by 2010 it will lose to retirement two-thirds of its supervisors and one-half of its claims representatives and computer specialists. Retirements are expected to peak at nearly 3,000 a year between 2007 and 2009. "Our [workforce] problem is probably fairly typical," says Sue Roecker, director of SSA's office of strategic management. "We also . . . can fairly confidently project a steady increase in our workload over the next decade, since our work is based on demographics. A lot of other agencies don't necessarily have the ability to do that."

In early 2000, the agency laid out its goals for recruitment, retention, training and its transition to a workforce of the future. Later in the year it published its "2010 Vision," a strategic plan that set goals for dealing with future workloads while meeting service delivery standards. The documents paint a picture of a future SSA populated with employees who are more skilled, who have a broader range of expertise and authority than today's staff, and who are working in a streamlined, highly automated environment. But neither document projects how large that workforce will be. SSA grew substantially during the 1970s to handle a burgeoning workload of SSI disability claims and other new responsibilities, then shrank by some 20,000 positions during the overall government downsizing over the last two decades. The agency's fiscal 2002 budget proposal projects the workforce holding virtually steady next year, with a gain of just 147 positions.

"We can't say what our actual staffing level will be in 2010 because that depends on the budget process," says Paul D. Barnes, deputy commissioner for human resources. "Our focus is on how many people are we going to lose, what kinds of procedures do we need to have in place to deal with those losses and how do we transition the people who are with us now to the people who will be with us then." The National Council of Social Security Management Associations, an organization of some 3,000 managers at field offices and teleservice centers, recommends reversing cutbacks in supervisory positions-some 1,000 front-line managerial positions were lost in a de-layering effort over the last five years-and increasing the field office staff by 5,000 positions to about 34,000. About 75 percent of the council members who responded to a survey last year said waiting times in their offices are unacceptable. About the same percentage said their offices did not provide acceptable telephone service and that waiting times had increased over the last five years. Of those holding that view, more than four-fifths cited a lack of staff. Nearly 80 percent said the quality of the work had declined in that time, with three-fourths of those citing the reduction in supervisors as a reason.

Says Steve Korn, president of the association, "The managers are now looking internally at how do I manage this particular unit I'm supervising, versus how do I better coordinate services in the community-working with the welfare director, working with the welfare office, that kind of thing. Those types of things, which were part of the mix, but are not as measurable, really have slipped." The American Federation of Government Employees, which represents about 50,000 SSA employees, also is urging the agency to add workers. "When you have a growth agency like us, if you don't provide for similar growth on the administrative side, you're not going to do that work-or you're going to do it in a way that's not going to be pleasing to the public," says Witold Skwierczynksi, president of AFGE's National Council of SSA Field Operations Locals, which represents employees who deal with the public in field offices and teleservice centers. "I'm not too optimistic that the agency can get sufficient resources to redesign in a way that provides the kind of service that the American public deserves. The agency's having a hard time keeping its head above water right now. If you expand the number of options the public has with regard to how they interact with the agency, you have to provide bodies to do that," he says. "You can talk as much as you want about having a 24-hour-a-day operation seven days a week and having an 800 number with operators to answer your questions and take your claims, but unless you provide the resources for that, it's not going to happen."

Technology Skeptics

According to "2010 Vision," SSA would need 95,000 to 100,000 work years to handle its projected 2010 workload using current methods. "We recognize that an infusion of this level of resources is neither likely nor the best means to achieve our vision," it says. Thus the agency plans to make more and better use of technology. It has crafted a plan for restructuring business practices to build on its recently installed computer network and to make more use of wireless devices, new Internet applications, and new speech and video technologies. Social Security expects the investment in technology to produce savings in staffing but has no firm projections. Much of the agency's work-especially that related to disability claims-is labor-intensive, and technology improvements can only help so much. Already, SSA has a reputation for efficient delivery of services; in 2000, administrative expenses as a percentage of total expenditures were just 0.6 percent for retirement benefits and 2.9 percent for the disability insurance program. In addition, political and program considerations may limit the agency's ability to save personnel costs.

For example, one common benefit of automation is freedom to consolidate small, scattered offices. But cutting back on SSA's far-flung network of some 1,300 field offices, 36 teleservice centers-which take claims and provide information on Social Security benefits-and 130 offices where hearings and appeals take place does not appear to be a viable option. The agency expects the field offices to become less involved in taking applications, but instead of shrinking in number, they will be devoted more to complex cases and follow-up work. "We're not a private company where we can offer our services to whoever wants to come in and deal with us in the way we want to offer services. We have to offer services that can be used by everyone," says Roecker. "The population we serve is not just one homogenous group," she adds. "We have folks who are homeless, illiterate, non-English speaking, the elderly. Their choice for dealing with us needs to include an opportunity to walk into a local office and deal with people face to face." In addition, for security reasons, the agency prefers to handle certain transactions in person. The agency is streamlining many of its work processes. Its revision of the workflow at hearings offices to reduce turnaround times is a good example. It also hopes to move toward a "single point of contact" approach, in which one employee could handle all of an applicant's needs. SSA has been experimenting with that approach through a pilot program that combines the multiple functions involved in processing and adjudicating disability claims.

However, one-stop shopping will require retraining employees schooled as specialists to give them broader expertise, as well as putting the right technology in their hands. Skeptics doubt the agency's ability to deliver, especially on the technology end. "What I have found is that we tend to be more optimistic about how quickly and how great the effect of technology will be in terms of productivity improvement," says Korn, district manager of the SSA office in Vallejo, Calif. "Because it's so difficult to get money out of Congress, we tend to promise things to get the money that aren't necessarily proven, and the time frames tend to slip. While technology will be part of it, it may not be the panacea that it's presented as. We need to be realistic about what the resource needs are, in addition to any productivity gains that automation does give us," he says.

"They tend to over-promise," agrees a staff member of the House Ways and Means Committee, whose Social Security Subcommittee held hearings last year on the agency's dual retirement challenges. "We're asking them to really scrub things and to be very clear with us about what they're going to need over the next five years-particularly when it comes to the human capital they're going to need, and the technology, which they clearly are in need of desperately. We want to be sure that they are accurate in terms of assessing their needs, accurate in terms of cost-benefit analysis and being able to achieve what they say they're going to achieve."

GAO has criticized the agency in several reports for its handling of initiatives to improve processing of disability claims. For example, SSA spent seven years and more than $71 million designing and developing a new software application to better automate the disability claims process. But it had to discontinue the initiative and fall back to a less ambitious approach because of continuing performance problems and delays in developing the software, GAO reported in January ("Major Management Challenges and Program Risks: Social Security Administration," GAO-01-262).

"Historically, I think you can show that a lot of the projected savings from technology that were used to justify reductions in the workforce have not taken place," says Social Security Advisory Board Chairman Ross, a partner in the Washington law firm Arnold and Porter. "This was a game in which the agency took the cuts but the cavalry never came to the rescue with the technology. There's a deep skepticism within the agency on this issue," he adds. "I think in the long term there will be technological improvements. How much they'll help is conjectural, though, because the most difficult workloads like SSI and disability are labor-intensive even if you have good technology. I think there's a justified skepticism about technology being the savior."

Says Roecker, "Technology can't stand alone. It's an enabler but it's not the only factor that has to be addressed. We've tried a number of things-streamlining, process redesign, use of technology. That puts us in a good position to understand how you have to balance your approach as you look forward to the next decade."

Filling the Void

The challenge of integrating new technology is accompanied by the challenge of integrating a significant number of new employees into the agency. Step No. 1, of course, is finding enough people willing to take the jobs. So far, that hasn't been a major problem despite the government's overall recruiting troubles. In fiscal 2000, SSA lost about 3,400 employees but hired about 3,500, notes Barnes. "Thirty-five hundred people for 10 years is 35,000 [about the projected loss over that time]. So we think we are well-positioned to do the recruiting that we need to do. Being able to hire that many people last year is the best proof that we're headed in the right direction," he says.

Because of the desk-bound nature of much of its work, SSA offers opportunities for family- friendly work arrangements such as alternate work schedules and telecommuting, and can readily accommodate people with disabilities. SSA in particular has a great need for bilingual employees, particularly those who speak Spanish. Over the last three years, 25 percent of the agency's hires have been Hispanic, and the agency's population is 10 percent Hispanic, 3.4 percent above the governmentwide average. SSA employees speak more than 90 languages. "What's critical to this agency is that we reflect the community we serve," says John Rynne, district manager of the Rutland, Vt., office, who is part of a special recruiting working group in the agency's Boston region. "It's not just going to a college and setting up a booth and saying, 'Hey, is anybody interested?' Is there a newspaper where we can place a job announcement looking to bring in, say, Chinese-speaking individuals who are qualified candidates? How do we bring in individuals with disabilities? Rather than just do a blanket announcement, get on the phone and call up the association for business and industry and ask are they aware of any candidates." "We have a good brand recognition," he adds. "Social Security is favorably thought upon. We can hire people."

The agency also is enticing prospective hires with such tools as recruitment and retention allowances and relocation bonuses. In addition, SSA has been delegated for one year the authority to rehire up to 500 Social Security retirees without having to reduce their annuities, an authority it would like to have permanently. About 75 retirees have returned under this inducement so far.

Another major initiative is succession planning-making sure the agency has people ready to assume positions of responsibility as executives leave, says Barnes. "We really feel very good about what we're doing about growing the next generation of leaders," he says. The agency has beefed up its leadership development programs, which include a Senior Executive Service candidate development program for grade 15 employees, an advance leadership development program for the grade 13 and 14 levels, and a leadership development program at the 9, 11 and 12 levels. About 1,200 employees have participated over the last three years. The programs feature rotational assignments at SSA, in other agencies and in the private sector and specific training.

The agency has revamped many of its traditional training programs by, for example, emphasizing on-site sessions, including desktop video instruction, to replace its past use of training centers. In addition to savings on travel costs, the agency is finding that employees who couldn't spend long periods away from home-most typically women-now can get training that is valuable for career advancement. The agency would like to begin hiring replacement employees before the incumbents retire, in order to pass on institutional knowledge. Such transitions are crucial because "the people who have been working for the agency for the last 20 or 30 years are going to be the people leaving," says Tony Pezza, vice president of the National Council of Social Security Management Associations. "We really need to get people in place before that happens. This is a complex program. We need the lead-time to get people in place, to get them on duty, fully trained and get them to the journeyman level before the retirement wave really impacts us. You just can't wait for them to leave and replace them the next day with a fresh face. No matter how much those fresh faces smile, they don't have the background and the technical knowledge to handle this program," adds Pezza, who also is district manager for SSA's Hackensack, N.J., office.

Barnes says that while the agency has done some advance hiring, budget constraints limit how much it can do. "We're hopeful that we can work with OPM and the Congress to provide a little flexibility to do more of that, particularly in instances where you have offices in isolated areas where you really do need some time for transition," he says.

The Clock's Ticking

SSA still has time to accomplish the workforce transition and other changes, observers say, but that time is growing shorter. With the agency lacking a new commissioner through the first half of 2001 and with so much of the Bush administration's attention likely to focus on the financing, not the operation, of Social Security, they wonder whether the agency will put those plans into effect. "There is some time, albeit brief, for them to make some of these decisions. They clearly have been looking at alternative ways of doing business to meet their customer needs and try to streamline the process," says the House Ways and Means Committee staffer. "It boils down to whether they'll be able to do what they say they're going to do."

Meanwhile, there are signs of trouble, such as the waiting time in field offices, where waits of up to four hours "are not uncommon," according to the Social Security Advisory Board. Even with the agency's vaunted toll-free number (800-772-1213), 17 million of the 76 million calls last year either resulted in a busy signal or were abandoned before callers were served. Just one and one-half years ago, in December 1999, the service scored an 82 in a customer satisfaction index-15 percent higher than the government as a whole. Recent reports from the Social Security Advisory Board, GAO and SSA's inspector general show that slow processing times and payment errors continue to plague the SSI and disability insurance programs, a portent of more severe problems when the workload surges.

Says Ross, "The agency, I think, is whistling a little in the dark. They're saying, 'Well, if we get this, that and the other thing, we'll do the job. We always have. We'll be OK.' I don't think you'll wind up with the resources you're going to need unless you make your case clear. The beginning of getting the resources is being candid with the Congress and OMB and the President and the public about how deep and serious your problems are.

"Clearly, the number of workers is inadequate for the workload, and, short term, there's no substitute for the number of workers. Longer term, maybe technology and different methods of doing business can substitute for bodies, but I don't think that's true in the short term," he says. "The public is going to be ill-served if these shortfalls in service delivery are not corrected, like, yesterday. It's not being well-served right now in some ways."