Agencies Need More Flexibility to Fill Vacancies

Government should be a great place to work for talented people who want to tackle the toughest problems. It certainly used to be. But agencies now find it difficult to compete for talent. Skills shortages and vacancies have become perpetual problems. Without major changes, the problems will only increase and performance will deteriorate.  

Well managed companies are committed to adding the talent needed for continued success and they do what’s necessary to hire and keep talent. But government’s workforce management practices are frozen in an entrenched management philosophy and an outdated civil service system that go back more than half a century.   

The shortage of cybersecurity staff is in the headlines almost daily. Job vacancies at the Veterans Affairs Department run to the tens of thousands. Now we’re learning that vacancies at the Metropolitan Correctional Center in Manhattan, which is run by the Federal Bureau of Prisons, may have been a contributing factor in Jeffrey Epstein’s suicide.  

Staffing problems are not new at the bureau. Warnings surfaced years ago. Whitey Bulger’s murder at United States Penitentiary Hazelton in eastern West Virginia made headlines last year.

In the broader economy, there are many occupations where demand exceeds supply—police, teachers, nurses, manufacturing, construction workers. Government agencies are affected by the shortages, of course. But unlike in the private sector, the federal pay scale is unresponsive to occupational developments. And few agencies have initiated the changes in talent management that would once again make government careers attractive. 

Locality Pay Flaws

At the federal level, the most significant personnel system change was the switch 30 years ago to locality pay. That was prompted by staffing problems; agencies operating in New York City had problems filling vacancies throughout the city’s boroughs. A 1990 survey of companies with multiple locations confirmed they relied on local salary surveys to manage the compensation of non-management employees. The Federal Employee Pay Comparability Act was planned to piggyback on that practice, making federal salaries more competitive with market rates in high-pay cities.  

In hindsight, FEPCA’s planners failed to adopt a nuance in the way businesses use market pay data. Companies compare their pay levels and practices with similar employers competing for talent. That is reflected in hundreds of salary surveys. That’s also the basis for the surveys supporting the Federal Wage System and Title 38 salary schedules; their surveys focus on local area employers with common jobs. That’s textbook practice.

Unfortunately, in developing the steps to administer the locality pay system, government ignored the textbooks. This goes back two decades and involves decisions by the Office of Management and Budget and changes in the Bureau of Labor Statistics pay surveys. As a result, government does not generate the pay survey data needed to address local staffing problems. (For a fuller description of the problem, see here.)

The concerns start with the decision to base locality pay on OMB’s Metropolitan Statistical Areas, a practice that dates to 1949. There is a loose logic in relying on the MSAs, but drilling down exposes problems.

Those problems are highlighted with the New York MSA; it covers an area larger than Rhode Island. It encompasses 13 counties in New York state, 14 counties in New Jersey, five in Pennsylvania and three in Connecticut. It’s 161 miles from Cape May, New Jersey to Manhattan—the pay levels in the south Jersey beach towns are clearly not relevant for administering federal salaries in Manhattan.

The Washington, D.C., locality area includes an even larger number of counties: 17 in Maryland, 20 in Virginia, four in West Virginia and three in Pennsylvania plus the District of Columbia. Penitentiary Hazelton is in this locality area. Like the Metropolitan Correctional Center in Manhattan, it has a history of staffing problems.

Salary Management Has Changed 

The textbook for managing salaries was effectively rewritten in the decade following passage of FEPCA.  Those years saw the emergence of knowledge jobs and the growing importance of individual capabilities, defined by job-specific competencies. Today salary programs are far more flexible; jobs are assigned to salary grades based on market survey data. When high demand pushes up the market pay for a job, employers simply assign it to a higher grade.  

A basic flaw in the locality pay logic and the GS system is that the dynamic nature of labor markets is ignored. Government’s recent focus on cybersecurity specialists should make it clear that general or across-the-board increases are not the answer in competing for individuals with high-demand skills.  

Salary Council reports highlight agencies' need increased flexibility to stay competitive in local labor markets. Council hearings focus on specific staffing problems, not a need for across the board increases.

Vacancies Demand Change

No doubt there are agencies where vacancies can exist for extended periods and no one notices. But there are many where vacancies contribute to performance problems, even dangerous situations for workers and the public.

That appears to be true at both the Metropolitan Correctional Center in Manhattan and Penitentiary Hazelton in West Virginia. The two locations and the local labor markets could not be more different. An added difference in Manhattan is the time and cost of commuting to the prison. Public transportation routes make the trip from many residential areas—those where BOP salaries are a living wage—impractical. 

Corrections officers are paid under the Law Enforcement Officer locality schedules. In West Virginia’s Preston County, the salaries are locally competitive; in Manhattan, the salaries—even with the New York area differential—would not attract many applicants. The LEO schedules have no links to state or local prison pay rates.

The location of Bureau of Prison facilities is also a factor in the staffing problems. Of the 122 prisons, many are in rural areas, miles from a locality area. Residents in those areas are aging and their numbers declining. The BOP’s education and experience requirements reduce the pool of possible applicants.  

Pay is not the only problem; prison jobs are not for everyone. Prisons of course are 24-hour operations.  Vacancies force current employees to work longer hours. Over 35% of the bureau’s workforce will meet the age and service requirements for retirement within five years.  

At some point soon, the government is going to have to address this situation. It’s suggested an initial step would be to ask groups of managers and employees to discuss staffing problems and develop recommendations for near-term change. They know how working in their facility is viewed in the region.  They also understand the changes that are possible and would improve the current work climate. To borrow the title of a recent National Academy of Public Administration report, there’s “No Time to Wait.”