Managing Pay When the Goal is Rebuilding the STEMM Workforce

Workforce management in the federal government is at a crossroads. In March, a House subcommittee held a hearing, “Brain Drain: Rebuilding the Federal Scientific Workforce,” that focused on the talent lost during the Trump years. A staff report quantified the steady decline since 2016. President Biden’s budget proposal makes clear that the new administration views federal scientists and technologists as far more important than did the Trump administration. Further, the pandemic has proven the importance of the medical research community. 

But a key problem for government is that the General Schedule is an impediment to attracting talent for all STEMM field occupations: science, technology, engineering, mathematics and medicine. In addition to what many assume are noncompetitive salaries, seniority-based step increases send the wrong message for knowledge specialists. The recent Merit Systems Protection Board study documented all too clearly that the premise of performance-based step increases has failed. Additionally, the class standards for many of these job families are woefully out of date. 

Pay is a universal factor in recruiting and retaining talent. Federal policy details the Superior Qualifications and Special Needs authority and provides the framework for special rates, direct-hire authority and the Presidential Management Fellows program, but there is no policy commitment to maintaining competitive salaries. The Office of Personnel Management website states “the federal Government offers competitive base pay” but there is no evidence that any agency regularly tracks market data for STEMM specialists.

This would be an ideal time to rethink the talent management policies for these essential occupations. The common thread is the importance of professional knowledge. STEMM specialists are key to addressing critical problems that threaten the country. Government needs to be able to hire and retain the best.

James L. Perry, a leader on research in public administration, argued in January that fixing federal compensation should be a top priority for the Biden administration. He’s right, but as he noted, “we are stuck in neutral.” Meaningful reform for the entire white collar workforce would require analysis of a mountain of data, and even then, the political climate would almost certainly doom the effort. 

However, there is likely to be broader support and less resistance with a focus on STEMM fields. FedScope lists almost 350,000 employees in STEMM fields. This would not be a small project, but active professional associations could be enlisted to support the effort. Starting with the STEMM workforce would make it easier to initiate broader reform later.

The Importance of Fair Pay

Generational differences—young applicants vs. long-serving employees—represent a dilemma for government. To rebuild the workforce, agencies will need to attract young, qualified talent. Once hired, the management of their salaries will influence both their performance and their decision to commit to federal careers. Agencies need to learn if concerns about fair pay contribute to the early turnover problem. At the same time, the concerns of current employees cannot be ignored. Older employees worry that changing the GS system will adversely affect their careers. Balancing the concerns of the generations will be an ongoing issue across all occupations.

The staffing problems for these essential specialists are exacerbated by another important consideration: Talent shortages in the STEMM fields are real and expected to become worse as the economy improves. When the GS system was created, the focus was internal, and “fair pay” was limited to the pay of co-workers. The unions continue that tradition. It’s different now that pay data are readily available on websites like Glassdoor. Years ago, companies dropped the practices to maintain “internal equity.” Now they focus externally on market pay levels. 

Talent shortages make responding to competitive practices even more important. The importance of individual capabilities reinforces this concern. Simply stated, in knowledge fields as well as those where performance is valued, the best employees command higher salaries. It’s not an added cost, it’s an investment. The GS system with its annual “employer cost” adjustments and automatic step increases is not suited to competing for talent. With high demand talent, flexible practices are indispensable.

The development that is now in the headlines is the pressure to identify and replace discriminatory practices. Leading companies have recognized the importance of practices fair to all employees. It’s not yet clear how employers will respond but it’s unlikely they will ignore the concerns. Women and minorities are badly underrepresented in these fields. Increasing their numbers is an added challenge.

Planning new STEMM pay systems has to consider two key issues: 1) the need to attract and retain qualified, essential skills, and 2) the impact of pay and the way it is managed on individual performance and careers. 

A blueprint to assure support and buy-in for new pay practices as well as other people management practices is the strategy adopted by the National Geospatial-Intelligence Agency soon after it was created. The agency has won awards as an employer of choice.

The NGA Strategy

When NGA was created in the mid-1990s, the agency developed totally new people management systems. An early step was conducting a best practices benchmarking study. In addition, the HR team conducted a series of focus groups to understand manager and employee concerns and needs. Finally, the agency established a steering group of employees from across the organization.

The focus groups and steering team were the starting point for continuing employee involvement. When they reached agreement on the framework for new HR systems, the HR team asked 100 additional managers and lower-level staff members to participate on eight teams to flesh out new HR practices. Feedback was solicited at several points from stakeholders, including union representatives.

This involvement from inception assured buy-in, or ownership, across the different groups. Individuals who played a role often became champions of the new system. This also provided for diversity of perspective, which helped system planners anticipate special circumstances and issues that could prove problematic. By working with unions, NGAs leadership was able to address their concerns directly and mitigate them. One additional benefit of engaging the workforce early was that employees developed an understanding of issues and hurdles, along with linkages to organizational goals, putting them in position as trusted sources of information for coworkers. Developing a strategy to build support is key.

STEMM specialists are found in multiple agencies. Their jobs and duties vary. Furthermore, the several specialties work in a variety of private sector organizations. That makes it important to understand emerging skill deficits, competitive practices and what’s needed for effective recruiting. The answer is the NGA strategy expanded to multi-agency teams similar to the CIO Council to guide planning and ongoing adjustments. Their efforts will need to be coordinated but each team can develop program policies and budgets relevant to a field. A key is providing agencies the flexibility to be responsive to labor market developments. 

Dual Career Ladders

The pay program model that fits these occupations is a dual career ladder, based on salary bands. NGA and virtually all of the demo projects, starting with China Lake, manage pay within salary bands. The National Association of Public Administration has recommended the banded program model in reports going back three decades. It differs significantly from the GS model on a key point: Pay is not based narrowly on the “job,” it also considers individual skills and performance along with the experience attracting essential talent. It’s a proven program model that fits any knowledge job family.

Research shows the typical career ladder has three or four levels: entry, developmental, and full performance; the fourth is reserved for experts. Occupation-specific competencies can be defined for each level and used in evaluating employees for pay increases and promotions. Professional associations have often defined relevant competencies.

The ladder idea provides for paying high level, non-supervisory specialists as much or more than their managers. Under the GS system the only way a technical specialist can earn more money is to switch to a managerial career track. The skill sets required for the two roles are very different. The agency loses a valued specialist and finds the new manager is not effective. Dual career tracks avoid that problem.

In government, the STEMM fields sometimes include individuals who are among the world’s experts. The highest band should be reserved for those individuals—the Dr. Faucis of their respective fields. Their selection could be managed by a group of peers, possibly including practitioners from other sectors. 

Salary Planning

Bureau of Labor Statistics surveys do not generate occupation and career stage specific data—the BLS sampling strategy precludes reporting what jobs are paid in the labor market. That makes it unique among the thousands of private sector surveys.

STEMM salary data are readily available in private sector surveys. A search on the phrase “STEM salary surveys” produced 80 million results. Since surveys have different participating employers, it will be important to develop consolidated, occupation specific databases. The teams similar to the CIO Council should oversee the market analyses. Agencies need data comparable to what STEMM specialists have available on websites like Glassdoor. 

The overriding concern is government’s ability to address the challenges confronting the country. When key jobs remain unfilled or new skills are needed, it’s a mistake to manage compensation as a cost. Planning a pay program that attracts essential talent is an investment in the future.