Pay reform, recruiting cited as top personnel challenges

Pay system reform and recruiting and retaining an effective workforce are among the most critical challenges human resources leaders across the government face, according to a study released Thursday.

The report from the nonprofit Partnership for Public Service and the global consulting firm Grant Thornton is based on interviews with 55 federal human resources officials from 28 major agencies and more than a dozen small agencies.

"The Partnership's first policy proposal was the creation of the chief human capital officer [position]," said Max Stier, president of the Partnership, at an event Thursday. "It's fabulous to see in this report the real collective wisdom of that group."

The majority of participants identified a move to a more performance-sensitive and market-based pay system as critical to meeting recruitment and retention needs. Most cautioned, however, that the process of designing and implementing new pay systems should be slow and deliberate, with credible performance management systems and appraisals coming first.

They argued that keeping a strong focus on results and outcomes rather than process is vital, but cautioned against implementing a "one-size-fits-all" approach to human capital that would force the same administrative and reporting requirements on agencies that are vastly different.

The interviewees said the Office of Personnel Management and Congress should lay out guidelines for the outcomes of human resources programs, while giving agencies as much latitude as possible to achieve those results.

Demographic changes such as the impending retirement wave and gaps in the middle ranks also came up as a cause of concern. Nearly all human resources leaders interviewed agreed that workforce planning -- basing decisions on a desired set of skills rather than number of employees -- is the key to meeting these challenges.

They also said many of the government's 20,000 human resources professionals lack updated skills. More than half of interviewees said their operations lack sufficient funding, preventing them from reengineering business processes and investing in new technologies.

Despite these challenges, human capital chiefs reported that performance management at their agencies is improving, specifically in linking individual performance plans more closely to strategic agency goals and mission requirements.

Some of the leaders said they have made substantial progress in reducing the amount of time it takes to hire employees. They said, however, that they would appreciate having greater direct-hire authority, as well as the ability to offset retirees' annuities to keep needed talent in the workforce.

Retirees now have little incentive to return because current law cuts their salaries by the amount of their pensions. "We've had to bring back priceless human capital through contractors," said Ron Sanders, CHCO for the Office of the Director of National Intelligence, at Thursday's event. "Frankly, I'd like to see them come back as reemployed annuitants."