Federal HR Leaders Want a Comprehensive Review of the Government's Pay System

Top HR officials across the federal government have told the Office of Personnel Management that a combination of scarce funding and the strictures of the General Schedule pay system constitute “significant obstacles” to positive workforce outcomes, and that there must be a “comprehensive review” of the federal government’s pay system.

OPM this week published the summary report of its fiscal 2019 governmentwide human capital review survey. In the report, OPM said that although agency officials are already seeing dividends from taking a more data-driven approach to analyzing human capital management, agencies need more flexibility to make improvements.

“While comprehensive workforce needs analyses are maturing within the federal government, the process of identifying emerging needs is challenging,” the report stated. “Consequently, most agencies are just beginning to make progress on skills gap assessment and mitigation . . . Recruitment and retention for hard-to-fill vacancies such as information technology and cybersecurity positions in particular, are concerns for many agencies.”

According to the report, one of the biggest issues standing in the way of change is the General Schedule pay system, which officials says affects everything from compensation and retention of existing employees to recruitment of the next generation of federal workers.

“Many agencies view the current structure of the General Schedule to be a considerable obstacle when competing with the private sector for new talent and retaining high-performing employees,” OPM wrote. “Particularly in critical occupational areas, such as IT and cybersecurity, some agencies indicated that salaries are too low to be competitive, even when combined with compensation and benefits.”

As a result, many agencies have either established alternative pay systems or received special pay and hiring authorities to help meet their needs in mission-critical areas. But that has led to a two-tier system where agencies must compete against each other in addition to the private sector for new talent.

“Many agencies have secured congressional authority to establish alternative personnel systems that better enable them to strategically manage their workforces, but this has also caused problems for the agencies that must use the General Schedule because they do not have access to those same tools,” the report stated.

Even a wholesale change to how the federal government compensates its employees likely would not be enough to meet the needs of agency HR leaders, however. Agencies already on alternative pay systems also reported recruitment and retention challenges, often specifically tied to scarce funding for HR and pay.

“Even when flexibilities are available, agency funding issues may limit their use,” OPM wrote. “For example, in agency reports addressing cybersecurity skills shortages submitted to OPM this year, half of the [chief human capital officers] agencies cited stringent budgets as a challenge to attracting and retaining cybersecurity talent. To address any federal pay disparity with the private sector that has caused recruitment or retention problems, 12 agencies plan to seek special rates for various positions.”