Championing an expanded role for HR in the federal government

Last year the Office of Management and Budget announced a “reset” on how agencies manage their workplaces. Sometimes it’s hard to believe but the civil service system is today virtually unchanged since it was adopted in 1948 (except for the introduction of locality pay). Now, with the Great Resignation, dramatically altered labor markets, and serious staffing problems in several agencies, changes are definitely warranted. It follows similar changes in the private sector, led by the emergence of an expanded role for human resources. It supports the President’s Management Agenda’s No. 1 Priority - Strengthening the Federal Workforce. In light of what’s been called, the “new world of work,” change is needed, and arguably essential.  

The impetus for change in the private sector was the COVID crisis. The layoffs and business closures, followed by working remotely changed the work environment more than at any time in decades. The abrupt change in the daily lives of workers changed their job expectations. Employers in every sector, here and in other developed countries, are finding it difficult to fill vital job vacancies.  

The mounting shortages are affecting the delivery of vital public services. The IRS failure to fill thousands of tax processing positions stands out. That makes it a problem that should be addressed at the highest levels. Pew research shows a steady decline in the public’s trust of government, making it critical for leaders to focus on maintaining performance levels. However, that’s less and less possible with prolonged worker shortages. 

In the past staffing shortages have not been a pervasive problem in government. Recent reports, however, show that’s no longer true. In addition to the IRS, several other agencies have reported worker shortages – the Bureau of Prisons has reported chronic staffing shortages, Social Security Administration has had a “historic staffing shortfall,” the Veterans Affairs Department has reported “a spike in positions with critical shortfalls.” Last week The Washington Post reported there is “a workforce crisis.”

State and local government agencies are experiencing mounting job vacancies as well. The staffing problems in law enforcement, public health and public education have made headlines across the country.

Tight Labor Markets Are a Problem

Worker shortages are not a new problem. It began after the Great Recession and has gotten steadily worse. It’s attributable to two demographic trends that are affecting economies in every developed country – the aging population and smaller families. Birth rates have been steadily declining. Fewer young people are starting careers. Significantly, 30% of the U.S. population is age 55 or older. In the pandemic an “excess” 3 million workers retired.

Bureau of Labor Statistics data show there are more job vacancies than job seekers. Not too many years ago there were three unemployed workers for every vacancy.  In January there were 900,000 job openings at all levels of government. In December 2010, the total was 428,000.

The aging population is reflected in the federal workforce. Since 2010 the federal workforce ages 55 and over has increased by close to 100,000, from 537,000 to 630,000. Less than 200,000 are younger than 30. 

Government’s workforce plans are complicated by two obvious issues. First, there are occupations where demand is growing and the trained supply is inadequate to meet the country’s needs. Physicians and nurses are a prime example. Public health workers are also in short supply. Government employs specialists in roughly 350 occupations, making workforce planning far more complicated than in business.

The planning is complicated further by the many locations where federal employees are based. With COVID and the rising cost of living in major cities, young workers are staying away from cities like New York and Chicago. Pittsburgh and Nashville are reported favorites. Some local economies are growing, with employers offering attractive career opportunities; others are not. Congress partially addressed the differences in 1990 when locality pay was adopted. Now, however, the thousands of federal employees paid special rates confirms the “one-size-fits-all” General Schedule is no longer the answer.

Traditional thinking made pay increases the answer when an employer had a problem attracting or retaining workers. Now, an employer’s reputation, remote working opportunities, flexible work schedules, non-financial benefits are also important. Websites like Glassdoor post a wealth of employer information. Dissatisfied employees can easily move to new jobs. The recent GAO report on staffing problems in the Transportation Security Administration made it clear pay is not the only issue. 

Notably, reports on agency workforce problems have not focused on labor market issues or the current problem – worker shortages. There was a time when agencies could simply post job openings on usajobs.com and wait for applicants. Clearly that’s not an adequate practice today.  

Solving the problem starts with understanding what’s unfolding in labor markets; that is, the local business closures and layoffs, population trends, regional college graduations, etc. It’s all relevant to workforce planning. Data analytics are useful here to understand local hiring and turnover experience.

The Expanded Role for HR

In the past HR was limited to a “backroom,” administrative role but at least in the private sector that’s changing quickly. Forbes recently described what’s emerging as follows, 

“The days have long passed when the core duties of human resources experts only centered on welcoming new staff members and ensuring a safe, fair working environment. Today, HR leaders are a crucial instrument for unleashing human potential and driving an organization's progress. They're also uniquely positioned to redefine how the CEO views their business and workforce. The crux of this fresh perspective involves more than simply giving HR a seat at the leadership table; it entails a thoughtful reconsideration of HR's fundamental role within the organization.”

Studies over decades have shown successful companies have a highly engaged, committed workforce.  That’s been a focus for Gallup and the Great Places to Work Institute. HR executives have the lead role in creating a great workplace. COVID elevated and expanded HR’s role. McKinsey recently posted a description of “HR’s New Operating Model.”  Deloitte is discussing “HR Transformation.” Perhaps the best argument was in another Forbes column, “1. Employees First – Always” and “2. HR Innovation is Pivotal.” 

Government’s many, very different agencies resemble a business conglomerate. The GE corporation is – or was – a highly publicized conglomerate (It’s splitting into three companies). In businesses like GE, the corporate HR office is limited to managing executive pay and company-wide benefits but delegates workforce management to the subsidiaries. Government’s workforce problems are far more complicated than any corporation, including GE. That makes it fully appropriate and necessary to hold agencies and their HR offices accountable for creating and managing all aspects of their workforce.  

There are no companies with workforce problems as diverse or as complex as those in government agencies. There are also no companies that have to deal with the complex regulations governing how workers are managed. Change initiatives have been resisted and successfully blocked in the past.

This time hopefully will be different. One of the recently introduced tools that could help sell the need for change is the use of HR analytics, the data-driven approach to understanding “people problems” and supporting management decisions. The GAO report on the TSA staffing problem is an example of what’s possible. Actually, this is not new, statistical analyses were first used in comparable worth, now pay equity studies in the 1980s.

Analyses that bring together employee data with turnover and retirement data provide insight into staffing issues going forward. That information is the basis for workforce planning.

A new wrinkle that’s obviously been missing in workforce reports is the recognition that worker engagement is linked to agency performance. Since laws like the Government Performance and Results Act were enacted, reports have been silent on the importance of workers. They somehow exist in a separate world. Workforce management is also not addressed in graduate programs in public administration.

Recent OPM directives show that’s changing. In OPM’s FY 2023 Annual Performance Report and in the message from the agency’s director, Kiran Ahuja, the word “performance” appears over 300 times. The change is also reflected in the recent statement from OMB’s Jason Miller, “By Investing in People, We Invest in America,” which refers to workers as “Government’s most important asset” and lists a number of “workforce investments and policies” to build a fully productive workforce. 

Government is different from business in a fundamental way. Technology will soon replace administrative jobs but personal contacts and interaction with the public will always be central to many government jobs. Learning what drives worker performance is vital and varies from agency to agency. Related evidence-based analyses will help to understand workforce concerns like the reasons for turnover or promoting DEI in the workplace. HR analytics is the answer for building the workforce agencies need.