Strategic Human Capital Management
Mission-critical skills gaps in such occupations as cybersecurity and acquisition pose a high-risk to the nation: whether within specific federal agencies or across the federal workforce, they impede federal agencies from cost-effectively serving the public and achieving results. Addressing complex challenges such as disaster response, national and homeland security, and rapidly evolving technology and privacy security issues, requires a high-quality federal workforce able to work seamlessly with other agencies, levels of government, and across sectors. However, current budget and long-term fiscal pressures, declining levels of federal employee satisfaction, the changing nature of federal work, and a potential wave of employee retirements that could produce gaps in leadership and institutional knowledge, threaten the government’s capacity to effectively address these and many other evolving, national issues.
In February 2011, we reported that closing current and emerging critical skills gaps would require the Office of Personnel Management (OPM), agencies, and the Chief Human Capital Officers (CHCO) Council to address critical skills gaps that cut across several agencies. This issue requires continued attention because while OPM and agencies have taken steps that show promise for identifying and addressing mission-critical skills gaps, additional efforts are needed to coordinate and sustain these efforts going forward, as well as to make better use of workforce analytics which can be used to predict newly emerging skills gaps.
Over the last few years, OPM and individual agencies have taken important steps that will better position the government to close current and emerging critical skills gaps which are undermining agencies’ abilities to meet their vital missions. OPM and agencies have partially met four of the five high-risk criteria by demonstrating a leadership commitment to address the issue, developing capacity and action plans outlining appropriate strategies, as well as taking the initial steps to monitor their progress. However, OPM, the CHCO Council, and agencies will need to implement specific strategies and evaluate their results to demonstrate progress on addressing critical skills gaps.
Leadership Commitment: OPM and agencies have partially met the leadership criterion for removal from the High Risk List. OPM and the administration have launched several initiatives to address this issue at the government-wide level; however, OPM needs to address additional skills gaps having programmatic impacts, and needs to sustain senior leadership’s focus on this issue. In February 2011, we reported that closing on-going and emerging critical skills gaps would require agencies to continue to address their specific human capital needs, as well as work with OPM and through the CHCO Council to address critical skills gaps that cut across several agencies. In particular, we reported that actions were needed in three broad areas:
- Planning. Identifying the causes of, and solutions for, skills gaps and the steps to implement those solutions.
- Implementation. Defining and implementing corrective actions to narrow skills gaps through talent management and other strategies.
- Measurement and evaluation. Assessing the effects and evaluating the performance of initiatives to close skills gaps.
To address this issue at the government-wide level, OPM and agencies launched several initiatives. For example, in September 2011, OPM and the CHCO Council created the Chief Human Capital Officers Council Working Group (Working Group) to identify and address critical skills gaps. The Working Group was established as part of ongoing discussions between OPM, OMB, and GAO regarding the steps needed to address the federal government’s human capital challenges. Between 2011 and 2012, the Working Group identified skills gaps in six government-wide areas: (1) cybersecurity, (2) auditor, (3) human resources specialist, (4) contract specialist, (5) economist, and (6) the science, technology, engineering, and mathematics (STEM) functional community.
In addition to the efforts of the Working Group, the President’s Fiscal Year 2013 budget—released in February 2012—designated closing skills gaps as an interim, two-year Cross-Agency Priority (CAP) goal, specifically, to close skills gaps by 50 percent in three-to-five mission-critical occupations by September 30, 2013. As the designated CAP goal leader, the Director of OPM held quarterly meetings to review progress on achieving this goal.
These initiatives were important steps forward. However, since the Working Group began its efforts, our work has identified nearly two dozen mission-critical skills gaps across the government. While some of these skills gaps were consistent with those identified by the Working Group—such as the need for cybersecurity skills—our work has identified additional skills gaps, both government-wide and agency-specific, having a significant programmatic impact, such as:
- Staffing Shortages at Federal Prisons. In August 2014, we found that staffing shortages affected the Department of Justice’s Bureau of Prisons (BOP) ability to activate new institutions in a timely manner, which could affect how quickly BOP can reduce crowding. Although BOP does review system-wide staffing data, it does not monitor or analyze staffing data by individual institutions or track how long it takes individual institutions to hire staff. The Department of Justice agreed with our recommendation that BOP analyze institutional-level staffing data and develop strategies, such as using recruitment incentives, when hiring challenges occur at particular institutions. The Department of Justice noted that reports on the results of these analyses would be prepared on a quarterly basis.
- Telecommunications Specialists. In December 2013, we found that a decline in telecommunication expertise across multiple agencies compounded the General Services Administration’s (GSA) challenges in transitioning those agencies to a new network of telecommunications services, contributing to delays and cost overruns of 44 percent. Moreover, according to GSA, customer agencies are concerned that the shortage of telecommunications specialists will get worse because there are not enough to replace experienced workers nearing retirement. GSA has yet to fully study the issue of addressing mission-critical skills gaps and agreed that understanding expertise shortfalls would be useful for future transition planning purposes. Officials from GSA and OPM agreed with our recommendation on the need to better examine potential government-wide telecommunications expertise shortfalls and have agreed to coordinate on efforts to do so. While this recommendation was still open as of January 2015, GSA’s Office of Human Resources Management plans to take several actions such as identifying and validating technical competencies, developing competency models, and performing a workforce assessment against the models.
Moreover, as discussed elsewhere in this report, skills gaps are contributing factors behind many other GAO high-risk areas, including the following:
- Cybersecurity. Although steps have been taken to close critical skills gaps in the cybersecurity area, it remains an ongoing problem and additional efforts are needed to address this issue government-wide. As one example, recognizing the need to enhance the cybersecurity workforce at the Department of Homeland Security (DHS), two laws were enacted in December 2014. One requires DHS, among other actions, to work with OPM to identify areas of critical need in DHS’s cybersecurity workforce, while the second law requires DHS to assess its cybersecurity workforce, and develop a strategy to enhance the readiness, capacity, training, recruitment, and retention of this workforce. These issues are not new. Previously, we have reported that officials at several agencies, including DHS, identified concerns with the availability of candidates for certain highly technical positions, such as network security engineers. We recommended that OPM provide guidance to agencies on how to track the use and effectiveness of incentives for hard-to-fill positions, including cybersecurity positions. In August 2013, OPM issued final regulations requiring agencies to review retention incentives and group recruitment incentives targeted at difficult to fill positions at least annually. Although this effort is an important step forward, it has been recently implemented and its effectiveness remains to be seen. We will continue to monitor OPM and agencies’ efforts to strengthen the cybersecurity workforce going forward.
- Acquisition Management. Agencies such as the Department of Energy (DOE), Department of Defense (DOD), National Aeronautics and Space Administration (NASA), and DHS need to determine workforce needs and address shortages of acquisition personnel to oversee and manage contracts that have become more expensive and increasingly complex. For example, in a July 2013 DOE review, officials concluded that the agency had an extremely low number of contract specialists when benchmarked against other agencies. At the time, DOE’s acquisition workforce comprised less than 5 percent of DOE’s federal workforce, but was responsible for administering contract and other obligations representing over 90 percent of the agency’s annual budget. In response, in March 2014, the Secretary of Energy approved the implementation of the DOE Acquisition Fellows program, which is designed to recruit, acquire, develop, and retain contract specialists.
- Inspectors of Oil and Gas Facilities. In January 2014, we found that hiring and retention challenges at the Department of Interior (Interior) have resulted in fewer inspections of oil and gas facilities, which according to officials results in an increased risk to human health and safety due to a spill or accident. In 2012, Interior’s Bureau of Land Management had an attrition rate among petroleum engineers that, according to OPM data, is more than double the average federal attrition rate. Although Congress has provided Interior with authority to establish higher rates of basic pay for key inspection occupations, we reported that it was uncertain how Interior would address staffing shortfalls over time. Interior generally agreed with our recommendation that they systematically collect data on hiring times for key oil and gas positions, ensure the accuracy of the data, analyze the data to identify the causes of delays, and expedite the hiring process. In response to our recommendation, Interior stated that their bureaus have begun a more systematic collection and analysis of hiring data to identify the causes of delays and help expedite the hiring process.
- DHS Management Functions. While DHS has continued to strengthen its human capital management functions, additional efforts are needed in the areas of competency gap assessment, assessing training programs, and acquisition management. For example, we found that as of December 2014, DHS had completed competency gap assessments to identify potential skills gaps for 8 of 86 occupations that it identifies as critical to its mission. DHS intends to assess efforts to address existing competency gaps through September 2015 and will then assess gaps for additional occupations in 2016; therefore, it is too early to assess the effectiveness of these efforts.
- DOD Financial Management. In July 2014, we found that while DOD’s Financial Management workforce plan partially addressed statutory requirements to assess its current and future critical skills needs, additional efforts are needed. Among other things, we found that the plan did not provide an assessment of the overall financial management workforce’s competencies. DOD will need to fulfill the mandated critical-skill requirements for its financial management workforce to ensure that it has the capacity to make lasting improvements in its financial management.
In February 2013, we reported that removing skills gaps as a high-risk issue across the government will depend in part on the extent to which OPM and agencies continue to involve top management and include plans to monitor and evaluate progress toward closing skills gaps. The interim, two-year CAP goal for closing skills gaps expired as planned at the end of fiscal year 2013, and was replaced in March 2014 by a four-year CAP goal focusing on people and culture, including (1) creating a culture of excellence and engagement, (2) building a world-class federal management team starting with the Senior Executive Service, and (3) enabling agencies to hire the best talent from all segments of society. While these CAP goal elements contain workforce planning strategies and metrics relevant to closing skills gaps, there are no overall performance targets for closing skills gaps, and addressing skills gaps is no longer an explicit goal. The interim CAP goal to address skills gaps gave the entire effort government-wide focus and visibility, and provided OPM a mechanism to hold agencies accountable for results. Despite the expiration of the interim CAP goal, OPM officials have told us that they intend to continue holding meetings to track progress on closing government-wide skills gaps, as was done under the interim CAP goal.
Capacity: OPM and agencies have partially met this criterion. On the one hand, OPM has dedicated resources toward closing skills gaps; on the other hand, additional efforts will be needed to collect competency data on the federal workforce. By designating the Working Group’s efforts to close critical skills gaps as an interim CAP goal in the administration’s fiscal year 2013 federal budget, the Director of OPM—as CAP goal leader—developed capacity by identifying key, senior federal officials from each of the six government-wide mission-critical occupations to serve as “sub-goal leaders.” For example, at the time of our review, the sub-goal co-leaders for the cybersecurity workforce were from the White House Office of Science and Technology Policy and the Department of Commerce’s National Institute of Standards and Technology. Likewise, the sub-goal leader for the economist workforce was the Assistant Secretary for Economic Policy and Chief Economist at the U.S. Department of the Treasury.
Going forward, addressing government-wide skills gaps will require collecting data on the competencies of the federal workforce. According to OPM officials, federal agencies’ abilities to assess workforce competencies varies, which makes collection of government-wide data on competency gaps difficult. It will be important for OPM to work with agency CHCOs to bolster agencies’ capacity to assess workforce competencies and to ensure that such information can be stored and used for government-wide workforce analysis.
Action Plan: The six sub-goal groups developed planning documents aimed at addressing skills gaps. However, these planning documents only partially met this criterion because the plans did not incorporate all the key practices for project planning, such as identifying root causes and using outcome-oriented performance metrics. For instance, only the STEM and Auditor sub-goal groups’ plans discussed the root causes of their skills gaps and the purpose for their actions. Additionally, only three of the six sub-goal groups tracked outcome-oriented performance metrics in their plans. For example, the STEM sub-goal group’s plan tracked such items as the number of STEM hiring reforms that had been approved by OPM. While gaining OPM approval of hiring policy changes can be an important step in the process of attracting more qualified workforce candidates, the STEM sub-goal group’s plan did not track outcomes that might result from approving such policy changes, such as the number and quality of applicants and hires for STEM positions.
Monitoring: Because they did not always use outcome-oriented performance metrics, the sub-goal groups partially met this criterion. For example, the Human Resources sub-goal group tracked the percentage of federal human resources personnel who registered for and completed a single course on HR University—a centralized online suite of courses and curricula managed by OPM that agencies can use for training purposes. While we agree that ensuring that human resources professionals receive proper training is vital, relying on a metric of how many people register for and complete a single online course is not the most effective way to assess progress toward the outcome of closing skills gaps within the human resources occupation.
To monitor government-wide skills gaps, OPM and agencies face additional challenges going forward, including the following:
- While individual agencies are collecting metrics under an OPM initiative known as HRstat, those metrics vary across agencies. Although it is important for agencies to develop their own metrics that are relevant to them, a core set of metrics that are consistent for all agencies is also necessary so that OPM and agency leaders can have a clear view of progress in addressing government-wide mission critical skills gaps.
- OPM’s plan to use a database to capture staffing data from agencies for select occupations is still under development. However, OPM officials stated that no timeframe exists for modifying this database, although they intend to continue collecting agencies’ staffing data until OPM makes the necessary investments to modify its database.
- Developing a predictive capacity to identify newly emerging skills gaps beyond those areas already identified, and managing the risks associated with them is especially important now because (as shown in figure 6 below) agencies are facing a wave of potential retirements. Using the most recent available data, government-wide, about 30 percent of federal employees on board by the end of fiscal year 2013 will be eligible to retire by 2018. Some agencies, such as the Department of Housing and Urban Development and the Small Business Administration, will have particularly high eligibility rates by 2018.
Figure 6: Percentage of Career Permanent Employees on Board Eligible to Retire by 2018 by Agency (as of September 30, 2013)
Various factors affect when individuals actually retire, and some amount of retirement and other forms of attrition can be beneficial because it creates opportunities to bring fresh skills on board and allows organizations to restructure themselves to better meet program goals and fiscal realities. But if turnover is not strategically monitored and managed, gaps can develop in an organization’s institutional knowledge and leadership.
Demonstrated Progress: OPM and agencies have not met this criterion. Although the interim CAP goal’s target was to close skills gaps by 50 percent by the end of fiscal year 2013 in three-to-five of the six sub-goal groups, according to sub-goal leaders, the target was vague and difficult to measure. For example, the Cybersecurity sub-goal group did not have an effective baseline from which to measure 50 percent progress because they had not fully determined the nature of their skills gap. By June 2015 OPM officials expect to identify a new set of government-wide skills gaps that are to be addressed over a four-year period, and more time is needed to assess the impact of that initiative as well as other, ongoing efforts.
To date, Congress has provided agencies—individually and across the federal government—with various authorities and flexibilities to manage the federal workforce and make the federal government a more attractive employer. Further, hearings held by the House and Senate that have focused on federal human capital management challenges have been important for ensuring that OPM and agencies continue to make progress in acquiring, developing, and retaining employees with the skills needed to carry out the government’s vital work. Continued congressional attention to improving the government’s human capital policies and procedures will be essential going forward.
 The GPRA Modernization Act of 2010 requires the Office of Management and Budget to coordinate with agencies to establish outcome-oriented, federal government priority goals (known as cross-agency priority, or CAP, goals) with annual performance goals along with quarterly performance targets and milestones. See GAO, Managing for Results: OMB Should Strengthen Reviews of Cross-Agency Goals, GAO‑14‑526 (Washington, D.C.: June 10, 2014).
 GAO, Bureau of Prisons: Management of New Prison Activations Can Be Improved, GAO‑14‑709 (Washington, D.C.: Aug. 22, 2014).
 GAO, Telecommunications: GSA Needs to Share and Prioritize Lessons Learned to Avoid Future Transition Delays, GAO‑14‑63 (Washington, D.C.: Dec. 5, 2013).
[4 The high-risk areas in this report for which we found skills gaps to be a contributing factor were (1) Management of Oil and Gas Reserves; (2) DOD Approach to Business Transformation; (3) DOD Business Systems Modernization; (4) Ensuring the Security of Federal Information Systems and Cyber Critical Infrastructure and Protecting the Privacy of Personally Identifiable Information; (5) DOD Financial Management; (6) Strengthening the Department of Homeland Security Management Functions; (7) Protecting Public Health through Enhanced Oversight of Medical Products; (8) Transforming EPA’s Processes for Assessing and Controlling Toxic Chemicals; (9) DOD Contract Management; (10) DOE’s Contract Management for the National Nuclear Security Administration and Office of Environmental Management; (11) NASA Acquisition Management; (12) Enforcement of Tax Laws; and (13) Managing Risks and Improving VA Health Care.
 Homeland Security Cybersecurity Workforce Assessment Act, enacted as part of the Border Patrol Agent Pay Reform Act of 2014, Pub. L. No. 113-277, § 4, 128 Stat. 2995, 3008-3010 (Dec. 18, 2014); Cybersecurity Workforce Assessment Act, Pub. L. No. 113-246, 128 Stat. 2880 (Dec. 18, 2014).
GAO, Cybersecurity Human Capital: Initiatives Need Better Planning and Coordination, GAO‑12‑8 (Washington, D.C.: Nov. 29, 2011).
 GAO, Oil and Gas: Interior Has Begun to Address Hiring and Retention Challenges but Needs to Do More, GAO‑14‑205 (Washington, D.C.: Jan. 31, 2014).
 As reported, Congress initially authorized the special pay authority for use during fiscal years 2012 and 2013. Subsequently, the authority was extended through fiscal year 2015.
 For an example of our work discussing DHS’ human capital management, see GAO, Department of Homeland Security: Progress Made; Significant Work Remains in Addressing High-Risk Areas, GAO‑14‑532T (Washington, D.C.: May 7, 2014).
 GAO, Human Capital: DOD Should Fully Develop Its Civilian Strategic Workforce Plan to Aid Decision Makers,
Our work has made several recommendations that cut across the five criteria for removal from the High Risk List. Most recently, in January 2015, we reported that OPM and the CHCO Council should incorporate lessons learned from their initial efforts to close skills gaps to strengthen future approaches. We recommended that OPM, among other actions, take the following steps:
- Develop goals for closing skills gaps with targets that are both clear and measurable.
- Design outcome-oriented performance metrics that align with overall targets for closing skills gaps.
- Follow key practices for project planning when developing action plans designed to close skills gaps.
- Identify a core set of metrics that all agencies should use as part of their HRstat data-driven reviews.
OPM generally concurred with these recommendations, and we will monitor OPM’s progress in implementing them going forward.
Moreover, in May 2014, we reported on human capital strategies which will help agencies meet their mission in an era of constrained resources. We made several recommendations that collectively will strengthen agencies’ leadership commitment and capacity to address skills gaps. OPM agreed with these recommendations, which include the following:
- Strengthening OPM’s coordination and leadership of government-wide human capital issues, in part by developing a government-wide human capital strategic plan that would establish priorities, time frames, responsibilities, and metrics to better align the efforts of members of the federal human capital community.
- Exploring the feasibility of expanded use of enterprise or “whole of government” solutions to address shared human capital issues—such as workforce planning tools and lessons learned that would help build the capacity of agencies to address skills gaps.
- Reviewing the extent to which new capabilities are needed to promote agile talent management—including developing or sharing tools and resources to help identify skills gaps and mechanisms for increasing staff mobility within and across agencies.
In response, OPM is considering a multi-phase human capital strategy designed to, among other things, institutionalize processes for identifying and addressing government-wide and agency skills gaps and emphasize the use of workforce data and analytic tools.
Furthermore, individual agencies must take the lead in addressing their own mission critical skills gaps. For example, our December 2013 report found that the Department of Transportation’s Federal Railroad Administration (FRA) lacked a plan to have a sufficient number of safety inspectors to carry out oversight of such initiatives as positive train control—a communications system designed to prevent events like train-to-train collisions. FRA officials agreed to consider our recommendation that FRA develop a strategic human capital plan that includes specific approaches for how it will recruit, train, and retain both its current inspectors as well as its new workforce of safety risk management specialists. We will continue to monitor FRA’s progress on developing their strategic human capital plan.
 GAO, Federal Workforce: OPM and Agencies Need to Strengthen Efforts to Identify and Close Mission-Critical Skills Gaps, GAO‑15‑223 (Washington, D.C.: January 30, 2015).
 GAO, Human Capital: Strategies to Help Agencies Meet Their Missions in an Era of Highly Constrained Resources, GAO‑14‑168 (Washington, D.C.: May 7, 2014).
 GAO, Rail Safety: Improved Human Capital Planning Could Address Emerging Safety Oversight Challenges, GAO‑14‑85 (Washington, D.C.: December 9, 2013)
GAO-15-223: Published: Jan 30, 2015. Publicly Released: Jan 30, 2015.
GAO-14-709: Published: Aug 22, 2014. Publicly Released: Sep 22, 2014.
GAO-14-565: Published: Jul 9, 2014. Publicly Released: Jul 9, 2014.
GAO-14-168: Published: May 7, 2014. Publicly Released: Jun 6, 2014.
GAO-14-532T: Published: May 7, 2014. Publicly Released: May 7, 2014.
GAO-14-205: Published: Jan 31, 2014. Publicly Released: Feb 19, 2014.
GAO-14-85: Published: Dec 9, 2013. Publicly Released: Dec 9, 2013.
GAO-14-63: Published: Dec 5, 2013. Publicly Released: Jan 6, 2014.
GAO-13-228: Published: Feb 27, 2013. Publicly Released: Feb 27, 2013.
GAO-13-103: Published: Dec 14, 2012. Publicly Released: Dec 14, 2012.
GAO-12-1023T: Published: Sep 19, 2012. Publicly Released: Sep 19, 2012.
GAO-12-8: Published: Nov 29, 2011. Publicly Released: Nov 29, 2011.