Securities And Exchange Commission:

Human Capital Challenges Require Management Attention

GAO-01-947: Published: Sep 17, 2001. Publicly Released: Oct 23, 2001.

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The U.S. Securities and Exchange Commission's (SEC) human capital management practices have been shaped largely by a growing staffing crisis that threatens to undermine the agency's ability to carry out its mission. GAO surveyed current and former SEC attorneys, accountants, and examiners to determine what factors influenced turnover, satisfaction, and morale among SEC staff. GAO found that inadequate compensation is the primary reason that employees leave the agency. But staff raised other issues that warrant attention, including limited opportunities for advancement, the amount of uncompensated overtime, and the quality of administrative support services. In response to the high turnover rates, SEC has placed greater emphasis on compensation-based human capital programs, including compensation-based flexibilities and performance awards. Although SEC uses compensation-based flexibilities to a greater extent than do other government agencies, the Office of Personnel Management believes it could do more. SEC has taken several steps to focus more attention on strategic human capital management but faces continuing challenges. In April 2001, SEC integrated its human capital strategies with it's core business practices by adding a human capital goal to its 2002 Annual Performance Plan. SEC has also developed an extensive recruiting program for attorneys.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Although SEC has taken steps toward strengthening its strategic human capital management plans, it has not yet devised a method of measuring the success of its initiatives. The Chairman of SEC should use formal approaches such as periodically surveying its employees to evaluate employees' job satisfaction and morale, identify employee concerns, and analyze the effectiveness of the agency's use of flexibilities and work-life programs to retain employees.

    Agency Affected: United States Securities and Exchange Commission

    Status: Closed - Implemented

    Comments: SEC responded that the Commission understands the importance of surveys as a tool to measure the morale and learn about the concerns of its employees. SEC intends to continue to take the steps necessary to examine the level of employee morale and job satisfaction. As part of the effort, SEC will develop and implement a more formalized survey system. SEC has not surveyed staff across the agency. Instead, SEC has held focus group discussions to determine the success of particular worklife programs such as flexiplace. As of 4/29/05: SEC developed the following methodology in 2003 to evaluate employees' job satisfaction, identify employee concerns, and analyze the effectiveness of their use of flexibilities:(1) new employee survey,(2) recruitment focus groups (conducted with attorneys, accountants, and examiners hired in the previous 3 years), (3) exit surveys, and (4) retention focus groups (conducted in early 2004 of attorneys, accountants, and examiners). In addition, SEC requested data from GAO's 2004 survey of SEC employees (GAO-05-118R), which was provided to SEC.

    Recommendation: Strategic human capital management, a component vital to addressing SEC's current staffing crisis, has received little attention from the Commission until recently. Although SEC has added a human capital goal to its annual performance plan, its strategies do not detail the steps necessary to meeting this goal. Therefore, the Chairman of SEC should enhance its annual performance plan by including a strategy for succession planning and expanding the human capital strategies presented in the annual performance plan into a comprehensive, coordinated workforce planning effort, that includes all of SEC's divisions and offices.

    Agency Affected: United States Securities and Exchange Commission

    Status: Closed - Implemented

    Comments: SEC completed an internal review of its operations in 2002. SEC is still in the process of transforming that review into a new strategic plan and corresponding human capital plan. As of 4/29/05, SEC, in order to determine the allotment of over 800 newly created positions in 2003/2004, conducted a series of workforce and workflow reviews and each division/office provided input into their human capital needs. In addition to staffing requests, division heads were also asked to provide an implementation plan for integrating new staff. SEC's Office of Human Capital is currently formalizing a strategic workforce plan (which is based on their current strategic plan and its human capital goals) and reviewing succession planning efforts.

    Recommendation: To help create an organizational culture that ensures ongoing attention to human capital issues, the Chairman of SEC should identify ways to involve human capital leaders in decisionmaking and establish a practice that requires management to continually monitor and refine SEC's human capital approaches to ensure their ongoing effectiveness in addressing employees' needs, including working with the union to expeditiously address the areas of dissatisfaction identified in GAO's survey.

    Agency Affected: United States Securities and Exchange Commission

    Status: Closed - Implemented

    Comments: SEC and NTEU signed a contract on August 1, 2002. This contract will be implemented after a 30-day review period. SEC has identified a staff person dedicated to handle issues resulting from this contract.

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