Human Capital:

Strategies to Help Agencies Meet Their Missions in an Era of Highly Constrained Resources

GAO-14-168: Published: May 7, 2014. Publicly Released: Jun 6, 2014.

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What GAO Found

GAO convened a forum of chief human capital officers (CHCO) who described a number of difficulties their agencies face in maintaining the capacity to meet their missions during lean fiscal times. GAO's analysis identified three broad recurring human capital challenges and strategies to address them. While these challenges were not new nor exclusively a result of constrained budgets, reduced resources exacerbated the challenges and also created a willingness among agencies to consider nontraditional strategies for addressing them, namely:

1. Strengthening coordination to address a fragmented human capital community. Our analysis found that the federal human capital community is highly fragmented with multiple actors inside government informing and executing personnel policies and initiatives in ways that are not always aligned with broader, government-wide human capital efforts. The CHCO Council was established to improve coordination across federal agencies on personnel issues, but according to the CHCOs, the council is not carrying out this responsibility as well as it could. This challenge manifests itself in two ways: across organizations, with many actors making human capital decisions in an uncoordinated manner, and within agencies, excluding CHCOs and the human capital staff from key agency decisions.

2. Using enterprise solutions to address shared challenges. Our analysis found that agencies have many common human capital challenges, but they tend to address these issues independently without looking to enterprise solutions that could resolve them more effectively. Across government, there are examples of agencies and the Office of Personnel Management (OPM) initiating enterprise solutions to address crosscutting issues, including the consolidation of federal payroll systems into shared-services centers. The CHCOs highlighted human resource information technology and strategic workforce planning as two areas that are ripe for government-wide collaboration.

3. Creating more agile talent management to address inflexibilities in the current system. Our analysis found talent management tools lack two key ingredients for developing an agile workforce, namely the ability to (1) identify the skills available in their existing workforces, and (2) move people with specific skills to address emerging, temporary, or permanent needs within and across agencies.

The CHCOs said OPM needs to do more to raise awareness and assess the utility of the tools and guidance it provides to agencies to address key human capital challenges. The CHCOs said they were either unfamiliar with OPM's tools and guidance or they fell short of their agency's needs. OPM officials said they had not evaluated the tools and guidance they provide to the agencies. As a result, a key resource for helping agencies improve the capacity of their personnel offices is likely being underutilized.

Why GAO Did This Study

Given the budgetary and long-term fiscal challenges facing the nation, agencies must identify options to meet their missions with fewer resources. However, if agencies do not pay careful attention to strategic workforce planning and other approaches to personnel management, then reduced investments in human capital can have lasting, detrimental effects on their capacity to meet their mission. GAO was asked to review the actions taken by selected agencies to manage their workforces and plan for future needs in an era of flat or declining budgets. This report assesses (1) key strategic human capital challenges federal agencies face in an era of highly constrained resources and identifies strategies for addressing them, and (2) the extent to which OPM ensures agencies have the assistance that CHCOs considered most important to mitigate human capital challenges.

What GAO Recommends

GAO recommends that OPM work with the CHCO Council to: (1) strengthen coordination and leadership on government-wide human capital issues, (2) explore expanded use of enterprise solutions to more efficiently and effectively address shared challenges, (3) review the extent to which new capabilities are needed to promote agile talent management, and (4) evaluate the communication strategy for and effectiveness of tools, guidance, or leading practices OPM provides for addressing human capital challenges. OPM and the CHCO Council concurred with GAO's recommendations.

For more information, contact Robert Goldenkoff at (202) 512-2757 or goldenkoffr@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Priority recommendation

    Comments: In April 2017, OPM issued a final regulation requiring OPM and agencies take significant steps in identifying, prioritizing, and coordinating efforts to address critical human capital issues. The regulation will require OPM to complete the Federal Workforce Priorities Report (FWPR). According to OPM, the FWSPR will serve as tool for all stakeholders and agencies to: (1) be informed about current and emerging workforce challenges, (2) develop strategies to address the impending risks, and (3) monitor progress. The FWSPR will also serve as a tool for the Administration to develop their Human Capital President's Management Agenda, as well as Cross Agency Priority Goals. the regulation also requires agencies to develop a Human Capital Operating Plan, which will reflect the priorities identified in the FWSPR. We believe this final regulation represents an important step forward in addressing the current fragmentation of the federal human capital community and will continue to monitor its status.

    Recommendation: To create a more effective human capital system that is more responsive to managing priorities and future workforce needs, the Director of OPM, in conjunction with the CHCO Council, should strengthen OPM's coordination and leadership of government-wide human capital issues to ensure government-wide initiatives are coordinated, decision makers have all relevant information, and there is greater continuity in the human capital community for key reforms. Such actions could include: (1) developing a government-wide human capital strategic plan that, among other things, would establish strategic priorities, time frames, responsibilities, and metrics to better align the efforts of members of the federal human capital community with government-wide human capital goals and issues; and (2) coordinating communication on government-wide human capital issues with other members of the human capital community so that there is greater consistency, transparency, and completeness in exchanging and using information by stakeholders and decision makers.

    Agency Affected: Office of Personnel Management

  2. Status: Open

    Priority recommendation

    Comments: In April 2017, OPM officials said it had developed some enterprise solutions to address shared or government-wide human capital challenges. For example, OPM officials said it created a multi-factor model workforce planning tool to assess the risk of agency-specific mission critical occupations. Officials said this tool is the foundation for any good workforce planning process to better understand which MCOs require the greatest attention. Officials said the model was drafted from input from an intra-agency workgroup, was beta tested with a workforce planning workgroup consisting of the majority of CFO Act agencies and finally approved by the full Chief Human capital Officer's Council. This tool was then used by agencies to identify their agency-specific high risk MCOs. OPM officials said they plan to use this model to develop other tools. We believe this tool represents an important step forward in identifying enterprise tools and will continue to monitor OPM's continued efforts.

    Recommendation: To create a more effective human capital system that is more responsive to managing priorities and future workforce needs, the Director of OPM, in conjunction with the CHCO Council, should explore the feasibility of expanded use of enterprise solutions to more efficiently and effectively address shared or government-wide human capital challenges. Such actions could include: (1) seeking cost savings and improved functionality through coordinated government-wide Human Resources Information Technology planning and acquisition, (2) seeking agency input to ensure OPM's workforce planning tools provide effective guidance for agencies, and (3) sharing workforce planning lessons learned and successful models across the government.

    Agency Affected: Office of Personnel Management

  3. Status: Open

    Comments: As of October 2016, OPM has been exploring the use of agile talent management approaches. OPM established the pilot project, Gov Connect, that tests how employees can move within and across agencies to work on self-initiated and/or manager-initiated projects. Currently, OPM is working to design Phase II of the effort, which is to develop a model for the government wide implementation of the initiative. Over 10 agencies were involved with Phase I for the single agency pilot process and more contact OPM each day as they learn about Gov Connect. OPM briefed the CHCOC and the President's Management Council (PMC) two years ago about the initiative and since then, Gov Connect has become a part of the President's Management Agenda (PMA). To further the familiarity of Gov Connect, OPM established a Starter Kit, which was designed to communicate a suggested approach for how to implement one or several of the Gov Connect models within a respective agency. The Starter Kit is a reflection of agency lessons learned through their experience with Phase I, and OPM continues to refresh the content as additional information is learned. With regards to skill identification, OPM has begun working to address this through the work with the government wide skills gap initiative. A key aspect of the initiative includes the identification of a root cause. Through this process, it is expected that needed skills will become evident. Subsequently, strategies will be established to address the root cause. In addition, OPM is revising its data collection process. OPM, because of statute and regulation, has the ability to require a set of workforce metrics, such as agency projections. We are currently exploring how to establish the capability to capture information regarding the current workforce. Work will continue through FY 17 until a solution has been identified. In June 2015, OPM reported that its Center for Strategic Workforce Planning (SWP) is developing tools to better visualize results of the CHCO manager satisfaction survey and the CHCO applicant satisfaction survey for distribution to agencies. OPM is also developing a model to assist agencies in selecting mission critical occupations for government-wide skills gap closure based on multiple factors, including separation rates, retention percentages, and applicant to job ratios. SWP is currently co-leading the GovConnect initiative, which explores models for workforce agility that include micro-detailing, cloud-based skill deployment across organizational components, and employee-initiated innovation initiatives. OPM is collaborating with the Chief Learning Officers Council to develop standards for agency use of data to prioritize investment in workforce development. Through these standards, agencies will apply data including skills gap analysis (e.g., retirement projections, competency gaps, etc.) to prioritize needs. We will continue to monitor OPM's efforts.

    Recommendation: To create a more effective human capital system that is more responsive to managing priorities and future workforce needs, the Director of OPM, in conjunction with the CHCO Council, should review the extent to which new capabilities are needed to promote agile talent management. Such actions could include developing or sharing: (1) tools, resources, and methods to help identify skills gaps and surpluses that can inform agency recruitment, retention, and training needs; and (2) mechanisms for increasing staff mobility within an agency and government-wide to assist agencies in aligning their workforces with evolving needs.

    Agency Affected: Office of Personnel Management

  4. Status: Open

    Comments: As of August 2016, OPM reported that its office of Employee Services is developing for deployment a comprehensive Strategic Human Capital Management (SHCM) needs survey that will be distributed to the CHCO Council. The survey is designed to directly solicit information about relevant tools, guidance and resources from agency human capital professionals that they feel will benefit their SHCM processes. This annual survey and the information OPM gathers from the survey results will assist OPM with developing/providing suggested tools through the HCF. We will continue to monitor OPM's efforts.

    Recommendation: To create a more effective human capital system that is more responsive to managing priorities and future workforce needs, the Director of OPM, in conjunction with the CHCO Council, should ensure agencies are getting the guidance and tools that they need by evaluating the communication strategy for and effectiveness of relevant tools, guidance, or leading practices created by OPM or the agencies to address crosscutting human capital management challenges.

    Agency Affected: Office of Personnel Management

 

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