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: As of October 2016, OPM stated that it and the CHCO Council had taken a number of steps to address fragmentation. Among them, OPM established the Human Capital Strategic Framework (HCSF). The HCSF includes a number of items required for a government-wide strategic plan, including: environmental scanning, workforce planning, and a range of Human Capital strategies. When each component is fully established, it will give agency leadership, managers and HR practitioners a clear, logical way to integrate Human Capital Management with broader human capital planning and agency strategic planning. OPM is also (through 5 CFR 250 and the establishment of the new Human Capital Framework (HCF) and accompanying Online Resource Guide), using the Framework to serve as a key medium for communicating with all stakeholders who influence and/or are impacted by Human Capital. This includes Senior Executives, Hiring Managers, Supervisors and employees. The goal of the HCF Online Resource Guide is to serve as a primary repository of information about how to approach the Strategic Management of Human Capital. Information reflects the four HCF Systems: Strategic Planning and Alignment, Talent Management, Results Oriented Performance Culture, and Evaluation. The HCF includes information for each respective stakeholder about their roles and responsibilities as it pertains to each system within the HCF, and the guide includes tools and resources such as emerging and promising practices from other agencies. Additionally, the regulation serves to facilitate the integration of Human Capital further into agency practices through the introduction of Foresight into the strategic planning process for HC. Historically, HC has not fully engaged in the agency strategic planning process and has not used Foresight to its fullest. The regulation not only requires that agencies adopt and implement the approaches within the Foresight method, but agencies are also given supporting tools and guidance for how to do so. To ensure that agencies are able to adopt the new requirements, OPM established a government wide environmental scanning process that included agency representatives from across government to facilitate the adoption of good practices that allows agencies to leverage each other during austere times. Also, OPM is propagating the application of Foresight and working to mitigate future skill gaps through the publication of the first Federal Workforce Strategic Priorities Report (FWSPR). The FWSPR will serve as tool for all stakeholders, such as Congress, OMB 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 any incoming Administration to develop their Human Capital President's Management Agenda, as well as Cross Agency Priority or CAP goals. The timeline for implementation for the various components mentioned have begun and will be fully implemented in FY 17. In February 2016, OPM proposed regulatory changes to include the development of a federal workforce strategic priorities report, to be issued by OPM with the start of each presidential term. OPM would develop the federal workforce strategic priorities report which would communicate key government-wide human capital priorities and suggested implementation strategies. Agencies would use the federal workforce strategic priorities report to inform agency strategic and human capital planning and to align the executive branch human capital policies and priorities. We believe this proposal 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: As of August 2016, OPM stated it was developing enterprise methods for agencies to deal with mission critical skills and occupation gaps. OPM began leading the effort, in coordination with the Chief Human Capital Officers Council (CHCOC) to establish a government wide workforce planning process. The process established a myriad of requirements that would ensure that all critical occupations were given the attention warranted-to ensure that efficiencies could be achieved to address critical workforce challenges, despite being in an austere environment. OPM is implementing multifaceted skills gaps closure (workforce planning) process that includes using a data-driven approach for identifying cross cutting and agency specific skills gaps, known as the Factor Model, allowed OPM and agencies to make objective determinations about the occupations that were at greatest risk of mission failure; and a Federal Agency Skills Teams or FASTs have been established, and are currently operational. These teams are formed as either government wide or agency teams and are tasked to identify root cause for a skill gap, develop action plans that address the respective root cause, monitor and report their progress on a quarterly basis to OPM. This method is being institutionalized within regulation (the proposed draft 5 CFR 250, which we expect will become final in Q1 of FY 17), which will require that focus is given to identify, address and monitor skill gaps on a 4 year cycle. This will allow for sufficient time for the identification of and/or revalidation of the current MCOs and/or it will add new MCOs that need to be addressed. If it is determined that the root cause has been sufficiently addressed and the skill gap has been reduced and/or eliminated, then the occupation will be removed from the high risk list. However, it is important to note that although an occupation may be removed from the "watch" list, it can be added back to the list if a new root cause emerges that warrants addressing. The process also includes the identification of future challenges that will affect the workforce to ensure that mitigation strategies are incorporated into the skill gap closure implementation plan. As a result of the information gleaned from the inputs from the agency skills teams, OPM will analyze the information to determine what additional policies, authorities, etc. will be needed to address the identified challenges. OPM believes that this enterprise approach for identifying and addressing skills gaps allows for the Chief Human Capital Officer, in coordination with subject matter experts within the respective occupations within their organizations, to coordinate with their Human Resource Business Partners to develop sustainable strategies that will support our mission with recruiting, developing and retaining a 21st Century workforce. In August 2014, OPM reported that to expand the use and acceptance of government-wide solutions, also referred to as "enterprise solutions," agencies must understand how the offered enterprise solution can support their agency-specific needs. As of June 2015, OPM's Center for Strategic Workforce Planning (SWP) is currently developing a crowdsourcing mechanism within the online resource guide for the Human Capital Framework (HCF) that will highlight sound agency practices that can be adapted for government-wide and/or use within specific agencies. OPM's subject matter experts is soliciting tools and information from agencies that are known to have effective human capital models and/or are referred by other agencies so that the Chief Human Officers Council can review the models before disseminating those that are most appropriate for government-wide use. OPM is also are deploying a strategic human capital management survey that will solicit information from agencies about current workforce planning efforts, while garnering best practices.

    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.

    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.

    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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