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: Closed - Implemented

    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 FWPR will serve as tool for all stakeholders and agencies to be informed about current and emerging workforce challenges, develop strategies to address the impending risks, and monitor progress. The FWPR 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 FWPR. In February 2018, OPM issued the FWPR. It outlines three priorities for reshaping the workforce: (1) succession planning and knowledge transfer; (2) deploying communication tools; and (3) securing technological solutions for human capital analysis . It also includes three priorities focused on maximizing employee performance: (1) expanding employees' development opportunities; (2) bolstering employee recognition programs; and (3) enhancing productivity through a focus on employee health. The report concludes with several descriptions of programs and initiatives undertaken by agencies aimed at addressing the priority goals .We believe this final regulation and associated FWPR represents an important step forward in addressing fragmentation within the federal human capital community.

    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: Closed - Implemented

    Priority recommendation

    Comments: As of February 2020, we found that OPM, in coordination with the CHCO Council, has identified and implemented enterprise solutions to address government-wide human capital challenges. With respect to seeking cost savings and improved functionality through coordinated government-wide Human Resources Information Technology planning and acquisition, OPM hosts a suite of tools on an end-to-end HR services process such as USAJobs, USAStaffing, USAPerformance, USAHire, and Open Opportunities. Each of these tools support Federal agencies and stakeholders from hire to retire. OPM regulation 5 CFR 250 subpart B supports Federal departments and agencies in their ability to implement Strategic Human Capital Management across their varied missions. This regulation creates the Human Capital Framework for agencies to align the human capital necessary to achieve their strategic plans while creating a mechanism for monitoring progress and achieving results. Moreover, this regulation allows OPM to gather information from agencies to ensure OPM's workforce planning tools provide effective guidance for agencies. Based on OPM's Federal Workforce Priorities Report, agencies can align their human capital strategies with the agency strategic plans. Agencies can then develop and implement agency strategic plans with human capital strategies that support mission-oriented goals based on Government Performance and Results Act Modernization Act, which requires agencies to align human capital efforts to their agency strategic objectives. OPM assists agencies in sharing effective workforce planning practices through its foresight efforts and conducts human capital learning sessions to support agencies in aligning human capital tools to their strategic objectives. Embedded within Human Capital Operating Plans (HCOP) are strategies to close skills gaps. Agency-specific gaps are identified using OPM's Multi-Factor Model to assist agencies in identifying their high risk mission critical occupations to target for closure. Based on information gathered from the HCOPs, OPM develops tools, flexibilities, and authorities to support efforts to hire, retain, and develop the workforce, and identified methods for delivery of said tools. OPM provides feedback to agencies to address strengths and weaknesses of the HCOP. Agencies participate in annual Human Capital Review (HCR) discussions with OPM to focus on human capital results achieved and challenges linked to goals in agency HCOPs and the President's Management Agenda. OPM also reviews key drivers of transformation including IT modernization; data, accountability, and transparency; and developing a workforce for the 21st century. Flexibilities such as Direct Hire, legislation, improved guidance and other tools result from HCR discussions, as OPM reviews methods for sharing workforce planning lessons learned and successful models across the government. OPM develops the HCR Report based on the HCRs and highlights trends and emerging practices. Finally, the future Federal Workforce Priorities Report is informed from HCR results. We believe these actions, taken together, are sufficient to close this recommendation as implemented because it provides a framework that can enable OPM to continuously reassess the enterprise solutions needed as the federal workforce, technology, budgets and agency priorities change over time.

    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: Closed - Implemented

    Comments: As of June 2015, OPM had begun developing tools and resources to help agencies identify and address skills gaps. A key aspect of the initiative includes the identification of a root cause. Through this process, it was expected that needed skills will become evident. Subsequently, strategies were established to address the root cause. OPM reported that its Center for Strategic Workforce Planning (SWP) was developing tools to better visualize results of the CHCO manager satisfaction survey and the CHCO applicant satisfaction survey for distribution to agencies. OPM also developed 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. OPM told us they collaborated with the Chief Learning Officers Council to develop standards for agency use of data to prioritize investment in workforce development. Through these standards, agencies were to be able to apply data including skills gap analysis (e.g., retirement projections, competency gaps, etc.) to prioritize needs. In September 2019, we reviewed OPM's progress on these and other activities related to the recommendation. We determined OPM has taken important actions to develop and provide tools, resources, and methods to help identify skills gaps and surpluses that can inform agency recruitment, retention, and training needs. Those actions included issuing the multi-factor model for the closing skills gaps, issuance of the Federal Workforce Priorities Report, implementation of 5 CFR 250(B) that required agencies to develop a Human Capital Operating Plan, providing web-based access of mission critical occupation resource charts across federal agencies, and web-based sessions on topics such as workforce planning, sustaining employee engagement, and closing skills gaps. We also determined OPM took actions to develop and share mechanisms for increasing staff mobility within an agency and government-wide to assist agencies in aligning their workforces with evolving needs, such as the launch of the Open Opportunities webpage. As a result, we closed this recommendation as implemented. The magnitude of this government-wide challenge is so great, however, that OPM will have to continue and expand upon these efforts to remain responsive for real, systemic improvements to occur across the government.

    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: Closed - Implemented

    Comments: OPM issued the CHCO Needs Assessment Survey to the CHCO Council in January 2015 and, based on the results of that survey, took a number of actions to address this recommendation. One question asked, "does OPM provide sufficient training, guidance, and resources to help the CHCO and his or her staff?" The two areas respondents identified for improvement were the labor-management program and effective performance management strategies. Another question asked, "which methods would be most effective in understanding strategic human capital topics?" The highest responses included workbooks with checklists or other planning aids, online content like the Human Capital Framework (HCF), webinars/webcasts, in-person training, and videos. In response, OPM took actions to address the findings of the survey. For example, OPM issued the Gears of Transformation which include an executive playbook, a reskilling toolkit and a change management guide. OPM provided agencies the Talent Connect Guide (formerly Gov Connect) which walks them through step-by-step how to implement "an agile workforce program that focuses on using employees' pre-existing skills and expertise to support other projects within the employee's agency or in another government agency for short periods of time." In April 2017, OPM launched the HCF diagnostic tool to support agencies in the implementation of the four systems of the HCF which is the cornerstone of human capital planning. Relatedly, OPM issued a diagnostic tool, covering the 16 focus areas of the HCF and containing over 100 questions to guide agencies through strategic human capital management. The tool provides links to resources based on the self-assessment. OPM also created a YouTube channel https://www.youtube.com/user/USOPM, where videos and training are uploaded to support the agencies including videos on workforce planning, implementing the human capital framework, and other topics. In addition to addressing the major items outlined in the CHCO Needs Assessment Survey, OPM has also responded to this recommendation by involving the agencies in the development of some of the human capital guidance that has been issued. For example, the agencies helped develop the Federal Workforce Priorities Report, the Human Capital Operating Plan guidance, HRStat guidance, Human Capital Review guidance and revisions to the CHCO Manager Satisfaction Survey. In order to evaluate the effectiveness of its training, webinars, and support, OPM implemented an evaluation process which includes a hard copy and electronic evaluation to gauge the effectiveness of its sessions. OPM reported they will continue to provide these tools and guidance to agencies, evaluate their effectiveness, and make improvements when necessary. As a result of these actions and others OPM took to address this recommendation, we are closing the recommendation as implemented.

    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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