The Securities and Exchange Commission oversees financial markets. To do so, it needs to attract and retain a high-quality workforce.
We surveyed SEC employees on their views of SEC's personnel management practices. Since 2013, when we first reported on this topic, employees' views on morale and other issues have improved.
Employees also have favorable views of SEC's efforts to ensure a diverse and inclusive workforce. But SEC's strategy for doing so doesn't include a way to measure its progress—which is necessary in ensuring it meets its goals. We recommended including such measures when it updates its strategy for FYs 2023-2026.
What GAO Found
The views of Securities and Exchange Commission (SEC) employees on certain personnel management topics—such as staff morale—have improved since 2013 (see figure). In 2022, employees also expressed positive views on the support SEC provided to employees during pandemic-related telework and the agency's diversity and inclusion efforts, among other issues. However, many employees continue to have unfavorable views on some issues related to performance management. For example, more than half of employees disagreed that SEC's new two-tier rating system creates meaningful distinctions in performance among employees or incentivizes high performance.
SEC Employee Views on Staff Morale Improved from 2013 through 2022
Since GAO's most recent review in 2019, SEC has made two significant changes to personnel management:
- In February 2022, SEC and the SEC employee union agreed that SEC employees would not receive Performance Incentive Bonus program awards in 2022, 2023, or 2024. SEC officials stated that supervisors could use other types of monetary and nonmonetary awards to recognize employee accomplishments.
- In 2022, SEC replaced a program designed to identify a cohort of high-potential leaders available to fill vacant senior officer positions. Whereas the previous program assessed employees to create and develop a pool of candidates, the new program assesses employees for each vacancy and opens leadership training to all employees.
In 2020, SEC released its first diversity and inclusion strategic plan, covering fiscal years 2020–2022. Since then, SEC has initiated a number of new diversity and inclusion efforts, including a professional development program for minority leaders at the agency. SEC did not develop performance measures related to the goals in the plan, but SEC intends to develop such measures for its 2023–2026 plan, according to SEC officials. Performance measures that align with goals and are clear, measurable, objective, and reliable could help SEC better track its progress in achieving diversity and inclusion goals and objectives. Improved tracking, in turn, could help SEC to understand which efforts are effective and target resources toward goals needing more attention.
Why GAO Did This Study
Effectively carrying out its regulatory responsibilities requires that SEC attract and retain a high-quality workforce. The Dodd-Frank Wall Street Reform and Consumer Protection Act contains a provision for GAO to report triennially on SEC's personnel management. GAO's first three reports (GAO-13-621, GAO-17-65, and GAO-20-208) identified a number of challenges and included 10 recommendations, all of which SEC has addressed.
This report examines (1) employees' views of SEC's personnel management, (2) personnel management practices SEC implemented since GAO's 2019 report, and (3) SEC's diversity and inclusion efforts. GAO surveyed a representative sample of nonexecutive SEC employees and all senior officers in key occupations in nine key divisions and offices. The results of the nonexecutive employee survey are generalizable to SEC's mission-critical employees. GAO also reviewed SEC documents, relevant academic literature, and a management consultant report; interviewed SEC employees and officials and the SEC employees' union; and analyzed SEC workforce data.
GAO recommends that SEC ensure the performance measures in its diversity and inclusion strategic plan for fiscal years 2023–2026 align with the plan's goals and are clear, measurable, objective, and reliable. SEC agreed with this recommendation.
Recommendations for Executive Action
|United States Securities and Exchange Commission
|The Director of SEC's Office of Minority and Women Inclusion should ensure that performance measures for SEC's diversity and inclusion strategic plan for fiscal years 2023–2026 align with the plan's goals and are clear, measurable, objective, and reliable. (Recommendation 1)
Closed – Implemented