Background We and others have identified challenges facing the federal human  capital system’s ability to recruit, retain, develop, and engage workers,  both today and in the future. For example: Classification system. The General Schedule classification  system—which defines and organizes federal positions, primarily to  assign rates of pay—has not kept pace with the government’s  evolving requirements. Recruiting and hiring. Federal agencies need a hiring process that is  applicant friendly and flexible, and meets policy requirements. Pay system. Employees are compensated through an outmoded  system that (1) rewards length of service rather than individual  performance and contributions, and (2) automatically provides across- the-board annual pay increases, even to poor performers. Performance management. Federal agencies have faced long- standing challenges developing modern, credible, and effective  employee performance management systems and dealing with poor  performers. Employee engagement. Agencies can improve employee  engagement and performance through analysis and sharing of  promising practices. Employee engagement is generally defined as  the sense of purpose and commitment employees feel toward their  employer and its mission. The administration is moving forward with broad efforts to address  government-wide human capital challenges, improve government  efficiency, and understand how key trends will affect the future of federal  work and the workforce. For example, the President’s Management  Agenda’s cross-agency priority goal on the 21st century workforce aims  to (1) improve employee performance management and engagement, (2)  train staff to develop new skills and redeploy human capital resources,  and (3) enable simple and strategic hiring practices. In 2018, OPM issued the first Federal Workforce Priorities Report to  communicate key government-wide human capital priorities, suggest  strategies, and help inform agency strategic and human capital  planning. The report identifies changes in the external environment that  will likely affect federal human capital management, including the evolving  role of workers, changes in technology, employee health, and shifting  generational demographics. In addition, OPM is developing a foresight  program to help federal agencies navigate emerging strategic workforce  challenges and harness potential opportunities. As part of its foresight  efforts, OPM has also hosted a series of symposia that provide human  capital specialists insight on addressing workforce challenges of the  future. Federal Work Is  Changing Amid  Demographic and  Technological Trends We identified key trends in agency operations and attitudes toward work  that are affecting how federal work is done and, consequently, the skills  and competencies that workers need to accomplish agency missions, as  illustrated by figure 1. These trends will require a federal workforce that  can better adapt to and leverage constantly evolving technology and  mission requirements. They will also require a federal workforce that can  effectively collaborate and partner with workers both within and outside of  the federal sector to achieve national policy objectives. Technological Advances Technological advances will change the way work is done. Advances in  automation, artificial intelligence, robotics, and information and  communication technology have the potential to accelerate changes in  federal work beyond any past experience, but they also involve risks.  Advances in automation and robotics are changing the way that work is  done by altering the balance between what tasks are completed by  humans and those completed by machines. The federal workforce will  need to develop new skill sets and expertise to effectively utilize and  manage these technological advances. In 2017, we convened a forum that highlighted several applications of  artificial intelligence, many of which could affect agencies and federal  work. For example, robots enabled by artificial intelligence could assist  patients with medication management and mobility support in clinical  settings; developments in automated vehicles could affect work related to  government vehicle pools, safety, and transportation management; the  use of artificial intelligence in criminal justice and cybersecurity  applications could bring benefits but would need to be carefully managed  with regard to privacy protection, among other concerns; and the  accelerated pace of change associated with artificial intelligence may  strain workforce systems’ capacity to train and hire individuals with  appropriate skill sets. Technology is also changing human capital management, according to  experts we contacted. Experts stated that technology can help improve  recruitment efforts, streamline hiring processes, and match employees to  tasks. For example, they said that employers can develop mobile apps to  make the hiring process easier to navigate and use artificial intelligence to  better screen and align applicants with job positions. Experts also stated  that employees will need to constantly update their digital literacy to stay  current with emerging technology. OPM has also explored the effect of technology on the federal workforce.  In February 2018, OPM reported that, in most jobs, certain activities may  be automated rather than the entire occupation. OPM also reported that  machine assistance may amplify the value of expertise and may increase  work capacity by providing employees time to focus on more important  work. Further, OPM reported that it is seeking to acquire or develop  enterprise technological solutions to improve the analytic capabilities of  the federal human capital community. Improved data analytics should  help support more informed and evidence-based planning and decision- making. OPM suggested that the technological changes will require agencies to  coordinate efforts to (1) fund technological experimentation and pilots; (2)  promote acquisition of skills that are not replaced by technology (e.g.,  creativity, relationship building, and innovation); and (3) engage in  strategic foresight activities. Relatedly, OPM, the Office of Management  and Budget, and the Department of Defense are developing a plan to  identify ways to provide employees impacted by automation with other  work, and to identify skills needed in the future. The agencies’ efforts are  part of the cross-agency priority goal on the 21st century workforce. Federal work is also being affected by increased use of virtual  communication, which provides flexibility in where employees can do their  work. In both the workforce-at-large and the federal workforce, the  percentage of employees who telework has increased. For example,  OPM reported that the percent of eligible employees teleworking  increased from 29 percent in 2012 to 51 percent in 2016. We have previously reported that the federal government has increasingly  recognized telework as an important human capital strategy that can give  employees more work-life balance and help agencies continue operations  during emergency events. However, federal agencies also face costs  associated with telework, including training staff, ensuring supervisors  have the necessary skills to manage remote staff, and overseeing the  telework program to ensure compliance and reduce the risk of fraud. In  July 2016, we found that OPM provided resources to agencies to help  them with their telework programs, but was missing other opportunities to  help agencies better identify the net cost savings associated with their  telework programs. We recommended that OPM work with the Chief Human Capital Officers  Council to provide clarifying guidance on options for developing  supporting data for benefits and costs associated with agency telework  programs. OPM concurred with the recommendation and in October  2018 provided documentation showing it is developing draft guidance on  evaluating work-life programs, including telework. To fully implement this  recommendation, it will be important for OPM to finalize and provide this  guidance to agencies. Increased Reliance on  Nonfederal Partners An increased reliance on nonfederal partners to achieve policy goals will  require new skills and competencies for which agencies will need to  identify, recruit, and hire. Increasingly, the federal government works with  state and local governments, as well as other partners, to achieve a wide  range of policy goals. The federal government uses grants as a tool to  achieve national priorities through nonfederal partners, including state  and local governments, educational institutions, and nonprofit  organizations. Federal grant outlays to state and local governments have generally  increased as measured in constant fiscal year 2015 dollars from $230  billion in fiscal year 1980 to $624 billion in fiscal year 2015. We previously  reported that a range of skills are needed to manage the various tasks  associated with the grants life cycle. For example, the grants workforce  needs to notify grant awardees of the general terms and conditions of the  grant, including statutory and regulatory requirements. In support of their missions and activities, agencies also use contractors  to procure a variety of services and products, including products that  cannot be easily and clearly defined in advance and that are difficult to  verify after delivery. In addition, agencies use contractors to provide the  skills needed to help them manage complex operations. In fiscal year  2017, federal agencies obligated almost $306 billion for service contracts.  Contractors can help agencies meet surge capacity needs, among other  benefits. However, the Office of Federal Procurement Policy and our prior  work have identified risks of overreliance on contractors and the need for  increased management attention on certain types of services, such as  professional and management support services. In addition to using grants and contractors, Congress has given broad  statutory authority across the executive branch to use various open  innovation strategies. Open innovation involves using various tools and  approaches to harness the ideas, expertise, and resources of those outside an organization to address an issue or achieve specific goals. Our  October 2016 report highlighted cases where agencies are using open  innovation strategies—such as crowdsourcing and prize competitions—to  effectively engage and collaborate with each other, and to leverage  knowledge outside the federal workforce to achieve their goals. For example, at the time we found that every 2 years since 2009 the  Federal Highway Administration had engaged a broad range of public-  and private-sector stakeholders to identify and implement innovative  ideas that measurably improved highway construction projects. Federal  workers in charge of such open innovation initiatives will need to be able  to work in collaborative, cross-cutting environments. To that end, in June  2017, we identified various government-wide and agency-level resources  —such as interagency communities of practice and dedicated staff  positions—the executive branch has put into place to support effective  implementation of open innovation initiatives. Fiscal Constraints Increasing fiscal constraints require agencies to reevaluate and  reprioritize what the federal government does, how it does business, and,  as appropriate, who conducts its business. The nation is on a long-term,  unsustainable fiscal path. We have previously reported that the federal  government is spending far more money than it is collecting and is  projected to do so going forward. Further, fiscal pressures have already  begun to affect the management of the federal workforce, including  decisions to hire, retain, train, contract, and collaborate. Without careful  attention to strategic and workforce planning and other approaches to  managing and engaging personnel, the reduced investments in human  capital may have lasting, detrimental effects on the capacity of an  agency’s workforce to meet its mission. In May 2014, we identified strategies to help agencies maintain their  human capital capacity while facing fiscal constraints. These strategies  include strengthening coordination within the human capital community,  using enterprise solutions to address shared challenges, and creating  more agile talent management to address inflexibilities in the current  system. Also, guidance from the Office of Management and Budget directs federal  agencies to reconsider priorities, determine how to make trade-offs, and  evaluate the potential effects of these decisions. In June 2018, we  reported that as federal agencies reexamine their role in carrying out  specific missions and programs, they should determine whether the  federal government is best suited to provide that service or if it can be  provided by some other level of government or sector more efficiently or  effectively. Evolving Mission  Requirements Evolving mission requirements challenge agencies to adapt their work  and workforces as they respond to policy shifts, technology changes, and  resource constraints affecting their work. Our previous work on the Census Bureau (Bureau) highlights this trend.  The Bureau is redesigning its approach to the 2020 Census to address  rising costs and declining response rates. In May 2017, we reported that  the basic design of the enumeration—mail out and mail back of the  census questionnaire with in-person follow-up for nonrespondents—has  been in use since 1970. However, this traditional design is no longer  capable of cost effectively counting the population, and the Bureau has  fundamentally reexamined its approach for conducting the 2020 Census.  For example, the Bureau is planning to offer households the option of  responding to the survey through the internet. The Bureau is also leveraging nonfederal partners and technology to  respond to evolving mission requirements. For example, the Bureau plans  to enhance its work with nonfederal partners to successfully complete the  enumeration, particularly for hard-to-count groups, such as minorities,  renters, and young children. In July 2018, we reported that to facilitate  this effort, the Bureau plans to hire nearly twice as many partnership  specialists as it had planned for the 2010 Census. These partnership specialists will need core relationship-building skills  and advanced knowledge of digital media. However, the Bureau faces a  significant challenge in hiring staff with these skills because it is operating  in a much tighter labor market than it did prior to the 2010 Census.  Likewise, the Bureau has had difficulty filling key positions to oversee  information technology contracts. In August 2018, we reported that a  government program management office is managing the contractor that  will integrate all of the Bureau’s key systems and infrastructure for the  decennial. However, in June 2018, Bureau officials reported that 33 of  the office’s 58 federal employee positions were vacant. These vacancies  create risks for the program management office’s ability to oversee  contractor cost, schedule, and performance. Changing Demographics  and Shifting Attitudes  towards Work Changing demographics and shifting attitudes towards work may require  new skills to manage a diverse workforce that seeks purpose, autonomy,  and career mobility. We found increases in the percentage of federal  employees who had a disability, identified as a minority, were veterans, or  who held an advanced degree over the past 10 years (see figure 2). This increasing diversity should help provide agencies with the requisite  talent and multidisciplinary knowledge to accomplish their missions. While  the percentage of federal employees 40 years and older remained  relatively flat, the federal workforce had a higher percentage of individuals  who are 40 and older compared to the U.S. employed civilian labor force.  The federal workforce had a higher percentage of people with a disability,  who were veterans, or held an advanced degree (see figure 3). Agencies face a potential risk related to retirement, particularly among the  Senior Executive Service (SES). Specifically, we found that retirement  rates for SES employees are higher than for all employees, with 7 to 8  percent of SES retiring every year for the past 6 years (see figure 4).  Cumulatively, 41 percent of the permanent SES workforce in fiscal year  2012 retired by fiscal year 2017. If turnover is not strategically managed  and succession plans are not in place, gaps can develop in an agency’s  institutional knowledge and leadership as experienced employees retire.  While retirements can aggravate the problem of skill gaps, they also  present an opportunity for agencies to realign their workforce with needed  skills and leadership levels to better meet existing and newly emerging  mission requirements. Based on expert interviews, we also identified shifts in employee attitudes  toward work, which present recruiting opportunities and challenges for the  federal government. Experts said that employees seek meaningful work (i.e., work that can influence the greater society); autonomy within the workplace (i.e., opportunities to develop creative  and innovative solutions to complex problems);  control over their work environment (i.e., they want to set a schedule  and to work in a location that provides work-life balance); and  career mobility, including opportunities for upward mobility (i.e.,  promotions) and lateral mobility (i.e., opportunities to rotate to different  roles or projects within the same agency, a different agency, or  outside of government). Related to career mobility, experts said that employees are seeking  greater developmental opportunities and would prefer longer-term  employment where they can continue to build their skills and train.  Experts noted that while employees change jobs more often than in the  past, this phenomenon can be a result of employers investing less in  employee development, which has led to greater turnover. OPM also  recently reported that millennials are known for frequently transitioning  from one job to the next. While federal agencies offer unique opportunities to pursue meaningful  work, achieve autonomy, and have a healthy work-life balance, experts  also highlighted key challenges regarding perceptions surrounding federal  work from the potential applicants. These challenges include perceptions  that the government is too bureaucratic, federal work lacks innovation and  involves maintaining the status quo, federal work is less prestigious than  the private sector, and federal workers do not get to see the immediate  effect of their work. Officials from federal employee and manager groups  believed that furloughs, government shutdowns, pay freezes, and  negative rhetoric from elected officials have all contributed to the negative  perceptions among potential applicants. For example, from December 22,  2018, to January 25, 2019, a partial government shutdown occurred as a  result of a lapse in appropriations affecting some, but not all federal  agencies. It was the second multiweek lapse in appropriations causing a  government shutdown since 2013 and the longest shutdown in American  history. Federal employees at the affected agencies did not receive a  paycheck during the government shutdown. Experts we interviewed  noted that the perception of job security offered by federal work is  attractive to employees. However, prolonged shutdowns may alter this  perception and harm the government’s recruitment and retention efforts. Given the changing demographic composition of the federal workforce  and shifting attitudes toward work, our analysis suggested that it may be  important to select and train managers and supervisors who possess  several leadership competencies. These competencies include fostering  an inclusive workplace (valuing diversity and individual differences and  leveraging these differences to achieve the agency’s mission); team  building (inspiring and fostering team commitment, spirit, pride, and trust);  interpersonal skills (treating others with courtesy, sensitivity, and respect);    and managing conflict (encouraging differing opinions to be expressed  and resolving disagreements in a constructive manner). Such  competencies can help managers and supervisors develop an agency  culture where all employees feel valued, respected, engaged, and able to  contribute toward an agency’s mission. Key Talent  Management  Strategies Can Help  OPM and Agencies  Better Manage the  Current and Future  Workforce In light of trends discussed, we identified actionable strategies that  agencies may be able to use to effectively manage the future federal  workforce in key talent management areas (see table 1). While these  strategies are not an exhaustive list, collectively they suggest basic steps  that agencies can take within existing authorities to position themselves to  meet their talent needs. Since, in some cases, agencies already use  these strategies, focused attention to leadership, culture, and sound  management practices can help agencies prepare for the future  workforce. For each strategy, we highlight some of the challenges agencies face,  actions OPM can take to implement open, related recommendations from  our prior work, and practices that may help agencies implement the  strategy. These practices are based on our review of related reports,  group interviews with federal Chief Human Capital Officers (CHCO), and  interviews with selected private organizations and foreign governments. Align Human Capital  Strategy with Current and  Future Mission  Requirements Why Is Aligning Human Capital Strategies  Important?  Strategic workforce planning aligns an  organization’s human capital program with its  current and emerging mission and  programmatic goals, and develops long-term  strategies for acquiring, developing, and  retaining staff to achieve programmatic goals.  This process—in conjunction with identifying  skills and competencies and analyzing gaps— enables the organization to be agile, resilient,  and responsive to current and future  demographic and technological trends, as well  as other demands. These efforts can also  help agencies tailor their recruiting programs. In our prior work, we reported that high-performing organizations define  what they want to accomplish and what kind of organization they want to  be. They then identify and analyze the personnel skills, competencies,  numbers, and other factors needed to achieve those objectives. However,  these steps are a challenge for agencies that lack the capacity for  strategic workforce planning. Consequently, these agencies’ human  capital efforts tend to focus on support and transactional activities and  compliance with rules and regulations. While these functions are  important, successful strategic human capital management requires  human capital professionals to integrate human capital strategies with  their agency’s core business practices. In addition, high-performing  organizations recognize the fundamental importance of measuring both  the outcomes of human capital strategies and how these outcomes have  helped the organizations accomplish their missions and programmatic  goals. Set Workforce Goals and  Assess Skills and  Competencies Needed to  Achieve Them Identify existing skills and competencies. In May 2014, we reported  that agencies should be aware of existing skills and competencies in their  workforce to help inform workforce planning. According to the  Department of the Treasury (Treasury) CHCO, establishing a skills  inventory can help managers assign the right talent to the right place at  the right time. For example, the CHCO told us that during the Puerto  Rico debt crisis, Treasury needed to be able to identify the necessary  skills to manage the crisis. The agency is now implementing an Integrated  Talent Management System to facilitate workforce and succession  planning as well as learning and performance management. In May 2014, we recommended that OPM work with the CHCO Council to  review the extent to which new capabilities are needed to develop tools  that help identify existing skills. OPM agreed and took a number of  actions to address this and other related recommendations. For example,  OPM developed an action plan template for closing skills gaps that  adheres to our selected best practices for project planning. However, as  of November 2018, other actions were still needed to fully address this  and other related recommendations. Assess gaps in existing and future skills and competencies. With  shifting attitudes toward work, technological advances, and increased  reliance on nonfederal partners, agencies need to assess whether there  are gaps in existing and future skills and competencies. We previously  reported that most federal human resources (HR) systems—reflecting the  General Schedule classification system—only identify employee skills and  competencies by their occupational series, job title, and grade. This  level of detail does not adequately address the multidisciplinary nature of  modern work. For example, cybersecurity spans many occupational  families. Similarly, with technological advances, agencies may need  interdisciplinary talent such as workforce specialists in information  technology. Agencies may be better able to assess gaps in such talent by  defining, developing, and deploying workers based on skills and  competencies, not by occupational series. According to the Department of Defense Civilian Human Capital Officer,  agencies can assess gaps in skills and competencies through functional  communities, in which experienced leaders in areas such as acquisition  or financial management define, assess, and determine how to distribute  skills and competencies in the workforce. She said that although her  department and other agencies have made progress in closing skills  gaps, only functional communities themselves can define the skills and  competencies needed for current and future work. She also said that a  mature functional community can help align workforce planning to agency  strategic goals and objectives. In January 2015, we recommended that OPM work with agency CHCOs  to (1) establish a schedule specifying when OPM will modify its Enterprise  Human Resources Integration (EHRI) database to capture staffing data  that it currently collects from agencies through its annual workforce data  reporting process; and (2) bolster agencies’ ability to assess workforce  skills and competencies by sharing competency surveys, lessons learned,  and other tools and resources. In December 2018, OPM released a  memorandum outlining plans for a phased, government-wide competency  assessment of program and project managers beginning in May 2019.  Additionally, in March 2019, OPM reported that it had identified a data  source that was more efficient and accurate in identifying staffing gaps  than EHRI data. We will continue to monitor OPM’s progress in  implementing its planned actions. Monitor progress toward closing skills gaps. We previously reported  that the federal government faces skills and competencies gaps in a  number of agency-specific and government-wide occupations. One  such occupation is in the HR profession. Skills gaps in HR occupations  can hamper both strategic and transactional HR activity, exacerbate  additional skill gaps, and hinder agencies’ ability to accomplish their  missions. For example, our December 2016 report highlighted how the  Veterans Health Administration’s limited HR capacity undermined its  ability to improve delivery of health care services to veterans. Further, OPM officials said that a challenge to federal hiring efforts is high  turnover among HR staff, and one CHCO said her HR staff is not up to  date on hiring options. As a result, OPM officials noted that HR offices are  missing specialists who understand the agencies’ specific hiring needs  and flexibilities. In January 2015, we recommended that OPM (1) work with the CHCO  Council to develop a core set of metrics that all agencies should use to  close mission-critical skills gaps, among other HR goals; and (2)  coordinate with the interagency working group that identified the list of  skills gaps to explore the feasibility of collecting necessary information  during a CHCO-led review of HR goals. OPM concurred with the  recommendation in 2015. In March 2019, OPM stated it had addressed  the recommendation by developing a multifactor model consisting of core  metrics. This model included quit rates and retirement rates. OPM said  that it provides the model to agencies for identifying mission-critical  occupations. OPM added that agencies should have the autonomy to  determine which human capital metrics are important for achieving their  missions. While this is an important step forward, to close the  recommendation, OPM needs to provide evidence that agencies are  using the multifactor model as a common set of metrics to close mission- critical skills gaps, regardless of other agency-specific metrics. Acquire and Assign Talent Why Is Acquiring and Assigning Talent  Important?  To ensure agencies have the capacity to  address evolving mission requirements,  agencies will need to compete with other  sectors to acquire top talent, as well as have  the flexibility to reassign existing talent to  where they are most needed. This helps  ensure the right people, with the right skills,  are assigned to the right roles at the right  time. According to OPM data, expert interviews, and our previous work, the  federal government faces a range of challenges acquiring and assigning  talent. These challenges include a lengthy hiring process and negative  perceptions of government. In 2017, the average government-wide time- to-hire was 106 days, according to OPM. Candidates do not consider this  time frame to be reasonable, according to human capital experts and  federal employee and management groups. OPM’s government-wide  goal is 80 days. Further, only 42 percent of respondents to the 2017 Federal Employee  Viewpoint Survey (FEVS) think their work unit can recruit the right skills.  Human capital experts, CHCOs, and OPM officials reported that agencies  face challenges (1) matching applicants with job positions best suited to  their skills, and (2) moving existing employees with specific skills to  address emerging, temporary, or permanent needs across an agency. In the sections below, we highlight actions OPM can take to implement  open recommendations from our prior work, and practices agencies can  follow to address these challenges by (1) sourcing and recruiting talent,  (2) assessing and screening candidates, and (3) assigning employees  where needed. Source and Recruit Talent Sourcing and recruiting is the process of attracting strong applicants who  are prepared to perform successfully on the job. Some practices agencies  can use to better source and recruit include cultivating a talent pipeline,  highlighting agency mission, recruiting continuously, starting the hiring  process early in the school year, reviewing available hiring flexibilities,  and writing user-friendly vacancy announcements. Cultivate a diverse talent pipeline. In our prior work, we have noted the  importance of active campus recruiting that goes beyond infrequent  outreach to college campuses. Active campus recruiting includes  developing long-term institutional relationships with faculty,  administrators, and students. In addition, OPM guidance emphasizes that  agencies should develop an inclusive approach to their talent acquisition  strategies. This includes developing strategic partnerships with a  diverse range of colleges and universities, trade schools, apprentice  programs, and affinity organizations from across the country. Likewise, representatives of consulting firms we interviewed stated they  cultivate a talent pipeline by building a brand on campus, developing  relationships with college students, and recruiting on campuses for entry- level positions and internship programs. One consulting firm  representative said that the firm sends “brand ambassadors” to build  relationships with college freshmen and sophomores, and to discuss  working in the professional services industry. Another consulting firm  representative said that the firm uses social media to develop  relationships with students prior to a campus visit. Consulting firm  representatives also noted that they expanded their talent pool by visiting  technical conferences, veteran groups, and campuses with students of  diverse backgrounds. Consulting firm representatives stated that their internship programs are  among their most successful practices for cultivating a talent pipeline  because the firms can offer full-time positions to rising seniors during the  internship. Similarly, CHCOs and federal employee and management  group representatives we interviewed noted that internships are important  for establishing a pipeline for recruitment. Highlight agency mission. Agencies can help counter negative  perceptions of federal work by promoting their missions and innovative  work, according to expert and CHCO interviews. For example, the Department of Homeland Security (DHS) provides “Day in the Life”  information on its work to promote public awareness of how its everyday  tasks tie in with its mission of protecting the United States, according to  the DHS CHCO. The DHS CHCO stated that promoting agency mission  can be done while cultivating a talent pipeline and assessing applicants’  abilities. For example, the department holds recruitment events where  potential candidates can participate in law enforcement-related activities  such as fitness testing. The CHCO noted that in addition to promoting  homeland security careers, these events help prospective candidates  determine if a position is a good fit for them. Recruit continuously and start the hiring process early in the school  year. The ability to hire students is critical to ensuring that agencies have  a range of experience levels for succession planning and a talent pipeline  to meet mission requirements. One of the key challenges agencies face  in recruiting students is managing the timing of recruitment. The federal  fiscal year begins on October 1—about when private sector firms we  interviewed start recruiting on campus. Frequently, however, federal  agencies have been unable to hire at this time of year because of the  limitations of continuing resolutions. Yet if agencies wait to start the  recruiting and hiring process until they receive funding, many graduates  will have taken other job opportunities. Agencies can overcome these timing challenges by recruiting  continuously and starting the hiring process early in the school year. To  recruit continuously, CHCOs from the U.S. Departments of Agriculture  and Homeland Security said they advertise funding-conditional positions  throughout the year. Similarly, representatives of some consulting firms  said they post positions that are contingent on funding and complete the  hiring paperwork, among other requirements, for these positions before  obtaining federal funding. This has helped navigate the timing of annual  appropriations because these organizations can onboard candidates as  soon as they receive funding. Representatives of one federal management group also stated that  recruiting continuously and starting the hiring process earlier is a good  practice even when agencies receive funding in October, since it can  reduce stress from cumbersome recruiting and hiring work when a  position needs to be filled. Strategically leverage available hiring flexibilities. CHCOs cited the  complex competitive examining process as a cause of the lengthy hiring  time. This has been a long-standing concern: In our 2002 report on  human capital flexibilities, we noted that for many years prior, federal  managers had complained that competitive examining procedures were  rigid and complex. However, agencies can use a number of additional hiring authorities  beyond competitive examining. These authorities can add flexibility to  the process and CHCOs expressed a desire for more. However, we  previously found that agencies relied on only a small number of available  authorities. In fiscal year 2014, 20 hiring authorities were used to make  around 90 percent of the new appointments, although agencies used 105  hiring authority codes in total. We recommended that OPM use information from its review of agencies’  use of certain hiring authorities to determine whether opportunities exist  to refine, consolidate, or expand agency-specific authorities, and  implement changes where OPM is authorized, including seeking  presidential authorization or developing legislative proposals if  necessary. OPM agreed with our recommendation and has made progress in these areas, although more work is needed. As of July 2018,  OPM had started a project to review hiring authority data and to create an  inventory of authorities used by agencies. In its July 2018 study on  excepted service hiring authorities, OPM identified possible opportunities  to streamline authorities and outlined planned actions to promote a more  effective and efficient hiring process. As of December 2018, OPM said  that it continues to research and examine these streamlining opportunities  as part of the broader initiative to modernize federal hiring practices under  the President’s Management Agenda. To fully implement the  recommendation, OPM needs to complete these efforts and, as  appropriate, develop legislative proposals in consultation with the CHCO  Council. Write user-friendly vacancy announcements. We previously reported  that some federal job announcements were unclear. This can confuse  applicants and delay hiring. In July 2018, OPM officials stated that  agencies can develop more effective vacancy announcements when  hiring managers partner with HR staff. According to OPM, hiring  managers can work with HR staff to identify the critical competencies  needed in the job, develop a recruiting strategy, and ensure the job  announcement accurately and clearly describes the required  competencies and experience. To promote collaboration between hiring  managers and HR staff, OPM is training agencies on the role of hiring  managers in writing vacancy announcements, according to OPM officials. As we reviewed human capital practices in foreign governments,  Canadian officials told us that Canada’s Public Service Commission  shortened job announcements and reduced the number of qualifications  required to apply for most positions. Canadian officials also noted that  they simplified their job application portal, which reduced the time to apply  for a job. Assess and Screen  Candidates Assessing includes developing and implementing tests, structured  interviews, and other evaluations to determine whether candidates are  qualified for the position and to gauge their relative levels of knowledge,  skills, and abilities. Screening involves reviewing qualified candidates for  potential suitability concerns and conducting background investigations.  Practices for assessing and screening include using relevant assessment  methods, sharing hiring lists, and improving the security clearance  process. Use relevant assessment methods and share hiring lists. CHCOs and  OPM officials stated that roadblocks to hiring the right skills include issues  with assessment methods. Specifically, agencies may use methods that  are less relevant for assessing the desired skills or agencies may  experience issues incorporating multiple assessments in the hiring  process. For example, one CHCO said that her agency uses multiple- choice questions to assess candidates, but essay questions more  effectively assess the skills she seeks. OPM issued guidance to agencies  on how to use additional assessment methods, including how to rank  applicants. Additionally, federal employee and management group representatives  said agencies could reduce the time of the assessment process by  sharing hiring lists. The Competitive Service Act of 2015 allows agencies  to share hiring lists, but agencies have only started to pilot the practice  within departments, according to OPM officials. OPM and agencies  discussed sharing hiring certificates with the CHCO Council, and OPM is  planning virtual training sessions on this topic. However, one federal  employee group representative noted that to be consistent with merit  principles, agencies may need to refresh the list every 2-to-3 months to  give new candidates the opportunity to enter the application pool. In looking at human capital practices in foreign governments, we found  that Australian agencies incorporated more relevant assessment methods  and shared hiring certificates. According to officials from the Australian  Public Service Commission, Australian agencies previously relied on  interviews as the main assessment method. However, the Australian  Public Service Commission encouraged agencies to use a range of  different assessment methods, such as prescreening questionnaires,  video interviews, and technical multiple-choice questions. As a result,  officials stated that Australian agencies interview fewer but more suitable  candidates, which can save time and resources. Also, Australian  agencies can hire from a list of candidates that one agency already  determined to be qualified in certain skills. Improve the security clearance process. The security clearance  process can contribute to onboarding delays, according to CHCOs. For  example, at one agency, the CHCO said it takes applicants more than  400 days to receive their security clearances. Also, our previous work  found that 98 percent of agencies did not meet the 60-day timeliness  objectives for initial secret clearances in fiscal year 2016, an increase of  25 percentage points since fiscal year 2012. In January 2018, we added the security clearance process to our High- Risk List and reported a backlog of more than 700,000 background  investigations as of September 2017. In December 2017, we made three  recommendations to the National Background Investigations Bureau  within OPM. These recommendations included developing a plan for reducing the  security clearance backlog, increasing total investigator capacity, and  implementing a comprehensive strategic workforce plan that focuses on  what workforce and organizational needs and changes will enable the  National Background Investigations Bureau to meet the current and future  demand for its services. OPM concurred with the recommendations, and  officials reported in February 2019 that the National Background  Investigations Bureau had taken steps to reduce backlog of pending  security clearance investigations to approximately 565,000 and increase  the number of investigators to almost 8,700. The National Background  Investigations Bureau has also reported publically on the security  clearance background investigations, including investigator headcounts,  in September 2018, and quarterly on performance.gov. While an  important step, OPM needs to complete the workforce plan and identify  workforce goals to fully implement the recommendation. The Department of Homeland Security (DHS) CHCO said DHS navigates  this challenge by onboarding talented, qualified applicants as soon as  possible, then, while waiting for their high-level clearance, assigning them  tasks that do not require the clearances. She also said that DHS has  issued more interim clearances and has redesignated some positions so  they can be held by employees with a lower clearance classification. Assign Employees Where  Needed Our previous work noted that it is important for agencies to be able to  place employees where needed, especially since utilizing skills of  employees already in the workforce could improve agencies’ ability to  meet emerging or temporary mission needs more cost-effectively than  hiring employees. Develop a culture of agility. We previously reported that to develop a  culture of agility, agencies need to be able to (1) identify the skills  available in their existing workforces, and (2) move people with specific  skills to address emergency, temporary, or permanent needs within and  across the agencies. Agencies can develop a culture of agility to meet  mission needs by supporting rotational assignments for employees. For  example, the Nuclear Regulatory Commission established an oversight  board when it faced a period of downsizing and could not hire externally  as a result of contraction within the nuclear industry, according to the  agency CHCO. This board helped ensure that employees with the  required skill sets were considered first before an approval to hire would  be granted. Through its active rotational program and hiring oversight, the  commission met its mission amidst the downsizing, according to the  agency’s CHCO. Relatedly, Canada and two of the private government contractors we  interviewed have used internal job application platforms to promote a  culture of agility. Canada’s internal job platform, Career Marketplace,  allows all government employees to share profiles and career  opportunities, particularly for short-term projects. One company’s  representatives said their internal job platform posts openings in different  countries and industries across the company. According to these  representatives, this company established a culture where supervisors  understand that staff work for the entire company, not just a particular unit  or program. Another company supplements its internal job platform with  tools to recognize employee skills and find opportunities that best fit those  skills. Incentivize and  Compensate Employees Why Is Incentivizing and Compensating  Employees Important?  Changing mission requirements and  technological trends requires the federal  government to compete with other sectors for  in-demand skill sets, and compensation and  incentives are key determinants of where  employees choose to work. While federal  agencies may struggle to offer competitive  compensation for highly skilled workers given  fiscal constraints, leveraging existing  incentives such as work-life balance programs  can help agencies to better compete for top  talent even in labor markets where federal pay  may not be competitive. While federal agencies may face challenges implementing competitive  compensation in certain labor markets, certain benefits and incentives  other than pay can help federal agencies better compete in the labor  market. However, agencies do not always promote these benefits and  incentives as part of a total compensation package, in part because  managers are not always aware of the importance of doing so. In the  sections below, we highlight practices agencies can use to promote  current benefits and incentives, and discuss our open recommendations  to leverage existing pay flexibilities. Leverage Benefits and  Incentives In cases where federal pay may not be competitive, certain benefits and  incentives, such as work-life balance programs, tax-exempt health  savings plans, and retirement savings plans, could give the government  an edge to recruit and retain employees. Some practices agencies can  use to leverage these benefits and incentives are as follows. Increase awareness of benefits and incentives, such as work-life  programs. In 2017, the majority of federal employees were satisfied with  compensation, and employees who participated in work-life programs  were satisfied with those incentives (see table 2 and figure 5). However,  OPM’s 2018 Federal Work-Life Survey Governmentwide Report found  that one of the most commonly reported reasons employees do not  participate in work-life programs is lack of program awareness among  employees and supervisors. For example, 23 percent of those who did  not participate in the employee assistance program said they were  unaware of the program services. Some agencies are addressing this issue by advertising and helping  employees use available benefits, work-life balance programs, and other  resources. For example, the National Science Foundation offers  employees many opportunities to learn about existing benefits, according  to the foundation’s CHCO. These opportunities include triannual  retirement seminars where employees receive personalized retirement  estimates, quarterly financial planning seminars where employees receive  a free 1-hour consultation, and annual benefit fairs where employees can  learn about various health care providers, the work-life programs, and the  employee assistance program. Tailor benefits and incentives to employees’ needs. Our analysis of  CHCO and expert interviews also found that employees may value  different benefits and incentives depending on their stage in life. By better  understanding the desires of the workforce at various life stages,  agencies can better tailor benefits packages and incentives to their  employees. For example, the Social Security Administration’s CHCO said  that the agency’s younger workers value work-life and wellness  programs, so the agency implemented a health-tracking program and a  fitness discount program for all employees. CHCOs also suggested  identifying and incorporating the benefits that would be most useful to  various groups of employees, such as sabbaticals for midlevel employees  or paid parental leave for employees starting families. One CHCO found  that her cybersecurity workforce values subsidies for training and  additional certifications more than bonus pay. Further, OPM’s 2018 Federal Work-Life Survey Governmentwide Report  found that the number of respondents who anticipate adult dependent  care responsibilities in the next 5 years (31 percent) is double the number  of number of respondents with current adult dependent care needs (15  percent). OPM officials stated in light of this change, agencies may need  to provide greater workplace flexibilities and other support services to  retain talent. Address barriers to telework. Telework can serve as an important  recruitment and retention tool. According to OPM’s 2018 Federal Work- Life Survey Governmentwide Report, 68 percent of employees who  telework said they intended to remain at their agencies, compared to 62  percent of those who do not telework. However, our previous work and  OPM’s 2018 Federal Work-Life Survey Governmentwide Report  found  that some supervisors discourage telework despite agency participation  goals and that managers may make telework decisions before taking  relevant training. In February 2017, we recommended that OPM develop tools to help  agencies assess and analyze persistent barriers to telework, including  managerial resistance. While OPM disagreed with our recommendation, it  took steps consistent with the recommendation. For example, in 2017,  OPM administered the first government-wide work-life survey. This survey  included questions about a number of work-life programs, including  telework, to help identify common barriers to participation in telework,  including managerial resistance. Specifically, the survey discussed  supervisory perceptions of employees' reported telework participation  outcomes, supervisors' confidence to effectively manage telework  performance, and key drivers for telework approvals and denials. OPM  then provided individualized reports on results to agencies and agency  components. OPM also developed and distributed a video tutorial to help  agencies analyze their results. In 2019, following receipt and review of  documentation from OPM, we determined that these actions will help  agencies prioritize ways to improve their telework programs. We then  closed the recommendation as implemented. In our review of other countries’ human capital practices, we found that  Australia encouraged managers to support telework by passing legislation  outlining standards and developing a culture that supports work-life  programs. For example, Australia’s Parliament passed legislation  outlining standards for work-life programs, but Australian officials also  stated that commitment from top management was instrumental in  creating a culture that supported work-life programs, including telework.  More than 80 percent of respondents to the Australian Public Service  employee census reported that their supervisor actively supports work-life  programs. Leverage Existing Pay  Authorities It is the policy of Congress that pay for federal workers under the General  Schedule (GS) classification system—the pay system covering the  majority of federal employees—align with pay for comparable nonfederal  workers. However, in 2012, we reported that recent studies comparing the compensation of federal employees to workers in other sectors  arrived at different conclusions as to which sector had the higher pay and  the size of the pay disparities, in part because each study included  different sets of assumptions. When necessary, agencies can use  special payment authorities strategically to help ensure pay is  competitive. Use special payment authorities strategically. A variety of authorities  can help agencies compete in the labor market for top talent, but  agencies only use them for a small number of employees. In December  2017, we reported that agencies can tap an array of special payments  when they need to recruit or retain experts in engineering, cybersecurity,  or other in-demand fields. These payments include, for example,  payments for recruitment, retention, or critical positions. We found that  agencies reported that these payments were helpful, but few documented  their impacts, and OPM had not assessed their effectiveness. Further, we  analyzed EHRI data and found that less than 5 percent of employees  received payments for recruitment or retention annually in the past 10  years. In December 2017, we recommended that OPM track the effectiveness of  special payment authorities, provide guidance and tools to assess their  effectiveness, and review and consider ways to streamline approval  procedures. OPM partially concurred with the recommendation to track  the effectiveness of special payment authorities, saying that agencies are  in the best position to take this action. Moreover, in December 2018,  OPM stated that it established a baseline to measure changes in the use  of special payment authorities over time, and that it is focused on  government-wide, mission-critical occupations to help identify trends  where there may be recruitment and retention difficulties. OPM is also  working with the CHCO Council to administer a survey to agencies to  obtain input on possible improvements to special payment authorities and  whether agencies have best practices to share on effective use of special  payment authorities. OPM officials said that they plan to review approval  procedures in 2019 for ways to streamline them; however, they have not  yet provided documentation on how this and future reviews will identify  ways to streamline the procedures. We will continue to monitor OPM’s  actions to implement this recommendation. Engage Employees Why Is Engaging Employees Important?  Employee engagement— generally defined  as the sense of purpose and commitment  employees feel toward their employer and its  mission—is important because engaged  employees are more innovative, more  productive, more committed, more satisfied,  and less likely to leave, according to OPM. OPM’s study on engagement and our prior work found that what matters  most in improving engagement levels is valuing employees by  authentically focusing on their performance and career development.  Specifically, our prior work found that the strongest drivers of engagement  were similar across age groups and include constructive performance  conversations and communication from management, career  development and training, inclusion and involvement in decisions  affecting employees’ work, and work-life balance. The challenge for agencies, then, is to (1) overcome weaknesses in the  performance management process, including rewarding strong  performers and dealing with poor performers; (2) create support for an  inclusive work environment; and (3) develop and implement strategies for  prioritizing training during times of fiscal constraint. In the sections below,  we highlight actions OPM can take to implement open recommendations  from our prior work and practices agencies can take to improve employee  engagement. Manage Employee  Performance and Create a  “Line of Sight” Between  Individual Performance and  Organizational Results Experts said that employees desire an environment where they can  collaborate with their peers and feel a sense of comradery. In contrast,  even a small number of poor performers can negatively affect employee  morale and agencies’ capacity to meet their mission, according to CHCOs  and our previous work. In the 2017 FEVS, 64 percent of federal employee  respondents agreed that their supervisor provides them with constructive  suggestions to improve job performance and 31 percent agreed that  steps are taken to deal with poor performers. Without effective  performance management, agencies risk not only losing the skills of top  talent, they also risk missing the opportunity to effectively address  increasingly complex and evolving mission challenges. Agencies can  make performance management more effective with the following  practices. Improve selection and training of supervisors and managers.  Agencies can improve employee engagement by having a strong  management team that can provide constructive performance  conversations and deal with poor performers. This can be done by  selecting managers who (1) are inclined toward and interested in  supervision, and (2) have the ability to coach staff and provide  constructive performance feedback. One way agencies can ensure they  are selecting managers who want to manage is to establish a dual career  ladder structure, which allows advancement opportunities for employees  who have technical skills but are not inclined to manage. Representatives of private consulting firms we interviewed use the dual  career ladder and said it helps expand opportunities for employees to  move around internally. We recommended in 2015 that OPM determine if  promising practices, such as the dual career ladder structure, should be  more widely used across government. In November 2018, OPM officials  said that the President’s Management Agenda requires agencies to  ensure first-line supervisors possess critical leadership competencies  within the first year of appointment, either through selection or  development. We will continue to monitor OPM’s actions in this area. Agencies can also train managers to ensure they have skills to address  poor performance. In February 2015, we reported that supervisors may  not possess confidence or experience in having difficult performance  conversations, and they may not have skills or training on addressing  poor performance. These factors point to the importance of effective  selection, assessment, and development of new supervisors, as well as  to the importance of providing refresher training for current supervisors. Link agency’s mission and employees’ work. We have previously  reported that high-performing organizations create a “line of sight”  between individual performance and organizational results by aligning  employees’ daily activities with broader results. Further, agencies can  motivate and retain employees by connecting them to their agency’s  mission, according to human capital experts and federal employee and  management group representatives we interviewed. Employee responses  to FEVS indicate the federal government appears to be performing well in  this area. In 2017, 84 percent of employees knew how their work related  to the agency goals and priorities. Several private consulting firms we spoke with connect employees to their  missions in various ways. One firm aligns individual performance  expectations with the organization’s goal of serving federal clients  objectively with the highest caliber of scientific and technical excellence.  According to the firm’s representative, this effort has improved employee  satisfaction scores. Other firms train employees on the firm’s core values  and its clients’ missions. According to the firms’ talent directors, this  practice helps keep employees interested in working for the firm. Implement meaningful rewards programs. We have previously  reported that high-performing organizations seek to create effective  incentive and reward systems that clearly link employee knowledge,  skills, and contributions to organizational results. However, agencies  sometimes struggle to allocate limited resources between mission  requirements and recognition, according to CHCOs and representatives  of one federal management group. According to the representatives,  some managers may not implement reward programs because they are  time intensive, and managers may not understand the importance of  reward programs to motivating the workforce. Among 2017 FEVS  respondents, 50 percent reported that they were satisfied or greatly  satisfied with the recognition received for doing a good job. Further, our November 2018 report highlighted challenges in recognizing  employee performance. We noted that approximately one-third of 2017  FEVS respondents agreed or strongly agreed with the statement, “In my  work unit, differences in performance are recognized in a meaningful  way.” We also found that employees in supervisory roles responded more  positively to statements related to rewarding performance than other  employees. For example, in 2017, an estimated 69 percent of senior  leaders agreed or strongly agreed with the statement. In contrast, an  estimated 48 percent of supervisors and an estimated 33 percent of  nonsupervisors and team leaders agreed or strongly agreed. Human capital experts and federal employee and management group  representatives said that recognizing employees for their contribution to  achieving the agency’s mission can be as strong an incentive as money.  For example, according to the Social Security Administration CHCO, the  agency offers a variety of awards programs. These programs include  agency-wide monetary awards that are based on performance ratings,  monetary awards that are not based on performance ratings, and  nonmonetary awards, some of which are showcased in a virtual  ceremony during Public Service Recognition Week. The Social Security  Administration also incorporates office-level awards to recognize  employee contributions. For example, in some offices, supervisors give  “Life Saver” or “You Rock” certificates. Share innovative approaches to performance. In November 2018, we  found that opportunities exist to share innovative approaches to  performance management. We recommended that OPM work with the  CHCO Council to develop a strategic approach for identifying and sharing  emerging research and innovations in performance management.  Examples of innovations OPM has found include changes in performance  ratings models and setting goals that are focused on growth. We also  recommended that OPM develop and implement a mechanism for  agencies to share promising practices, such as focusing on performance  conversations and recognition to increase engagement and performance.  OPM agreed with our recommendations and reported that it plans to  formalize its processes for sharing emerging research and soliciting views  from the CHCOs. We will monitor OPM’s efforts to implement the  recommendations. Involve Employees in  Decisions Our analysis of expert interviews found that employees seek autonomy in  the workplace, meaningful work, and opportunities to achieve results by  developing creative and innovative solutions. Also, experts noted that in  some cases, connecting employees to a sense of inclusion and meaning  can compensate for the opportunity to make higher salaries in other  sectors. Having an inclusive work environment is one practice that can  help increase employee involvement in decisions. Increase support for an inclusive work environment. An increasingly  diverse workforce can help provide agencies with the requisite talent and  multidisciplinary knowledge to accomplish their missions. We previously  reported that diversity in the workforce can help address complex  challenges and foster innovation and creativity. We also reported that  fostering a diverse and inclusive workplace could help organizations  reduce costs by reducing turnover, increasing employee retention across  demographic groups, and improving morale. To harness diverse talent,  agencies need to continue using thoughtful strategies to engage  employees. In 2017, almost 70 percent of FEVS respondents stated that  supervisors work well with employees of different backgrounds, and about  half were satisfied in other areas related to inclusiveness (see table 3). In January 2005, we reported that top management commitment is a  fundamental element in the implementation of diversity management  initiatives. We’ve also reported on the importance of diversity in the  Senior Executive Service (SES) corps. In January 2003, we stated that  diversity can bring a wider variety of perspectives to bear on policy  development and decision-making that help agencies achieve results.  Other practices that can help agencies support an inclusive environment  include having a diversity strategy and plan that are developed and  aligned with the organization’s strategic plan. Agencies should also  involve employees in driving diversity throughout the organization (e.g.,  implementing mentoring programs or advisory groups). Practices implemented by the United Kingdom (UK) and Australia  emphasize the importance of setting an inclusive tone from the top. For  example, according to country officials, the UK and Australia designate  high-level agency officials to champion a particular government-wide  initiative, such as increasing diversity and inclusion, work-life balance,  and well-being. In the UK, champions promote the initiatives by blogging  or chairing interagency groups of senior civil servants to share best  practices, among other activities. Agencies can promote an inclusive work environment by providing  employees opportunities to share common interests and involving  employees in decisions. Private consulting firms we interviewed help  employees feel involved in the organization by sponsoring employee  groups where employees can gather around common interests, such as  community service, or skill sets, such as cybersecurity or acquisition  management. One firm incorporates results of its annual employee  survey into its decision-making and modified its career progression  trajectory based on feedback from employee focus groups. Develop Employees Agencies can use career developmental opportunities, including training,  details, and rotations, to (1) help the workforce develop skills to meet  evolving mission requirements, (2) ensure managers are well qualified,  and (3) appeal to current and future workers’ desires for career mobility.  Some actions OPM can implement and practices agencies can take  include prioritizing training and encouraging mobility opportunities. Prioritize training for employees and managers. CHCOs and federal  employee and management group representatives said that more can be  done to prioritize training, particularly given resource constraints. Further,  our past work found that diversity training can help employees develop  concrete skills to assist in communicating and increasing productivity. However, in 2017, only 55 percent of FEVS respondents were satisfied  with training. In 2012, we recommended that OPM include in its guidance steps and  factors agencies should consider when prioritizing training. OPM  partially agreed with our recommendation and has taken steps to  implement it. In July 2017, OPM officials reported they were gathering  information on agencies’ talent development processes, tools, and  procedures, and would use the information they gathered to develop  criteria for ranking training. We requested an update in December 2018  and will continue to monitor OPM’s actions to implement this  recommendation. As an example of agency training efforts, the Social Security  Administration has national and regional development programs that offer  12 to 18 months of training and rotations for entry-, mid-, and senior-level  employees to strengthen foundational, technical, and leadership  knowledge and skills, according to the agency’s CHCO. For example, its  Leadership Development Program assigns selected GS-9 through GS-12  employees to developmental assignments in new areas of work, and  provides leadership training that broadens their perspective of the  agency’s mission. Encourage details, rotations, and other mobility opportunities.  According to our group interviews with CHCOs and interviews with human  capital experts and federal management groups, upward and lateral  mobility opportunities are important for retaining employees. CHCOs also  said that in some cases, lateral mobility opportunities such as rotations,  details, and opportunities to gain experience in other sectors can help  employees gain new skills more cost effectively than training, particularly  for rapidly changing skill sets such as those related to the sciences. We  previously reported that effective interagency rotational assignments can  develop participants’ collaboration skills and build interagency networks. Further, providing supervisory candidates with details or rotational  opportunities could help them develop and demonstrate supervisory  competencies. Regarding upward mobility, the 2017 FEVS found that only 37 percent of  respondents were satisfied with opportunities to get a better job in their  organization. Agencies can use details and rotations to meet employees’  desire for mobility, according to our CHCO group interviews and  interviews with human capital experts and federal employee and  management groups. However, according to OPM data, few federal  employees moved horizontally in 2017 (see table 4). Few employees move horizontally because managers are sometimes  reluctant to lose employees, according to federal manager group  representatives and our previous work. Furthermore, federal budgeting  and account structures create disincentives to share resources across  agencies. Additionally, barriers to rotations in other sectors may include  challenges identifying willing industry partners and addressing concerns  regarding conflict of interest and access to sensitive information.  Meanwhile, federal employees who have left for another sector must  apply competitively to return at a higher level. We have previously made recommendations that could help address  these challenges. In 2014, we recommended that OPM review the extent  to which new capabilities are needed to promote mechanisms for  increasing employee mobility within an agency and government-wide.  OPM agreed with the recommendation and since October 2016 has been  exploring a pilot project, GovConnect, that tests models for workforce  agility that includes cloud-based skill deployment across organizational  components and employee-initiated innovation initiatives. In November  2018, OPM officials also stated that the President’s Management Council  Interagency Rotations Program offers rotational assignments across  agencies. We will continue to monitor OPM’s efforts in this  recommendation. In 2015, we recommended that OPM determine if promising practices,  such as providing detail opportunities or rotational assignments to  managerial candidates prior to promotion, should be more widely used  across government. OPM partially concurred with this recommendation  and agreed to work with the CHCO Council to explore more government- wide use of rotational assignments. However, OPM noted that agencies  already have authority to take these actions. As of October 2018, OPM  had not provided us with information regarding how it plans to implement  the recommendation. In looking at human capital practices in foreign governments, we found  that the UK encourages rotation and promotion opportunities through its  developmental programs for entry-, mid-, and senior-level employees. For  example, participants in its entry-level program, called Fast Stream, are  centrally employed in the UK Cabinet Office. For the first 3 to 4 years,  Fast Stream participants rotate among agencies and receive technical  training in a specific field, such as accounting, finance, or human capital.  While evaluating Fast Stream’s feasibility in the federal workforce, one  federal employee group representative emphasized the need to provide  career development opportunities to all employees, not just selected  program participants. Agency Comments We provided a draft of this report to the Acting Director of OPM for review  and comment. OPM provided technical comments, which we incorporated  as appropriate. We revised the report to further emphasize how agencies  can use work-life programs to recruit, retain, and engage federal  employees. We also added the concept of interpersonal skills to our  discussion of the leadership competencies needed to manage the future  workforce. OPM’s comments also included updates to prior  recommendations on enterprise human capital solutions, skills gaps,  telework, and special pay authorities. We incorporated these comments  as appropriate. As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Acting Director of the Office of Personnel  Management, and other interested parties. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact  me at (202) 512-2757 or goldenkoffr@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III. Appendix I: Objectives, Scope, and  Methodology In this report, we identify (1) key trends affecting federal work and  workers, and (2) key talent management strategies agencies can employ  to achieve a high-performing federal workforce, given those trends. To address both objectives, we reviewed our own reports as well as those  from the Office of Personnel Management (OPM), academia, think tanks,  and public opinion organizations related to human capital and the future  of work. We also analyzed data from OPM’s Enterprise Human  Resources Integration (EHRI) system. EHRI contains personnel action  and onboard data for most executive branch and some legislative branch  federal civilian employees. We analyzed government-wide EHRI data on  demographics, including veterans status; employee movement such as  details and transfers; and retirement eligibility. We analyzed 10-year  trends from fiscal years 2008 to 2017, the most recent, complete fiscal  year of data available at the time of our review. For our analysis of demographic trends, we included permanent,  temporary, and term-limited employees. However, we focused on  permanent employees in our analysis of personnel movement and  retirement eligibility because these employees (1) comprise most of the  federal workforce and (2) become eligible to retire with an annuity, for  which temporary and term-limited employees are ineligible. To calculate the number of federal civilian employees, we included all  onboard staff, regardless of their pay status. Cases with missing values  on a variable were excluded from the reported statistics for that variable.  To calculate eligibility for retirement within the next 5 years, we computed  the date at which the employee would be eligible for voluntary retirement  with an unreduced annuity, using length of service, birth date, and  retirement plan coverage. Since work schedule does not affect retirement  eligibility, we included permanent employees with full-time schedules and  part-time, seasonal, and other schedules in these results. We assessed the reliability of the EHRI data through electronic testing to  identify missing data, out-of-range values, and logical inconsistencies. We  also reviewed our prior work assessing the reliability of these data and  corresponded with OPM officials knowledgeable about the data to discuss  its accuracy and the steps OPM takes to ensure reliability. On the basis of  this assessment, we believe the EHRI data we used are sufficiently  reliable for the purpose of describing demographic trends and workforce  management challenges facing the federal government. Objective 1 To identify key trends in the workforce and workplace, we analyzed data  from the U.S. Bureau of Labor Statistics (BLS) Current Population Survey  (CPS) and Federal Procurement Data System – Next Generation,  reviewed our prior work, and reviewed reports from OPM and selected  think tanks and consulting firms. Key trends in the workforce. To assess key trends in the workforce, we  analyzed data from the CPS, a national survey designed and  administered jointly by BLS and the Census Bureau. The CPS is a key  source of official government statistics on employment and  unemployment in the United States, and also contains data on poverty  rates, earnings, and labor market demographics. We analyzed 2017  annual averages on age, racial or ethnic minority status, disability status,  veteran status, and educational attainment of the U.S. civilian labor force. The CPS uses a probability sample conducted monthly. As with all  samples, estimates produced from the CPS are subject to sampling and  nonsampling error. Sampling error results from the fact that the samples  are one of a large number of random samples that might have been  drawn. We followed the BLS technical guidance for estimating the  standard errors of annual average totals from CPS data. We used the  standard errors to construct 95 percent confidence intervals for each  estimate presented in this report. This is the interval that would contain  the actual population value for 95 percent of the CPS samples that the  BLS could have drawn. All estimates from the CPS presented in this  report have a margin of error of plus or minus 4 percentage points or  fewer at the 95 percent confidence level. Nonsampling error results from  issues such as inability to obtain information about all people in the  sample, or the inability or unwillingness of respondents to provide correct  information in the self-reporting process. We assessed the reliability of  CPS data by reviewing related technical documentation from the BLS  website on the concepts and methodology of the CPS, and obtaining BLS  feedback on our analysis. We conducted manual data testing for obvious  errors and compared selected underlying data to CPS annual reports. We  found the data were sufficiently reliable for the purposes of comparing  characteristics of the federal workforce to those of the U.S. civilian labor  force. Key trends in the workplace. To assess key trends in the workplace, we  reviewed our prior work on human capital management and trends in  government and the workforce. We also reviewed OPM reports on  human capital trends and management, including the 2018 Work-Life  Survey Governmentwide Report, 2018 Federal Workforce Priorities  Report, and 2016 Federal Employee Benefits Survey Results. We  interviewed OPM officials knowledgeable on these topics to better  understand the methodology used to obtain report findings, and to  understand previous and current efforts to assess federal human capital  policies. We also reviewed selected reports from think tanks, public  opinion organizations, and consulting firms on workplace trends. For  reports used in our analysis, we corresponded with knowledgeable staff  to better understand the methodologies used to obtain findings in the  report and we assessed the methodologies against our own standards. Service contracts. To describe the size of service contract obligations in  fiscal year 2017, we reviewed data from the Federal Procurement Data  System – Next Generation. We found the data sufficiently reliable for this  purpose based on our review of related documentation. Objective 2 To identify key areas to help agencies manage the workforce, we  analyzed employee responses to questions from OPM’s 2017 Federal  Employee Viewpoint Survey (FEVS) and spoke with various groups. We  interviewed human capital experts, federal employee and management  groups, and held moderated group interviews with agency Chief Human  Capital Officers (CHCO). Federal Employee Viewpoint Survey. To obtain information on federal  employee attitudes toward work and the workplace, we analyzed  employee responses to questions from OPM’s 2017 FEVS, the most  recent data available at the time of our analysis. The FEVS provides a  snapshot of employees’ perceptions about how effectively agencies  manage their workforce. The FEVS includes a core set of 84 questions. Agencies have the option of adding questions to the surveys sent to their  employees. The 84 questions address the following areas: (1) work  experience, (2) work unit, (3) agency, (4) supervisor, (5) leadership, (6)  satisfaction, (7) work-life, and (8) demographics. OPM has administered  the FEVS annually since 2010. The FEVS is based on a sample of full- and part-time, permanent,  nonseasonal employees of departments and large, small, and  independent agencies. The total sample size for the 2017 FEVS was  1,139,882 employees and the response rate was 45.5 percent. According  to OPM, the 2017 sample size was sufficient to ensure a 95 percent  chance that the true population value would be between within 1 percent  of any estimated percentage for the total federal workforce. Since each  sample could have provided different estimates, we express our  confidence in the precision of the FEVS statement estimates using the  margin of error at the 95 percent level of confidence. This margin of error  is the half-width of the 95 percent confidence interval for a FEVS  estimate. A 95 percent confidence interval is the interval that would  contain the actual population value for 95 percent of the samples that  could have been drawn. For our analysis, we selected FEVS questions related to work unit  recruitment, satisfaction with compensation and incentives, management,  employee involvement, and career opportunities. We categorized  responses into three categories—positive, neutral, and negative, as  shown in table 5. In our findings, we included the percent of positive  responses to FEVS questions. Neutral responses ranged from 6.7 to 29.3  percent, as shown in table 5 below. To assess the reliability of the FEVS data, we reviewed FEVS technical  documentation. On the basis of these procedures, we believe the data  were sufficiently reliable for our purposes. Interviews with experts. To identify key strategies for managing a high- performing workforce, we conducted semistructured interviews with 22  experts in the areas of human capital, strategic foresight, and the future of  work. See appendix II for a list of experts interviewed. We selected these  experts using a nonprobability sample based on our literature review,  suggestions from OPM officials and our own human capital experts, and  relevance of their expertise to our objectives. We selected experts from a  range of organizations to ensure our analysis included a variety of  viewpoints. During these interviews, we asked about, among other things,  future trends that are likely to affect the federal workforce and innovative  practices to recruit and retain a high-performing workforce. We analyzed the interviews using qualitative analysis software to  describe employees’ shifting attitudes toward work, and to categorize the  practices into key strategies for managing a high-performing workforce.  We corroborated these practices with federal human capital experts,  CHCOs, and federal employee and management groups, and reflected  their input in our report. Interviews with private organizations and foreign governments. To  identify examples of human capital practices for managing a high- performing workforce, we conducted semistructured interviews with  human capital managers from four private organizations (Noblis, Deloitte,  Accenture, and NetImpact Strategies) and officials from three foreign  governments (Australia, Canada, and the United Kingdom). We selected  the private organizations based on (1) the similarities of their talent pool  to that of the federal government, (2) accolades received for being a good  place to work, and (3) size of the organization and types of services  offered. We selected foreign governments based on (1) similarities to the  United States in terms of percent of the labor force in civil service, and (2)  the country having recently improved human capital policies or practices,  or having been recognized for having human capital practices that  positively affect recruitment and retention. In our report, we included  examples of human capital practices that managers and officials told us  were helpful to improving their organization, and that could feasibly be  implemented within the federal government. Interviews with federal employee and management group  representatives. We interviewed representatives from federal employee  and management groups to assess the feasibility of applying the  identified examples to the federal sector, including identifying any  opportunities or challenges. We selected employee groups that  represented the broadest population of blue- and white-collar federal  employees from all 24 Chief Financial Officers Act agencies: the  American Federation of Government Employees and the National  Treasury Employees Union. We selected the Federal Managers  Association due to its representation of federal managers, supervisors,  and executives. Group Interviews with CHCOs. We also held two virtual, moderated  group interviews with a nongeneralizable sample of CHCOs. We invited  23 CHCOs from the 24 Chief Financial Officers Act agencies; of those,  nine were available and participated (see table 6). To ensure the  questions were valid and understandable, we pretested the questions  with our CHCO and Deputy CHCO. During each group interview, one of  our own moderators used a standard set of discussion questions to ask  participants to (1) assess the feasibility of specific examples for improving  employee recruitment and retention, (2) explain challenges to  implementing these examples in specific agencies, and (3) identify other  agency examples. At the group interviews, at least two analysts took and  reconciled their notes to summarize the results. We reviewed our  summaries of the group interviews to identify key themes discussed.  When highlighting examples from CHCOs, we provided summaries of the  examples to the CHCOs for comment and incorporated technical edits,  where appropriate. Because of the dynamics inherent in a group interview  setting, we cannot be sure whether the participating CHCOs discussed  the same information in the group format with other CHCOs present that  they might have discussed in individual interviews without other CHCOs  present. We conducted this performance audit from April 2017 to March 2019 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. Appendix II: Experts We Interviewed Appendix III: GAO Contact and Staff  Acknowledgments GAO Contact Robert Goldenkoff, (202) 512-2757 or goldenkoffr@gao.gov. Staff  Acknowledgments In addition to the individual named above, Shannon Finnegan, Assistant  Director; Shelby Kain, Analyst-in-Charge; Justine Augeri; Jehan Chase;  Arpita Chattopadhyay; Ann Czapiewski; Robert Gebhart; John Hussey;  Krista Loose; Meredith Moles; Rachel Stoiko; Jessica Walker, and Edith  Yuh made major contributions to this report. James Ashley, Chelsa  Gurkin, Elizabeth Hennemuth, and Walter Vance also contributed to the  report. Related GAO Products Best Practices and Leading Practices in Human Capital Management.  https://www.gao.gov/key_issues/leading_practices_in_human_capital_ma nagement/issue_summary. Strategic Management of Human Capital—High Risk Issue.  https://www.gao.gov/key_issues/strategic_human_capital_management/i ssue_summary. Federal Workforce: Opportunities Exist for OPM to Further Innovation in  Performance Management. GAO-19-35. Washington, D.C.: November  20, 2018. Federal Pay: Opportunities Exist to Enhance Strategic Use of Special  Payments. GAO-18-91. Washington, D.C.: December 7, 2017. Federal Hiring: OPM Needs to Improve Management and Oversight of  Hiring Authorities. GAO-16-521. Washington, D.C.: August 2, 2016. Federal Workforce: Additional Analysis and Sharing of Promising  Practices Could Improve Employee Engagement and Performance.  GAO-15-585. Washington, D.C.: July 14, 2015. Federal Workforce: Improved Supervision and Better Use of Probationary  Periods Are Needed to Address Substandard Employee Performance.  GAO-15-191. Washington, D.C.: February 6, 2015. Federal Workforce: OPM and Agencies Need to Strengthen Efforts to  Identify and Close Mission-Critical Skills Gaps. GAO-15-223. Washington,  D.C.: January 30, 2015. Human Capital: OPM Needs to Improve the Design, Management, and  Oversight of the Federal Classification System. GAO-14-677.  Washington, D.C.: July 31, 2014. Human Capital: Strategies to Help Agencies Meet Their Missions in an  Era of Highly Constrained Resources. GAO-14-168. Washington, D.C.:  May 7, 2014. Federal Workers: Results of Studies on Federal Pay Varied Due to  Differing Methodologies. GAO-12-564. Washington, D.C.: June 22, 2012. Organizational Change  and Transformation Government Reorganization: Key Questions to Assess Agency Reform  Efforts. GAO-18-427. Washington, D.C.: June 13, 2018.
Much has changed since the federal government's employment policies were designed generations ago. Without careful attention to strategic human capital management, the federal government may continue to struggle to compete for workers with the skills needed to address the nation's social, economic, and security challenges. GAO was asked to review issues related to the future of federal work and the workforce. This report identifies: (1) key trends affecting federal work and workers, and (2) key talent management strategies for achieving a high-performing workforce, given those trends. GAO analyzed data from OPM and the Bureau of Labor Statistics, and reviewed reports from GAO, OPM, and selected think tanks. GAO also held group interviews with agency Chief Human Capital Officers, and interviewed human capital experts and representatives of federal labor unions, managers, and executives. Additionally, GAO spoke with private consulting firms and foreign governments regarding human capital strategies that officials said were helpful to improving their organizations. Federal work is changing amid demographic and technological trends (see figure below). Given these trends, key talent management strategies can help agencies better manage the current and future workforce. These strategies are all within agencies' existing authorities: Align human capital strategy with current and future mission requirements. With shifting attitudes toward work, technological advances, and increased reliance on nonfederal partners, agencies need to identify the knowledge and skills necessary to respond to current and future demands. Key practices include identifying and assessing existing skills, competencies, and skills gaps. Acquire and assign talent. To ensure agencies have the talent capacity to address evolving mission requirements and negative perceptions of federal work (e.g., that it is too bureaucratic), agencies can cultivate a diverse talent pipeline, highlight their respective missions, recruit early in the school year, support rotations, and assign talent where needed. Incentivize and compensate employees. While federal agencies may struggle to offer competitive pay in certain labor markets, they can leverage existing incentives that appeal to workers' desire to set a schedule and to work in locations that provide work-life balance. Engage employees. Engaged employees are more productive and less likely to leave, according to the Office of Personnel Management (OPM). Agencies can better ensure their workforces are engaged by managing employee performance, involving employees in decisions, and developing employees.