Up With People

Four years after Congress created the chief human capital officer position in agencies, those with the job finally feel welcome.

Federal human resources executives have long been considered paper pushers. While the government often touts people as its greatest asset, few agencies have viewed human resources professionals as true strategic leaders.

But now, seven years after the Government Accountability Office placed human capital on its high-risk list, and four years after Congress created the chief human capital officer position, those who hold the title finally are being heard.

"Most CHCOs say they feel that they are welcomed to the table, that their views are being sought and that they're part of the leadership team," says John Palguta, vice president for policy at the nonprofit Partnership for Public Service. "I'm not sure that before the CHCO position was created that we would have gone out and talked to all the HR directors and gotten the same response."

Many CHCOs would argue that making human capital less high risk is a long way off. But that's not stopping many of them from implementing some of the most dramatic workforce transformations the federal government has seen in decades.

At the Office of the Director of National Intelligence, CHCO Ron Sanders has worked to incorporate human capital into the intelligence community's 500-day strategic plan to improve integration and collaboration among its 16 agencies by 2009. During the past year, Sanders launched a common performance management framework across the intelligence community and pushed for the creation of the joint-duty program, which requires all employees to complete at least one assignment outside their home agency to be eligible for promotion to the senior ranks.

The response from many CHCOs is the same: an increased focus on people issues across government has elevated their roles and brought their ideas to the table. Whether it's creating more pay flexibility for employees, establishing new telework policies at agencies or reforming the federal hiring process, CHCOs now are watching their ideas come to life. And with a major presidential transition and pending exodus of seasoned employees with critical skills and knowledge, the role of CHCO may well be the most critical in sustaining the important work of the federal government.

Reforming Pay

As they look toward the future, most CHCOs and workforce analysts are convinced that the federal pay system-one of the most talked about areas for improvement-is headed for significant reform, regardless of who controls the White House and Congress in 2009.

"Whether it will pass out of vogue because of implementation issues, and it could, the drivers for it still remain," says John Crum, acting director of the Office of Policy and Evaluation at the Merit Systems Protection Board. "We have issues of accountability. We want to have credibility to the public that their money is spent well in terms of the workforce. . . . It does take a cultural shift. And it does take experience and a demonstration to the people under [the new systems] that things will be done fairly."

David S.C. Chu, undersecretary of Defense for personnel and readiness, points to the Democratic Congress' decision not to overturn the department's National Security Personnel System as evidence that while lawmakers may move to protect union rights under new pay systems, they are unlikely to stymie attempts to implement pay for performance.

But CHCOs are moving carefully to ensure employee buy-in, work within budgetary constraints, and learn from other agencies' experiences as they craft their own flexible pay systems.

Sanders, for example, looked to the National Geospatial-Intelligence Agency, now in its ninth year of pay for performance, in designing a departmentwide performance pay system. "Wherever possible, we've patterned ourselves after the NGA model, and as we roll that out, that will give our employees some comfort that this isn't an untested system," he says. "There are plenty of employees at NGA who can provide a candid view of the system."

Sanders says the transition is easier because many intelligence agency employees have indicated in survey results that they favored a stronger connection between performance ratings and pay and promotions. But to stave off potential dissatisfaction, the Office of the DNI will preserve General Schedule and locality increases for employees who are rated acceptable; workers can earn additional performance increases, but employees who are rated unacceptable will earn no increase at all.

In addition to studying other government programs, CHCOs also are examining the salaries other employers are paying comparable employees.

"Pay for performance is very budget-intensive, and it's also critical you do all the market analysis to make sure you do it all correctly," says Mari Barr Santangelo, CHCO at the Justice Department.

Janet Murphy, chief human capital officer at the Office of Federal Housing Enterprise Oversight and co-chairwoman of the Small Agency Human Resources Council, says the success of OFHEO's 15-payband system is due to a sophisticated model the agency developed allowing it to determine salaries within each band based on factors including education, experience and performance appraisals from other jobs.

Tapping Talent

Pay is only one component CHCOs are considering as they prepare for an impending wave of retirements and devise ways to attract recruits to replace outgoing employees and bring fresh eyes to new challenges.

Crum says the government needs to do more to get the word out to potential employees so it can attract a larger pool of candidates from which to hire-a task that may become more difficult as competition over a smaller crop of younger workers grows.

Ambassador Harry K. Thomas, director general of the Foreign Service and head of human resources at the State Department, says changes, such as giving the Foreign Service exam more often, have brought in not just new, but different employees.

"You have so many people coming from the West Coast and particularly the Northwest who already have an outlook on Asia," he says. "We have people coming from farms. Agriculture is very important because it's our largest export and food aid is hugely important to us. Having people who can talk to agricultural economists is hugely important."

Santangelo points out that the Justice Department has tried to provide potential recruits with the opportunity to talk to people who work in the fields they would be entering. "If you're applying for a job in journalism, or law, or [the FBI], you don't want to talk to an HR person, you want to talk to a person actually in the field," she says.

Agencies also are investing considerable resources into recruiting. Santangelo says Justice spends $20 million annually on student loan repayments, and according to Murphy, OFHEO ponies up the money for pricey ads in publications like the Wall Street Journal and the Economist-favorites of the senior-level workers the agency most needs to recruit.

Hiring Help

With 60 percent of the federal workforce eligible to retire during the next decade, CHCOs are desperate to change agency policies that can make the hiring process burdensome and discourage potential applicants. Sen. Daniel Akaka, D-Hawaii, echoed that sentiment at a hearing in May: "The federal government has become the employer of the most persistent," he said. James McDermott, human resources director at the Nuclear Regulatory Commission, says strong commitment and participation from top leadership are what ultimately led to a successful surge in recruiting and hiring at his agency.

NRC has been considered a model for other agencies because of its efficient hiring processes and recognition as the "Best Place to Work" in the federal government, according to a 2007 survey from the Partnership for Public Service. In fiscal 2007, NRC hired 441 employees for a net gain of 216, after factoring in retirements and attrition rates. In prior years, the agency had been able to hire only slightly more than 220 employees per fiscal year. McDermott chalks up NRC's hiring success to four key ingredients: support and involvement from management, a strong mission, creative use of hiring tools and flexibilities, and an attractive work-life culture.

Still, many CHCOs say they have not found the proper fix to a broken federal hiring process. Murphy of OFHEO says that while the application process has been electronic for years, it has not reduced the burden on the applicant. "It only helps HR to manage tons of paperwork and not lose résumés," she says. Santangelo says Justice has made some strides in reforming hiring. It now takes roughly 30 days between closing a job vacancy announcement and hiring a candidate. But, she admits, there is still room for improvement. "If we want you to work for us, then we should be courting you. When you apply, we need something that comes back to you that thanks you for your interest and gives you a sense of how and when you're going to hear about the job," she says.

While intelligence agencies still are blessed with tens of thousands of applications each year, the lengthy security clearance process associated with bringing in new hires is still a major obstacle. As a result, agencies have established interim job centers to allow employees awaiting security clearance to perform unclassified work until their background investigation is complete, according to Sanders.

Building a Support System

As CHCOs review their accomplishments and look ahead to the new administration, they say the Chief Human Capital Officers Council, which celebrates its fifth anniversary this year, has matured into a valuable source of support and training.

John Salamone, the executive director of the council, is proud of its accomplishments, but says there is much more work to be done. At a training event in April for human resources employees, more than half of the 50 attendees were at a council event for the first time, "So it felt like 'gee, the council is still reaching into the agencies,' " he says. But those sessions reached more than 300 HR professionals in fiscal 2007 and are on track to reach a similar number of employees this year.

The council meetings often have a substantive effect on agencies' policies. The Foreign Service's Thompson says one get-together inspired him to set up a task force focused on streamlining the overseas appointments process.

Sanders, the ODNI chief human capital officer, credits Salamone and Office of Personnel Management Director Linda Springer with making the council more action-oriented, particularly by setting strategic goals for its subcommittees starting in fiscal 2007.

Murphy, of the Small Agency Human Resources Council, says she wishes her members had more access to the CHCO Council, which many small agencies are not a part of. "I think we're probably getting the information we need, but I'm not sure that our voice is being heard over there on small agency component issues," she says. "The difference is resources."

CHCOs could face their greatest challenges in the coming year, as federal agencies make a major transition to new national leadership. Current politically appointed CHCOs will depart, leaving deputy human resources leaders to sustain changes. Career CHCOs may opt to continue pushing human capital reforms at their agencies, while some may choose to step down or retire.

Managing Change

"The CHCO Council needs to take a look at their own succession planning as a community, look at continuity of operations within HR programs and make sure they have a plan for supporting the next administration, even if some of their top HR people are leaving," Palguta says. "Where are we going to get the next generation of CHCOs?"

Santangelo of Justice says she has been working with the CHCO Council to study the various areas of human resources that agencies need to look at to ensure success through the transition. "We're ready here," she says. "We're looking at the components and what their role is in passing on key issues and in assessing those first 30-day decisions they'll have to make."

It's unclear, however, whether all the clout CHCOs have gained during the past six years will survive the transition and a new administration. While Bush has made human capital a major focus of his tenure, it remains to be seen whether his replacement will tackle the issue with the same intensity.

Crum of MSPB says the profile of human capital has risen during the last eight years-success he hopes will continue into the next administration. He cautioned against trying to reform areas of human capital that are no longer broken and advised the next president to have a vision for agency performance and human capital, both of which rely on capable CHCOs being involved with major agency decisions.

"The success of the next administration will depend heavily on its ability to address human capital issues like the retirement wave, hiring and increased competition for top talent," Palguta says. "The people issues are only going to be compounded, not eased."

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