People Persons

Over at the Interior Department, Carolyn Cohen is trying to get a handle on how the department's mission may change under a new administration and Congress. Will the Bureau of Reclamation be asked to reclaim more land? Will Congress take funds away from the National Park Service? And what does the future hold for the beleaguered Bureau of Indian Affairs?

Stephen Benowitz at the National Institutes of Health is in the same boat, albeit in slightly different circumstances. He's got to figure out how a doubling of NIH's budget by 2005 will alter the landscape of medical research.

Benowitz, however, doesn't wear a white lab coat and go to conferences to talk about the latest discoveries in cancer research. Nor does Cohen head up any of Interior's bureaus. And Maconaughey does not manage any of EPA's program or policy offices. All three are human resources managers. Individually, they are trying to make sure their agencies hire the right people at the right time for the right job. Collectively, they represent a growing movement that, if effective, could change the way government operates and determine how successful agencies are in meeting their missions.

It's a formidable challenge. Typically, when line managers in government hear the words "I'm from human resources," they envision a cop coming to enforce arcane rules. At a time when the government is grappling with a so-called "human capital crisis," that perception is in need of a major overhaul. In today's government, it's not enough for human resources professionals to enforce rules on hiring procedures, benefits disbursements and disciplinary actions. They are now being asked to become full-fledged strategic partners and help agency heads rebuild and restructure their shrinking workforces. The question is: Are they ready? Even some of the government's top human resources professionals say, "Not yet."

"We grew up in a system that is very rule-bound," says Benowitz, NIH's director of human resources. "There is a huge web of federal personnel rules. On top of that, each department and agency has its own individual rules-for hiring, for benefits and so on. A lot of the work that we've done is transactional." He continues, "The mission for human resources at NIH has to be the same as that of the scientists. If you are here for any other reason, you are not going to be a part of the planning process. If HR is talking about personnel rules and scientists are talking about their research needs, eventually what happens is the scientists disregard human resources."

In order for human resources professionals to have a seat at the table with the rest of top agency managers, they need to become more focused on their customers' needs, according to a September 2000 report, "A Call to Action," by the International Personnel Management Association. Getting there won't be easy, though. A January 2000 Office of Personnel Management report found that 94 percent of human resources executives believe their staffs lack key competencies needed to evolve from cop to consultant. Yet just 33 percent of the executives said they had a formal plan in place to close the gap.

Demographic Wave

In an ironic twist, federal human resources officers are being asked to bail the government out of a crisis they helped create. The government's current personnel problems stem in large part from the downsizing effort launched by the Clinton administration and backed by Congress in the 1990s. The federal government shrank from 2.3 million non-postal civilian employees in 1990 to 1.9 million in 1999. Human resources staffs were major victims of those cuts, seeing their ranks decline by 20 percent between 1991 and 1998. At the same time, personnel specialists were negligent in raising awareness of the dangers of the reinventing government movement, says an official at the Office of Personnel Management who asked not to be named. Of course, the official concedes, most personnel managers were locked out of the decision-making process.

But now-thanks in large part to the efforts of General Accounting Office Comptroller General David Walker-members of Congress, agencies and the Bush administration are focusing on human capital issues. Walker has made improving federal personnel policy a personal crusade for the past year and a half. In his view, for all the good accomplished by reinvention efforts, the federal government has a depleted and demoralized workforce. For too long, he says, employees have been seen as a cost to be cut rather than an asset to be valued. Walker is not alone in his thinking. "Years of inattention to sound human resources management within the federal government have taken their toll," said Sen. George Voinovich, R-Ohio, at a Feb. 1 hearing of his Governmental Affairs Subcommittee on Oversight of Government Management. GAO, Voinovich noted, made human capital the only new addition to its list of federal high-risk issues and areas. Then he reeled off what has become a widely repeated set of statistics about the federal workforce. The average employee is 46 years old; by 2005, 34 percent of employees will be eligible for regular retirement and 20 percent more will be eligible for early retirement. That means half the federal workforce-900,000 employees-could potentially leave in the next four years. No one expects nearly 1 million workers to hand in their resignations by 2005, but the potential loss of hundreds of thousands of employees poses big challenges for many agencies. GAO offers several examples:

• NASA: The loss of staff and critical skill sets poses potentially serious problems for the safety and planned flight rate of future space shuttle missions.
• Nuclear Regulatory Commission: The agency's inability to retain people with skills necessary to "achieve its mission and fill the gaps created by growing retirement eligibilities could be threatened by the decline in university enrollments in nuclear engineering and other fields related to nuclear safety."
• Social Security Administration: Increasing demand for services, the imminent retirement of a large part of its workforce, changing customer expectations and mixed results of utilizing new technology will challenge the agency's ability to distribute benefits more quickly and accurately.
• Agency for International Development: Staffing shortfalls in the procurement area hamper the agency's ability to initiate and monitor contracts.

The personnel problem extends to the most senior ranks of the civil service. More than 70 percent of career Senior Executive Service members will be eligible to retire by 2005. GAO estimates that 45 percent will actually leave the federal government.

Still, the problem is not just one of having the right number of people. In some cases, Walker says, agencies can function quite well with smaller workforces. The real question is whether they have the right people with the right skills in the right jobs. During the downsizing of the 1990s, most agencies did a poor job of assessing their talent pools. Employees were shuffled out of the government with little attention to workforce planning. "There is a price to be paid for that," Walker says.

"Crisis is not my terminology, but it conveys the right image," Interior's Cohen says. "We do have a reason to be concerned. We have downsized without an empirical approach. We did it with early exits and buyouts. Retirements will exacerbate the skills imbalance. Another factor is the great competition there is for talent. We are out there playing with the big boys in an effort to hire."

90 Percent Solution

While the challenges are immense, Walker is quick to point out that 90 percent of the solutions are already available. The first step is creating a people-friendly work environment. For instance, agencies can offer to pay part of an employee's college loans. They can also pay relocation expenses and offer retention bonuses, or bonuses tied to performance. There are tremendous flexibilities to offer training. But agencies have failed to make use of these flexibilities, says John Palguta, director of the Office of Policy and Evaluation at the Merit Systems Protection Board.

"Part of that comes from the human resources profession," says Ronald Sanders, chief human resources officer at the Internal Revenue Service. "I was brought up this way when I started: We were told to be policemen, the cops. We didn't take a human capital approach. That's led to an arms-length approach."

In other cases, it comes down to a matter of money. Every dollar spent on training or other human resources initiatives is a dollar that doesn't get spent on something deemed more mission-critical. Anecdotal evidence suggests that as agencies scale back, they tend to cut performance rewards, training and professional development programs, according GAO. "These curtailed investments in human capital took place even as a smaller federal workforce remained to oversee larger federal budgets," GAO states in its high-risk series report (GAO-01-263). Not everyone is dissatisfied with the current personnel system, though. "Agencies are continually going to appropriations committees looking for more flexibility," says a staffer with the House Government Reform Committee. "They want more flexibility in the compensation arena, in the ability to fire poor performers. They all complain about the slow process in hiring people, too. But the fact is, they've been given more authority to do direct hiring. Maybe they just haven't streamlined the process enough."

Some agencies, such as the IRS and the Federal Aviation Administration, have won support from Congress to create their own new personnel systems independent of the standard rules laid out in Title V of the U.S. Code. But it's unlikely that Congress will approve major governmentwide changes to the personnel system soon. Instead, legislators may tinker around the edges this year, says a Senate Governmental Affairs Committee staffer. Two areas of particular interest to committee chairman Fred Thompson, R-Tenn., are streamlining the hiring process and making it easier for agency heads to get rid of poor performers. "What we need to do first is see what flexibilities actually exist and see how agencies are using them," the House staffer says.

Perhaps more important than any reform is the idea of making human resources an integral part of strategic planning. In the waning months of his administration, President Clinton tried to do just that. Last June, he issued a memorandum to agency leaders instructing them to "recognize and reinforce the critical role human resources management plays in achieving each agency's mission and strategic goals." The memo directed agency heads to integrate human capital matters into their planning, budgeting and mission evaluation efforts, and, beginning in October 2000, to include HR management objectives in their annual performance plans. An Office of Management and Budget circular issued at the same time ordered agencies to set goals in such areas as recruitment, retention, workforce diversity and performance appraisals in their fiscal 2002 performance plans.

Champions of Change

To fully implement these directives, agencies almost certainly would have to give human resources professionals a seat at the management table. But that alone won't get the job done. "You can't just say we are going to impose the people and that will take care of it," says Palguta. "Sometimes HR people are at the table and they have nothing to offer."

To earn their seats at the table, human resources professionals have to reinvent themselves, says Benowitz. Or, as Interior's Cohen says, "We have to show [senior managers] how bad things are. We are going to get asked 'What's in it for me?' a lot."

At Interior, Cohen and her staff have developed a workforce planning guide to help human resources employees in the department's bureaus. The guide suggests bureaus conduct demographic studies-collecting data on occupations, grade levels, diversity, length of service and retirement status of employees. It also requires human resources officials to understand their bureaus' missions, including which areas might become higher priorities requiring new skills. Such efforts may seem obvious, but they've been lacking in the government for years.

"In the past, what we were doing was vacancy management," says Richard Whitley, associate state director for the Bureau of Land Management's office covering New Mexico, Oklahoma and Texas. "We waited until we had a vacancy, and we filled it. Sometimes it was too late. We were stuck because we didn't do a broad-scale assessment."

All that is changing. In late 1999, each work unit under Whitley's charge-nine field offices, two divisions and the state director's office-started collecting demographic information on their workforces. They took a comprehensive look at strategic planning and budgets. Then leaders from human resources, policy and budget offices came together to set priorities. They looked for areas where jobs could be shared with the Forest Service or contracted out, for example.

"The idea is to feed back budget information and business practice information into this assessment on an ongoing basis," Whitley says. "Every year we update our workforce plan. The whole strength is that we can now demonstrate what our needs are and we can show where we've shifted resources. It's always nice to tell Congress not just 'I need more people and resources,' but to say, 'Here's what we need and why we need it and here are the improvements we've made to our work practices.'"

There are growing pains. Whitley gives the first effort a grade somewhere between a C+ and B-. The greatest difficulty is convincing program managers to give up a little so that someone else can gain. For example, Whitley says, "Water is a big issue in the Southwest. We don't have a lot of expertise in that area. We can now make the case that we need more water experts, so maybe other programs can cough something up."

EPA's Maconaughey has been doing similar work. Through its Workforce Assessment Project, EPA assessed the competencies of its employees and how well they match up with the agency's core mission. The project tried to get a handle on what EPA's human resources needs will be in 2005 and 2020. "We need to figure out what we have to do to be ready for the future," Maconaughey says.

Going through the process has helped EPA figure out not only what kinds of employees it has to recruit, but also what training current employees need. Through workforce planning, the human resources staff can make a business case for training to ensure employees have the right skills to help the agency achieve its mission into the future.

Bubbling Up

All the workforce planning will be for naught, however, unless program managers and agency heads buy into it. "What I'm concerned about is that unless it bubbles up from the grassroots and managers take a hold of this, it just becomes another program that sits on the shelves and gets dusty," says David Anderson, who helped develop Interior's workforce planning guide.

There's no silver bullet to getting buy-in. It essentially comes down to human resources professionals showing they have something to offer, says the IRS' Sanders. "Make sure [the effort] isn't seen as just another human resources program."

Congress has granted the IRS more flexibility than most agencies get to address human capital issues. Yet Sanders says the only way to make personnel reforms stick is to involve management and employee unions. He's built a cadre of councils that work with management to find ways of better aligning human resources with the agency's strategic plan and its customers' needs.

Getting management buy-in also requires human resources professionals to address problems in their own ranks. The downsizing of HR staffs in the past decade was done with little advance planning. At Interior, for example, agency brass simply strived for a ratio of one human resources staffer for every 100 workers, according to a former department official. The situation is not getting any better. Between 1998 and 2000, more than 16,000 federal human resources professionals left the field. During the same time, less than 1,500 were hired. OPM officials worry that as baby boomers retire, there will be a major void of qualified human resources professionals to replace those who leave.

Recognizing the problem, OPM is developing tools to train human resources professionals, including an online university. Given budget shortfalls, however, the agency has had to move slowly. The first phase is a Web site providing links and information about various training opportunities. OPM hopes to launch the site before the end of the fiscal year. A fully interactive online university won't be live for another three to five years, according to OPM officials. The Human Resources Management Council, an organization of federal human resources executives, still is deciding how it wants to harness the Web.

The private sector is getting involved too. Working with GAO, the Private Sector Council is looking for ways to link federal human resources managers with peers from private companies. "The private sector has been dealing with this and planning for it at a time when the government hasn't," says Pete Smith, head of the council. "Sometimes HR people want an easy answer-take these courses and you'll have the answer. They have to realize is this builds over time. They can get to the table, but they have to show that they bring value."