Agencies can’t fix problems they haven’t first clearly identified. Better data is essential.
To paraphrase Mark Twain, "Never let the facts get in the way of a good argument." For decades, stakeholders and critics have argued the issues involved in federal pay, but credible, readily understood facts have never been developed. Year after year an obviously broken pay system has been allowed to continue. Now there is growing understanding that the failure to "fix" the system is a barrier to building the workforce needed for the future.
Government’s workforce problems are not limited to the General Schedule but pay is the core problem. The rigidity of the GS system makes it impossible to compete for essential talent.
The 2018 Foundations for Evidence-Based Policymaking Act, which President Trump signed into law in January, could trigger new initiatives to assess federal pay. That would be consistent with the requirement to develop plans for evidence-based decision making. An assessment of the GS system should be a priority.
The right metrics can deliver enormous value. The 2018 VA Mission Act, which became law a year ago, required the Veterans Affairs Department to report vacancies. In the department’s first report last August, VA’s turnover rate compared favorably with other large agencies and within the healthcare industry. That’s worth a little bragging because it’s evidence of good management. Posting metrics is a subtle way to promote an organization's successes.
To highlight why this is important, a widely used metric—“time to hire”—is a human capital indicator, or HCI, central to recruiting. In fiscal 2017, government’s average time to hire was 106 days, up from the 87-day average in fiscal 2012. In contrast, a 2018 study in the private sector by Gartner found the average time to hire after the initial interview was 33 days. There are companies that make job offers to top talent the day of the interview, because delays can lead to losing out on prime candidates. Federal agencies have gotten slower for five consecutive years.
HCI’s are metrics defined to assess the effectiveness of human resources practices or workforce management. As with other metrics, HCIs track change over time or compare performance across organizations. The most widely cited HCI is employee engagement. Posting engagement levels along with other HCIs makes it easier to build support for efforts to improve.
There is broad recognition that government needs to rebuild its workforce. That’s a focus of the president’s management agenda. Facts would help to track progress.
New Focus on HCIs
Government’s use (or failure to use) HCIs was discussed in the recently released Federal Salary Council report to the Pay Agent. The council’s recommendation, restated, is for groups petitioning to be designated as a locality area “to submit additional empirical evidence—in the form of various HCIs—showing extraordinary and persistent recruiting and/or retention difficulties.” In other words, the groups need to provide evidence that noncompetitive pay is causing staffing problems.
The growing list of locality pay areas confirms one obvious fact: there are no national labor markets (except for executives in larger companies and recognized experts). The hearings make another fact clear: each local area has somewhat different talent issues.
The caveat is that the hearings confirm the importance of factors unrelated to compensation that impact hiring and turnover. Several of the factors cannot be quantified. Local housing costs, commuting times, family ties, etc., have been cited in presentations to justify creating new locality pay areas. One that is central to early turnover problems is new hire dissatisfaction with the work experience. Where agencies are experiencing staffing problems, it is important to understand the causal factors.
The importance of "other factors" is clear in an attachment to the council’s report, a list of 39 locations that contacted council staff about locality pay between April and November of 2018. The last on the list stands out—Mammoth Hot Springs, Wyoming (home of Yellowstone National Park), which has a population of 263. Glades County, Florida, along Lake Okeechobee, and Prescott County, Arizona, also stand out. Those locations may well have workforce problems but it's doubtful pay is the core issue. Increasing salaries is not a universal answer.
The council report focuses on HCIs relevant to staffing but others have been developed to assess training, compensation and the full range of HR responsibilities. Those that track administrative costs would be valuable, especially when compared with costs in the private sector. Government HR offices should make developing a plan to use HCIs a priority. Congress saw the value of making HCI data public.
Strategic Use of HCIs
The council's HCI recommendation and the VA news release on vacancies highlight a growing and low cost practice: developing and posting HCIs on agency dashboards. Creating dashboards makes the metrics available to executives and employees as well as the public to monitor an organization's progress in building the workforce capabilities needed for the future. It’s a subtle but effective way to reinforce group focus.
Dashboards are used to communicate a variety of information, from corporate performance to functional information like sales and manufacturing data. The VA could adopt the practice in healthcare and use dashboards to make performance data available to staff. An example in government is the IT dashboard posted by the Office of Management and Budget.
Discussions of the problems agencies need to address rarely mention it but not having essential, fully committed and qualified talent will always be a barrier to achieving goals. That's basic to the gamut of federal operations, from providing care in VA medical facilities to protecting endangered species. Despite the advances in technology, government remains dependent on the work of a lot of talented people.
The VA would be an ideal agency to build on the law’s requirement and develop HR dashboards for each of its medical centers and outpatient facilities. At its November meeting, the Salary Council learned about “the significant challenge to recruit and retain employees with high-demand skill sets” at the VA medical center in Charleston, South Carolina. With the national shortage of medical specialists, and the VA’s 25,000 vacancies in medical job series, other VA facilities are having similar problems. The dashboards could be a valuable recruiting tool.
That would be true for every federal work site—federal prisons, air traffic control centers, U.S. attorney offices, etc. The majority are located outside of the locality pay areas and every location has a unique group of employers competing for talent.
Dashboards could also provide an easily accessible way for the Office of Personnel Management to monitor progress. It’s possible they could also trigger competition between facilities to realize improved results on HCI metrics.
HCIs need to be conceived and managed to support an organization’s talent management strategy. Their value is greatest when they are used to identify and assess problems and enhance decision making. The right HCIs provide a focus and understanding of needed change.