Rigid pay systems listed among top workforce challenges

Rigid pay systems and leadership skills gaps are among the challenges agencies will face as they seek to offset a talent shortage expected over the next decade, top government officials and an outside observer said Tuesday.

At a breakfast sponsored by the Georgetown University Public Policy Institute and the management and consulting firm Accenture, representatives from three agencies and a nonprofit group agreed that federal officials should immediately begin planning for how they will address such challenges.

If that doesn't happen, "rather than getting the best of the brightest, we're going to end up with the best of the desperate," said John Palguta, vice president for policy and research at the nonprofit Partnership for Public Service.

Palguta said the keys to preventing a potential talent drain include replacing the decades-old General Schedule pay system, reforming the hiring system and ensuring managers have the right skills. "If you put all of that together, the government will be very successful," he said. "If we don't pay attention to all those things, we're going to have some problems."

Michael Dominguez, principal deputy undersecretary of Defense for personnel and readiness, said the government would have difficulty meeting the challenge. "I anticipate some problems," he said. "I can't say with high confidence that we're poised for success."

Still, all panelists agreed that the General Schedule is too rigid and needs to be replaced with a more performance-based, market-sensitive pay system. "Any system that's based on tenure is not going to produce the kind of results that are really going to move an organization forward," said Kevin Mahoney, associate director of the Office of Personnel Management.

Dominguez touted pay reforms under the National Security Personnel System at the Defense Department, noting that one key to building a successful compensation system is top officials emphasizing exactly what they want to achieve. "It's about realigning your organization around observable outcomes," he said. "That's a leader thing, not a civilian personnel manager thing."

Dominguez said Defense has a problem with pay for high-ranking officials. "Our executive compensation schedule for senior executives is way underpriced for the value we get from those people," he said. "We need to jack that up."

Sallyanne Harper, chief financial officer and chief administrative officer at the Government Accountability Office, noted that in addition to implementing a pay-for-performance system, intern programs and student loan repayments are a major boost to recruiting for GAO. She also recommended that the government work out an accommodation to allow retirees to return to federal service on a part-time basis.

Compensation and other human resources initiatives are worthless unless accompanied with solid leadership, Palguta said. Panelists agreed that in addition to more flexible pay systems, agencies must have dedicated managers who can ensure employees have clear performance expectations and goals aligned with missions.

"I think we have a growing consensus … that in government, you can have the best technology, all the infrastructure and even the budget, and none of it works unless you have the right people in place," Palguta said. "I think leaders are starting to understand that."