Shutterstock.com

Administration to Review Government ‘Competitiveness’ on Compensation

The White House declined to release details on how officials will formulate its comparison between federal and private sector jobs.

The offices of Personnel Management and Management and Budget will spend the next year studying the “competitiveness” of federal compensation with that of agencies' private sector counterparts, according to a quarterly update to President Trump’s management agenda.

The report on progress on the Workforce for the 21st Century cross-agency priority goals included a new milestone, tasking OPM and OMB with obtaining “market information” and studying “the federal government’s competitive posture in total compensation for civilian federal employees, to include base pay, benefits, and other relevant total reward elements.”

Officials at OPM had been working to provide details about the agency’s plans to Government Executive, but declined comment after intervention from OMB. The effort is expected to be completed by September 2019, and any resulting report would join a crowded field of controversial attempts to compare federal employees’ compensation with their counterparts in the private sector.

The Congressional Budget Office most recently found in 2017 that federal workers make on average 17 percent more than employees in the private sector, but critics, including Democrats and federal employee unions, argue its methodology does not adequately account for differences in educational attainment, among other issues.

And in April, the Federal Salary Council used data from the Bureau of Labor to conclude that feds make nearly 32 percent less than private sector workers, but that analysis omits some non-salary elements of compensation.

Howard Risher, a consultant on pay and compensation issues who in 1990 managed the project that led to the passage of the 1990 Federal Employees Pay Comparability Act, said a key problem with both metrics for comparison is they are too broad.

The dueling reports attempt to capture compensation data on all private sector companies, big and small, rather than only comparable large businesses of at least 500 or 1,000 employees. And neither report adequately focuses on the compensation of workers who have the skills desired by federal agencies. Instead, OPM and OMB should compile a series of local surveys of a subset of the workforce, Risher said.

“What they should be doing is figuring out who they’re competing with for talent,” he said. “[Most] industries have an industry survey that’s done privately . . . What I would do is I would go out to the [Federal Executive Boards] in each of the major cities and regions, and talk about what data would be useful in this area. You have to get people to agree about how to ‘price’ jobs in these cities, and then if there are local surveys that would be useful.”

Even using that methodology, trying to design a comparison of “total compensation,” including health care, retirement programs and bonuses, is fraught with difficulty. Each company, when devising a benefits package, comes up with their own array of assumptions, typically done by actuaries, regarding how much a new hire is likely to make over the course of their careers, how long they expect them to live after they retire, and a host of other variables.

And it is difficult to account for some other non-salary benefits offered in the private sector, like stock options and year-end bonuses.

“The other big thing that’s important here is that if you go to corporations, it would be fairly common for senior management and even middle management and supervisors to provide some sort of stock ownership opportunity, and ignoring that is a big mistake,” Risher said. “And BLS specifically does not look at year-end incentive payments or any payout that is dependent on performance. So a manager making $100,000 almost across the board will have an incentive of at least 10 to 15 percent of their salary. So you’re missing a big chunk of what they can earn.”

While there are many granular details to be ironed out before a study of federal compensation can be successful, it is just as important that OPM and OMB gain a consensus and the trust of various stakeholders, including lawmakers of both parties and employee groups. With federal employee unions in a pitched legal battle with the Trump administration over the constitutionality of three controversial executive orders aimed at reducing their influence in the federal workforce, such agreement would be difficult in the current climate.

“You have to reach an agreement about what’s valid for this purpose, and a part of that is [getting buy-in] from unions,” Risher said. “Unions, first of all, are democracies, and when people get elected to those offices, they have to prove that they’re doing good work for the members of that union. And there’s an innate distrust that changes to the General Schedule are going to lead to people getting screwed . . . [OPM and OMB] need what they produce to be credible, because there will just be people throwing rocks at it otherwise.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.