Veterans Benefits Administration
Better Collection and Analysis of Attrition Data Needed to Enhance Workforce Planning Gao ID: GAO-03-491 April 28, 2003By the year 2006, the Veterans Benefits Administration (VBA) projects it will lose a significant portion of its mission-critical workforce to retirement. VBA has hired over 2,000 new employees to begin to fill this expected gap. GAO was asked to review: (1) the attrition rate at VBA, particularly for new employees who examine veterans' claims, and the agency's methods for calculating attrition; and (2) the adequacy of VBA's analysis of attrition data, including the reasons for attrition. To answer these questions, GAO analyzed attrition data from VBA's Office of Human Resources, calculated attrition rates for VBA and other federal agencies using a governmentwide database on federal employment, and interviewed VBA officials about their efforts to measure attrition and determine why new employees leave.
About 16 percent of new examiners hired in fiscal year 2001 left VBA within 12 months of their hiring date, more than double the 6 percent rate for all VBA employees who left that year. In general, new hire attrition tends to exceed the rate for all other employees, and VBA's 16 percent rate is similar to the attrition rate for all new federal employees hired in recent years, when as many as 17 percent left within 12 months of being hired. VBA does not have adequate data on the reasons why employees, particularly new employees, choose to leave the agency. VBA has descriptive data on whether employees leave the agency through resignation, termination, retirement, or transfer, but does not yet have comprehensive data on the reasons employees resign. While VBA collects some data on the reasons for attrition in exit interviews, these data are limited because exit interviews have not been conducted consistently, and the data from these interviews are not compiled and analyzed. Without such data, VBA cannot determine ways to address why employees are leaving. Furthermore, VBA has not performed analysis to determine whether it can reduce its staff attrition. Despite recent steps to improve the collection and analysis of data on the reasons for attrition, an overall strategy for the collection and analysis of attrition data could help guide workforce planning and determine the extent to which attrition and its costs could be reduced.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-03-491, Veterans Benefits Administration: Better Collection and Analysis of Attrition Data Needed to Enhance Workforce Planning
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Report to the Ranking Democratic Member, Committee on Veterans'
Affairs, House of Representatives:
United States General Accounting Office:
GAO:
April 2003:
Veterans Benefits Administration:
Better Collection and Analysis of Attrition Data Needed to Enhance
Workforce Planning:
GAO-03-491:
GAO Highlights:
Highlights of GAO-03-491, a report to the Ranking Democratic Member,
Committee on Veterans' Affairs, House of Representatives
Why GAO Did This Study:
By the year 2006, the Veterans Benefits Administration (VBA) projects
it will lose a significant portion of its mission-critical workforce to
retirement. VBA has hired over 2,000 new employees to begin to fill
this expected gap. GAO was asked to review: (1) the attrition rate at
VBA, particularly for new employees who examine veterans‘ claims, and
the agency‘s methods for calculating attrition; and (2) the adequacy of
VBA‘s analysis of attrition data, including the reasons for attrition.
To answer these questions, GAO analyzed attrition data from VBA‘s
Office of Human Resources, calculated attrition rates for VBA and other
federal agencies using a governmentwide database on federal employment,
and interviewed VBA officials about their efforts to measure attrition
and determine why new employees leave.
What GAO Found:
About 16 percent of new examiners hired in fiscal year 2001 left VBA
within 12 months of their hiring date, more than double the 6 percent
rate for all VBA employees who left that year. In general, new hire
attrition tends to exceed the rate for all other employees, and VBA‘s
16 percent rate is similar to the attrition rate for all new federal
employees hired in recent years, when as many as 17 percent left within
12 months of being hired.
VBA does not have adequate data on the reasons why employees,
particularly new employees, choose to leave the agency. VBA has
descriptive data on whether employees leave the agency through
resignation, termination, retirement, or transfer, but does not yet
have comprehensive data on the reasons employees resign. While VBA
collects some data on the reasons for attrition in exit interviews,
these data are limited because exit interviews have not been conducted
consistently, and the data from these interviews are not compiled and
analyzed. Without such data, VBA cannot determine ways to address why
employees are leaving. Furthermore, VBA has not performed analysis to
determine whether it can reduce its staff attrition. Despite recent
steps to improve the collection and analysis of data on the reasons for
attrition, an overall strategy for the collection and analysis of
attrition data could help guide workforce planning and determine the
extent to which attrition and its costs could be reduced.
What GAO Recommends:
To ensure that VBA collects and analyzes information on the reasons for
attrition, particularly for new hires, GAO recommends that the
Secretary of Veterans Affairs (VA) direct the Under Secretary for
Benefits to develop a strategy for the systematic collection and
analysis of attrition data, including attrition rates, reasons for
leaving, and cost data; and that VBA integrate the results of its
attrition analysis into its workforce plan. VA concurred with GAO‘s
recommendation.
www.gao.gov/cgi-bin/getrpt?GAO-03-491.
To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Cynthia A. Bascetta at (202) 512-7101 or
bascettac@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Attrition at VBA Is Higher for Newly Hired Examiners Than for the
Agency Overall:
VBA Lacks Adequate Data on Reasons Employees Leave and Analysis of
Staff Attrition:
Conclusions:
Recommendation:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Objectives:
Scope and Methodology:
Appendix II: Comments from the Department of Veterans Affairs:
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Acknowledgments:
Related GAO Products:
General Human Capital Reports:
Department of Veterans Affairs:
Veterans Benefits Administration:
Table:
Table 1: Overall Attrition Rates for VBA Examiners, Other VBA, Other
Department of Veterans Affairs, and Other Federal Employees, Fiscal
Years 2000-2002:
Figures:
Figure 1. Examiners Hired by VBA, Fiscal Years 1998-2002:
Figure 2: Percentage of Examiners Who Left VBA within 2 Years of Their
Hiring Date, Fiscal Years 1998-2001:
Abbreviations:
CPDF: Central Personnel Data File:
OMB: Office of Management and Budget:
OPM: Office of Personnel Management:
SSA: Social Security Administration:
VA: Department of Veterans Affairs:
VBA: Veterans Benefits Administration:
United States General Accounting Office:
Washington, DC 20548:
April 28, 2003:
The Honorable Lane Evans
Ranking Democratic Member
Committee on Veterans' Affairs
House of Representatives:
Dear Mr. Evans:
The Veterans Benefits Administration (VBA) projects that 21 percent of
its employees who examine veterans' claims and are eligible to retire
will do so by the year 2006. To prevent the potential disruptions in
service to veterans applying for disability compensation that could
result from these retirements, as well as to address a large claims
backlog, VBA hired over 2,000 new examiners between fiscal years 1998
and 2002. While VBA recognizes the importance of retaining its new
employees, until 2001 it was not regularly calculating an attrition
rate for its newly hired employees.
Because of the concern that VBA maintain a sufficient workforce, you
asked us to examine (1) the attrition rate at VBA, particularly for new
employees who examine veterans' claims, and the agency's methods for
calculating attrition; and (2) the adequacy of VBA's analysis of
attrition data, including the reasons for attrition.
To do our work, we obtained and analyzed attrition data from VBA's
Office of Human Resources and interviewed VBA officials. We focused our
analysis on new employees because of the investment in training they
need to reach full productivity. We calculated VBA's attrition rates
and compared them to those for other federal new hires, using a
governmentwide database on federal civilian employment. We also
interviewed Office of Personnel Management (OPM) officials to identify
generally accepted methods of calculating attrition and to determine
how federal agencies develop and analyze data on attrition and the
reasons for attrition. We conducted our work between October 2002 and
February 2003 in accordance with generally accepted government auditing
standards.
Results in Brief:
Using OPM data for fiscal year 2001, we calculated the attrition rate
at VBA for newly hired examiners at about 16 percent, more than double
the 6 percent rate for all VBA employees. The attrition rate for newly
hired examiners is similar to the attrition rate for all new federal
employees hired in recent years. Specifically, between fiscal years
1998 and 2001, as many as 17 percent left within 12 months of being
hired. While it is typical for new hire attrition to exceed overall
attrition, the new hire attrition rate was much higher in certain VBA
regional offices located in major urban areas than it was in other
regional offices. For example, in the Newark regional office, 40
percent of examiners hired in fiscal year 2001 left within the first
year of employment, while no newly hired examiners in Wichita left. VBA
calculates attrition by counting employees who leave the agency and
comparing that number to either total employees or a subgroup of total
employees. The methods VBA uses to calculate attrition are consistent
with those used by OPM and other federal agencies, and VBA's
calculations are similar to those we used for this report.
While VBA has descriptive data on whether employees leave the agency
through resignation, termination, retirement, or transfer, it does not
yet have adequate analytic data on the reasons why employees,
particularly new examiners, leave the agency. VBA has also not
conducted the types of analysis that would help the agency determine
whether its attrition, particularly for newly hired examiners, is
excessive. Efforts to collect better data on the reasons for attrition,
for example by using exit interviews, are under way, but it will take
some time before the results can be fully analyzed. Without such
analysis, VBA cannot determine ways to address the reasons employees
are leaving. Furthermore, VBA has not fully analyzed the cost
implications of its attrition, nor has it performed the types of
analysis, such as comparisons of its own attrition to that of other
federal employees who perform similar work, that would help the agency
determine the significance of its attrition rate, particularly for
newly hired examiners. However, recent requirements approved by the
Department of Veterans Affairs (VA) will begin to provide VBA the
opportunity to enhance the collection and analysis of attrition data.
For example, a VA-wide policy approved in January 2003 requires the use
of attrition data to guide workforce planning.
Because information on staff attrition is essential for effective
workforce planning, we are recommending that the Secretary of Veterans
Affairs direct the Under Secretary for Benefits to develop a strategy
for the systematic collection and analysis of attrition data at VBA.
Furthermore, we recommend that the results be integrated into the
agency's workforce plan. VA concurred with our recommendation.
Background:
VBA provides benefits to about 2.7 million veterans and about
579,000 surviving spouses, children, and parents. These benefits and
services include disability compensation and pension, education, loan
guaranty, and insurance. VBA employs about 5,000 examiners,[Footnote 1]
and they represent about 40 percent of the agency's entire workforce.
Most examiners are located at 57 regional offices and are responsible
for reviewing and processing veterans' disability claims. Typically,
they begin service at GS-5 or GS-7 and can be promoted to GS-
10.[Footnote 2]
Between 1998 and 2002, VBA hired over 2,000 new examiners (see fig. 1).
According to VBA officials, this was the first time VBA had the
authority to hire significant numbers of examiners. These examiners
were hired in anticipation of a large number of future retirements. For
example, in
2000, VBA was expecting the retirement of 1,100 experienced examiners
in the subsequent 5 years. The hiring of these new examiners coincided
with a growth in the backlog of claims awaiting decisions. Between 1998
and 2001, the backlog increased by 74 percent from about 241,000 to
about 420,000. VBA has since implemented an initiative to reduce this
backlog.[Footnote 3]
Figure 1: Figure 1. Examiners Hired by VBA, Fiscal Years 1998-2002:
[See PDF for image]
[End of figure]
According to VBA, it takes 2 to 3 years for a newly hired examiner to
become fully productive. After being hired, new examiners receive a
combination of formal training in a central location and on-the-job
training in one of VBA's regional offices. Once on the job, these
workers perform a variety of critical tasks, such as compiling medical
evidence, assessing the extent of the disability, determining the level
of benefit, handling payment, and considering appeals.
Workforce planning, which can be guided by different types of data, is
a key component to maintaining a workforce that can carry out the tasks
critical to an agency's mission. Strategic workforce planning focuses
on developing and implementing long-term strategies--clearly linked to
an agency's mission and programmatic goals--for acquiring, developing,
and retaining employees. In addition to data on attrition rates and the
reasons for attrition, data that can guide workforce planning include
size and composition of the workforce, skills inventory, projected
retirement eligibility and retirement rates, and feedback from exit
interviews.[Footnote 4] These data can be analyzed to identify gaps
between an agency's workforce and its current and future needs. This
insight can, in turn, become the basis for developing strategies to
build a workforce that accommodates those needs.
Attrition at VBA Is Higher for Newly Hired Examiners Than for the
Agency Overall:
We calculated the fiscal year 2001 attrition rate for new examiners at
VBA at about 16 percent, more than twice as high as the 6 percent rate
for all employees who left that year. About 16 percent of new examiners
hired in fiscal year 2001 left the agency within 1 year of being hired.
According to human resources experts, it is typical for new employees
to leave at higher rates than all other employees. However, minimizing
attrition is important because of the high costs of hiring and training
new examiners. VBA calculates attrition by counting employees who leave
the agency and comparing that number to either total employees or a
subgroup of total employees. The methods VBA uses to calculate
attrition are consistent with those used by OPM and other federal
agencies.
Attrition for New Employees at VBA Is More Than Twice as High as the
Agency's Overall Rate of About 6 Percent:
Attrition rates for new VBA examiners were generally higher than those
for all VBA examiners and other employees. As shown in table 1, in
fiscal years 2000, 2001, and 2002, overall attrition rates for VBA
examiners and other VBA employees ranged from about 4 percent to 8
percent. However, among all new examiners hired in fiscal year 2001,
about 16 percent left the agency within 12 months, as shown in figure
2.[Footnote 5] These attrition rates, for all employees as well as for
newly hired examiners, reflect all types of attrition--including
resignation, retirement, and termination.[Footnote 6] New hire
attrition consists predominantly of resignations.
Table 1: Overall Attrition Rates for VBA Examiners, Other VBA, Other
Department of Veterans Affairs, and Other Federal Employees, Fiscal
Years 2000-2002:
Fiscal year: 2000; VBA: Examiners: 4.6; VBA: All other employees: 6.9;
VBA: Agencywide: 6.0; All other VA: 8.2; All other federal government:
7.4.
Fiscal year: 2001; VBA: Examiners: 6.0; VBA: All other employees: 6.6;
VBA: Agencywide: 6.4; All other VA: 7.8; All other federal government:
7.0.
Fiscal year: 2002; VBA: Examiners: 7.0; VBA: All other employees: 8.1;
VBA: Agencywide: 7.6; All other VA: 7.6; All other federal government:
6.5.
Source: OPM's Central Personnel Data File.
Note: GAO performed these calculations by dividing separations by an
average of the total workforce on board at the beginning and end of
each year. The averages could only be calculated for the years shown.
For all categories of employees shown, attrition rates were calculated
based on white-collar employees only.
[End of table]:
Figure 2: Percentage of Examiners Who Left VBA within 2 Years of Their
Hiring Date, Fiscal Years 1998-2001:
[See PDF for image]
Note: Data for fiscal year 2001 do not reflect a full 24-month time
period. A comparable analysis could not be done for fiscal year 2002
because comparable data were not available to reflect a full 24-month
time period.
[End of figure]:
According to human capital experts, in general, new employees tend to
leave at higher rates than all other employees, and some of this
attrition may even be desirable. Higher attrition among new hires has
been the experience for federal agencies historically and, according to
our analysis of OPM's data, is generally the case governmentwide. The
attrition rate for all federal employees, both new hires and senior
staff, was 7 percent in fiscal year 2001.[Footnote 7] However, for all
new federal employees--those hired in fiscal years 1998, 1999, 2000,
and 2001--as many as 17 percent left within 12 months of being hired.
In some instances, according to a VBA official, such attrition may even
be desirable. For example, a newly hired employee may turn out not to
be a good fit for the agency.
The attrition rates we calculated for VBA's newly hired examiners are
similar to those that the Social Security Administration (SSA) found
among its own new hires doing comparable work. As part of its own
workforce planning efforts, SSA has collected data on new hire
attrition. Of its employees who examine and process benefit claims, SSA
found attrition rates that ranged from about 15 percent for those hired
in 1998 to about 14 percent for those hired in 2000.[Footnote 8]
VBA calculations show, and agency officials acknowledge, that attrition
for newly hired examiners is particularly high or particularly low in
certain locations.[Footnote 9] Specifically, VBA found attrition rates
of 38 percent to
49 percent for new examiners hired over a 3-year period at four
regional offices--Baltimore (38 percent), Chicago (39 percent), Newark
(41 percent), and New York (49 percent). By contrast, some offices--
such as Phoenix, Louisville, Huntington, and Wichita--experienced no
attrition among new examiners hired during this period.
VBA Uses Accepted Methods to Calculate Attrition:
The two basic methods VBA uses to calculate attrition are consistent
with methods used by OPM and other federal agencies. Each method, the
"annual calculation" and the "cohort calculation," compares employees
who leave the agency to either total employees or a subgroup of total
employees. They provide different ways of looking at attrition trends.
The annual calculation indicates broad attrition patterns from year to
year. In contrast, the cohort calculation follows a particular group of
employees over time to see how many leave the agency, and the group or
the timeframe can vary to suit the needs of the analysis. VBA's
calculations using this method are similar to ours. For example, VBA
found that, of all examiners hired in 2001, 18 percent had left within
2 years of their hiring date, while our calculations using OPM data
showed a corresponding rate of 17.6 percent. The following are the two
methods VBA uses:
* Annual calculation. This method calculates attrition by dividing all
employees who left in a given year by an average of employees working
at the agency at the beginning of the year and at the end of the year.
:
* Cohort calculation. This method calculates attrition by following a
specified group or "cohort" of employees to see how many leave the
agency. The cohort can be defined as all those hired (new hires only)
during a specific timeframe. These new hires are tracked for selected
intervals (3 months, 6 months, etc.). This method can be adapted by
defining the cohort differently (e.g., to track attrition among a
subgroup of new hires) and by using different timeframes for the
tracking (e.g.,
12 months, 18 months, etc.). This calculation differs from the annual
calculation in that it does not use an average of the total workforce.
VBA used this method to determine the attrition rate of certain newly
hired examiners for a presentation in 2001 and for additional, more
comprehensive calculations in 2002. VBA plans to use this method to
calculate attrition rate for new examiners at least annually starting
in 2003.
According to OPM officials, the annual method is a generally accepted
method used to calculate attrition by federal agencies. OPM officials
also recognized the value of the cohort method for calculations that
require specific time frames or groups of employees and added that
tracking the attrition of new employees is an important practice. OPM
does not mandate the use of a particular method for the calculation of
attrition, but officials said that any method used should be clearly
explained.
VBA Lacks Adequate Data on Reasons Employees Leave and Analysis of
Staff Attrition:
While VBA has descriptive data on whether employees leave the agency
through resignation, termination, retirement, or transfer, it does not
yet have adequate information to analyze the reasons why employees,
particularly new employees who examine veterans' claims, leave the
agency. While efforts to collect these data--for example, through an
automated exit interview process--are under way, it will take some time
before the results can be fully analyzed. Furthermore, VBA has not
performed the types of analysis on its data, such as an analysis of the
costs of attrition, that would help the agency determine whether its
attrition, particularly for new examiners, is excessive. VBA is taking
steps to ensure that attrition data will be available to guide its
workforce planning.
VBA Collects Some Data on Types of Separations, but Data on Reasons Are
Limited:
While VBA systematically collects descriptive data on whether employees
leave the agency through resignation, termination, retirement, or
transfer, the data on the reasons employees leave have not been
systematically collected or analyzed. Without such analysis, VBA cannot
determine the extent to which its attrition of newly hired examiners
could be reduced. As at other federal agencies, when employees leave
VBA, a standard federal "Form 52" is filled out.[Footnote 10] This form
records whether the employee is leaving due to a resignation,
termination, retirement, or transfer. Because this information appears
on the form in discrete fields, VBA human resources staff can easily
enter it into the agency's computer system to aggregate information on
the types of separations.
The Form 52 also includes a blank space for narrative comments on the
reasons for leaving. This space is primarily intended to be used in the
case of resignation, and its use is optional on the part of the
employee. According to VBA officials, this area is frequently left
blank. When this area is filled out, it is up to a human resources
employee to decide how to label an employee's reason for leaving in the
computer system. Several "quit codes" exist to help in this labeling
process. For example, reasons for leaving can be coded as relating to
pay and benefits, supervisory relationship, opportunity for
advancement, or personal reasons, including family responsibilities,
illness, or household relocation. All forms are sent to one of four
human resource centers to be entered into the agency's computer system.
Human resources employees in these centers are instructed to code the
reasons for leaving to the best of their ability. However, these staff
members cannot clarify reasons when the information is blank or
ambiguous because they do not have access to either the separated
employee or the regional human resources staff who actually processed
the employee's separation. Therefore, VBA officials do not consider the
Form 52 to be a complete or reliable source of information on the
reasons employees resign from VBA.
Another source of information on reasons why examiners leave VBA is
exit interviews. However, according to VBA officials, exit interviews
have not been consistently conducted for all separating employees. VBA
officials said that the downsizing of human resources staff in regional
offices is at least partly responsible for the inconsistency with which
exit interviews have been conducted in the past. In addition, the data
from the interviews that were conducted have not been forwarded to
national headquarters to be aggregated and analyzed. Existing VA policy
has recognized the importance of exit interviews for determining the
reasons an employee leaves, but it has not explicitly required the
department to conduct them. To ensure more systematic collection of
information about the reasons employees leave, as of February 2003, VA
planned to change existing policy to require the department to offer
exit surveys to separating employees, according to a VA official. Both
VA and VBA told us they have plans to require that exit surveys be
offered by spring 2003.
Some offices and staff members within VBA have made special efforts to
compile or collect information on the reasons examiners leave the
agency by producing special studies or reports. These include the
following:
* High-Performing Young Promotable Employees (HYPE). In September 2002,
a group of employees, representing six regional offices, prepared a
report based on 72 exit interviews conducted at seven regional offices.
The exit interviews had been conducted over 3 fiscal years:
1999, 2000, and 2001. The report included recommendations that the
agency develop a comprehensive strategic plan to address attrition and
retention and improve and centralize its exit interview process.
:
* Loss of New Hires in Veterans Service Centers. At the request of the
head of VBA, the newly organized Office of Performance Analysis and
Integrity (OPAI) issued a report in September 2002 that examined new
hire attrition rates for regional offices individually. The report also
looked at reasons for leaving, based on interviews with the directors
of two regional offices.
:
* Review of attrition data at certain regional offices. At least two
regional offices have investigated the reasons for attrition in their
own offices. For example, in October 2002, senior management at the
Newark regional office compiled information on the attrition of
examiners over a 3-year period and the reasons these examiners left.
This study was prompted by concern about high attrition rates at the
Newark office. Portland did a similar review in September 2001.
These special efforts had several common findings. For example, three
reported that inadequate opportunity for training was one of the
reasons examiners left VBA. Two reported dissatisfaction with workload
or employees' descriptions of the job as too difficult as reasons for
leaving. Two also identified instances in which examiners resigned as a
result of pending termination for poor performance or conduct. Reports
associated with these efforts touched on other reasons for resignation,
including inadequate opportunity for full utilization of skills and
various personal reasons.
The other source of information on reasons examiners left VBA was
anecdotal information provided by regional and other senior human
resources officials. For example, senior human resources officials said
that reasons for leaving included factors such as inadequate work space
and computer equipment as well as insufficient pay. According to a VBA
official, certain regional offices are aware of the types of employers
with whom they are competing. For example, some regional offices report
losing employees to a range of employers in both the public sector,
including other federal agencies (such as SSA and the Department of
Labor), and the private sector, including information technology firms.
In addition, these officials reported that some newly hired examiners
left when they discovered that the job tasks were not what they had
expected. Certain regional offices have taken steps to respond to some
of these findings. For example, some have offered job candidates
opportunities to observe the work place before being hired.
While all of these sources of information provide examples of reasons
why examiners left VBA, no comprehensive analysis of the reasons for
attrition has yet been conducted, due in large part to the
inconsistency with which exit interviews have been conducted and the
fact that data on reasons for leaving have not been compiled
nationwide. Without such analysis, VBA cannot yet determine the extent
to which attrition among newly hired examiners involves reasons that
could be addressed by the agency, such as work environment, or the
reasons the agency cannot control, such as personal reasons and market
conditions. As a result, VBA has lacked important information that
could help the agency determine the extent to which attrition could be
reduced.
VBA Has Not Fully Analyzed Data to Determine Whether Attrition Is
Excessive:
VBA has not performed the types of analysis on its data that would help
the agency determine the extent to which an attrition problem may
exist. To better understand its own attrition, an agency can take
advantage of
a range of analyses. These include the following:
* Comparisons. To understand the degree to which its attrition is a
problem, an agency can compare its own attrition to the attrition of
other federal agencies, especially to the attrition of agencies with
employees who do similar work. While one of VBA's special reports did
some broad comparisons of VBA's attrition to the attrition at other
federal agencies, VBA has not compared the attrition of newly hired
examiners to the attrition of employees in other parts of the federal
government with comparable job series, nor has it coordinated with
other agencies to share attrition data.
:
* Attrition modeling. To understand the degree to which attrition is a
problem, an agency can estimate the attrition rates it expects in the
future, providing a baseline against which to measure the actual
attrition it experiences.[Footnote 11] This allows officials to
determine if attrition rates are higher or lower than expected. While
VBA has projected retirement rates for planning purposes, according to
VBA officials, there was no formal or informal process to estimate the
expected attrition rates of the examiners who joined the agency since
1998. In 2002, VA projected future attrition trends for examiners in a
restructuring plan submitted to the Office of Management and Budget
(OMB), and officials expect to compare these projections to actual
attrition rates for examiners in the future.
:
* Cost analysis. To understand the degree to which attrition is a
problem, an agency can estimate the cost of recruiting and training new
employees who leave and the cost of recruiting and training their
replacements. While VBA's Office of Human Resources conducted a partial
estimate of attrition costs in 2001, this estimate did not include all
associated costs. For example, the investment lost when a trained
employee leaves was not included, although it is one of the most
important and potentially expensive costs.
:
* Labor market analysis. To understand the degree to which its
attrition is a problem, an agency can evaluate labor market conditions
in locations where it operates. Such an evaluation can provide context
for understanding if an attrition rate is higher than might be expected
in those locations. Using general labor market data, VBA has identified
several locations where it faces significant competition from other
employers, both public and private. This information could be used to
better understand its attrition rate in those locations in the future.
However, this information is not based on the actual employment plans
of separating employees, and VBA does not routinely collect or document
this information. According to a VBA official, collecting data on where
VBA's separating employees find employment after VBA would be useful
for developing a more accurate understanding of the employers with whom
VBA is competing.
VBA is taking steps to ensure that attrition data will be available to
guide workforce planning. First, according to a VBA official, VBA
developed a workforce plan, following a workforce policy approved by VA
in January 2003.[Footnote 12] In a related document, VA stated its
expectation that, in the current economy, attrition among examiners may
stabilize. However, VBA cannot test that assumption without continued
monitoring of attrition rates and improved data on reasons for
attrition. Second, VBA has recently designated an official to head
strategic planning efforts. While these efforts will address attrition
and other human capital issues, a VBA official told us that its Office
of Human Resources is expected to assume primary responsibility for
human capital issues and to coordinate with the strategic planning
office. Third, VA's new automated exit survey, which VA officials
expect to be available in spring 2003, has the potential to aid VBA in
its attrition data gathering and analysis. Separating employees will be
able to answer a series of questions about the reasons they decided to
leave the agency. The survey will provide confidentiality for the
employee, potentially allowing for more accurate responses. The survey
will also facilitate electronic analysis that could be broken down by
type of job and region. As of March 2003, VBA had created and filled a
new position intended to help VBA implement the automated exit survey,
among other responsibilities.
Conclusions:
VBA's ability to effectively serve veterans hinges on maintaining a
sufficient workforce through effective workforce planning. While
attrition data are just one part of workforce planning, the data are
important because they can be used to anticipate the number of
employees and the types of skills that need to be replaced. While VBA
officials told us about plans under way to better manage new hire
attrition, the agency currently lacks useful analysis of the reasons
new employees leave. Furthermore, while it is typical for new hires to
leave their jobs at higher rates than other employees, and this
phenomenon is not unique to VBA, VBA has not yet analyzed whether its
new hire attrition is excessive, nor has it analyzed the cost
implications of such attrition to the agency. Such analysis can help an
agency determine the extent to which attrition could be reduced.
Sustained attention to both attrition rates and reasons for attrition,
particularly for new employees, can help VBA conduct more effective
workforce planning. Understanding the reasons for attrition could also
help the agency minimize the investment in training lost when a new
employee leaves.
Recommendation:
To ensure that VBA collects and analyzes information on the reasons for
attrition, particularly for new employees, we recommend that the
Secretary of Veterans Affairs direct the Under Secretary for Benefits
to develop a strategy for the systematic collection and analysis of
attrition data. This could include the calculation of attrition rates,
analysis of the reasons for leaving, and estimation of the costs
associated with new hire attrition. Furthermore, we recommend that VBA
integrate the results of its attrition analysis into its workforce
plan.
Agency Comments:
In its written comments on a draft of this report (see app. II), VA
agreed with our findings and conclusions and concurred with our
recommendation. VBA is targeting July 1, 2003 for the implementation of
an exit survey process to develop data on reasons for employee turnover
and the costs of new hire attrition. VBA is also in the process of
developing its workforce plan as part of overall departmental efforts.
This should better position VBA to integrate the results of its
analysis of attrition into its workforce plan.
As agreed with your office, unless you publicly release its contents
earlier, we will make no further distribution of this report until 10
days after its issue date. At that time, we will send copies of this
report to the Secretary of the Department of Veterans Affairs,
appropriate congressional committees, and other interested parties. We
will also make copies of this report available to others on request.
The report will also be available at no charge on GAO's Web site at
http://www.gao.gov.
If you or your staff have any questions about this report, please call
me at (202) 512-7101. Other contacts and contributors to this report
are listed in appendix III.
Sincerely yours,
Cynthia A. Bascetta
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Objectives:
The objectives of our review were to determine: (1) the attrition rate
at the Veterans Benefits Administration (VBA), particularly for new
employees who examine veterans' claims, and VBA's methods for
calculating attrition; and (2) the adequacy of VBA's analysis of
attrition data, including the reasons for attrition. We conducted our
work between October 2002 and February 2003 in accordance with
generally accepted government auditing standards.
Scope and Methodology:
To determine the attrition rate for newly hired veterans claims
examiners at VBA, we analyzed data from the Office of Personnel
Management's (OPM) Central Personnel Data File (CPDF). Using the CPDF
data, we identified the newly hired veterans claims examiners and
followed them over time to see how many left VBA. We identified all new
hires for fiscal years 1998 through 2002 by using personnel action
codes for accessions and conversions to career or career conditional
positions. Accessions include new hires and hires of individuals
returning to the government. Conversions are primarily temporary
federal government employees whose positions are made permanent. Next,
we determined whether these individuals had personnel actions
indicating they had separated from VBA. Separation (attrition) included
resignations, retirements, terminations, and deaths. We did not include
a small percentage of individuals with inconsistent data such as
multiple or different hiring or separation dates. The small percentage
of employees with inconsistent data is congruent with the generally
reliable data in the CPDF we have reported previously. (See U.S.
General Accounting Office, OPM's Central Personnel Data File: Data
Appear Sufficiently Reliable to Meet Most Customer Needs, GAO/GGD-98-
199 (Washington, D.C.: Sept. 30, 1998)). By subtracting the hire date
from the separation date, we determined how long individuals worked
before separating. We also noted those individuals who had not
separated within specific time periods such as 0 to 12 months and 13 to
24 months. We calculated the attrition rate for a specific time period
by dividing the number of individuals who left within that time period
by the total number of new hires tracked for that time period. Since we
issued our statement,[Footnote 13] OPM issued 2002 data, which we used
to update this analysis. The additional year of data resulted in a
small number of additional employees who had multiple, different
separation dates. Because we excluded all instances of employees with
multiple records and because some of these instances corresponded to
records previously included in our original analysis, the additional
year of data resulted in some revisions to our original analysis.
To determine overall attrition rates for veterans claims examiners at
VBA (not just new hires), we analyzed data from the CPDF for fiscal
years 2000 through 2002. For each fiscal year, we counted the number of
permanent employees with personnel actions indicating they had
separated from VBA. We divided the total number of separations for each
fiscal year by the average of the number of permanent employees in the
CPDF as of the last pay period of the fiscal year before the fiscal
year of the separations and the number of permanent employees in the
CPDF as of the last pay period of the fiscal year of separations. To
place the overall attrition rates for VBA claims examiners in context,
we compared VBA's rates to those for employees in other occupations and
agencies (all other white-collar VBA employees, all other white-collar
employees in the Department of Veterans Affairs, and all other white-
collar employees in the executive branch of the federal government).
To determine VBA's methods for calculating attrition, we interviewed
VBA officials and reviewed VBA's calculations. We also interviewed OPM
officials to identify generally accepted methods of calculating
attrition. To determine the adequacy of VBA's data on the reasons for
attrition and its analysis of attrition data, we reviewed VBA reports
with information about the reasons for attrition, interviewed VBA
officials to determine how VBA collects data on the reasons employees
leave the agency, and interviewed a VA official about a new initiative
to develop and implement an automated exit survey. To determine the
adequacy of VBA's analysis of its attrition, we reviewed VBA efforts to
analyze attrition, interviewed VBA officials, and interviewed OPM
officials and relied on our prior reports on federal human capital
issues to determine how federal agencies develop and analyze data on
attrition and the reasons for attrition.
[End of section]
Appendix II: Comments from the Department of Veterans Affairs:
THE SECRETARY OF VETERANS AFFAIRS
WASHINGTON:
April 16, 2003:
Ms. Cynthia A. Bascetta Director, Education Workforce and Income
Security Issues 441 G Street, NW Washington, DC 20548:
Dear Ms. Bascetta:
The Department of Veterans Affairs (VA) has reviewed your draft report,
VETERANS BENEFITS ADMINISTRATION: Better Collection and Analysis of
Attrition Data Needed to Enhance Workforce Planning (GAO-03-491). VA
agrees with your findings and conclusions and concurs with your
recommendation. In fact, the recommendation is consistent with
initiatives already underway in the areas of data collection, data
analysis, and workforce planning.
The Veterans Benefits Administration's (VBA) Office of Human Resources
(OHR) is implementing an exit interview survey process to develop data
on the reasons for employee turnover. Implementation target is July 1,
2003. VBA is partnering with the Departmental Office of Human Resources
Management to conduct data analysis centrally. The analysis will review
overall attrition and stratification by grade and/or tenure. While
initial analysis will address reasons for losses on a national level,
VBA expects that by accumulating additional data, the analysis will
yield area and regional office rates and trends. Analysis of the costs
of new hire attrition will also be included. Subsequently, training
will be offered to VBA field managers on hiring and retaining
employees.':
The Veterans Health Administration maintains a robust payroll data
system through its VISN Support Service Center (VSSC). VBA is obtaining
attrition data through the VSSC. Additionally, recurring reports and
local access to data are being tracked so that management officials may
monitor attrition rates in their workforce.
As part of the overall Departmental efforts, VBA has recently completed
its initial workforce plan. The plan analyzed workforce needs and
trends, including retirement and non-retirement losses in the aggregate
and by key occupations. VBA understands that successful workforce
planning includes managing the hiring, training, and retention of
talented employees. Findings and recommendations in the plan are now
under review. VBA will revise its plans according to the
Departmental schedule and VBA's needs. The workforce plan will be
addressed at VBA's Directors' Conference in June 2003 and its Human
Resources Conference in August 2003.
Thank you for the opportunity to comment on your draft report.
Anthony J. Principi:
Signed by Anthony J. Principi:
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Irene Chu, (202) 512-7102
Chris Morehouse, (202) 512-7214:
Acknowledgments:
In addition to those named above, others who made key contributions to
this report are Ronald Ito, Grant Mallie, Corinna Nicolaou, and Gregory
Wilmoth.
:
[End of section]
Related GAO Products:
General Human Capital Reports:
High-Risk Series: Strategic Human Capital Management. GAO-03-120.
Washington, D.C.: January 2003.
Human Capital: Effective Use of Flexibilities Can Assist Agencies in
Managing Their Workforces. GAO-03-2. Washington, D.C.: December 6,
2002.
Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of
Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.
A Model of Strategic Human Capital Management, Exposure Draft.
GAO-02-373SP. Washington, D.C.: March 15, 2002.
Federal Employee Retirements: Expected Increase Over the Next 5 Years
Illustrates Need for Workforce Planning. GAO-01-509. Washington, D.C.:
April 27, 2001.
Human Capital: A Self-Assessment Checklist for Agency Leaders. GAO/OCG-
00-14G. Washington, D.C.: September 2000.
Department of Veterans Affairs:
Major Management Challenges and Program Risks: Department of Veterans
Affairs. GAO-03-110. Washington, D.C.: January 2003.
High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January
2003.
Veterans Benefits Administration:
Veterans' Benefits: Claims Processing Timeliness Performance Measures
Could Be Improved. GAO-03-282. Washington, D.C.: December 19, 2002.
Veterans' Benefits: Despite Recent Improvements, Meeting Claims
Processing Goals Will Be Challenging. GAO-02-645T. Washington, D.C.:
April 26, 2002.
Veterans' Benefits: Training for Claims Processors Needs Evaluation.
GAO-01-601. Washington, D.C.: May 31, 2001.
Veterans Benefits Administration: Problems and Challenges Facing
Disability Claims Processing. GAO/T-HEHS/AIMD-00-146. Washington,
D.C.: May 18, 2000.
FOOTNOTES
[1] According to VBA, these positions carry the title of Veterans
Service Representative. These positions and similar ones, such as
rating specialists, are classified as job series 996, veterans claims
examiner. For our analysis, we focused on the 996 job series. For this
report, we are referring to jobs in this series as examiners.
[2] According to a VBA official, in some cases, they can also start at
GS-9. In 2003, basic starting salaries for GS-5 and GS-7 are about
$23,400 and $29,000, respectively, not counting locality pay, and for
those hired at the GS-9 level, the corresponding starting salary is
about $35,500. VBA is planning to extend competitive promotion
potential for this job series to GS-11.
[3] VBA began to implement this initiative, called Claims Process
Improvement, at all of its regional offices in July 2002. For more
information, see U.S. General Accounting Office, Veterans' Benefits:
Claims Processing Timeliness Performance Measures Could Be Improved,
GAO-03-282 (Washington, D.C.: Dec. 19, 2002).
[4] For more information, see U.S. General Accounting Office, A Model
of Strategic Human Capital Management, Exposure Draft, GAO-02-373SP
(Washington, D.C.: Mar. 15, 2002).
[5] Since we issued our statement, Veterans Benefits Administration:
Better Staff Attrition Data and Analysis Needed GAO-03-452T
(Washington, D.C.: Feb. 11, 2003), OPM issued 2002 data, which we used
to update this analysis. For further information about our methodology,
see appendix I.
[6] We did not include in our analysis of new hire attrition staff who
left the examiner position but remained in VBA, nor did we include
transfers within VA.
[7] These attrition rates represent employees at all federal agencies
except VA.
[8] SSA's analysis focused on claims representatives, service
representatives, and teleservice representatives. We could not
duplicate this analysis because OPM's Central Personnel Data File does
not break out job series into the kinds of subcategories that SSA was
able to use by accessing its own records. According to SSA officials,
SSA plans to issue a report including its attrition and other workforce
analyses in spring 2003.
[9] According to VBA officials, attrition rates could also be
calculated for certain subgroups of newly hired examiners such as
veterans or minorities. VBA has not calculated attrition rates for
these subgroups.
[10] The Form 52, Request for Personnel Action, is used by all federal
agencies, including VBA.
[11] For more information on attrition modeling, see U.S. General
Accounting Office, Air Traffic Control: FAA Needs to Better Prepare for
Impending Wave of Controller Attrition, GAO-02-591 (Washington, D.C.:
June 14, 2002). For additional information on how attrition data can be
used by federal agencies, see Human Capital: A Self-Assessment for
Agency Leaders, GAO/OCG-00-14G (Washington, D.C.: Sept. 2000) and, for
the importance of valid and reliable data in assessing an agency's
workforce requirements, see A Model of Strategic Human Capital
Management, Exposure Draft, GAO-02-373SP (Washington, D.C.: Mar. 15,
2002).
[12] The new VA policy requires workforce plans from all three of VA's
administrations--VBA, the Veterans Health Administration, and the
National Cemetery Administration. VA first identified the need for a
workforce policy following a workforce analysis required of all
executive branch agencies by OMB in May 2001.
[13] GAO-03-452T.
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