International Trade
USTR Would Benefit from Greater Use of Strategic Human Capital Management Principles Gao ID: GAO-06-167 December 6, 2005The Office of the U.S. Trade Representative (USTR) has a unique role in coordinating trade policy, resolving disagreements, and framing issues for presidential decision through an interagency trade policy process. In recent years, USTR's increased workload from numerous new regional and bilateral free trade agreement negotiations and a new round of multilateral negotiations at the World Trade Organization has raised concerns about its human capital strategy. GAO examined whether USTR is pursuing an effective human capital strategy that supports the ability of its workforce to accomplish its mission. Specifically, GAO (1) reviewed USTR's commitment to strategic human capital leadership and planning and (2) analyzed to what extent USTR has used human capital tools to address its workforce challenges.
USTR could benefit from greater use of strategic human capital management principles in leadership and planning, considering that its small size and interagency trade leadership and coordination role give it a unique responsibility to lead the trade agenda. First, USTR has not sustained the leadership resources for human capital; for example, the top human capital management post has not been filled for over 1 1/2 years. Second, USTR has not undertaken formal strategic human capital planning to mitigate the risks inherent in its dependency--as a "networked organization"--on interagency resources to achieve its mission. Therefore, it does not have a method to account for changes in other agencies' resources that might impact its ability to achieve its mission. Third, USTR has focused its human capital planning efforts primarily on short-term responses to trade negotiating needs identified in its 2-year budget planning process; it has not conducted ongoing parallel efforts to analyze longer-term workforce needs. USTR's efforts to address its specific workforce challenges could benefit from greater use of human capital tools. First, USTR could use more of the existing federal human capital flexibilities to better tailor its human capital approaches to organizational needs. Although the agency has used and benefited from some special hiring and pay authorities, such as the use of higher-than-minimum salary offers, it has yet to take advantage of others, such as retention bonuses. Second, while USTR prides itself on being a results-oriented agency, most USTR staff are not subject to agencywide performance expectations linked to organizational goals. While managers have stressed the importance of certain individual skills needed to advance USTR's mission, most staff are held accountable to a range of expectations that vary among offices.
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-06-167, International Trade: USTR Would Benefit from Greater Use of Strategic Human Capital Management Principles
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Report to the Chairman, Subcommittee on Oversight of Government
Management, the Federal Workforce, and the District of Columbia,
Committee on Homeland Security and Governmental Affairs, U.S. Senate:
December 2005:
International Trade:
USTR Would Benefit from Greater Use of Strategic Human Capital
Management Principles:
GAO-06-167:
GAO Highlights:
Highlights of GAO-06-167, a report to the Chairman, Subcommittee on
Oversight of Government Management, the Federal Workforce, and the
District of Columbia, Committee on Homeland Security and Governmental
Affairs, U.S. Senate:
Why GAO Did This Study:
The Office of the U.S. Trade Representative (USTR) has a unique role in
coordinating trade policy, resolving disagreements, and framing issues
for presidential decision through an interagency trade policy process.
In recent years, USTR‘s increased workload from numerous new regional
and bilateral free trade agreement negotiations and a new round of
multilateral negotiations at the World Trade Organization has raised
concerns about its human capital strategy.
GAO examined whether USTR is pursuing an effective human capital
strategy that supports the ability of its workforce to accomplish its
mission. Specifically, GAO (1) reviewed USTR‘s commitment to strategic
human capital leadership and planning and (2) analyzed to what extent
USTR has used human capital tools to address its workforce challenges.
What GAO Found:
USTR could benefit from greater use of strategic human capital
management principles in leadership and planning, considering that its
small size and interagency trade leadership and coordination role give
it a unique responsibility to lead the trade agenda. First, USTR has
not sustained the leadership resources for human capital; for example,
the top human capital management post has not been filled for over 1½
years. Second, USTR has not undertaken formal strategic human capital
planning to mitigate the risks inherent in its dependency”as a
’networked organization“”on interagency resources to achieve its
mission. Therefore, it does not have a method to account for changes in
other agencies‘ resources that might impact its ability to achieve its
mission. Third, USTR has focused its human capital planning efforts
primarily on short-term responses to trade negotiating needs identified
in its 2-year budget planning process; it has not conducted ongoing
parallel efforts to analyze longer-term workforce needs.
USTR‘s efforts to address its specific workforce challenges could
benefit from greater use of human capital tools. First, USTR could use
more of the existing federal human capital flexibilities to better
tailor its human capital approaches to organizational needs. Although
the agency has used and benefited from some special hiring and pay
authorities, such as the use of higher-than-minimum salary offers, it
has yet to take advantage of others, such as retention bonuses. Second,
while USTR prides itself on being a results-oriented agency, most USTR
staff are not subject to agencywide performance expectations linked to
organizational goals. While managers have stressed the importance of
certain individual skills needed to advance USTR‘s mission, most staff
are held accountable to a range of expectations that vary among
offices.
USTR Leads the Interagency Trade Policy Process:
[See PDF for image]
[End of figure]
What GAO Recommends:
GAO recommends that the U.S. Trade Representative develop a strategic
human capital management system addressing the areas of strategic human
capital leadership, planning, recruitment and retention, and
performance management. USTR said it shared our general observations
and recommendations regarding the critical importance of human capital
planning, but believes it is sufficiently performing these functions.
Other agencies did not provide comments.
www.gao.gov/cgi-bin/getrpt?GAO-06-167.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Loren Yager, 202-512-
4347, yagerl@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
USTR Could Benefit from Greater Commitment to Strategic Human Capital
Principles in Its Human Capital Leadership and Planning:
USTR Makes Limited Use of Human Capital Tools to Mitigate Risk of
Workforce Challenges:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: USTR Staff Profile:
Appendix III: Human Capital Flexibilities Available to USTR:
Appendix IV: Comments from the Office of the U.S. Trade Representative:
GAO Comments:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Active USTR Staff by Office:
Table 2: Flexibilities Available to USTR that Could Address Recruitment
Risks:
Table 3: Flexibilities Available to USTR that Could Address Retention
Risks:
Figures:
Figure 1: USTR Organizational Structure, as of July 5, 2005:
Figure 2: GAO Model of Strategic Human Capital Management:
Figure 3: USTR FTEs Authorized and Actual, Fiscal Year 2000 through
First Half of Fiscal Year 2005:
Figure 4: Number of USTR Staff by Grade Level:
Figure 5: Percent of USTR Staff Eligible for Retirement in 5 Years or
Less:
Figure 6: USTR Staff Occupation Comparison, Attorneys and Economists:
Figure 7: USTR Active Detailees, by Year Detail Started:
Abbreviations:
APEC: Asia-Pacific Economic Cooperation:
CAFTA: Central American Free Trade Agreement:
EOP: Executive Office of the President:
FTA: Free Trade Agreement:
FTE: Full-time Equivalent staff:
ITC: U.S. International Trade Commission:
OMB: Office of Management and Budget:
OPM: Office of Personnel Management:
SES: Senior Executive Service:
TPRG: Trade Policy Review Group:
TPSC: Trade Policy Staff Committee:
USTR: Office of the U.S. Trade Representative:
WTO: World Trade Organization:
Letter December 6, 2005:
The Honorable George V. Voinovich:
Chairman, Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
Dear Mr. Chairman:
The Office of the U.S. Trade Representative (USTR) plays the lead role
in developing U.S. trade policy, negotiating trade agreements, and
monitoring and enforcing those agreements. It leads and coordinates the
development and implementation of U.S. trade policy through an
interagency trade policy process, comprised of 19 federal agencies and
offices. As such, USTR has a unique role within the trade policy arena
in terms of providing the leadership and coordination to build the
consensus and marshal the resources to move the interagency process
forward to achieve the U.S. trade agenda.
As a small, cabinet-level office within the Executive Office of the
President (EOP), USTR has about 200 full-time employees and uses
temporary detailees from other agencies to supplement its core staff.
In recent years, USTR's workload has grown as the number and complexity
of trade agreements has increased, with both ambitious negotiations of
numerous new regional and bilateral free trade agreements and a new
round of multilateral negotiations in the World Trade Organization
(WTO). USTR's extensive interagency leadership responsibilities and
increasing workload have increased the importance of having a sound
human capital strategy.
Similarly, human capital planning has taken on increased importance in
the public sector in recent years. We have established strategic human
capital principles and standards in recent years in our Model of
Strategic Human Capital Management and a large body of work addressing
specific human capital issues, such as strategic workforce planning.
The Office of Personnel Management (OPM) has also established its Human
Capital Assessment and Accountability Framework, which is consistent
with our model, to provide the basis for executive branch agencies to
meet the human capital goals set out as the first element in the
President's Management Agenda. All of this guidance stresses the
importance of tailoring the approaches to the characteristics of each
organization, such as size and function.
To examine whether USTR is pursuing an effective human capital strategy
that supports the ability of its workforce to accomplish its mission,
we reviewed its human capital planning and implementation efforts.
Specifically, we (1) reviewed USTR's commitment to strategic human
capital leadership and planning and (2) analyzed to what extent USTR
has used human capital tools to address its workforce challenges.
To determine USTR's commitment to strategic human capital leadership
and planning, we reviewed internal planning documents and interviewed
USTR human resources staff, office managers, and senior management. We
used GAO's Model of Strategic Human Capital Management as our framework
to assess USTR's human capital efforts.[Footnote 1] We also discussed
interagency resource planning with four trade agencies: the Departments
of State, Commerce, and Agriculture, as well as the U.S. International
Trade Commission. To determine how USTR has addressed its human capital
challenges, we interviewed officials at USTR and the four trade
agencies, as well as trade association representatives and former USTR
officials. We reviewed USTR human capital data for key human capital
trends in areas such as staff profile, retirement eligibility, and
retention challenges. We tested USTR data for reliability by comparing
them with OPM data and with other USTR human capital documents. We
determined that these data were sufficiently reliable for the purposes
of this report. We conducted our work from January 2005 to September
2005 in accordance with generally accepted government auditing
standards.
Results in Brief:
USTR could benefit from greater use of strategic human capital
management principles in the areas of leadership and planning,
considering that its small size and interagency trade leadership and
coordination role give it a unique responsibility to lead the trade
agenda. While USTR officials state that their human capital efforts are
sufficient to accomplish USTR's immediate mission, USTR does not
demonstrate a commitment to managing its human capital strategically.
First, USTR has not sustained the leadership resources for human
capital; for example, the top human capital management post has not
been filled for over 1½ years. USTR also does not conduct formal
succession planning to fill critical management positions in a timely
manner. Second, while USTR performs an interagency leadership and
coordination mission that it cannot achieve without the participation
and support of other trade agencies, it has not undertaken strategic
human capital planning to mitigate the risks inherent in its
dependency--as a "networked organization"--on interagency resources.
For example, in recent trade negotiations, other trade agencies
comprised about 75 percent of the total delegation staff. However, USTR
does not formally conduct any planning for these critical human capital
resources at the interagency level and, therefore, does not have a
method to account for changes in other agencies' resources that might
impact its ability to achieve its mission. Third, USTR's human capital
planning efforts have been focused primarily on short-term responses to
trade negotiating needs identified in its 2-year budget planning
process; it has not conducted ongoing parallel efforts to analyze the
organization's longer-term workforce needs. For example, USTR does not
routinely review senior staff's eligibility for retirement to ensure
the organization's continued capacity to achieve its mission. Moreover,
USTR does not maintain the kind of up-to-date information on available
staff and future human capital needs that would be necessary in
conducting effective strategic workforce planning, reducing its ability
to make data-driven human capital decisions.
USTR's efforts to address its specific workforce challenges could
benefit from greater use of human capital tools. First, USTR could use
more of the existing federal human capital flexibilities to better
tailor its human capital approaches to its organizational needs.
Although the agency has used and benefited from some special hiring and
pay authorities, such as the use of higher-than-minimum salary offers,
it has yet to take advantage of others, such as retention bonuses.
Second, while USTR prides itself on being a results-oriented agency, it
could do even better if it linked its individual performance
expectations to organizational goals. Most USTR staff are not subject
to agencywide performance expectations linked to organizational goals.
While managers have stressed the importance of certain individual
skills needed to advance USTR's mission, most staff are held
accountable to a range of expectations that vary among offices.
In this report, we make several recommendations to improve USTR's human
capital management in the areas of strategic human capital leadership
and planning, recruiting and retention, and performance management. We
provided a draft of this report to USTR; the Departments of
Agriculture, Commerce, and State; and the U.S. International Trade
Commission. USTR provided written comments, which are reproduced in
appendix IV. The other agencies did not provide comments. USTR stated
that it shared our general observations and recommendations regarding
the critical importance of human capital planning and said it would
take some of the steps suggested by our report. However, in other
areas, USTR believes it is sufficiently performing its human capital
functions. USTR also provided technical comments, which we have
incorporated where appropriate.
Background:
USTR Mission and Organizational Structure:
USTR is responsible for developing and coordinating U.S. international
trade, commodity, and direct investment policy and for overseeing trade
negotiations with other countries. The head of USTR is the U.S. Trade
Representative, a Cabinet member who serves as the president's
principal trade advisor, negotiator, and spokesperson on trade issues.
Through an interagency structure, USTR coordinates trade policy,
resolves disagreements, and frames issues for presidential decision.
USTR provides trade policy leadership and negotiating expertise in its
major areas of responsibility, including the following:
* Bilateral, regional, and multilateral trade and investment issues;
* Expansion of market access for U.S. goods and services;
* International commodity agreements;
* Negotiations affecting U.S. import policies;
* Oversight of the Generalized System of Preferences and Section 301
complaints concerning foreign unfair trade practices;
* Trade, commodity, and direct investment matters managed by
international institutions such as the Organization for Economic
Cooperation and Development and the United Nations Conference on Trade
and Development;
* Trade-related intellectual property protection issues; and:
* WTO issues.
USTR has offices in Washington, D.C., and Geneva, Switzerland, where
the WTO is located. The Geneva Deputy USTR is the U.S. Ambassador to
the WTO and to the United Nations Conference on Trade and Development
on commodity matters. Figure 1 shows USTR's organizational structure as
of July 5, 2005.
Figure 1: USTR Organizational Structure, as of July 5, 2005:
[See PDF for image]
[End of figure]
Interagency Trade Policy Process:
USTR leads and coordinates the development and implementation of U.S.
trade policy through an interagency process. It consults with other
government agencies on trade policy matters through the Trade Policy
Review Group (TPRG) and the Trade Policy Staff Committee (TPSC). USTR
administers and chairs these groups, which are composed of 19 federal
agencies and offices. TPSC is the primary operating group, with
representation at the senior civil service level. If agreement is not
reached in TPSC, or if significant policy questions are being
considered, then issues are taken up by TPRG (Deputy USTR/Under
Secretary level). The final tier of the interagency trade policy
mechanism is the National Economic Council, chaired by the President.
The National Economic Council Deputies' committee considers memorandums
from TPRG, as well as important or controversial trade-related issues.
The current administration operates the National Economic Council
jointly with the National Security Council, according to a senior USTR
official.
Strategic Human Capital Management Principles:
We have developed a Model of Strategic Human Capital
Management[Footnote 2] to help agency leaders effectively use their
people, or human capital, and determine how well they integrate human
capital considerations into daily decision making and planning for the
program results they seek to achieve. It highlights the importance of a
sustained commitment by agency leaders to maximize the value of their
agencies' human capital and manage related risks.
As shown in figure 2, the model has four human capital cornerstones:
(1) leadership; (2) strategic human capital planning; (3) acquiring,
developing, and retaining talent; and (4) results-oriented
organizational cultures. Each of these cornerstones, in turn, is
characterized by two critical success factors.
Figure 2: GAO Model of Strategic Human Capital Management:
[See PDF for image]
[End of figure]
Our human capital model is consistent with similar efforts by the
Office of Management and Budget (OMB) and OPM to develop federal human
capital standards. In the summer of 2001, OMB announced the President's
Management Agenda, designed to address management weakness across the
government. To this end, the agenda highlighted five governmentwide
initiatives for management reform. The first of these was the Strategic
Management of Human Capital Initiative, which is being led by OPM. As
part of this initiative, in October 2002, OPM released a Human Capital
Assessment and Accountability Framework that built on its prior
guidance for workforce planning. OPM has also developed Human Capital
Standards for Success, which incorporates the GAO model's critical
success factors.[Footnote 3]
USTR Could Benefit from Greater Commitment to Strategic Human Capital
Principles in Its Human Capital Leadership and Planning:
USTR does not follow key strategic human capital principles in its
human capital leadership and planning. While USTR officials state that
their human capital efforts are sufficient to accomplish USTR's
immediate mission, USTR does not demonstrate a commitment to strategic
human capital management. First, the commitment of USTR to providing
the leadership resources of human capital has not been sustained.
Second, while USTR performs an interagency leadership and coordination
mission that it cannot achieve without the participation and support of
other trade agencies, it has not undertaken formal strategic human
capital planning to mitigate the risks inherent in its dependency on
interagency resources. Third, USTR's human capital planning efforts
have been primarily focused on short-term responses to trade
negotiating needs identified in its 2-year budget planning process; it
has not conducted ongoing parallel efforts to analyze the
organization's longer term workforce needs to ensure its continued
capacity to achieve its mission.
USTR Does Not Address Human Capital Leadership Strategically Despite
the Importance of Each Position:
Despite being the lead U.S. trade agency and having the responsibility
to coordinate the U.S. government trade agenda, which places a
significant responsibility on each individual, USTR does not manage
human capital strategically. USTR's commitment to provide leadership
resources for human capital has not been sustained. For example, USTR
does not have the human capital management resources in place to ensure
that critical human capital management tasks--such as succession
planning--are carried out, which places its interagency leadership role
at risk when key vacancies occur within a short period of time. In
fact, the senior human capital management post has not been filled for
over 1½ years. USTR has relied on one person to act as senior manager
for administration, thus assuming all senior human capital and
administrative duties.
Although a key element of strategic human capital leadership principles
is the use of succession planning to ensure a smooth transition of
knowledge from incumbents to successors to strengthen organizational
capacity,[Footnote 4] USTR does not conduct formal succession planning.
Federal agencies that manage succession well do so with active
leadership support for identifying critical talent throughout the
organization and linking succession efforts to the agency's overall
long-term goals.[Footnote 5] Our analysis of USTR's human capital data
found substantial risk of future leadership and knowledge loss due to
retirement. Five of 22 senior executive service (SES) staff are
currently eligible to retire, representing 23 percent of USTR's SES
staff. Another 4 SES staff are eligible to retire in five years or
less, for a total of 41 percent either currently eligible to retire or
eligible in 5 years or less. Along with the SES posts, USTR also faces
the potential retirement of several experienced trade experts and
attorneys who also have roles coordinating U.S. trade policy. Just over
10 percent of GS-15 trade analysts, attorneys, or economists are
eligible to retire in 5 years or less.[Footnote 6] USTR has not
undertaken formal succession planning to fill these eventual vacancies,
even though the staff USTR risks losing to retirement are critical to
managing the interagency process. Instead, senior managers reexamine
the staffing balance as vacancies occur, and office managers may look
for good candidates as replacements from other agencies in the
interagency process or from the private sector. According to a senior
manager, USTR receives an occasional list of staff eligible to retire
in the next year or two from the EOP. However, USTR senior management
staffing discussions are limited to short-term contingency plans for
particular posts and are not part of any systematic agencywide
succession planning effort. Likewise, when office managers look outside
the agency to find potential USTR staff, their efforts also are not
part of any formal succession strategy. As we have previously
reported,[Footnote 7] without careful planning, an organization's
retirement eligibility rate can suggest that it will experience an
eventual loss in institutional knowledge, expertise, and leadership
continuity. Moreover, leading organizations go beyond a succession
approach that simply replaces individuals. Rather, they instead
identify and develop successors for leadership and other key positions.
USTR also faces periodic management transitions, which illustrates the
risk to its interagency leadership role of facing multiple senior
vacancies within a short period of time. The turnover in key positions
that can result from such management transitions is particularly
critical for a small agency such as USTR, at which each position is
vitally important and staff are not easily replaced. For instance, a
recent transition in early 2005 resulted in vacancies of five key posts
within a 2-month period, including the offices of China Affairs, Europe
and Mediterranean, and Labor.[Footnote 8] While USTR generally managed
to fill these positions in a timely manner,[Footnote 9] the risks
inherent in suddenly having large gaps to fill in the government trade
leadership underscore the importance of USTR having the human capital
leadership in place to prepare the agency for transitional vacancies
with minimal disruption to the interagency trade process.
USTR Operates as a Networked Organization Performing an Interagency
Leadership and Coordination Mission, but Without Formal Interagency
Resource Planning:
USTR's lack of commitment to strategic human capital principles in its
human capital leadership and planning also has implications for the
interagency trade process. USTR is a highly networked
organization[Footnote 10] that performs an interagency leadership and
coordination mission. It administers and chairs TPRG and TPSC, which
make up the subcabinet-level mechanism for developing and coordinating
U.S. government positions on international trade and trade-related
investment issues. Supporting TPSC are more than 90 subcommittees
responsible for specialized areas and several task forces that work on
particular issues. USTR works with other agencies to carry out its
mission, including obtaining approval for initiatives in the
interagency process. Through interviews with current and former USTR
officials, other trade agency officials, and trade association
representatives, we found that USTR, a small trade agency that receives
support from other larger agencies (e.g., Commerce, State, and
Agriculture) in doing its work, operates more like an elite core staff
that provides leadership and coordination in working in concert with
others in the interagency trade policy process. USTR's networked
operational mode is a defining characteristic.
In developing trade policy and conducting trade negotiations, the USTR
office directors (Assistant USTRs) whom we spoke with described working
with an extended interagency group comprised of other subject experts
at USTR and at a range of agencies. One Assistant USTR for a geographic
office described working with a "virtual team" that crossed agency
boundaries but was instantaneously connected by e-mail. Another
Assistant USTR stressed that she had also developed a close working
relationship with embassy staff in her primary countries of interest,
whom she described as a critical resource. An Assistant USTR for a
functional office added that USTR was not only interacting with the
major trade agencies in the interagency process but also on many issues
with the relevant regulatory agencies in order to gain their
perspective. One example would be USTR's Agricultural Affairs office
working not just with the Foreign Agricultural Service at the
Department of Agriculture but also with the Animal and Plant Health
Inspection Service for scientific assessment and analysis on
sanitary/phytosanitary issues such as mad cow disease.
In explaining how USTR works to marshal interagency support, the
Assistant USTR for the Americas gave the example of the recently
concluded Central American Free Trade Agreement (CAFTA), for which she
had the negotiating lead. She said her negotiating team included
members of her office staff working with Central American desk officers
at a range of agencies, such as State and Commerce. However, it also
included subject experts from other USTR offices, for issues such as
financial services, agriculture, intellectual property,
pharmaceuticals, market access, and labor; and they all worked with
their counterparts at a range of agencies, such as Treasury,
Agriculture, the Patent and Trademark Office, the Food and Drug
Administration, Commerce, and Labor, respectively. In addition to their
interagency interactions, the Office of the Americas also coordinated
and received input from USTR's private sector advisory committees as
well as trade associations.
USTR can operate as a small elite agency precisely because of the
extensive support it receives from the other trade agencies. This
support can be characterized as falling into three main categories of
assistance:
* Participation in the interagency process--As other trade agencies
participate in the interagency trade process, their staff contribute to
the work of the Trade Policy Staff Committee and its approximately 90
subcommittees. These staff assist in trade policy development in their
areas of expertise. When USTR forms trade negotiating teams, the USTR
negotiating lead generally draws the team largely from this core group
of experts and supplements with others, as necessary. Generally, even
though USTR has the lead, its staff are a small minority, averaging
about 24 percent of the total delegation staff.[Footnote 11]
* Technical assistance--USTR receives extensive technical assistance
from subject experts at the other agencies through formal and informal
requests for information. For instance, U.S. International Trade
Commission staff may provide data analyses on the impact of tariff
reductions or eliminations in prospective free trade agreements. USDA
Foreign Agricultural Service staff may provide commodity expertise on
issues related to Brazilian cotton or Japanese beef, or Health and
Human Services staff may provide information on pharmaceutical pricing.
* Detailees - USTR also benefits from temporary staff on detail from
other agencies that continue to pay their salaries; USTR provides
office space and travel expenses. This is an important avenue for
supplementing USTR's core staff with specific subject expertise on a
temporary basis. For example, as of July 5, 2005, USTR supplemented its
core staff of 206 permanent employees with 26 detailees in its
Washington, D.C., office and 9 in its Geneva, Switzerland, office.
This extensive assistance underlies USTR's ability to operate as a
networked organization. USTR officials stressed that it would not make
sense to try to duplicate this expertise within USTR and is unnecessary
because they can tap governmentwide expertise, when needed, without
bringing on staff they might not need permanently. USTR only adds core
staff for the most critical, long-term issues. For example, USTR added
intellectual property rights staff when it became clear it was a long-
term issue important to U.S. industry, according to a senior USTR
official. In addition, USTR also added staff with expertise on labor
issues in recent years.
However, USTR does not formally discuss or plan human capital resources
at the interagency level, even though it must depend on the
availability of these critical resources to achieve its mission,
according to USTR officials. Interagency discussions focus on the
substance of trade policy; USTR does not formally discuss or plan the
resources needed to implement policies. In two recent reports, we have
addressed the need for USTR to conduct interagency resource planning
related to specific trade issues,making specific recommendations for
improvements.[Footnote 12] Such interagency resource planning would
also facilitate human capital planning by the other agencies that work
with USTR. For example, USTR undertakes resource planning when forming
actual trade negotiating teams rather than at times when this would
contribute to agency resource planning. USTR officials told us that
their view is that when agencies reach formal TPRG agreement on a trade
policy or trade agreement, it carries a commitment by the agencies to
provide resources. In addition, they said that assisting USTR is a part
of the other trade agencies' missions to support the U.S. government
trade agenda. While officials we interviewed at other agencies
generally agreed with this perspective, some of them also said that
potential budget cuts could result in fewer resources being available
for USTR. For example, officials at the Foreign Agricultural Service
expressed concern that the expanding trade agenda has been a strain on
its resources, and it was facing serious budget cuts. As a result,
since USTR does not provide the other agencies with specific resource
requirements when the agencies are performing their planning, it is
shifting the risk to the agencies of having to later ensure the
availability of staff in support of the trade agenda, potentially
straining their ability to achieve other agency missions.
A fundamental principle of strategic human capital management is that
high-performing organizations manage risk based on strategic planning
supported by reliable and current information. One result of USTR's
lack of strategic planning for these critical interagency resources is
that it does not have a systematic method to account for potential
changes in other agencies' resources that might impact its ability to
achieve its mission. The absence of this method also affects the other
agencies' ability to account for changes that could affect their
ability to provide resources to support the trade agenda.
USTR Is Not Conducting Ongoing Strategic Human Capital Planning:
USTR's human capital planning efforts have been focused primarily on
short-term responses to trade negotiating needs; it has not conducted
ongoing long-term analyses of its workforce needs. USTR conducts human
capital planning primarily in its centrally administered annual budget
process that looks forward 2 fiscal years. For instance, in the summer
of 2005, USTR planned needed adjustments for the fiscal year 2006
budget and made projections for fiscal year 2007. The organization
plans the resources--including staff or funding for travel--it will
need for specific trade activities in that time frame, whether free
trade agreement negotiations, WTO meetings, or trade conferences.
USTR Conducts Short-Term Planning through Its Budget Process:
Each summer the USTR budget office sends a budget call to the
negotiation offices and requests a time table of expected expenditures,
such as negotiations rounds. Support offices review negotiation office
estimates and complete their own estimates, accordingly. The USTR
budget office uses the office-level information to compile a total
budget estimate and set the level of staffing and other budgetary
allowances across the agency. For instance, when the CAFTA negotiations
were launched, the Assistant USTR for the Americas--whose office had
the lead responsibility for the negotiations--estimated what additional
staff might be needed, how many rounds of negotiations might take place
over the next 2 fiscal years, and how much money would be needed for
travel, translations, conferences, or other needed expenses. She also
indicated the assistance her office would likely need from other
functional offices (such as Agricultural Affairs or Services,
Investment, and Intellectual Property) and from staff offices (such as
General Counsel or Economic Affairs). In turn, these functional and
staff offices could then also factor this information, as well as the
requests for assistance from the other geographic offices, into their
own office planning. In addition, the budget office also monitors the
need for resources throughout the year through its mid-year adjustment
reviews, generally in the form of monthly resource checks and quarterly
revised budget calls.
USTR Does Not Conduct Ongoing Strategic Workforce Planning:
While USTR uses its annual budget planning process to meet its short-
term human capital needs, it has not conducted ongoing parallel efforts
to analyze the organization's longer term workforce needs. Although
USTR's human capital planning is directly linked to the organization's
mission and objectives in the budget process, this is essentially a
short-term tactical process to meet immediate needs. USTR does not
conduct ongoing strategic planning or routinely analyze the
organization's longer term workforce needs, for example, such as
routinely reviewing eligibility for retirement of senior staff and
conducting formal succession planning, as discussed above, so that it
ensures the organization's continued capacity to achieve its mission.
USTR also does not conduct ongoing analysis of workforce composition
and skills. (For information related to USTR's staff profile, see app.
II.) While USTR conducted a workforce analysis required by OMB of all
executive branch agencies in mid-2001, which incorporated many of these
elements, it has not followed up on this analysis in a systematic,
ongoing manner, or used it as the basis for strategic workforce
planning.
In addition, USTR management does not maintain the kind of up-to-date
information on available staff and future human capital needs that
would be necessary in conducting effective strategic workforce
planning. USTR's personnel data files are maintained in EOP's Office of
Administration; USTR itself maintains little human capital data. USTR's
Office of Administration did not have the internal human capital
information available that would be required for workforce analyses.
For instance, it did not have a personnel roster associated with
information such as employees' retirement eligibility or their specific
knowledge and skills, such as language ability.
USTR officials said that USTR is such a small organization that
managers know the professional and skill backgrounds of the staff,
therefore such a data system would not be needed. This means that,
rather than establishing information systems, institutional knowledge
at USTR depends on individuals. However, as we have previously
reported, it is crucial that human capital leadership and planning be
based on a data-driven decision-making process. The absence of such
data can seriously undermine efforts to identify and respond to current
and emerging human capital challenges, particularly in a small
organization where turnover or unfilled positions could quickly deplete
the institutional memory.
USTR Makes Limited Use of Human Capital Tools to Mitigate Risk of
Workforce Challenges:
USTR does not make full use of available human capital tools, despite
facing recruitment and retention challenges; and it does not link most
employees' performance standards with organizational needs. While USTR
can generally recruit staff with requisite skills, competitive
pressures and postemployment restrictions on foreign representation
could place limitations on USTR's ability to hire from the private
sector. More use of available human capital flexibilities could help to
better ensure consistent success in recruitment and retention. In
addition, USTR risks inconsistent attainment of its strategic goals if
it does not link individual performance expectations to its needs.
USTR Uses Some Human Capital Tools but Could Benefit from Adding
Others:
USTR faces risks from recruitment and retention challenges, which in
turn could hamper its interagency leadership role. USTR addresses these
risks in part through limited use of human capital flexibilities, and
USTR office managers said they do not have difficulties recruiting
needed staff. However, senior managers said that the recruitment
environment for staff with critical skills needed for USTR's
interagency leadership role, such as trade attorneys, is becoming more
competitive. Not only can people with these skills find higher-paying
positions outside the federal government, they also face restrictions
on representing foreign clients after service with USTR, according to
senior managers. USTR often seeks interagency trade experts for
recruitment, according to USTR and other trade agency
management.[Footnote 13] Other trade agency officials have confirmed
that USTR targets their high-performing staff and that several current
USTR employees were hired from their agencies. However, USTR has
benefited from the hiring flexibility to hire private sector attorneys
at a "higher-than-minimum step," which, according to a senior manager
in USTR's Office of General Counsel, helps attract experienced private
sector attorneys who may be reluctant to start federal service at the
minimum pay step. USTR also uses its authority to hire and pay
administratively determined positions without regard to the civil
service laws, but this authority restricts the agency to 20 such
positions.[Footnote 14]
USTR does not take advantage of other available human capital
flexibilities, most of which are expanded and more targeted versions of
those it now uses. As we have previously reported, hiring flexibilities
could help agencies in expediting and controlling their hiring
processes.[Footnote 15] Moreover, insufficient and ineffective use of
flexibilities can significantly hinder the ability of federal agencies
to recruit, hire, retain, and manage their human capital.[Footnote 16]
Examples of expanded human capital flexibilities for which USTR has
authority, but does not use, include the following:
* Expanded direct hire authority, which would streamline hiring for
critical needs, such as trade experts;
* Recruitment and retention authorities, both of which would allow USTR
to offer bonuses of 25 to 50 percent for new hires and highly qualified
employees; and:
* Enhanced annual leave authority, which would allow nonfederal staff,
such as private sector attorneys, to enter federal service with higher-
than-minimum annual leave rates.
See appendix III for a more detailed description of federal human
capital flexibilities available to USTR.
Closely aligned with USTR's recruiting efforts is how well it can
retain staff, but USTR's efforts to minimize its retention risks have
also been limited. Retention concerns are especially relevant given
that, according to senior officials, USTR employees have highly
marketable skills. In addition, USTR staff have an important role in
leading and coordinating the interagency trade policy process. To
illustrate the potential for retention risks, from March 2000 through
March 2005, 158 USTR employees separated from the agency, according to
our calculations of EOP data.[Footnote 17] USTR has also experienced
turnover among its recently hired staff during this time period. For
instance, 25 professional staff (defined in this report as GS-13
through SES staff) hired in the last 5 years have already left USTR.
While USTR is in the process of taking steps to increase compensation
for senior executives to help keep pay competitive, which would allow
for bonuses of 5 to 20 percent, officials could not provide a specific
time frame for implementation. In addition, a senior USTR official told
us that the loss of senior GS-level trade experts can create a loss of
institutional knowledge. According to a Commerce official, familiarity
with the details of negotiated agreements is critical for subsequent
enforcement of trade agreements. Finally, USTR has had challenges
retaining security administrators (e.g., three of five hired in the
past 5 years have left).[Footnote 18]
USTR Does Not Link All Staff Performance Appraisals to Agency Goals:
USTR does not link the performance of most of its staff to agencywide
goals, risking the loss of consistency in its implementation of agency
goals, even though USTR's small size and leadership role mean that all
employees have a critical role in maintaining the agency's trade policy
coordination mission. Only SES staff, making up just over 10 percent of
USTR employees, are subject to agencywide performance competencies. In
addition, attorneys in the Office of General Counsel and its Monitoring
and Enforcement Unit have performance competencies that are linked to
agency goals, accounting for another 12 percent of staff. USTR managers
have stressed the importance of certain individual skills needed to
advance USTR's mission, such as the ability to effectively interact
within the interagency trade policy framework. However, USTR employees
not subject to agencywide standards are instead held accountable for a
range of expectations that vary among USTR offices according to
specific assignments. As we have previously reported,[Footnote 19]
linking performance expectations to organizational goals is important
because strategic goals should guide job responsibilities. In this way,
an agency can ensure that staff performance supports agency goals.
Moreover, high-performing organizations use their performance
management systems to help provide continuity during transition by
maintaining a consistent focus on a broad set of mission priorities. In
USTR's case, without a performance management system that ties
individual performance to USTR's goals, it does not have a mechanism to
translate its strategic goals into individual performance. Without
agencywide goals, USTR is at risk of having its mission guided by
office-level goals, which would not be conducive to meeting agency
goals, given that USTR has over 15 separate mission-related offices. In
addition, USTR could help mitigate the potentially disruptive effects
of periodic management transitions, such as it experienced this year,
with a concrete set of performance expectations that guide staff
performance throughout such periods and ensure consistency in mission
priorities.
Conclusions:
USTR needs to place more emphasis on strategic human capital
principles, otherwise it leaves itself open to human capital risks that
could otherwise be mitigated. While USTR often cites its small size as
a reason it can afford to sidestep requirements that are often applied
to larger bureaucracies, in the case of human capital management, it is
precisely because every individual is important that effective human
capital leadership is critical. Yet our review has found that USTR is
focused on achieving trade results but has overlooked the substantial
additional value it could gain from strategic human capital management.
For example, without a senior manager acting as its chief human capital
officer, USTR cannot ensure that critical human capital leadership
tasks, such as succession planning, are accomplished in a way that
maximizes USTR's ability to achieve its mission with minimal risk of
interagency disruption due to management transitions. Given the number
of SES staff who will be eligible to retire within the next 5 years, it
is important that USTR address these issues strategically rather than
reactively. Further, although USTR seems to be making effective use of
its networked structure to marshal the relevant expertise across the
government in support of the trade agenda, it has not taken additional
steps to mitigate the risk inherent in its dependency on interagency
resources. Without a method to plan interagency resources devoted to
the trade agenda, USTR has no way to account for potential changes in
other agencies' resources. Given the prospect of a tightening federal
budget environment, lack of a formal interagency resource planning
method means USTR is in no position to evaluate how budget reductions
could impact USTR's ability to achieve its mission. In addition, USTR
has not conducted ongoing strategic human capital planning for its own
longer-term organizational workforce needs and does not maintain the
information systems required for such analysis. While USTR primarily
uses its 2-year budget planning process to focus its human capital
planning efforts, this approach limits it to planning how it can best
achieve its trade mission with the resources available to it in the
short term. USTR has not taken steps to strategically identify and
respond to current and emerging human capital risks in its workforce.
As a result, by not conducting ongoing strategic workforce planning,
USTR is opening itself up to human capital risks that it could be
taking steps to mitigate.
USTR could also better meet some of its key workforce challenges by
making better use of available human capital tools. In an increasingly
competitive recruitment environment, USTR could benefit from using the
additional hiring and pay flexibilities available to it. In addition,
USTR has not ensured that its performance standards support its
organizational goals by extending agencywide performance criteria to
its entire staff. As a result, USTR is missing an opportunity to
translate its strategic goals into individual performance.
Recommendation for Executive Action:
To improve USTR's human capital management, we recommend that the U.S.
Trade Representative develop a strategic human capital management
system. The system should include the following elements, tailored to
its small size and unique role:
* filling its senior human capital management positions with human
capital professionals who will significantly contribute to strategic
planning and decision making,
* developing an interagency resource planning method with appropriate
participation from key agency stakeholders,
* undertaking strategic workforce planning in order to optimize its
workforce's continued capacity to achieve its mission,
* improving its ability to utilize data for measuring the effectiveness
of human capital approaches in support of its mission and goals,
* determining if additional use of available pay and hiring
flexibilities would better position USTR to hire and retain experts,
and:
* developing agencywide performance criteria for staff to align
management expectations with critical organizational goals.
Agency Comments and Our Evaluation:
We provided a draft of this report to USTR; the Departments of
Agriculture, Commerce, and State; and the U.S. International Trade
Commission. USTR provided written comments, which are reproduced in
appendix IV. The other agencies did not provide comments.
USTR stated that the insights provided by our study were a valuable
contribution to its ongoing internal efforts to effectively manage its
human capital. USTR said it shared our general observations and
recommendations regarding the critical role of human capital planning.
USTR also noted that it (1) has recently hired a new Assistant U.S.
Trade Representative for Administration, (2) will examine the
additional human capital flexibilities available to it, and (3) is
committed to linking performance evaluations to its strategic planning.
USTR stated that it believed we had not adequately factored into our
analysis how it had tailored its human capital planning to its size and
networked organizational structure. While we have modified our report
language in several places to clarify our discussion of USTR's human
capital planning, we do not agree, however, that USTR's human capital
planning activities, which primarily focus on meeting short-term
negotiating needs, have to this point demonstrated a commitment to long-
term strategic human capital planning.
USTR also stated that our report suggests that it should extend its
interagency coordinating role to formally overseeing the human capital
planning activities of these agencies. Our recommendation that USTR
develop an interagency resource planning method with appropriate
participation from key agency stakeholders is not intended to suggest
that USTR should formally oversee the human capital planning activities
of the agencies involved, but rather envisions an extension of USTR's
interagency coordination role to better anticipate and plan resource
needs devoted to the U.S. trade agenda. This recommendation is
consistent with several of our recent reports.
USTR also provided technical comments, which we have incorporated where
appropriate.
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from the date of its issuance. At that time, we will send copies of
this report to appropriate congressional committees. We will also send
copies to the U.S. Trade Representative, the Secretaries of
Agriculture, Commerce, and State, and the Chairman of the U.S.
International Trade Commission. We will also make copies available to
others upon request. In addition, this report will be available at no
charge on the GAO Web site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-4347 or [Hyperlink, yagerl@gao.gov]. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix V.
Sincerely yours,
Signed by:
Loren Yager:
Director, International Affairs and Trade:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
To determine whether the Office of the U.S. Trade Representative (USTR)
is pursuing an effective human capital strategy that adequately
supports the ability of its workforce to accomplish its mission, we
reviewed its human capital planning and implementation efforts and
compared them with U.S. government best practices. We used our Model of
Strategic Human Capital Management as the framework in assessing USTR's
human capital efforts. Specifically, we (1) reviewed USTR's commitment
to strategic human capital leadership and planning and (2) analyzed to
what extent USTR has used human capital tools to address its workforce
challenges.
To determine USTR's commitment to strategic human capital leadership
and planning, we reviewed USTR's available human capital planning
documents, including annual performance planning required by the
Government Performance Results Act for the past 5 years, the most
recent annual USTR budget call, and agency budget justifications for
the past 5 years. We also reviewed Office of Personnel Management (OPM)
and Office of Management and Budget (OMB) human capital guidance and
our previous human capital reports to determine how government best
practices could be best applied to USTR. We augmented our documentation
review with interviews with USTR human resources staff, office
managers, and senior management at the Washington, D.C., and Geneva,
Switzerland, offices. We spoke with the Geneva senior manager by
telephone. We further discussed interagency planning and commitment of
resources with officials of four trade agencies: the Departments of
State, Commerce, and Agriculture, as well as the U.S. International
Trade Commission (ITC).
To determine to what extent USTR has used human capital tools to
address its workforce challenges, we obtained USTR human capital data
from the Executive Office of the President (EOP) for key human capital
trends, such as retirement eligibility, time in service, and dates of
separation. We also reviewed these data for certain routine human
capital categories to better understand the agency's overall staff
profile, such as office level and aggregate staffing levels, grade
levels, and occupation types. Finally, we used these data to determine
the extent to which USTR fills its job announcements, as well as the
number of staff who received training. We tested USTR data for
reliability by comparing them with OPM data from the central personnel
data file and with USTR organizational documents. We determined that
these data were sufficiently reliable for the purposes of this report.
We used USTR's pending senior executive service (SES) performance
management guidance as part of our review of the agency's efforts to
address performance management. Along with the data review, we
interviewed office managers and senior management officials at USTR to
determine the workforce challenges they faced and how they were
addressing those challenges. We also met with officials from the
Departments of State, Commerce, Agriculture, and ITC, as well as with
trade association representatives and former USTR officials, to get
their perspectives on USTR's workforce challenges. Finally, to
determine which human capital flexibilities USTR was eligible for, and
which could benefit USTR, we reviewed existing human capital statutes.
We compared these statutory authorities with those that USTR currently
uses, accounting for workforce challenges identified through USTR human
capital data obtained from EOP and interviews. We conducted our work
from January 2005 to September 2005 in accordance with generally
accepted government auditing standards.
[End of section]
Appendix II: USTR Staff Profile:
EOP provided us with recent USTR human capital data. We analyzed data
in the following categories: (1) active staff, by office; (2)
agencywide, full-time equivalent staff (FTE) over recent years; (3)
grades; (4) retirement eligibility; (5) length of service; (6)
occupations;[Footnote 20] (7) active detailees; (8) position
announcement fill rates; and (9) training.[Footnote 21]
These data spanned 5 years, from January 2000 to April 2005, with the
exception of detailees, the reliability of which was limited to active
detailees; position announcements, available back to March 2003; and
training data, which USTR could only provide back to May 2001, but up
to June 2005.
Active USTR Staff by Office:
As of April 2005,[Footnote 22] USTR had 212 active staff. USTR offices
average about 8 staff, but some, such as Administration, have over 20
while others, such South Asia, Labor, and Trade Capacity, have 2 staff
each. SES or political appointees head most offices. Exceptions include
one office that is headed by a staff member under special hiring
authority and another office headed by a staff member at the GS-15
level. The South Asia and the Europe and Mediterranean offices are both
currently headed by temporary detailees.
Table 1: Active USTR Staff by Office:
Office: Office of the Ambassador;
Active staff: 4.
Office: Deputies[A];
Active staff: 7.
Office: Geneva;
Active staff: 13.
Office: Chief Agriculture Negotiator;
Active staff: 2.
Office: Administration;
Active staff: 21.
Office: Agriculture;
Active staff: 8.
Office: Africa;
Active staff: 6.
Office: China Affairs;
Active staff: 9.
Office: Congressional Affairs;
Active staff: 3.
Office: Economic Affairs;
Active staff: 4.
Office: Environment and Natural Resources;
Active staff: 7.
Office: Europe and Mediterranean;
Active staff: 11.
Office: General Counsel;
Active staff: 13.
Office: Monitoring and Enforcement[B];
Active staff: 17.
Office: Industry, Market Access, and Telecommunications;
Active staff: 12.
Office: Intergovernmental Affairs and Public Liaison;
Active staff: 4.
Office: Japan, Korea, and APEC[C];
Active staff: 6.
Office: Labor;
Active staff: 2.
Office: Policy Coordination and Information;
Active staff: 5.
Office: Public Media Affairs;
Active staff: 3.
Office: SE Asia and the Pacific;
Active staff: 5.
Office: Services, Investment, and Intellectual Property[D];
Active staff: 16.
Office: Special Textile Negotiator;
Active staff: 4.
Office: South Asia Affairs;
Active staff: 2.
Office: The Americas;
Active staff: 13.
Office: Trade Capacity Building;
Active staff: 2.
Office: WTO and Multilateral Affairs;
Active staff: 13.
Office: Total;
Active staff: 212.
Source: GAO analysis of EOP data.
Note: Active staff as of April 2005, not including temporary detailees
from other agencies.
[A] Deputies includes both Washington, D.C.-based deputy offices.
[B] The Monitoring and Enforcement Unit is part of the Office of
General Counsel.
[C] APEC is Asia-Pacific Economic Cooperation.
[D] Since we received these data, the Services, Investment, and
Intellectual Property office has been reorganized into a Services
office and an Intellectual Property office, both headed by GS-15 level
staff acting as office heads.
[End of table]
USTR Agencywide FTEs in Recent Years:
USTR's use of FTEs has been guided by the number Congress has
authorized.[Footnote 23] USTR's FTE authorization has increased over
the past 5 years, from 185 in fiscal year 2000 to 225 in fiscal years
2004 and 2005. In those years, USTR has actually used 171 FTEs in
fiscal year 2000 and 212 FTEs by fiscal year 2005, as shown in figure
3. While there was a slight decrease in FTEs used between fiscal years
2001 and 2002, the number of FTEs USTR has used has risen steadily,
along with its authorization. However, as of the middle of fiscal year
2005, the number of FTEs used has not changed significantly from fiscal
year 2004.
Figure 3: USTR FTEs Authorized and Actual, Fiscal Year 2000 through
First Half of Fiscal Year 2005:
[See PDF for image]
Note: Actual FTEs are 4th quarter data except for fiscal year 2005,
which are 2nd quarter data.
[End of figure]
Grades:
USTR's interagency leadership role is evident in its high number of
middle and senior grade levels. About half of USTR career staff are at
the GS-15 level,[Footnote 24] about one-sixth are GS-13 and GS-14
levels, and slightly over one-tenth are SES level. Another fifth of
USTR personnel are GS-12 and below, which are primarily support staff.
Figure 4: Number of USTR Staff by Grade Level:
[See PDF for image]
Note: Does not include 13 special employees, including presidential
appointees or student employees and those classified under special
hiring authority.
[End of figure]
Retirement Eligibility:
About 18 percent of all USTR staff are eligible for retirement within
the next 5 years. Within individual grades, political appointees and
SES have the highest percent of staff who are eligible for retirement.
Among other grades, the GS-15 level, made up mostly of trade analysts
and attorneys, make up the bulk of USTR staff and have one of the
lowest percent of staff eligible for retirement within the next 5 years
or less. (See fig. 5.)
Figure 5: Percent of USTR Staff Eligible for Retirement in 5 Years or
Less:
[See PDF for image]
Note: Does not show political appointees or those classified under
special hiring authority.
[End of figure]
Length of Service:
The median length of agency service at USTR for active staff is just
under 4 years. About 30 percent of active staff have been at the agency
for less than 2 years. However, given USTR's interagency ties, some
USTR staff have longer experience within the interagency structure
through service with other trade agencies.
Occupations:
According to information from OPM's central personnel data file, most
USTR FTEs are classified as miscellaneous administration and program
occupation. This particular occupation reflects the overall FTE gains
at USTR in the past 5 years. However, certain occupations, such as
economists, attorneys, and support staff, illustrate different trends.
For instance, in the past 10 years, the number of attorneys has
increased substantially, from 18 to 45, or 150 percent, as USTR has
added attorneys to address an increased litigation caseload (see fig.
6). However, during that same time period, the number of economists
decreased from 46 to 17, a decrease of about 63 percent. From fiscal
year 2000 through 2004, support occupations such as clerks and
secretaries also decreased. USTR officials told us that as agency
functions have become more automated, the need for previous numbers of
support staff decreased.
Figure 6: USTR Staff Occupation Comparison, Attorneys and Economists:
[See PDF for image]
[End of figure]
Active Detailees:
USTR had 30 active temporary detailees from other trade agencies, as of
April 2005.[Footnote 25] USTR has a formal detailee program with the
Department of State, and less formal agreements with other trade
agencies, such as the U.S. International Trade Commission, Agriculture,
and Commerce. However, USTR also currently uses temporary detailees
from a variety of other agencies and entities, including the
Congressional Research Service, the Central Intelligence Agency, the
Small Business Administration, and the White House.
Out of the 30 temporary detailees assigned to USTR, most began service
in 2004, as shown in figure 7. However, several current detailees were
assigned to USTR before 2003, and 1 active detailee, from USDA, has
been at the USTR Washington, D.C., office longer than 5 years,
according to data from EOP.
Figure 7: USTR Active Detailees, by Year Detail Started:
[See PDF for image]
Notes: As of April 2005; includes 7 detailees assigned to Geneva, 4 of
whom started in 2002 or before.
[End of figure]
USTR Job Announcements:
Most job announcements that USTR has advertised in recent years have
been filled, according to EOP data. Of 79 USTR announcements EOP posted
from October 2002 through March 2005, 45 announcements, or 57 percent,
were filled. Of the job announcements USTR did not fill, most were
trade analysts or support staff and Information Technology positions,
but three unfilled positions were attorney slots, and four were budget
or human resources positions. USTR did not fill one senior human
capital position, Assistant USTR for Administration, in Spring 2004,
and that position remains unfilled as of October 1, 2005.
A USTR human resources official told us that the reason the agency does
not fill certain announcements may vary. For instance, the agency may
decide to pull announcements before they are filled, announcements may
not receive qualified applications, or job offers may not be accepted.
If a job announcement was not filled, USTR might post it again under a
separate announcement. As a result, according to the USTR human
resources official, USTR's data did not allow us to identify that
multiple announcements had been made for a specific job and to link
them to the position being filled on a specific date.
Training:
USTR employees do not receive very much formal training. In a 4-year
period from May 2001 to June 2005, 51 USTR staff took part in 76
training courses, according to USTR human resource data. A little over
80 percent of the courses USTR staff received were mission related; the
rest were for personal enrichment, such as retirement seminars. Most
staff who received training were GS-12 and under, and GS-15 levels.
USTR staff from the offices of Administration, Americas, Agriculture
Affairs, and Environment and Natural Resources received the most
mission-related training over the 4-year period, while staff from other
offices, such as Services, Investment, and Intellectual Property, South
East Asia and the Pacific, and Europe and Mediterranean, received no
mission-related training.
[End of section]
Appendix III: Human Capital Flexibilities Available to USTR:
USTR is eligible to use a variety of human capital flexibilities to
address its risk of future workforce challenges. Tables 2 and 3 show
specific authorities that USTR is eligible to use that could address
its recruitment and retention challenges.
Table 2: Flexibilities Available to USTR that Could Address Recruitment
Risks:
Authority: Direct Hire Authority;
Statutory basis: Homeland Security Act of 2002 [P.L. 107-296, § 1312].
Found at 5 U.S.C. § 3304(a)(3);
OPM regulations: 5 C.F.R. §§ 337.201-337.206;
Description: Authority to directly hire employees (without using the
competitive service process) for positions for which OPM has determined
there is a critical hiring need or a severe shortage of candidates.
Authority: Recruitment and Relocation Bonus Authority;
Statutory basis: Federal Workforce Flexibility Act of 2004 [P.L. 108-
411, § 101]. Found at 5 U.S.C. § 5753;
OPM regulations: 70 F.R. 25732 (Interim rule);
Description: Expanded authority to pay bonuses to a new hire or a
current employee moving to a new position or geographic location of up
to 25 percent of base pay multiplied by the years the employee has
agreed to serve in a written service agreement. OPM may authorize up to
50 percent of base pay if there is a critical agency need.
Authority: Enhanced Annual Leave Authority;
Statutory basis: Federal Workforce Flexibility Act of 2004 [P.L. 108-
411, § 202]. Found at 5 U.S.C. § 6303(e);
OPM regulations: 70 F.R. 22245 (Interim rule);
Description: Authority to credit relevant nonfederal service for
purposes of determining annual leave accrual rates if an agency
determines it is necessary for its mission or a performance goal.
Source: GAO analysis of human capital statute.
[End of table]
Table 3: Flexibilities Available to USTR that Could Address Retention
Risks:
Authority: Retention Bonus Authority;
Statutory basis: Federal Workforce Flexibility Act of 2004 [P.L. 108-
411, § 101]. Found at 5 U.S.C. § 5754;
OPM regulations: 70 F.R. 25732 (Interim rule);
Description: Expanded authority to pay bonuses to employees with
unusually high or unique qualifications or to a group of employees if
there is a high risk that a significant portion would likely leave. The
bonus may be up to 25 percent of basic pay (50 percent for a critical
agency need with OPM approval) or 10 percent for a group of employees
and is subject to a written service agreement.
Authority: Senior Executive Service Compensation Increase[A];
Statutory basis: Homeland Security Act of 2002 [P.L. 107-296, § 1322];
FY04 Defense Authorization Act [P.L. 108-136, § 1125]. Found at 5
U.S.C. §§ 5307(d), 5382(b);
OPM regulations: 5 C.F.R. §§ 430.401- 430.405, 530.203, 534.403;
Description: Increased maximum rate of base pay for the SES to
Executive Schedule Level II and increased cap on total annual
compensation (base salary plus bonuses, awards, etc.) to the Vice
President's salary for agencies certified by OPM and OMB as having a
performance appraisal system which makes meaningful distinctions based
on relative performance.
Source: GAO analysis of human capital statute.
[A] USTR officials told us they are planning to eventually implement
this flexibility, but they do not have a specific time frame.
[End of table]
[End of section]
Appendix IV: Comments from the Office of the U.S. Trade Representative:
EXECUTIVE OFFICE OF THE PRESIDENT:
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE:
WASHINGTON, D.C. 20508:
November 10, 2005:
Mr. Loren Yager:
Director, International Affairs and Trade Issues:
U.S. Government and Accountability Office:
Washington, D.C. 20548:
Dear Mr. Yager:
Thank you for the opportunity to submit comments from the Office of the
United States Trade Representative (USTR) on the draft Government
Accountability Office (GAO) report regarding USTR's human capital
planning and practices. According to the draft, the GAO conducted the
study to examine whether USTR is pursuing an effective human capital
strategy that supports the ability of its workforce to accomplish its
mission.
As GAO recognizes in its draft, USTR has a unique role in developing
trade policy, resolving disagreements, and coordinating trade-related
issues for presidential consideration through an interagency trade
policy process. As a result, GAO, over the course of its nine-month
study, went to great lengths to examine and understand all of the
dimensions of that unique role, conducting over 30 hours of interviews
with senior USTR managers and examining in exhaustive detail the
extensive information supplied by USTR in response to requests from GAO
staff. USTR dedicated all of the resources necessary to respond to this
extensive investigation so as to ensure that GAO could properly
evaluate the implications of its efforts with as complete an
understanding as possible about USTR and its staff.
USTR agrees with GAO that its human capital is the agency's single
greatest asset. As such, we invest more resources in our people than
any other area. Ambassador Portman fully appreciates the direct
correlation between the performance of USTR's staff and the ability of
USTR to accomplish its mission. That imperative dictates that the
agency carefully consider how to most effectively manage its human
capital to advance its mission. We view the insights provided by this
GAO study as a valuable contribution to that ongoing internal effort.
However, we are disappointed that the GAO report fails to adequately
recognize USTR's integration of human capital planning and development
into the accomplishment of its mission.
The Proper Model: GAO uses the framework it created in its Model of
Strategic Human Capital Management as the template against which it
evaluated all components of existing USTR human capital policies,
efforts, and successes. The report notes that the Office of Personnel
Management (OPM) and the Office of Management and Budget (OMB) have
also developed federal human capital standards. What we believe GAO
failed to adequately factor into its analysis is that all of these
models recognize one key principle: each human capital plan must be
tailored to the mission, characteristics, and workforce of each agency.
USTR does its human capital planning in an integrated fashion which is
tailored to its size and tightly networked organizational structure.
USTR engages its detailee program and the interagency process to
develop and identify potential future employees. USTR staff work
closely with negotiating teams from other agencies and through their
work together develop and build relationships with colleagues who may
join USTR in the future. As we explained in several interviews, we
develop talent within USTR on an employee by employee basis by
assigning employees greater responsibilities as they demonstrate
greater abilities. Finally, we integrate human capital planning into
our strategic planning two year budget cycle as well as through the 5-
year workforce analysis reports we provide OMB. We believe our
tremendous results in accomplishing our mission speak to the success of
our planning.
Interagency Human Capital Planning: The GAO report suggests that USTR
should extend its coordinating role through the interagency trade
policy process to formally overseeing the human capital planning
activities of the agencies with whom we coordinate. The interagency
process is very robust in the trade area. That process includes
establishing long-range strategic priorities through sharing strategic
plans. As explained in the interviews, USTR is in continuous discussion
with the other agencies. These discussions cover support, human
capital, and resources needs for each agreement and all aspects of the
U.S. Trade Agenda. In addition, our interagency colleagues each have a
trade component within their own respective agency missions. As such,
we work together to advance the U.S. Trade Agenda and accomplish our
missions together.
Commitment Moving Forward: We share GAO's general observations and
recommendations regarding the critical importance of human capital
planning. USTR has recently hired a new Assistant United States Trade
Representative for Administration - retired Rear Admiral Fred Ames who
has extensive experience with human capital development. He is a
critical addition to our staff and will contribute greatly to our
ongoing human capital planning efforts.
USTR's human capital is its most valuable asset, and we are constantly
looking for new and more effective ways to reward, retain, recruit, and
recognize the efforts of our staff. As the GAO report acknowledges,
USTR has adopted a number of workforce flexibilities. Based on our
conversations with the GAO, and our own internal discussions, we are
committed to examine each of the flexibilities available to USTR and to
take advantage of those that might strengthen our human capital and
advance our mission. We are also committed to linking performance
evaluations to our strategic planning to better develop and improve our
workforce.
USTR's reputation and success arise from the quality of our staff, and
Ambassador Portman is committed to examining and adapting our human
capital planning to best serve our staff and advance our mission.
Thank you for the opportunity to give our perspectives on your report.
Sincerely,
Signed by:
Rob Lehman:
Chief of Staff:
The following are GAO's comments on USTR's letter dated November 10,
2005.
GAO Comments:
1. We agree that human capital planning must be tailored to the mission
and characteristics of each agency and, in fact, had stressed this
critical idea at several points in the report, including the
recommendations. We acknowledge the steps USTR has taken in its human
capital planning and have added clarifications where appropriate to
further reflect USTR's human capital planning activities and actions.
However, we do not believe that these steps demonstrate a commitment to
long-term strategic human capital planning. USTR's human capital
planning focuses primarily on short-term responses to trade negotiating
needs identified through the budget process, such as shifting staff and
resources to meet the increased needs associated with particular trade
negotiations. This kind of planning, while valuable, is not the same as
strategic, ongoing analysis and planning for long-term agencywide
workforce needs, such as retirement eligibility of senior staff or
changing workforce composition and skills needs. Further, while at the
conclusion of our study USTR provided us with a 5-year workforce
analysis it had been required to conduct in 2001 by OMB, it was not
able to show us that it had used this analysis in an ongoing manner as
the basis of strategic workforce planning.
2. Our recommendation to USTR to conduct formal interagency resource
planning is consistent with several of our recent reports that came to
the same basic conclusion. We do not state that USTR should formally
oversee the human capital planning activities of the agencies involved.
Rather, we said that USTR should mitigate the risks inherent in its
dependency on interagency resources by developing an interagency
resource planning method with appropriate participation from key agency
stakeholders. This would envision an extension of USTR's coordination
role, not increased oversight over agency human capital planning
activities.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Loren Yager, (202) 512-4347:
Staff Acknowledgments:
In addition, Anthony Moran, Assistant Director; as well as Leyla Kazaz;
Donald Morrison; and Paul Revesz made key contributions to this report.
Other contributors include Martin DeAlteriis, William Doherty, Etana
Finkler, Ernie Jackson, Jeffrey McDermott, Jamie McDonald, Lisa Shames,
Sarah Veale, Michael Volpe, and Gregory Wilmoth.
(320304):
FOOTNOTES
[1] GAO, A Model of Strategic Human Capital Management, GAO-02-373SP
(Washington, D.C.: Mar. 15, 2002).
[2] GAO, A Model of Strategic Human Capital Management, GAO-02-373SP
(Washington, D.C.: Mar. 15, 2002). See also, GAO, Human Capital: Key
Principles for Effective Strategic Workforce Planning, GAO-04-39
(Washington, D.C.: Dec. 11, 2003).
[3] OPM's Human Capital Assessment and Accountability Framework and
Human Capital Standards for Success can be found at its Web site at
www.opm.gov. OPM's Web site also provides a link to the President's
Management Agenda and the Strategic Management of Human Capital
Initiative, or this document can be accessed through OMB's Web site at
www.whitehouse.gov/omb.
[4] GAO, Human Capital Succession Planning and Management Is Critical
Driver of Organizational Transformation, GAO-04-127T (Washington, D.C.:
Oct. 1, 2003); GAO, Human Capital: Selected Agencies Have Opportunities
to Enhance Existing Succession Planning and Management Efforts, GAO-05-
585 (Washington, D.C.: June 30, 2005).
[5] GAO-04-127T.
[6] About half of USTR career staff are at the GS-15 level. For more
information on USTR grade distribution, see appendix II.
[7] GAO, Results-Oriented Cultures: Creating a Clear Linkage between
Individual Performance and Organizational Success, GAO-03-488
(Washington, D.C.: Mar. 14, 2003.); GAO-04-127T.
[8] In addition, in a 6-month period, USTR had vacancies for General
Counsel, as well as chief of staff and three presidential appointments
requiring Senate confirmation.
[9] USTR filled the Europe and Mediterranean office vacancy with a
temporary detailee from the Department of State.
[10] There are various types of network structures ranging from
coordination and collaboration to high-performing partnerships, which
can involve federal agencies, state and local governments, and
nongovernmental organizations to achieve a particular outcome or
result. Recently, there has been an increased focus on the role of
networks in public sector governance, in studies by Stephen Goldsmith
and William Eggers (Goldsmith, Stephen and Eggers, William D.,
Governing by Network: The New Shape of the Public Sector, Brookings
Institution Press (Washington, D.C.: 2004)); the IBM Center for the
Business of Government (Kamensky, John M., and Burlin, Thomas J.,
Collaboration: Using Networks and Partnerships, Rowman & Littlefield
Publishers, Inc. (Lanham, MD: 2004)); and the National Academy of
Public Administration (National Academy of Public Administration,
Powering the Future: High-Performance Partnership (Washington, D.C.:
2003)). In October 2005, we reported on practices that can help enhance
and sustain one type of network, collaboration among federal agencies,
in GAO, Results-Oriented Government: Practices that Can Help Enhance
and Sustain Collaboration among Federal Agencies, GAO-06-15
(Washington, D.C.: Oct. 21, 2005).
[11] GAO, International Trade: Intensifying Free Trade Negotiating
Agenda Calls for Better Allocation of Staff and Resources, GAO-04-233
(Washington, D.C.: Jan. 12, 2004). This percentage was based on
estimated agency staff on U.S. negotiating teams for completed rounds
of free trade agreement (FTA) negotiations, as of October 2003. The six
FTA negotiations examined were Australia, Central American Free Trade
Agreement, Chile, Morocco, Southern African Customs Union, and
Singapore.
[12] These issues related to selection of FTA partners and monitoring
and enforcement implementation. See GAO, International Trade:
Intensifying Free Trade Negotiating Agenda Calls for Better Allocation
of Staff and Resources, GAO-04-233 (Washington, D.C.: Jan. 12, 2004);
and GAO, International Trade: Further Improvements Needed to Handle
Growing Workload for Monitoring and Enforcing Trade Agreements, GAO-05-
537 (Washington, D.C.: June 30, 2005).
[13] USTR officials said they actively recruit staff from their
interagency partners because of the knowledge of the interagency
process, as well as demonstrated performance, that such hires bring.
[14] See 19 U.S.C. § 2171(e)(1).
[15] GAO, Human Capital: Increasing Agencies' Use of New Hiring
Flexibilities, GAO-04-959T (Washington, D.C.: July 13, 2004).
[16] GAO, Human Capital: Effective Use of Flexibilities Can Assist
Agencies' in Managing Their Workforces, GAO-03-2 (Washington, D.C.:
Dec. 6, 2002).
[17] Of the 158 employees who separated during this time period, 71
held temporary positions, of which 17 were students and 54 were
political appointees.
[18] Two of the three security administrators who left were responsible
for a variety of duties for both the Washington and Geneva offices,
including emergency preparedness and building security, and the third
worked on information technology security in Washington.
[19] GAO-03-488, p. 17 and 29.
[20] We analyzed occupation data from OPM's central personnel data file
to obtain occupation data back to 1995.
[21] USTR's human resources office maintains training data.
[22] These are more detailed April 2005 data from EOP and differ
slightly from staff numbers discussed above and earlier in this report,
which came from a more recent July 5, 2005, USTR organizational chart.
[23] A limit on the level of authorized FTEs that USTR requests from
Congress is a ceiling set within the executive branch by OMB, which
reviews USTR's initial budget request, according to USTR officials.
[24] About 3 percent of the federal workforce was at the GS-15 level,
as of 2004.
[25] According to EOP data, as of April 2005. These data are more
detailed and differ slightly from staff numbers discussed above and
earlier in this report, which came from a more recent July 5, 2005,
USTR organizational chart.
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