Human Capital
Status of Efforts to Improve Federal Hiring
Gao ID: GAO-04-796T June 7, 2004
The executive branch hired nearly 95,000 new employees during fiscal year 2003. Improving the federal hiring process is critical given the increasing number of new hires expected in the next few years. In May 2003, GAO issued a report highlighting several key problems in the federal hiring process. That report concluded that the process needed improvement and included several recommendations to address the problems. Today, GAO is releasing a followup report requested by the subcommittee that discusses (1) the status of recent efforts to help improve the federal hiring process and (2) the extent to which federal agencies are using two new hiring flexibilities--category rating and direct-hire authority. Category rating permits an agency manager to select any job candidate placed in a best-qualified category. Direct-hire authority allows an agency to appoint individuals to positions without adherence to certain competitive examination requirements when there is a severe shortage of qualified candidates or a critical hiring need.
Congress, the Office of Personnel Management (OPM), and agencies have all taken steps to improve the federal hiring process. In particular, Congress has provided agencies with additional hiring flexibilities, OPM has taken significant steps to modernize job vacancy announcements and develop the government's recruiting Web site, and most agencies are continuing to automate parts of their hiring processes. Nonetheless, problems remain with a job classification process and standards that many view as antiquated, and there is a need for improved tools to assess the qualifications of job candidates. Specifically, the report being released today discusses significant issues and actions being taken to (1) reform the classification system, (2) improve job announcements and Web postings, (3) automate hiring processes, and (4) improve candidate assessment tools. In addition, agencies appear to be making limited use of the two new hiring flexibilities contained in the Homeland Security Act of 2002--category rating and direct-hire authority--that could help agencies in expediting and controlling their hiring processes. GAO surveyed members of the interagency Chief Human Capital Officers Council who reported several barriers to greater use of these new flexibilities. Frequently cited barriers included (1) the lack of OPM guidance for using the flexibilities, (2) the lack of agency policies and procedures for using the flexibilities, (3) the lack of flexibility in OPM rules and regulations, and (4) concern about possible inconsistencies in the implementation of the flexibilities within the department or agency. The federal government is now facing one of the most transformational changes to the civil service in half a century, which is reflected in the new personnel systems for Department of Homeland Security and the Department of Defense and in new hiring flexibilities provided to all agencies. Today's challenge is to define the appropriate roles and day-to-day working relationships for OPM and individual agencies as they collaborate on developing innovative and more effective hiring systems. Moreover, human capital expertise within the agencies must be up to the challenge for this transformation to be successful and enduring.
GAO-04-796T, Human Capital: Status of Efforts to Improve Federal Hiring
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Testimony:
Before the Subcommittee on Civil Service and Agency Organization,
Committee on Government Reform, House of Representatives:
For Release on Delivery Expected at 10: 00 a.m. CDT Monday, June 7,
2004:
HUMAN CAPITAL:
Status of Efforts to Improve Federal Hiring:
Statement of J. Christopher Mihm Managing Director, Strategic Issues:
[Hyperlink, http: //www.gao.gov/cgi-bin/getrpt?GAO-04-796T]:
GAO Highlights:
Highlights of GAO-04-796T, a testimony before the Subcommittee on
Civil Service and Agency Organization, Committee on Government Reform,
House of Representatives
Why GAO Did This Study:
The executive branch hired nearly 95,000 new employees during fiscal
year 2003. Improving the federal hiring process is critical given the
increasing number of new hires expected in the next few years.
In May 2003, GAO issued a report highlighting several key problems in
the federal hiring process. That report concluded that the process
needed improvement and included several recommendations to address the
problems.
Today, GAO is releasing a follow-up report requested by the
subcommittee that discusses (1) the status of recent efforts to help
improve the federal hiring process and (2) the extent to which federal
agencies are using two new hiring flexibilities”category rating and
direct-hire authority. Category rating permits an agency manager to
select any job candidate placed in a best-qualified category. Direct-
hire authority allows an agency to appoint individuals to positions
without adherence to certain competitive examination requirements when
there is a severe shortage of qualified candidates or a critical hiring
need.
What GAO Found:
Congress, the Office of Personnel Management (OPM), and agencies have
all taken steps to improve the federal hiring process. In particular,
Congress has provided agencies with additional hiring flexibilities,
OPM has taken significant steps to modernize job vacancy announcements
and develop the government‘s recruiting Web site, and most agencies
are continuing to automate parts of their hiring processes.
Nonetheless, problems remain with a job classification process and
standards that many view as antiquated, and there is a need for
improved tools to assess the qualifications of job candidates.
Specifically, the report being released today discusses significant
issues and actions being taken to:
* reform the classification system,
* improve job announcements and Web postings,
* automate hiring processes, and
* improve candidate assessment tools.
In addition, agencies appear to be making limited use of the two new
hiring flexibilities contained in the Homeland Security Act of 2002”
category rating and direct-hire authority”that could help agencies in
expediting and controlling their hiring processes. GAO surveyed members
of the interagency Chief Human Capital Officers Council who reported
several barriers to greater use of these new flexibilities. Frequently
cited barriers included (1) the lack of OPM guidance for using the
flexibilities, (2) the lack of agency policies and procedures for using
the flexibilities, (3) the lack of flexibility in OPM rules and
regulations, and (4) concern about possible inconsistencies in the
implementation of the flexibilities within the department or agency.
The federal government is now facing one of the most transformational
changes to the civil service in half a century, which is reflected in
the new personnel systems for Department of Homeland Security and the
Department of Defense and in new hiring flexibilities provided to all
agencies. Today‘s challenge is to define the appropriate roles and day-
to-day working relationships for OPM and individual agencies as they
collaborate on developing innovative and more effective hiring systems.
Moreover, human capital expertise within the agencies must be up to the
challenge for this transformation to be successful and enduring.
What GAO Recommends:
The report GAO is issuing today includes no new recommendations, but it
does underscore prior GAO recommendations to which additional attention
is needed.
www.gao.gov/cgi-bin/getrpt?GAO-04-796T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact J. Christopher Mihm at
(202) 512-6806 or mihmj@gao.gov.
[End of section]
Chairwoman Davis, Mr. Davis, and Members of the Subcommittee:
I appreciate the opportunity to be here today to discuss efforts to
improve the federal hiring process. As you are keenly aware, federal
agencies must have effective hiring processes to compete for talented
people in a highly competitive job market. Given the number of new
federal hires expected in the next few years, improving the
government's hiring process is critical. In fact, the executive branch
hired nearly 95,000 new employees in fiscal year 2003. Still, there has
been widespread recognition that the federal hiring process all too
often does not meet the needs of agencies in achieving their missions,
the needs of managers in filling positions with the right talent, nor
the needs of applicants for a timely, efficient, transparent, and
merit-based process. Clearly, things needed to change.
In May 2003, we issued a report highlighting several key problems in
the federal hiring process.[Footnote 1] That report concluded that the
federal hiring process needed improvements, and we made several
recommendations to address problems with key parts of the hiring
process. Specifically, we recommended that the Office of Personnel
Management (OPM) take additional actions to assist agencies in
strengthening the hiring process. Also, we reported that agencies must
take greater responsibility for maximizing the efficiency and
effectiveness of their individual hiring processes within the current
statutory and regulatory framework that Congress and OPM have provided.
Today, we are issuing a follow-up report, done at the request of the
Chairwoman and Mr. Davis, that focuses on recent governmentwide efforts
to improve the federal hiring process.[Footnote 2] My testimony today
summarizes the work we have done for this report. Specifically, you
asked us to (1) provide information on the status of recent efforts to
help improve the federal hiring process and (2) determine the extent to
which federal agencies are using new hiring flexibilities authorized by
the Homeland Security Act of 2002.[Footnote 3] Our work to address
these objectives was based on interviews with:
officials from OPM and the interagency Chief Human Capital Officers
(CHCO) Council, the results of our survey of 22 of the 23 agency
members serving on the CHCO Council,[Footnote 4] and our review of OPM
documents as well as data from OPM's central database of governmentwide
personnel information. We conducted our work in accordance with
generally accepted government auditing standards, during March through
May of this year.
In summary, we found the following:
* Congress, OPM, and agencies have recognized that federal hiring has
needed reform, and they have all undertaken efforts to do so. In
particular, Congress has provided agencies with additional hiring
flexibilities, OPM has taken significant steps to modernize job vacancy
announcements and develop the government's recruiting Web site, and
most agencies are continuing to automate parts of their hiring
processes. Nonetheless, problems remain with a job classification
process and standards that many view as antiquated, and there is a need
for improved tools to assess the qualifications of job candidates.
* Agencies appear to be making limited use of the two new hiring
flexibilities contained in the Homeland Security Act of 2002. One of
these hiring flexibilities, known as category rating, permits an agency
to select any job candidate placed in a best-qualified category rather
than being limited to three candidates under the "rule of three." The
other hiring flexibility, often referred to as direct hire, allows an
agency to appoint people to positions without adherence to certain
competitive examination requirements when there is a severe shortage of
qualified candidates or a critical hiring need.
The report we are issuing today includes no new recommendations, but it
does underscore our prior recommendations to which we believe
additional attention is needed. In response to a draft of the report we
are issuing today, OPM said that it has done much to assist agencies to
improve hiring and increase agency officials' knowledge about the
hiring flexibilities available to them. OPM stressed that agencies
themselves must rise to the challenge, provide consistent leadership at
the senior level, take advantage of the training opportunities offered
by OPM, and make fixing the hiring process a priority.
OPM and Agencies Are Taking Steps to Improve the Hiring Process:
OPM and agencies are continuing to address the problems with the key
parts of the hiring process we identified in our May 2003 report.
Significant issues and actions being taken include the following.
Reforming the classification system. In our May 2003 report on hiring,
we noted that many regard the standards and process for defining a job
and determining pay in the federal government as a key hiring problem
because they are inflexible, outdated, and not applicable to the jobs
of today. The process of job classification is important because it
helps to categorize jobs or positions according to the kind of work
done, the level of difficulty and responsibility, and the
qualifications required for the position, and serves as a building
block to determine the pay for the position. As you know, defining a
job and setting pay in the federal government has generally been based
on the standards in the Classification Act of 1949, which sets out the
15 grade levels of the General Schedule system.
To aid agencies in dealing with the rigidity of the federal
classification system, OPM has revised the classification standards of
several job series to make them clearer and more relevant to current
job duties and responsibilities. In addition, as part of the effort to
create a new personnel system for the Department of Homeland Security
(DHS), OPM is working with DHS to create broad pay bands for the
department in place of the 15-grade job classification system that is
required for much of the federal civil service. Still, OPM told us that
its ability to more effectively reform the classification process is
limited under current law and that legislation is needed to modify the
current restrictive classification process for the majority of federal
agencies. As we note in the report we are issuing today, 15 of the 22
CHCO Council members responding to our recent survey reported that
either OPM (10 respondents) or Congress (5 respondents) should take the
lead on reforming the classification process, rather than the agencies
themselves.
Improving job announcements and Web postings. We pointed out in our May
2003 report that the lack of clear and appealing content in federal job
announcements could hamper or delay the hiring process. Our previous
report provided information about how some federal job announcements
were lengthy and difficult to read, contained jargon and acronyms, and
appeared to be written for people already employed by the government.
Clearly, making vacancy announcements more visually appealing,
informative, and easy to access and navigate could make them more
effective as recruiting tools.
To give support to this effort, OPM has continued to move forward on
its interagency project to modernize federal job vacancy announcements,
including providing guidance to agencies to improve the announcements.
OPM continues to collaborate with agencies in implementing Recruitment
One-Stop, an electronic government initiative that includes the USAJOBS
Web site (www.usajobs.opm.gov) to assist applicants in finding
employment with the federal government. As we show in the report we are
issuing today, all 22 of the CHCO Council members responding to our
recent survey indicated that their agencies had made efforts to improve
their job announcements and Web postings. In the narrative responses to
our survey, a CHCO Council member representing a major department said,
for example, that the USAJOBS Web site is an excellent source for
posting vacancies and attracting candidates. Another Council member
said that the Recruitment One-Stop initiative was very timely in
developing a single automated application for job candidates.
Automating hiring processes. Our May 2003 report also emphasized that
manual processes for rating and ranking job candidates are time
consuming and can delay the hiring process. As we mentioned in our
previous report, the use of automation for agency hiring processes has
various potential benefits, including eliminating the need for volumes
of paper records, allowing fewer individuals to review and process job
applications, and reducing the overall time-to-hire. In addition,
automated systems typically create records of actions taken so that
managers and human capital staff can easily document their decisions
related to hiring.
To help in these efforts, OPM provides to agencies on a contract or
fee-for-service basis an automated hiring system, called USA Staffing,
which is a Web-enabled software program that automates the steps of the
hiring process. These automated steps would include efforts to recruit
candidates, use of automated tools to assess candidates, automatic
referral of high-quality candidates to selecting officials, and
electronic notification of applicants on their status in the hiring
process. According to OPM, over 40 federal organizations have
contracted with OPM to use USA Staffing. OPM told us that it has
developed and will soon implement a new Web-based version of USA
Staffing that could further link and automate agency hiring processes.
As we mention in the report we are issuing today, 21 of the 22 CHCO
Council members responding to our recent survey reported that their
agencies had made efforts to automate significant parts of their hiring
processes.
Improving candidate assessment tools. We concluded in our May 2003
report that key candidate assessment tools used in the federal hiring
process can be ineffective. Our previous report noted that using the
right assessment tool, or combination of tools, can assist the agency
in predicting the relative success of each applicant on the job and
selecting the relatively best person for the job. These candidate
assessment tools can include written and performance tests, manual and
automated techniques to review each applicant's training and
experience, as well as interviewing approaches and reference checks.
In our previous report, we noted some of the challenges of assessment
tools and special hiring programs used for occupations covered by the
Luevano consent decree.[Footnote 5] Although OPM officials said they
monitor the use of assessment tools related to positions covered under
the Luevano consent decree, they have not reevaluated these assessment
tools. OPM officials told us, however, that they have provided
assessment tools or helped develop new assessment tools related to
various occupations for several agencies on a fee-for-service basis.
Although OPM officials acknowledged that candidate assessment tools in
general need to be reviewed, they also told us that it is each agency's
responsibility to determine what tools it needs to assess job
candidates. The OPM officials also said that if agencies do not want to
develop their own assessment tools, then they could request that OPM
help develop such tools under the reimbursable service program that OPM
operates. As we state in the report we are issuing today, 21 of the 22
CHCO Council members responding to our recent survey indicated that
their agencies had made efforts to improve their hiring assessment
tools.
Although we agree that OPM has provided assistance to agencies in
improving their candidate assessment tools and has collected
information on agencies' use of special hiring authorities, we believe
that major challenges remain in this area. OPM can take further action
to address our prior recommendations related to assessment tools. OPM
could, for example, actively work to link up agencies having similar
occupations so that they could potentially form consortia to develop
more reliable and valid tools to assess their job candidates.
Agencies Appear to Be Making Limited Use of New Hiring Flexibilities:
Despite agency officials' past calls for hiring reform, agencies appear
to be making limited use of category rating and direct-hire authority,
two new hiring flexibilities created by Congress in November 2002 and
implemented by OPM in June of last year. Data on the actual use of
these two new flexibilities are not readily available, but most CHCO
Council members responding to our recent survey indicated that their
agencies are making little or no use of either flexibility (see fig.
1). OPM officials also confirmed with us that based on their contacts
and communications with agencies, it appeared that the agencies were
making limited use of the new hiring flexibilities. The limited use of
category rating is somewhat unexpected given the views of human
resources directors we interviewed 2 years ago. As noted in our May
2003 report, many agency human resources directors indicated that
numerical rating and the rule of three were key obstacles in the hiring
process. Category rating was authorized to address those concerns.
Figure 1: CHCO Council Members' Responses on the Extent to Which Their
Agencies Are Using Category Rating and Direct Hire:
[See PDF for image]
[End of figure]
The report we are issuing today also includes information about
barriers that the CHCO Council members believed have prevented or
hindered their agencies from using or making greater use of category
rating and direct hire. Indeed, all but one of the 22 CHCO Council
members responding to our recent survey identified at least one barrier
to using the new hiring flexibilities. Frequently cited barriers
included:
* the lack of OPM guidance for using the flexibilities,
* the lack of agency policies and procedures for using the
flexibilities,
* the lack of flexibility in OPM rules and regulations, and:
* concern about possible inconsistencies in the implementation of the
flexibilities within the department or agency.
Our Prior Recommendation Calls Attention to Additional Action Needed:
In a separate report we issued in May 2003 on the use of human capital
flexibilities, we recommended that OPM work with and through the new
CHCO Council to more thoroughly research, compile, and analyze
information on the effective and innovative use of human capital
flexibilities.[Footnote 6] We noted that sharing information about
when, where, and how the broad range of personnel flexibilities is
being used, and should be used, could help agencies meet their human
capital management challenges. As we recently testified, OPM and
agencies need to continue to work together to improve the hiring
process, and the CHCO Council should be a key vehicle for this needed
collaboration.[Footnote 7] To accomplish this effort, agencies need to
provide OPM with timely and comprehensive information about their
experiences in using various approaches and flexibilities to improve
their hiring processes. OPM--working through the CHCO Council--can, in
turn, help by serving as a facilitator in the collection and exchange
of information about agencies' effective practices and successful
approaches to improved hiring. Such additional collaboration between
OPM and agencies could go a long way to helping the government as a
whole and individual agencies in improving the processes for quickly
hiring highly qualified candidates to fill important federal jobs.
In conclusion, the federal government is now facing one of the most
transformational changes to the civil service in half a century, which
is reflected in the new personnel systems for DHS and the Department of
Defense and in new hiring flexibilities provided to all agencies.
Today's challenge is to define the appropriate roles and day-to-day
working relationships for OPM and individual agencies as they
collaborate on developing innovative and more effective hiring systems.
Moreover, for this transformation to be successful and enduring, human
capital expertise within the agencies must be up to the challenge.
Madam Chairwoman and Mr. Davis, this completes my statement. I would be
pleased to respond to any questions that you might have.
Contacts and Acknowledgments:
For further information on this testimony, please contact J.
Christopher Mihm, Managing Director, Strategic Issues, (202) 512-6806
or at [Hyperlink, mihmj@gao.gov]. Individuals making key contributions
to this testimony include K. Scott Derrick, Karin Fangman, Stephanie M.
Herrold, Trina Lewis, John Ripper, Edward Stephenson, and Monica L.
Wolford.
(450293):
FOOTNOTES
[1] U.S. General Accounting Office, Human Capital: Opportunities to
Improve Executive Agencies' Hiring Processes, GAO-03-450 (Washington,
D.C.: May 30, 2003).
[2] U.S. General Accounting Office, Human Capital: Additional
Collaboration Between OPM and Agencies Is Key to Improved Federal
Hiring, GAO-04-797 (Washington, D.C.: June 7, 2004).
[3] These hiring flexibilities are contained in the Chief Human Capital
Officers Act of 2002, Title XIII of the Homeland Security Act of 2002.
Pub. L. No. 107-296 (Nov. 25, 2002).
[4] The CHCO Council member from the Central Intelligence Agency (CIA)
did not respond to the survey because his representative said the
agency was an excepted service agency and thus the survey questions
were not relevant.
[5] The Luevano consent decree is a 1981 agreement that settled a
lawsuit alleging that a written test, Professional and Administrative
Careers Examination (PACE), had an adverse impact on African Americans
and Hispanics. See Luevano v. Campbell, 93 F.R.D. 68 (D.D.C. 1981). The
consent decree called for the elimination of PACE and required
replacing it with alternative examinations. In response to the consent
decree, OPM developed the Administrative Careers with America
examination. The consent decree also established two special hiring
programs, Outstanding Scholar and Bilingual/Bicultural, for limited use
in filling former PACE positions.
[6] U.S. General Accounting Office, Human Capital: OPM Can Better
Assist Agencies in Using Personnel Flexibilities, GAO-03-428
(Washington, D.C.: May 9, 2003).
[7] U.S. General Accounting Office, Human Capital: Observations on
Agencies' Implementation of the Chief Human Capital Officers Act, GAO-
04-800T (Washington, D.C.: May 18, 2004).