Older Workers
Enhanced Communication among Federal Agencies Could Improve Strategies for Hiring and Retaining Experienced Workers Gao ID: GAO-09-206 February 24, 2009The federal workforce, like the nation's workforce as a whole, is aging, and increasingly large percentages are becoming eligible to retire. Eventually baby boomers will leave the workforce and when they do, they will leave behind gaps in leadership, skills, and knowledge due to the slower-growing pool of younger workers. GAO and others have emphasized the need for federal agencies to hire and retain older workers to help address these shortages. Building upon earlier testimony, GAO was asked to examine (1) age and retirement eligibility trends of the current federal workforce and the extent to which agencies hire and retain older workers; (2) workforce challenges selected agencies face and the strategies they use to hire and retain older workers; and (3) actions taken by the Office of Personnel Management (OPM) to help agencies hire and retain experienced workers. To address these questions, GAO analyzed data from OPM's Central Personal Data File, interviewed officials at three agencies with high proportions of workers eligible to retire, and identified agencies' promising practices to hire and retain older workers. What GAO Recommends
The proportion of federal employees eligible to retire is growing. While this proportion varies across agencies, in four agencies--the Agency for International Development (USAID), the Department of Housing and Urban Development (HUD), the Small Business Administration, and the Department of Transportation--46 percent of the workforce will be eligible to retire by 2012, well above the governmentwide average of 33 percent. While these eligibility rates suggest that many will retire, the federal government has historically enjoyed relatively high retention rates, with 40 percent or more of federal employees remaining in the workforce for at least 5 years after becoming eligible. Beyond retaining older workers, in fiscal year 2007, federal agencies hired almost 14,000 new workers who were 55 years of age or older and brought back about 5,400 federal retirees to address workforce needs. The increasing numbers of retirement-eligible federal workers present challenges and opportunities. The three agencies we reviewed (HUD, SSA, and USAID) share common challenges. All have large proportions of employees nearing retirement, and according to officials, due to past hiring freezes all have relatively few midlevel staff to help pass down knowledge and skills to less experienced employees. Officials from all three agencies also told us that they have difficulty attracting qualified staff with specialized skills. To address these challenges, the three agencies rely on older workers in different ways. USAID brings back its knowledgeable and skilled retirees as contractors to fill short-term job assignments and to help train and develop the agency's growing number of newly hired staff. SSA uses complex statistical models to project potential retirements in mission critical occupations and uses these data to develop recruitment efforts targeted at a broad pool of candidates, including older workers. While all three agencies rely on older workers to pass down knowledge and skills to junior staff, HUD officials told us this is the primary way they involve older workers, due in part to the agency's focus on recruiting entry-level staff. In addition, some federal agencies have developed practices that other agencies might find useful in tapping older workers to meet short-term needs. For example, the Department of State has developed databases to match interested retirees with short-term assignments requiring particular skills. To help agencies hire and retain an experienced workforce, OPM provides guidance, including support tools and training, and has taken steps to address areas of concern to older workers. For example, OPM has initiated actions to streamline the federal application process and to eliminate barriers that deter some federal retirees from returning to federal service or from working part-time at the end of their careers. However, although some federal agencies have developed strategies that could be used effectively by other agencies to hire and retain experienced workers to meet workforce needs, this information is not widely available. And, while OPM has other methods available--such as its human capital and electronic government practices Web sites--that could be used to efficiently package and broadly disseminate this information to a much larger audience, it currently has no plans to do so.
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-09-206, Older Workers: Enhanced Communication among Federal Agencies Could Improve Strategies for Hiring and Retaining Experienced Workers
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Could Improve Strategies for Hiring and Retaining Experienced Workers'
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
February 2009:
Older Workers:
Enhanced Communication among Federal Agencies Could Improve Strategies
for Hiring and Retaining Experienced Workers:
GAO-09-206:
GAO Highlights:
Highlights of GAO-09-206, a report to congressional requesters.
Why GAO Did This Study:
The federal workforce, like the nation‘s workforce as a whole, is
aging, and increasingly large percentages are becoming eligible to
retire. Eventually baby boomers will leave the workforce and when they
do, they will leave behind gaps in leadership, skills, and knowledge
due to the slower-growing pool of younger workers. GAO and others have
emphasized the need for federal agencies to hire and retain older
workers to help address these shortages. Building upon earlier
testimony, GAO was asked to examine (1) age and retirement eligibility
trends of the current federal workforce and the extent to which
agencies hire and retain older workers; (2) workforce challenges
selected agencies face and the strategies they use to hire and retain
older workers; and (3) actions taken by the Office of Personnel
Management (OPM) to help agencies hire and retain experienced workers.
To address these questions, GAO analyzed data from OPM‘s Central
Personal Data File, interviewed officials at three agencies with high
proportions of workers eligible to retire, and identified agencies‘
promising practices to hire and retain older workers.
What GAO Found:
The proportion of federal employees eligible to retire is growing.
While this proportion varies across agencies, in four agencies”the
Agency for International Development (USAID), the Department of Housing
and Urban Development (HUD), the Small Business Administration, and the
Department of Transportation”46 percent of the workforce will be
eligible to retire by 2012, well above the governmentwide average of 33
percent. While these eligibility rates suggest that many will retire,
the federal government has historically enjoyed relatively high
retention rates, with 40 percent or more of federal employees remaining
in the workforce for at least 5 years after becoming eligible. Beyond
retaining older workers, in fiscal year 2007, federal agencies hired
almost 14,000 new workers who were 55 years of age or older and brought
back about 5,400 federal retirees to address workforce needs.
The increasing numbers of retirement-eligible federal workers present
challenges and opportunities. The three agencies we reviewed (HUD, SSA,
and USAID) share common challenges. All have large proportions of
employees nearing retirement, and according to officials, due to past
hiring freezes all have relatively few mid-level staff to help pass
down knowledge and skills to less experienced employees. Officials from
all three agencies also told us that they have difficulty attracting
qualified staff with specialized skills. To address these challenges,
the three agencies rely on older workers in different ways. USAID
brings back its knowledgeable and skilled retirees as contractors to
fill short-term job assignments and to help train and develop the
agency‘s growing number of newly hired staff. SSA uses complex
statistical models to project potential retirements in mission critical
occupations and uses these data to develop recruitment efforts targeted
at a broad pool of candidates, including older workers. While all three
agencies rely on older workers to pass down knowledge and skills to
junior staff, HUD officials told us this is the primary way they
involve older workers, due in part to the agency‘s focus on recruiting
entry-level staff. In addition, some federal agencies have developed
practices that other agencies might find useful in tapping older
workers to meet short-term needs. For example, the Department of State
has developed databases to match interested retirees with short-term
assignments requiring particular skills.
To help agencies hire and retain an experienced workforce, OPM provides
guidance, including support tools and training, and has taken steps to
address areas of concern to older workers. For example, OPM has
initiated actions to streamline the federal application process and to
eliminate barriers that deter some federal retirees from returning to
federal service or from working part-time at the end of their careers.
However, although some federal agencies have developed strategies that
could be used effectively by other agencies to hire and retain
experienced workers to meet workforce needs, this information is not
widely available. And, while OPM has other methods available”such as
its human capital and electronic government practices Web sites”that
could be used to efficiently package and broadly disseminate this
information to a much larger audience, it currently has no plans to do
so.
What GAO Recommends:
GAO recommends that OPM broadly disseminate agency-developed promising
practices. OPM said that it has tools on its Web site to assist
agencies in recruiting and retaining talented workers, including older
workers. Because OPM‘s Web site does not provide information on agency-
developed practices, this information is not readily available
governmentwide. GAO continues to believe sharing these practices would
be helpful.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-206]. For more
information, contact Barbara D. Bovbjerg at (202) 512-7215 or
bovbjergb@gao.gov or Robert Goldenkoff at (202) 512-6806 or
goldenkoffr@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
The Proportion of Federal Employees Eligible to Retire Is Growing:
Selected Agencies Face Common Challenges and Have a Variety of
Strategies to Tap Older Workers to Meet Workforce Needs:
OPM Has Taken Actions to Help Agencies Hire and Retain a Skilled
Workforce, but Could Do More to Share Promising Strategies:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objective, Scope, and Methodology:
Appendix II: Number and Percentage of Federal Workers without and with
Salary Reductions Re-employed by CFO Agencies in Fiscal Year 2007:
Appendix III: Comments from the Office of Personnel Management:
Appendix IV: GAO Contacts and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Governmentwide Options to Facilitate Hiring and Retention:
Table 2: Federal Agencies with the Highest Percentage of Rehired
Annuitants without Reduced Salaries in Fiscal Year 2007:
Table 3: Characteristics of Case Study Agencies:
Figures:
Figure 1: Percent of People in Specific Age Groups Who Are in the Labor
Force:
Figure 2: Age Distribution of Career Federal Employees at CFO Agencies
in Fiscal Year 2007:
Figure 3: Percent of Career Employees at CFO Agencies Eligible to
Retire by Fiscal Year 2012:
Figure 4: Certain Occupations with High Eligibility Retirement Rates at
CFO Agencies by Fiscal Year 2012:
Figure 5: Percent of Federal Workers in CFO Agencies Who Actually
Retired within 5 Years of First Becoming Eligible:
Figure 6: Age Distribution of Career Federal Employees Newly Hired by
CFO Agencies in Fiscal Year 2007:
Figure 7: Factors That Influence Use of Selected Human Capital
Flexibilities:
Abbreviations:
ACES: Agriculture Conservation Enrollees/Seniors:
Agriculture: Department of Agriculture:
CFO: Chief Financial Officer:
CHCO: Chief Human Capital Officer:
CPDF: Central Personnel Data File:
CSRS: Civil Service Retirement System:
Defense: Department of Defense:
DHS: Department of Homeland Security:
Education: Department of Education:
EPA: Environmental Protection Agency:
FERS: Federal Employees Retirement System:
HHS: Department of Health and Human Services:
HUD: Department of Housing and Urban Affairs:
Labor: Department of Labor:
Justice: Department of Justice:
NASA: National Aeronautics and Space Administration:
NRC: Nuclear Regulatory Agency:
NRCS: National Resources Conservation Service:
OMB: Office of Management and Budget:
OPM: Office of Personnel Management:
SEE: Senior Environmental Employment:
SBA: Small Business Administration:
SSA: Social Security Administration:
State: Department of State:
the Council: Chief Human Capital Officers Council:
Transportation: Department of Transportation:
Treasury: Department of the Treasury:
USAID: United States Agency for International Development:
Veterans Affairs: Department of Veterans Affairs:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
February 24, 2009:
The Honorable Herb Kohl:
Chairman:
Special Committee on Aging:
United States Senate:
The Honorable Susan M. Collins:
Ranking Member:
Senate Committee on Homeland Security and Governmental Affairs:
United States Senate:
Like the nation's workforce as a whole, the proportion of older workers
in the federal workforce is growing, and more and more workers are
becoming eligible to retire. Over the past several years, many have
projected a huge retirement wave as the baby boom generation ages. The
unfolding economic crisis may be changing these dynamics in the near
term as many workers, witnessing declining assets, choose to delay
retirement. It remains unclear when the expected retirement wave will
peak, but over time, more and more of the baby boom generation will
eventually retire. When they do, these older, experienced workers will
leave behind critical gaps in leadership, skills, and institutional
knowledge as fewer workers are equipped to take over. All of this
occurs at the same time the rate of growth for the pool of younger
workers has declined--by 2025, overall labor force growth is expected
to be only one-fifth of what it is today, and much less than the
expected growth in the number of retirees. As a result, the federal
government and other employers may face increased competition in hiring
skilled workers, and unless they develop effective retention
strategies, employers will need to look more aggressively for workers
with the right skills to meet their needs.
Current employment conditions aside, hiring and retaining older,
experienced workers could be part of a longer-term national strategy to
ensure an adequate workforce as an aging population, coupled with slow
labor growth, poses economic challenges to the nation. Many experts
maintain that older workers offer competitive advantages to employers
because they often possess management and organizational skills that
can be used in a variety of settings, and they bring to the job
knowledge, experience, and productive work habits. In addition, today's
older workers are better educated and healthier and are expected to
live longer than previous generations. As the nation's largest
employer, the federal government is well positioned to serve as a role
model for other employers. As with private sector employers, efforts
directed at recruiting, engaging, and retaining a diverse workforce,
including older workers, may serve to make the federal government a
more competitive and productive employer overall.
Given the issues confronting the nation's employers as they seek to
maintain competitiveness in the face of anticipated worker shortages,
you asked us to examine how the federal government is tapping older
workers as a means to respond to some of the same workforce challenges.
Our report builds on our earlier testimony before your committee
[Footnote 1] and addresses the following: (1) the age and retirement
eligibility trends of the current federal workforce and the extent to
which federal agencies are hiring and retaining older workers; (2) the
workforce challenges that federal agencies face, and the strategies
they use to recruit and retain older workers to help meet these
challenges; and (3) the actions that the Office of Personnel Management
(OPM) is taking to help agencies hire and retain an experienced skilled
workforce in its role as the federal government's human capital
manager.
To report governmentwide demographic trends, we analyzed information on
the 24 Chief Financial Officer Act (CFO) agencies[Footnote 2] from
OPM's human resource reporting system, the Central Personnel Data File
(CPDF). Based on previous work, we have determined that the CPDF is
sufficiently reliable for the informational purposes of this report. We
also used CPDF data to determine the extent to which agencies are using
some governmentwide flexibilities[Footnote 3] to hire and retain older
workers.[Footnote 4] In this report, we defined older workers as those
who are aged 55 or older. To report on how some federal agencies are
addressing their workforce challenges, we conducted in-depth reviews of
three agencies--the Department of Housing and Urban Development (HUD),
the Social Security Administration (SSA), and the United States Agency
for International Development (USAID). We chose these agencies because
they were among the agencies for which the proportion of their workers
who are eligible to retire within the next 5 years exceeds the
governmentwide average of 33 percent. We also reviewed studies and
conducted interviews with experts in the area of retirement[Footnote 5]
and various agency officials to identify additional approaches other
agencies have developed to hire and retain older workers.[Footnote 6]
We selected promising approaches based on a literature review and the
recommendations of experts and OPM officials. To report on OPM's
activities and challenges, we augmented information obtained from our
reviews of three agencies by interviewing various officials at OPM and
reviewing relevant documents. For a complete description of our scope
and methodology, see appendix I. We conducted this performance audit
from April 2008 to January 2009 in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence we obtained provides a
reasonable basis for our findings and conclusions.
Results in Brief:
Across the federal government, about one-third of federal workers will
be eligible to retire by 2012, although most federal employees do not
retire immediately upon becoming eligible. The proportion of workers
eligible to retire varies across agencies, but according to OPM's data,
46 percent of the workforce at several agencies--HUD, the Department of
Transportation (Transportation), the Small Business Administration
(SBA), and USAID--are eligible to retire by 2012, well above the
governmentwide average of 33 percent. Many of these workers are in
executive and supervisory positions, as well as occupations considered
critical to agencies' missions, including air traffic controllers and
administrative law judges. By 2012, nearly two-thirds of career
executives and almost half of other supervisors across the federal
government will be eligible to retire. In the current economic
situation, projections of how many federal workers will actually retire
upon becoming eligible remain unclear, but historically, the majority
of federal workers stay well past their initial retirement eligibility
date. Of the federal workers who first became eligible to retire
between 1997 and 2002, at least 40 percent were still in the federal
workforce 5 years later. Beyond retaining older workers in fiscal year
2007, federal agencies hired almost 14,000 new workers who were 55
years of age or older and brought back about 5,400 federal retirees to
address workforce needs.
The proportion of federal workers who are eligible to retire now or in
the near future presents challenges and opportunities for federal
agencies. The three agencies we reviewed--HUD, SSA, and USAID--face
common workforce challenges. For example, all have large proportions of
their workforces eligible to retire soon, and officials believe that
many of the retiring employees will leave gaps in institutional
knowledge and technical skills. In addition, officials from all three
agencies told us that as a result of past budget cuts and hiring
freezes, they have relatively few mid-level career staff in their
agencies to help pass down institutional knowledge and skills to less
experienced employees. Finally, they are all challenged in their
efforts to attract qualified staff with specialized skills that are
either uncommon or in high demand. To address their challenges, HUD,
SSA, and USAID rely on older workers in different ways and use selected
governmentwide human capital flexibilities in addition to their own
strategies to tap older workers to help meet their workforce needs.
USAID officials, for example, told us that USAID tends to bring back
its retirees, many of whom have specialized knowledge and skills, as
contractors to fill short-term job assignments and to help train and
develop the agency's growing number of newly hired staff. SSA has been
using complex statistical models for the past several years to project
potential retirements in mission-critical occupations and uses these
data to develop targeted recruitment efforts that reach out to a broad
pool of candidates, including older workers. While all three agencies
rely on older workers to pass down institutional knowledge and critical
skills to less experienced employees, HUD officials told us this is the
primary way they involve older workers mainly because HUD's human
capital efforts focus largely on recruiting and hiring entry-level
staff, not on hiring or retaining older workers. Beyond these three
case study agencies, we found that other federal agencies have
developed practices they consider promising in hiring older workers and
federal annuitants to meet short-term needs. For example, the
Department of State (State) has developed databases to match interested
retirees with short-term assignments requiring particular skills. State
officials told us that in 2004, they used these databases to quickly
identify experienced workers and retirees to help with tsunami relief
efforts. In addition, EPA designed a program that places older workers
in administrative and technical positions through cooperative
agreements with nonprofit firms. EPA uses this as an alternative
staffing mechanism to hiring older workers as federal employees or
bringing back retirees.
As the government's human capital leader, OPM provides a range of
assistance, including developing guidance, planning tools, and
legislative proposals, to support federal human capital efforts, but it
could do more to help agencies involve older workers in meeting
workforce needs. For example, OPM developed a resource tool called
Career Patterns to help federal agencies better advertise job openings
and broaden the pool of potential employees, and it has widely
disseminated this tool through its Web site, briefings, and training
sessions. In addition, OPM has taken action that addresses three areas
of special concern to older workers. It has begun to re-engineer the
job application process that in the past has frustrated job applicants,
particularly older workers. OPM has also submitted two legislative
proposals directly aimed at older workers. One proposal would make it
easier for federal agencies to rehire annuitants without reducing their
salaries by the amount of their annuities. The other would address an
inequity in the way federal annuities are calculated for some federal
workers who work part-time at the end of their careers. Despite these
efforts, OPM could do more to facilitate information sharing between
federal agencies. While some federal agencies have developed promising
practices that could be adopted by other agencies, information on these
practices is not widely available. And, while OPM has several methods
available--such as its human capital and electronic government
practices Web sites--that could be used to efficiently and
comprehensively package and broadly disseminate this information to a
much larger and diversified audience, it currently has no plans to do
so.
To help agencies hire and retain a skilled workforce, including older
workers, we recommend that the Director of OPM take steps to broadly
share information across the federal government about agency-developed
promising practices. In its comments, OPM said that the agency already
has tools available on its Web site to assist federal agencies in
attracting, recruiting, and retaining talented workers, including older
workers. We acknowledge OPM's efforts, but we also note that its Web
site does not provide information on agency-developed promising
practices and, therefore, this information is not readily available
throughout the federal government. We continue to believe that broad-
based sharing of alternative approaches for recruiting and retaining
talented workers is needed. Both HUD and SSA agreed that this
information would be helpful.
Background:
The percentage of older workers in the total workforce--those aged 55
and older--is growing faster than that of any other age group, and they
are expected to live longer than past generations. Labor force
participation for this cohort has grown from about 31 percent in 1998
to 38 percent in 2007. In contrast, labor force participation of
workers under the age of 55 has declined slightly (see figure 1).
Figure 1: Percent of People in Specific Age Groups Who Are in the Labor
Force:
[Refer to PDF for image]
This figure is a multiple line graph depicting the following data:
Year: 1998;
Under 40: 78%;
Age 40-54: 84%;
Age 55 and Over: 31%.
Year: 1999;
Under 40: 78%;
Age 40-54: 84%;
Age 55 and Over: 32%.
Year: 2000;
Under 40: 78%;
Age 40-54: 84%;
Age 55 and Over: 32%.
Year: 2001;
Under 40: 77%;
Age 40-54: 83%;
Age 55 and Over: 33%.
Year: 2002;
Under 40: 76%;
Age 40-54: 83%;
Age 55 and Over: 35%.
Year: 2003;
Under 40: 75%;
Age 40-54: 83%;
Age 55 and Over: 36%.
Year: 2004;
Under 40: 75%;
Age 40-54: 83%;
Age 55 and Over: 36%.
Year: 2005;
Under 40: 75%;
Age 40-54: 83%;
Age 55 and Over: 37%.
Year: 2006;
Under 40: 75%;
Age 40-54: 83%;
Age 55 and Over: 38%.
Year: 2007;
Under 40: 74%;
Age 40-54: 83%;
Age 55 and Over: 39%.
Source: GAO analysis of United States Bureau of Labor Statistics data.
[End of figure]
Many factors influence workers' retirement and employment decisions,
including retirement eligibility rules and benefits, an individual's
health status and occupation, the availability of health insurance,
personal preference, personal wealth, and the employment status of a
spouse. The availability of suitable employment, including part-time
work or flexible work arrangements, may also affect the retirement and
employment choices of older workers.[Footnote 7] In addition, under
current law, many federal retirees face a financial disincentive if
they decide to return to the federal workforce--their salaries would be
reduced by the amount of their annuities.
In the late 1980s, the federal government phased in a new retirement
system, replacing the Civil Service Retirement System (CSRS), a defined
benefit plan, with the Federal Employees Retirement System (FERS),
which combines a defined benefit plan with Social Security and a
defined contribution plan. Under CSRS, a worker can retire with full
benefits at age 55 with 30 years of service and at older ages with
fewer years of service. Under FERS, workers can receive their full
annuity at age 60 with 20 years of service. But, because of Social
Security rules, workers under FERS do not receive full Social Security
benefits until they are 65 or older; the specific age at which workers
receive their full Social Security benefits depends on their date of
birth. In addition, because the Thrift Savings Plan is an important
part of a retiree's income under FERS, balances in an individual's
Thrift Savings Plan also may help dictate when an individual chooses to
retire. While we do not know the total effect of this shift in
retirement plans on retirement decisions, it is possible older workers
under FERS will work longer than their CSRS colleagues in order to
increase their retirement earnings.
As the government's human capital leader, OPM is responsible for
helping agencies develop their human capital management systems and
holding them accountable for effective human capital management
practices. For example, one such practice is strategic human capital
planning, which addresses two critical needs: (1) aligning an
organization's human capital program with its current and emerging
mission and programmatic goals and (2) developing long-term strategies
for acquiring, developing, and retaining staff to achieve these goals.
In developing these strategies, we have reported that leading
organizations go beyond a succession-hiring approach that focuses on
simply replacing individuals. Rather, they engage in broad, integrated
succession planning and management efforts directed at strengthening
both current and future organizational capacity.[Footnote 8] In
implementing its personnel policies, federal agencies are required to
uphold federal merit system principles in recruiting, engaging, and
retaining employees. Among other provisions, the merit system
principles require agencies to recruit and select candidates based on
fair and open competition, as well as treat employees fairly and
equitably. Federal agencies can recruit skilled or experienced workers,
many of whom tend to be older, to fill full-or part-time career
positions requiring demonstrated expertise.
OPM is also responsible for providing guidance and information about
federal governmentwide hiring and retention authorities and
flexibilities to agencies to help them address workforce challenges. In
some cases, agencies can use options as they choose without prior
approval from OPM. For example, federal agencies can engage workers,
including older workers, as consultants to meet temporary or
intermittent needs or contract with individuals or organizations to
obtain needed skills. In other cases, OPM serves as the gatekeeper by
approving or disapproving an agency's request to use particular options
(see table 1). Of these options, only one, rehiring annuitants without
reducing their salaries, exclusively affects older workers. OPM is also
responsible for administering retirement, health benefits, and other
insurance services to civil service government employees, annuitants,
and beneficiaries. It also develops regulations when Congress makes new
options available to federal employees and often advocates for new
legislation.
Table 1: Governmentwide Options to Facilitate Hiring and Retention:
Strategy: Hiring authorities;
Authority of agencies:
* Hire individuals for temporary, short-term assignments;
* Use commercial and nonprofit firms to recruit candidates;
* Hire consultants for temporary or intermittent employment;
* Contract with individuals or organizations for services;
* Hire annuitants on a temporary basis to fill positions, providing
salaries are offset by the amount of the annuity that is received;
* Hire retired annuitants to fill acquisition positions on a temporary
basis without having to reduce their salaries. Although OPM approval is
not needed, agencies are required to notify and submit hiring plans to
OPM;
* Provide enhanced annual leave to employees based on their relevant
experience in the private sector;
* Hire certain veterans without competition to fill positions up to the
GS-11 level or disabled veterans at any level;
Authority of agencies with the approval from OPM or Office of
Management and Budget:
* Obtain dual compensation waivers from OPM to fill positions with
annuitants on a temporary basis without reducing salaries by amount of
annuities. Agencies can request waivers on a case-by-case basis for
positions that are extremely hard to fill, for emergencies, or for
other unusual situations or request a delegation of such authority from
OPM;
* Hire individuals on the spot without competition. May be used in
circumstances where (1) public notice has been given and (2) OPM
determined there is a severe shortage of candidates or a critical
hiring need.
Strategy: Flexible schedules and workplaces;
Authority of agencies:
* Allow employees to work on a part-time basis. Part-time work at the
end of a career--also known as phased retirement--will result in a
lower retirement annuity and will affect other benefits. Such part-time
service will have a particular effect on workers with full time CSRS
service prior to April 1986;
* Allow full-time or part-time employees to determine the hours they
begin and end their workday within certain established parameters;
* Allow full-time or part-time employees to modify and compress the
typical work schedule of 5 8-hour days per week by, for example,
working 4 10-hour days;
* Allow employees to work from alternative work sites, such as their
home or elsewhere outside the traditional office;
Authority of agencies with the approval from OPM or Office of
Management and Budget: [Empty].
Strategy: Compensation flexibilities;
Authority of agencies:
* Provide recruitment, relocation, and retention incentives;
* Set rate of basic pay above the minimum pay rate of appropriate GS
grade upon appointment of candidate with superior qualifications or for
whose services the agency has a special need;
* Set the rate of basic pay upon re-employment, transfer, reassignment,
promotion, demotion, or change in type of appointment of an employee by
taking into account employee's previous rate of pay in another civilian
federal position;
Authority of agencies with the approval from OPM or Office of
Management and Budget:
* Raise the pay rate of critical positions in an agency. This requires
OPM approval after consultation with OMB;
* Provide special rates, premium pay, and other compensation
flexibilities to recruit and retain specified health care employees,
under an agreement with OMB;
* Provide certain physicians allowances of up to $30,000 per year, with
OMB approval.
Source: GAO analysis of OPM data.
[End of table]
We and others have highlighted the need to hire and retain older
workers to address the challenges associated with an aging workforce.
In so doing, we have called upon the federal government to assume a
leadership role in developing strategies to recruit and retain older
workers. At our recommendation, the Department of Labor (Labor)
convened a task force composed of senior representatives from nine
federal agencies[Footnote 9] and issued its first report in February
2008.[Footnote 10] The report provides information on strategies to
support the employment of older workers, strategies for businesses to
leverage the skills of an aging labor pool, individual opportunities
for employment of older workers, and legal and regulatory issues
associated with work and retirement. In March 2008, the task force
formed work groups for each strategy that continue to meet and develop
implementation plans, and in June, OPM joined the task force and two of
the work groups. While the task force's focus is the private sector,
some of the strategies it identified are relevant for federal agencies
as well--for example, providing flexible work arrangements and
customized employment options that include alternative work schedules
and part-time work.
The Proportion of Federal Employees Eligible to Retire Is Growing:
Across the federal government, the proportion of older and retirement-
eligible workers is growing. About one-third of federal workers will be
eligible to retire by 2012, although most federal employees do not
retire immediately upon becoming eligible. The percentage of federal
workers nearing retirement eligibility varies across federal agencies.
For example, within 5 years, 20 percent of employees at the Department
of Homeland Security (DHS) will be able to retire, while 46 percent of
employees at HUD and Transportation will be eligible. Governmentwide,
the proportion of senior executives and supervisors eligible to retire
by 2012 exceeds the overall average, with 64 percent of senior
executives and 45 percent of supervisors eligible to retire within 5
years. In the current economic situation, projections of how many
federal workers will actually retire remain unclear, but historically,
the majority of federal workers stay well past their initial retirement
eligibility date. Of the federal workers who first became eligible to
retire between 1997 and 2002, at least 40 percent were still in the
federal workforce 5 years later. Beyond retaining their current federal
workforce, federal agencies' efforts to bring in additional older
workers to help meet workforce needs currently focus more on hiring
them as new employees than on bringing back federal retirees. In 2007,
federal agencies hired almost 14,000 new workers aged 55 and older. In
comparison, in 2007, federal agencies tapped 5,364 rehired annuitants
for service.
The Proportion of Older and Retirement-Eligible Workers Is Growing but
Varies Widely Across Federal Agencies:
The average age of federal workers is inching up, and older workers,
many of whom have passed their retirement eligibility age, now comprise
a larger proportion of the federal workforce than in the past. Based
upon OPM's data for 2007,[Footnote 11] the last year for which data are
available, the average age of federal workers is now about 48, somewhat
older than in 1998, when the average age of federal workers was about
45. Similarly, the proportion of federal workers aged 55 or older has
also increased to about 24 percent, up from about 20 percent in 1998.
However, the proportion of older workers varies widely across federal
agencies. For example, in fiscal year 2007, the percentage of career
federal employees in the 24 CFO agencies aged 55 or older ranged from
about 9 percent at the Department of Justice (Justice) to about 37
percent at HUD and SBA (see figure 2).
Figure 2: Age Distribution of Career Federal Employees at CFO Agencies
in Fiscal Year 2007:
[Refer to PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Agency: CFO Agencies Average;
Under 40: 25.9%;
40-54: 49.8%;
55 and older: 24.3%.
Agency: Agriculture;
Under 40: 25.5%;
40-54: 49.7%;
55 and older: 24.8%.
Agency: Commerce;
Under 40: 29.9%;
40-54: 43.9%;
55 and older: 26.1%.
Agency: Defense;
Under 40: 22.7%;
40-54: 52.8%;
55 and older: 24.5%.
Agency: DHS;
Under 40: 45.1%;
40-54: 40.1%;
55 and older: 14.8%.
Agency: Education;
Under 40: 24.8%;
40-54: 44.1%;
55 and older: 31.0%.
Agency: Energy;
Under 40: 20.2%;
40-54: 50.5%;
55 and older: 29.3%.
Agency: EPA;
Under 40: 21.3%;
40-54: 52.7%;
55 and older: 26.0%.
Agency: GSA;
Under 40: 23.2%;
40-54: 48.1%;
55 and older: 28.7%.
Agency: HHS;
Under 40: 25.5%;
40-54: 47.9%;
55 and older: 26.6%.
Agency: HUD;
Under 40: 16.5%;
40-54: 46.6%;
55 and older: 36.9%.
Agency: Interior;
Under 40: 23.1%;
40-54: 49.7%;
55 and older: 27.2%.
Agency: Justice;
Under 40: 40.3%;
40-54: 50.5%;
55 and older: 9.2%.
Agency: Labor;
Under 40: 24.0%;
40-54: 45.7%;
55 and older: 30.3%.
Agency: NASA;
Under 40: 19.5%;
40-54: 58.6%;
55 and older: 21.9%.
Agency: NRC;
Under 40: 24.8%;
40-54: 47.5%;
55 and older: 27.7%.
Agency: NSF;
Under 40: 21.3%;
40-54: 45.9%;
55 and older: 32.8%.
Agency: OPM;
Under 40: 23.6%;
40-54: 45.2%;
55 and older: 31.2%.
Agency: SBA;
Under 40: 14.2%;
40-54: 47.6%;
55 and older: 38.1%.
Agency: SSA;
Under 40: 28.5%;
40-54: 42.6%;
55 and older: 28.9%.
Agency: State;
Under 40: 29.0%;
40-54: 46.0%;
55 and older: 25.0%.
Agency: Transportation;
Under 40: 22.0%;
40-54: 56.8%;
55 and older: 21.2%.
Agency: Treasury;
Under 40: 22.2%;
40-54: 51.2%;
55 and older: 26.6%.
Agency: USAID;
Under 40: 18.8%;
40-54: 50.5%;
55 and older: 30.7%.
Agency: Veterans Affairs;
Under 40: 20.1%;
40-54: 49.2%;
55 and older: 30.8%.
Source: GAO analysis of CPDF data as of September 2007.
Note: Except for State, data include foreign service employees. State
discontinued reporting this information to the CPDF in fiscal year
2006.
[End of figure]
Similarly, the proportion of federal workers eligible or nearly
eligible to retire is increasing and varies across federal agencies.
Thirty-three percent of federal career employees in the workforce at
the end of fiscal year 2007 will be eligible to retire by 2012. This is
an increase from 10 years earlier when about 20 percent of federal
career employees in the workforce at the end of fiscal year 1997 were
projected to be eligible to retire by 2002. The effects of retirement
will likely differ across agencies, as many workers projected to be
eligible to retire by 2012 are concentrated within certain agencies.
These proportions range from a high of 46 percent at four agencies--
HUD, SBA, Transportation, and USAID--to a low of 20 percent at DHS (see
figure 3).
Figure 3: Percent of Career Employees at CFO Agencies Eligible to
Retire by Fiscal Year 2012:
[Refer to PDF for image]
This figure is a vertical bar graph depicting the following data:
Governmentwide average: 33%.
Agency: Agriculture;
Percentage: 35.
Agency: Commerce;
Percentage: 35.
Agency: Defense;
Percentage: 33.
Agency: DHS;
Percentage: 20.
Agency: Education;
Percentage: 39.
Agency: Energy;
Percentage: 40.
Agency: EPA;
Percentage: 34.
Agency: GSA;
Percentage: 39.
Agency: HHS;
Percentage: 31.
Agency: HUD;
Percentage: 46.
Agency: Interior;
Percentage: 38.
Agency: Justice;
Percentage: 29.
Agency: Labor;
Percentage: 37.
Agency: NASA;
Percentage: 31.
Agency: NRC;
Percentage: 35.
Agency: NSF;
Percentage: 38.
Agency: OPM;
Percentage: 45.
Agency: SBA;
Percentage: 46.
Agency: SSA;
Percentage: 39.
Agency: State;
Percentage: 32.
Agency: Transportation;
Percentage: 46.
Agency: Treasury;
Percentage: 35.
Agency: USAID;
Percentage: 46.
Agency: Veterans Affairs;
Percentage: 34.
Source: GAO analysis of CPDF data as of September 2007.
Notes: Except for State, data include foreign service employees. State
discontinued reporting this information to the CPDF in fiscal year
2006.
[End of figure]
These data on retirement eligibility reflect the workforce as of the
end of fiscal year 2007 and do not include actual or projected staff
hiring or attrition at CFO agencies between 2007 and 2012. Some
workforce turnover is common at federal agencies; however, in some
cases more staff are leaving the agency than are being hired.
Within agencies, the estimated proportion of workers eligible to retire
also varies at the component level--that is, by bureau or unit. Thus,
even those agencies that have relatively low overall percentages of
retirement-eligible employees may have components that have higher
percentages of retirement-eligible staff. This, in turn, could affect
the accomplishment of mission tasks and strategic goals for agency
components and for the agency as a whole. For example, although the
Department of Homeland Security (DHS) has a low proportion--20 percent-
-of workers eligible to retire by 2012, the proportion of workers
eligible to retire now or by 2012 in its Federal Emergency Management
Agency is currently about 33 percent, and agency projections indicate
that about 58 percent of the senior executives in this agency will be
eligible to retire by 2012.
Certain occupations have particularly high proportions of workers
eligible to retire by 2012. Fifty percent or more of workers in 24
occupations that have 500 or more staff are eligible to retire by 2012.
Several of these occupations, such as air traffic controllers, customs
and border agents, and administrative law judges, are considered
mission critical. In addition, federal law requires mandatory
retirement at specified ages for some occupations, such as air traffic
controllers who must retire at age 56 (see figure 4).
Figure 4: Certain Occupations with High Eligibility Retirement Rates at
CFO Agencies by Fiscal Year 2012:
[Refer to PDF for image]
This figure is a vertical bar graph depicting the following data:
Governmentwide average: 33%.
Occupation: Administrative Law Judge;
Percentage: 85.
Occupation: Correctional Institution Administration;
Percentage: 68.
Occupation: Industrial Specialist;
Percentage: 63.
Occupation: Construction Control;
Percentage: 60.
Occupation: Air Traffic Control;
Percentage: 58.
Occupation: Chaplain;
Percentage: 57.
Occupation: General Maintenance & Operations work family;
Percentage: 56.
Occupation: Carpenter;
Percentage: 56.
Occupation: Hearings And Appeals;
Percentage: 55.
Occupation: Boiler Plant Operator;
Percentage: 54.
Occupation: Appraising;
Percentage: 54.
Occupation: Crane Operating;
Percentage: 54.
Occupation: Librarian;
Percentage: 54.
Occupation: Distribution Facilities & Storage Manage;
Percentage: 53.
Occupation: Facility Operations Services;
Percentage: 52.
Occupation: Geology;
Percentage: 52.
Occupation: Health System Administration;
Percentage: 52.
Occupation: Customs And Border Protection Interdiction;
Percentage: 51.
Occupation: Packing;
Percentage: 51.
Occupation: Engineering Technician;
Percentage: 51.
Occupation: Property Disposal;
Percentage: 51.
Occupation: Meteorological Technician;
Percentage: 51.
Occupation: Industrial Engineering Technician;
Percentage: 51.
Occupation: Engineering Equipment Operating;
Percentage: 50.
Source: GAO analysis of CPDF data as of September 2007.
Note: Except for State, data may include foreign service employees.
[End of figure]
Moreover, the proportion of federal executives and supervisors who will
reach retirement eligibility exceeds that of the overall proportion of
federal employees. Of the approximately 7,200 career executives in the
federal workforce at the end of fiscal year 2007, 41 percent were
eligible to retire in 2008 and 64 percent will be eligible by 2012.
[Footnote 12] For supervisors who are not career executives, 25 percent
were eligible to retire in 2008, and 45 percent are projected to be
eligible by 2012. In comparison, 17 percent of all federal workers were
eligible to retire in 2008 and 31 percent are projected to be eligible
by 2012.
Many Federal Workers Stay Well Past Their Initial Retirement
Eligibility, and Agencies' Efforts to Bring in Older Workers Have
Focused More on Hiring New Workers Than on Rehiring Annuitants:
Agencies have a variety of options to tap older, experienced workers to
fill workforce needs, including retaining workers past initial
retirement eligibility, hiring new older workers, and bringing back
retired federal annuitants. Although no data are available on the
effects of specific retention strategies, most federal workers do not
retire immediately upon being eligible, according to OPM's data, and
many stay in the federal workforce more than 5 years past their initial
retirement eligibility date. Of the more than 31,000 workers who became
eligible to retire in 1997, only about 20 percent retired within the
first year and over 40 percent were still in the federal workforce
after 5 years. These retention trends have remained relatively stable
since 1997 (see figure 5);[Footnote 13] the current economic situation
may result in even higher retention rates.
Figure 5: Percent of Federal Workers in CFO Agencies Who Actually
Retired within 5 Years of First Becoming Eligible:
[Refer to PDF for image]
This figure is a stacked vertical bar graph depicting the following
data for fiscal years in which employees first became eligible to
retire:
Fiscal year: 1997;
1st year: 21%;
2nd year: 12%;
3rd year: 10%;
4th year: 10%;
5th year: 7%;
Still employed five years after becoming eligible: 39%.
Fiscal year: 1998;
1st year: 18%;
2nd year: 13%;
3rd year: 11%;
4th year: 8%;
5th year: 8%;
Still employed five years after becoming eligible: 41%.
Fiscal year: 1999;
1st year: 18%;
2nd year: 12%;
3rd year: 9%;
4th year: 10%;
5th year: 8%;
Still employed five years after becoming eligible: 42%.
Fiscal year: 2000;
1st year: 17%;
2nd year: 11%;
3rd year: 10%;
4th year: 10%;
5th year: 9%;
Still employed five years after becoming eligible: 43%.
Fiscal year: 2001;
1st year: 17%;
2nd year: 12%;
3rd year: 11%;
4th year: 11%;
5th year: 8%;
Still employed five years after becoming eligible: 41%.
Fiscal year: 2002;
1st year: 17%;
2nd year: 12%;
3rd year: 11%;
4th year: 10%;
5th year: 7%;
Still employed five years after becoming eligible: 41%.
Five year trend data not yet available:
Fiscal year: 2003;
1st year: 17%;
2nd year: 13%;
3rd year: 11%;
4th year: 9%;
Still employed as of FY 2007: 48%.
Fiscal year: 2004;
1st year: 18%;
2nd year: 11%;
3rd year: 10%;
Still employed as of FY 2007: 58%.
Fiscal year: 2005;
1st year: 17%;
2nd year: 10%;
Still employed as of FY 2007: 69%.
Fiscal year: 2006;
1st year: 17%;
Still employed as of FY 2007: 80%.
Source: GAO analysis of CPDF data.
Notes: Each column represents the aggregate percentage of that year's
workers who first became eligible to retire in that fiscal year and who
retired that year and the next 5 successive years to the extent that
data are available. For example, the top striped block in columns-
retirements in the fifth year-represents the percentage of federal
employees who retire within the fifth year after the year they become
eligible to retire.
Except for State, data include foreign service employees. State
discontinued reporting this information to the CPDF in fiscal year
2006.
[End of figure]
Beyond retaining workers, when agencies bring in older workers to help
fill skill gaps, their efforts have focused more on hiring them as new
employees than on bringing back federal retirees as rehired annuitants.
In 2007, federal agencies hired almost 14,000 new workers that were 55
years of age or older, and the percentage of newly hired federal
workers aged 55 and older has more than doubled in recent years, up
from 3.4 percent in 1995 to 7.8 percent in 2007. In addition, the
average age of workers at the time of their appointments to full-time,
permanent federal service has increased over that same time period from
an average age of about 35 in 1995 to slightly over 37 in 2007. OPM
officials attribute this change to increases in the level of education,
skills, and experience that are required for many federal jobs.
While the overall proportion of older workers aged 55 and over who are
newly hired into federal service is increasing, this proportion varies
across CFO agencies. The Department of Health and Human Services (HHS)
and OPM hired the largest proportions of older workers--about 20
percent--while Justice, EPA, the National Aeronautics and Space
Administration (NASA), and SSA hired the smallest proportion--ranging
from about 3 to 5 percent (see figure 6).
Figure 6: Age Distribution of Career Federal Employees Newly Hired by
CFO Agencies in Fiscal Year 2007:
[Refer to PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
CFO Agencies' Average;
Age: Less than 25: 12%;
Age: 25-39: 43%;
Age: 40-54: 34%;
Age: Over 55: 11%.
Agency: Agriculture;
Age: Less than 25: 13%;
Age: 25-39: 43%;
Age: 40-54: 37%;
Age: Over 55: 8%.
Agency: Commerce;
Age: Less than 25: 16%;
Age: 25-39: 40%;
Age: 40-54: 30%;
Age: Over 55: 14%.
Agency: Defense;
Age: Less than 25: 13%;
Age: 25-39: 41%;
Age: 40-54: 40%;
Age: Over 55: 6%.
Agency: DHS;
Age: Less than 25: 26%;
Age: 25-39: 45%;
Age: 40-54: 23%;
Age: Over 55: 6%.
Agency: Education;
Age: Less than 25: 10%;
Age: 25-39: 57%;
Age: 40-54: 26%;
Age: Over 55: 7%.
Agency: Energy;
Age: Less than 25: 10%;
Age: 25-39: 42%;
Age: 40-54: 39%;
Age: Over 55: 9%.
Agency: EPA;
Age: Less than 25: 13%;
Age: 25-39: 56%;
Age: 40-54: 27%;
Age: Over 55: 4%.
Agency: GSA;
Age: Less than 25: 17%;
Age: 25-39: 36%;
Age: 40-54: 38%;
Age: Over 55: 9%.
Agency: HHS;
Age: Less than 25: 3%;
Age: 25-39: 35%;
Age: 40-54: 44%;
Age: Over 55: 18%.
Agency: HUD;
Age: Less than 25: 6%;
Age: 25-39: 39%;
Age: 40-54: 46%;
Age: Over 55: 9%.
Agency: Interior;
Age: Less than 25: 10%;
Age: 25-39: 44%;
Age: 40-54: 37%;
Age: Over 55: 9%.
Agency: Justice;
Age: Less than 25: 16%;
Age: 25-39: 67%;
Age: 40-54: 14%;
Age: Over 55: 3%.
Agency: Labor;
Age: Less than 25: 9%;
Age: 25-39: 44%;
Age: 40-54: 37%;
Age: Over 55: 10%.
Agency: NASA;
Age: Less than 25: 33%;
Age: 25-39: 28%;
Age: 40-54: 35%;
Age: Over 55: 4%.
Agency: NRC;
Age: Less than 25: 13%;
Age: 25-39: 39%;
Age: 40-54: 36%;
Age: Over 55: 12%.
Agency: NSF;
Age: Less than 25: 4%;
Age: 25-39: 36%;
Age: 40-54: 46%;
Age: Over 55: 14%.
Agency: OPM;
Age: Less than 25: 8%;
Age: 25-39: 39%;
Age: 40-54: 34%;
Age: Over 55: 19%.
Agency: SBA;
Age: Less than 25: 6%;
Age: 25-39: 39%;
Age: 40-54: 40%;
Age: Over 55: 15%.
Agency: SSA;
Age: Less than 25: 16%;
Age: 25-39: 51%;
Age: 40-54: 27%;
Age: Over 55: 6%.
Agency: State;
Age: Less than 25: 14%;
Age: 25-39: 49%;
Age: 40-54: 29%;
Age: Over 55: 8%.
Agency: Transportation;
Age: Less than 25: 9%;
Age: 25-39: 43%;
Age: 40-54: 37%;
Age: Over 55: 11%.
Agency: Treasury;
Age: Less than 25: 18%;
Age: 25-39: 40%;
Age: 40-54: 31%;
Age: Over 55: 11%.
Agency: USAID;
Age: Less than 25: 5%;
Age: 25-39: 56%;
Age: 40-54: 30%;
Age: Over 55: 9%.
Agency: Veterans Affairs;
Age: Less than 25: 6%;
Age: 25-39: 37%;
Age: 40-54: 44%;
Age: Over 55: 13%.
Source: GAO analysis of CPDF data as of September 2007.
Note: Except for State, data include foreign service employees. State
discontinued reporting this information to the CPDF in fiscal year
2006.
[End of figure]
Although the proportion of retired federal workers brought back by CFO
agencies as re-employed federal annuitants is quite small--less than 1
percent of all federal employees--their numbers total 5,364 and vary
from over 2,000 at the Department of Defense (Defense) to none at the
Department of Education (Education).[Footnote 14] Thirty-nine percent
of the rehired federal annuitants return to federal employment despite
statutory requirements that their salaries be reduced by the amount of
their annuities. However, in some cases, retirees may be rehired
without having their salaries reduced if OPM delegates the agency
waiver authority or grants the agency waivers in specific cases.
[Footnote 15] Based on CDPF data, three federal entities which have
been granted special waiver authority by statute--Defense, NRC, and the
Federal Law Enforcement Training Center of DHS--have all increased the
number of retired annuitants they rehire.[Footnote 16] For example, the
number of rehired retirees with no salary reductions at Defense has
increased from 282 in fiscal year 2004 (the year the authority was
granted)[Footnote 17] to 838 in fiscal year 2005, and has continued to
increase to 1,931 in 2007. While the overall numbers are smaller, the
experience of two other agencies that had been granted this authority
was similar.[Footnote 18] The number of rehired retirees with no salary
reductions at NRC increased from 43 in Fiscal Year 2006, when the
authority was implemented, to 85 in Fiscal Year 2007.[Footnote 19] The
number of rehired retirees without salary reductions at the Federal Law
Enforcement Training Center, now in DHS, increased from zero in Fiscal
Year 2001 to 89 in fiscal year 2007[Footnote 20] (see table 2).
Table 2: Federal Agencies with the Highest Percentage of Rehired
Annuitants without Reduced Salaries in Fiscal Year 2007:
Agency: NRC[A];
Number of annuitants without reduced salaries: 85;
Percentage of annuitants without reduced salaries: 89%;
Number of annuitants with reduced salaries: 10;
Percentage of annuitants with reduced salaries: 11%;
Total number of rehired annuitants: 95;
Total Number of employees: 3,769.
Agency: Defense[A];
Number of annuitants without reduced salaries: 1,930;
Percentage of annuitants without reduced salaries: 88%;
Number of annuitants with reduced salaries: 264;
Percentage of annuitants with reduced salaries: 12%;
Total number of rehired annuitants: 2,200;
Total Number of employees: 680,332.
Agency: SBA;
Number of annuitants without reduced salaries: 47;
Percentage of annuitants without reduced salaries: 84%;
Number of annuitants with reduced salaries: 9;
Percentage of annuitants with reduced salaries: 16%;
Total number of rehired annuitants: 56;
Total Number of employees: 5,016.
Agency: USAID;
Number of annuitants without reduced salaries: 8;
Percentage of annuitants without reduced salaries: 73%;
Number of annuitants with reduced salaries: 3;
Percentage of annuitants with reduced salaries: 27%;
Total number of rehired annuitants: 11;
Total Number of employees: 1,370.
Agency: State;
Number of annuitants without reduced salaries: 41;
Percentage of annuitants without reduced salaries: 65%;
Number of annuitants with reduced salaries: 22;
Percentage of annuitants with reduced salaries: 35%;
Total number of rehired annuitants: 63;
Total Number of employees: 10,700.
Agency: Total for all CFO agencies;
Number of annuitants without reduced salaries: 3,245;
Percentage of annuitants without reduced salaries: 61%;
Number of annuitants with reduced salaries: 2,054;
Percentage of annuitants with reduced salaries: 38%;
Total number of rehired annuitants: 5,361;
Total Number of employees: 1,857,808.
Source: GAO analysis of CPDF data as of September 2007.
Note: Data do not include foreign service employees.
[A] Agency has special authority to rehire federal annuitants without
reducing their salaries.
[End of table]
Other agencies, including HHS, the Department of Veterans Affairs
(Veterans Affairs), and SSA, have received authority from OPM to waive
the salary reduction requirement for positions that have been difficult
to fill. For example, SSA has received delegated authority to re-employ
federal retirees with full salaries and annuities as administrative law
judges--positions that are extremely difficult to fill.
In addition to the above options, all agencies have legislative
authority to re-employ federal retirees without reducing their salaries
to fill acquisition-related positions, such as contract specialists,
provided they comply with OPM policies regarding reporting and
procedures.[Footnote 21] As of December 2008, 15 agencies have filed
plans to use this authority and had them approved by OPM.[Footnote 22]
Selected Agencies Face Common Challenges and Have a Variety of
Strategies to Tap Older Workers to Meet Workforce Needs:
The growing proportion of federal workers who are eligible to retire
now or in the near future presents challenges and opportunities for
federal agencies. While distinct in many ways, the agencies we
reviewed--HUD, SSA, and USAID--share common workforce challenges. Like
other federal agencies, HUD, SSA, and USAID have large proportions of
employees nearing retirement. Also, according to agency officials, all
three agencies have relatively few staff at mid-level positions to help
pass down institutional knowledge and skills to less experienced
employees due to past budget cuts and hiring freezes. Finally, they are
all challenged in their efforts to attract qualified staff with
specialized skills. Consequently, when their older workers eventually
retire, HUD, SSA, and USAID will face critical gaps in leadership,
skills, and institutional knowledge. To address these challenges, these
agencies rely on older workers in different ways and use selected
governmentwide human capital flexibilities in addition to their own
strategies, to hire and retain older workers. We also found that other
federal agencies have developed their own approaches to hire and engage
older workers to meet their workforce challenges, but these approaches
have not been widely shared with other federal agencies.
While Distinct in Many Ways, Three Case Study Agencies--HUD, SSA, and
USAID--Share Common Workforce Challenges:
The three case study agencies we reviewed--HUD, SSA, and USAID--have
very different missions that lead to different staffing needs and
solutions. HUD, for example, assists millions of individuals through
programs that help to encourage home ownership, provide housing
assistance to low-and moderate-income families, and promote economic
development. The agency employs approximately 9,600 individuals--two-
thirds of whom work in 81 field offices across the United States. In
addition to federal employees, HUD also relies on thousands of third-
party entities--such as private lenders, contractors, nonprofit
organizations, and local governments--to administer many of its
programs, including rental assistance and community development
programs. A large portion of HUD's employees are located in the Office
of Housing and work in a variety of positions, including specialists in
contract oversight, loan servicing, and public housing revitalization.
In comparison, SSA administers retirement and income support programs
for millions of disabled or older individuals and their dependents. SSA
is a large agency, employing approximately 62,600 individuals--many of
whom are located in field offices and work directly with customers. In
2007, the more than:
1,200 of SSA's field offices[Footnote 23] served approximately 42
million customers.[Footnote 24] Generally SSA seeks to hire individuals
with strong interpersonal and general analytical skills who are then
trained for direct service positions, such as social insurance
specialists and contact representatives. Different from both HUD and
SSA, USAID employees often work outside of the United States to provide
humanitarian and economic assistance to about 100 developing countries.
Of the approximately 2,400 USAID employees, about half belong to the
foreign service and the rest are civil service. Many of USAID's foreign
service employees work as foreign service officers. Entry level
qualifications for this position include having an advanced degree and
relevant international professional experience. In addition to its
federal employees, USAID relies heavily on contractors and grantees to
implement its overseas development projects, including Food for Peace
initiatives in South Asia and Democracy and Governance programs in the
Middle East. Table 3 below highlights some of these agencies'
characteristics.
Table 3: Characteristics of Case Study Agencies:
2007 budget:
HUD: $33.6 billion;
SSA: $624.6 billion;
USAID: $9.3 billion.
Agency's approximate size:
HUD: 9,600 civil service employees;
SSA: 62,600 civil service Employees;
USAID: 2,400 total (1,100 civil service employees and 1,300 foreign
service employees).
Agency's purpose:
HUD: Assists individuals through programs that help to encourage home
ownership, increase access to affordable housing free from
discrimination, and support community development;
SSA: Administers income support programs for millions of elderly or
disabled individuals and their dependents;
USAID: Provides humanitarian and economic assistance to about 100
developing countries.
Examples of mission-critical positions:
HUD: Loan servicing specialists; Public housing revitalization
specialists; Contract oversight specialists;
SSA: Social insurance specialists; Contact representatives;
Administrative law judges;
USAID: Health specialists; Contract specialists; Human resources
specialists.
Source: GAO analysis.
Note: Number of employees reflects CPDF data as of September 2007.
[End of table]
Despite their differences, HUD, SSA, and USAID share common workforce
challenges. Like the federal government as a whole, HUD, SSA, and USAID
have large portions of their workforces nearing retirement, and these
older, experienced workers may leave behind gaps in leadership, skills,
and institutional knowledge. Both HUD and USAID risk losing close to
half of their current workforces to retirement by 2012. Similarly, SSA
is expected to lose more than one-third of its employees to retirement
by 2012--a time when the agency expects to experience a dramatic
increase in workload due to the aging baby boom generation. Close to
half of the current workforces at HUD and USAID will be eligible to
retire in that same time period.
Officials believe that many of the retiring employees will leave gaps
in institutional knowledge and technical skills, especially in mission-
critical occupations--those that agencies consider key to carrying out
their missions. For example, SSA officials reported that between about
14 and 64 percent of its employees in mission-critical positions were
eligible to retire in fiscal year 2008. This includes 64 percent of its
administrative law judges and about 40 percent of its supervisors,
paralegal specialists, claims assistants and examining specialists. In
addition, HUD officials told us that half of its employees in mission-
critical occupations--2,057--are currently eligible to retire.
While these retirement eligibility rates suggest that large portions of
HUD, SSA, and USAID's current employees might retire by 2012, most
employees do not retire as soon as they become eligible. We have
previously reported that employment options--such as having the ability
to work part-time or having flexible work schedules--may affect
workers' decisions to stay employed. HUD, SSA, and USAID offer these
employment options, as well as other strategies, that may help retain
older workers. In addition, officials from all three agencies told us
that many employees stay past retirement eligibility because they are
dedicated to their work and the mission of the agency. SSA officials
reported that about 1,500[Footnote 25] SSA employees have been with the
agency for at least 40 years--tenures that extend well beyond the
average retirement age. HUD officials told us that less than 5 percent
of its total workforce has retired in the past 2 years. USAID officials
told us that on average their employees continue working 5 years after
they become eligible to retire. We found that in 1997, 1999, and 2002,
between 38 and 52 percent of employees at HUD, SSA, and USAID remained
in the federal workforce 5 years after first becoming eligible to
retire--somewhat above the overall governmentwide averages of between
41 and 45 percent in those same years. These retention trends may be
heightened in the near term, as the recent downturn in the economy may
cause many in the nation's workforce--including federal employees--to
postpone their retirements.
Another challenge that these agencies face is that they have relatively
few staff in mid-level positions (GS-12 to GS-15 for the civil service
and FS-4 to FS-2 for the foreign service)[Footnote 26] to pass down
institutional knowledge and skills to less experienced staff. According
to agency officials, budget cuts and hiring freezes of the 1990s kept
HUD, SSA, and USAID from filling many of their entry-level positions
with junior staff who would today be considered experienced, mid-level
employees. For example, between 1993 and 2007, HUD's overall staffing
levels decreased by about 30 percent, and USAID's decreased by about 40
percent.[Footnote 27] For USAID, not having enough mid-level staff is
made even more complicated as the agency has begun to grow. Recent
appropriations have allowed the agency to significantly increase its
foreign service workforce over the next several years with primarily
entry-level staff--employees who could generally benefit from the
knowledge and skills of experienced staff. While SSA's staffing levels
have declined in recent years, the size of its workload has increased
with the growing number of individuals eligible for SSA's services. We
reported in May 2008 that recent staffing declines may have been a
factor in reducing SSA's ability to complete all of its work while
providing quality customer service.[Footnote 28]
In addition, these agencies also are challenged in their efforts to
attract qualified staff with specialized skills that are either
uncommon or in high demand. USAID officials told us that many of its
foreign service positions require specialized and uncommon skills--such
as fluency in foreign languages and in-depth knowledge of cultures in
remote regions. The limited pool of qualified and experienced
individuals that the agency hires for these positions typically is
drawn from other federal agencies, such as Treasury and State, as well
as nongovernmental organizations. However, more often, USAID relies on
less experienced individuals with strong interests in and aptitude for
the foreign service and prepares these individuals for the highly
specialized positions by providing them with several months of
intensive language and overseas training. SSA and HUD also have hard-
to-fill positions that require specialized skills. One in particular is
the administrative law judge--a mission-critical position that both
agencies find hard to fill. As of July 2008, all three of HUD's
administrative law judge openings remained unfilled, and SSA had to
seek approval from OPM to hire back eight retirees for this hard-to-
fill position. These agencies also need individuals with other
specialized skills that are in high demand by other employers. For
example, HUD's financial analyst, auditing, and information technology
positions are similar to the positions in many private firms that pay
higher salaries in comparison to the federal government. Consequently,
these positions at HUD have been significantly understaffed--by up to
47 percent in some offices within HUD--for the past several years
because, according to officials, the agency cannot offer salaries to
attract qualified individuals away from the private sector. For the
same reason, SSA is challenged to fill a number of its specialized
positions, such as those for accountants, attorneys, and information
technology technicians.
Case Study Agencies Rely on Older Workers in Different Ways and Use
Selected Governmentwide Human Capital Flexibilities, in Addition to
Their Own Strategies, to Address Their Workforce Challenges:
To address their workforce challenges, HUD, SSA, and USAID rely on
older workers in different ways, sometimes through the use of selected
governmentwide flexibilities that are attractive to all workers,
including older workers. Human capital flexibilities represent policies
and practices that an agency may use in managing its workforce to
accomplish its mission and achieve its goals. These flexibilities--with
appropriate safeguards--allow agencies to take actions related to
recruitment, retention, compensation, work arrangements, and work-life
policies. Depending on their individual workforce needs and goals,
agencies tailor the use of these flexibilities.[Footnote 29] In
addition, we learned that other factors influenced the case study
agencies use of human capital flexibilities, including the potential
negative consequences they have on an agency's budget or workforce and
the ease with which these flexibilities are adopted.
Compared to other flexibilities, the flexibilities that help employees
strike a work-life balance, including telework and alternative work
schedules, may be less complex to adopt since each agency is
responsible for establishing its own policies within certain broad
guidelines. In addition, these work-life flexibilities may have little
to no negative impact on an agency's budget or workforce. For example,
a recent OPM survey found that telework has, in fact, improved
productivity and morale among many staff. We recently reported that
these work-life flexibilities are often extremely important to older
workers. For example, some research indicates older workers want to set
their own hours and to be able to take time off to care for relatives
when needed. In addition, older workers nearing retirement may prefer a
part-time schedule as a means to retire gradually.[Footnote 30] Figure
7 below outlines some of the factors that influence case study
agencies' use of selected human capital flexibilities.
Figure 7: Factors That Influence Use of Selected Human Capital
Flexibilities:
[Refer to PDF for image]
Potential benefits:
Rehiring retiree without financial offset:
Allows agencies to bring back knowledge-able and skilled retirees and
avoid the potential high cost of bringing retirees back as contractors;
Allows rehired annuitant the opportunity to train less experienced
staff and perform inherently governmental functions.
Targeted pay rate increase:
Helps agencies to attract or retain individuals, including older
workers, with superior qualifications.
Recruitment and retention incentives:
Helps agencies to attract or retain individuals, including older
workers, with specialized skills--for example information technology
specialists and accountants.
Part-time schedule:
Assists employees with personal commitments and is especially
attractive to older workers.
Enhanced annual leave accrual rates:
Helps agencies attract non-federal workers, including older workers,
who have specialized skills by using relevant work experience to
compute annual leave at higher rates.
Alternative work schedule:
Can improve morale, productivity, recruitment, and retention among
staff and assists employees with personal commitments; this flexibility
can be especially attractive to older workers.
Telework:
Can improve morale, productivity, recruitment, and retention among
staff; and assists employees with personal commitments; this
flexibility can be especially attractive to older workers.
Potential negative consequence:
Spectrum is from more negative consequence to less negative consequence
and from more complex to adapt to less complex to adapt:
Rehiring retiree without financial offset:
Has the potential to stymie promotion and work opportunities for new
and current employees.
Targeted pay rate increase:
Can decrease budget amount to fund the pay rate increase, which in turn
may reduce staffing levels.
Recruitment and retention incentives:
Can decrease budget amount to fund the incentives, which in turn may
reduce staffing levels.
Part-time schedule:
Can require additional administrative effort to ensure staff coverage.
Enhanced annual leave accrual rates:
Has little negative impact”with appropriate oversight”on an agency‘s
workforce, productivity, or budget.
Alternative work schedule:
Has little to no negative impact”with appropriate oversight”on an
agency‘s workforce, productivity, or budget.
Telework:
Has little to no negative impact”with appropriate oversight”on an
agency‘s workforce, productivity, or budget.
Safeguard:
Spectrum is from more negative consequence to less negative consequence
and from more complex to adapt to less complex to adapt:
Rehiring retiree without financial offset:
Requires most agencies to submit a request to OPM and receive approval
to fill hard-to-fill positions with federal retirees.
Targeted pay rate increase:
Requires agency officials to work within a fixed budget amount,
consider complex issues, and place a priority on hiring fewer
individuals with specialized skills or more individuals with general
skills.
Recruitment and retention incentives:
Requires agency officials to work within a fixed budget amount,
consider complex issues, and place a priority on hiring fewer
individuals with specialized skills or more individuals with general
skills.
Part-time schedule:
Requires agency officials to determine what is best for their workforce
and mission and approve part-time schedules on a case-by-case basis.
Enhanced annual leave accrual rates:
Requires approval by the head of the agency.
Alternative work schedule:
Requires managers and supervisors to approve flexible schedules on a
case-by-case basis.
Telework:
Requires agencies to establish policies that describe which employees
are eligible to participate.
Source: GAO analysis.
[End of figure]
Overall, we found that these work-life flexibilities were popular
options for many employees, including older workers, at HUD, SSA, and
USAID. For example, USAID officials told us that almost all of their
employees have flexible schedules. While they are popular, these
flexibilities do not fit well with every individual or every job. HUD
officials told us that while most of its employees have the opportunity
to work a compressed schedule so that they have a day off during a pay
period, supervisors and managers are not allowed to use this
flexibility because the agency values having management in the office 5
days a week to supervise program functions. Similarly, SSA officials
reported that many frontline employees at SSA do not telework because
SSA's primary service delivery structure requires staff to be
physically present at the field offices, working directly with its
customers. To help ensure that these flexibilities are appropriately
used, agencies typically require supervisory or managerial approval.
Other flexibilities, in contrast, can have substantial consequences on
a portion of an agency's budget or workforce. For this reason, certain
flexibilities have safeguards in place to help regulate their use. For
example, in order to hire federal retirees without reducing their
salaries by the amount of their annuities, most agencies must submit a
request to OPM. In 2007, OPM approved waivers to rehire only 22
annuitants across HUD, SSA, and USAID. Agencies have the option of
rehiring federal retirees without using the dual compensation waiver,
but the retirees' salaries are reduced by the amount of their
annuities. Perhaps as a result, a relatively small number of retirees-
-210--across these three agencies elected to return to federal service
when their salaries were to be reduced by their annuities.
In addition to the governmentwide flexibilities, HUD, SSA, and USAID
employ other strategies to involve older workers to help meet their
workforce needs. While all three agencies rely on older workers to pass
down institutional knowledge and critical skills to less experienced
staff, HUD officials told us this is the primary way they actively
involve older workers. One way HUD does this is through its formalized
mentoring program, which allows senior staff to share their
experiences, insights, and professional wisdom with junior staff. The
agency has also developed a 2-year training program in which newly
hired employees rotate through various positions throughout the agency
and work with a variety of experienced employees to learn critical
skills and knowledge. Officials told us that they use this program to
help train new employees in order to fill positions that become
available; and that they do not use recruiting or retention activities
directed at older workers with particular skills or experience.
According to officials, these mentoring relationships not only help
transfer knowledge to less experienced workers, they also help retain
older workers with the strong professional relationships the senior
staff build with junior employees.
In meeting workforce needs, SSA depends, in part, on its historically
high retention rate to ensure the right skill levels. Over the past
several years, however, SSA has increasingly used information
technology in strategic workforce planning and has taken certain
actions to recruit and retain older workers. For example, to better
understand where to place its human capital efforts, SSA has developed
a complex statistical model that uses historical data to project future
retirements. Specifically, this model projects who is likely to retire,
and SSA uses these projections to estimate gaps in mission-critical
positions and to identify what components of the agency could be most
affected by the upcoming retirements. With these estimates, the agency
develops action plans focused on hiring, retention, and staff
development.[Footnote 31] As a result of using these models, SSA has
developed targeted recruitment efforts that reach out to a broad pool
of candidates, some of whom are older workers and who have valuable
leadership experience and skills. SSA is also beginning to reach out to
older workers in order to achieve one of its diversity goals--
attracting a multigenerational workforce. These steps have included
developing recruiting material featuring images of older and younger
workers. In addition, SSA has two other efforts specifically designed
to retain older workers. One is a phased retirement program, which
allows employees to work on a part-time basis rather than fully
retiring. The other is a trial retirement program, which allows workers
to return to work within a year of retiring if they repay the annuities
they have received. However, SSA officials told us that the programs
have been used rarely because of the financial penalty workers would
face. SSA has developed programs, including elder and kinship care
referral services and financial literacy services, designed to help
retain workers.
Agency officials told us that USAID tends to bring back its retirees as
contractors to fill short-term job assignments and to help train and
develop the agency's growing number of newly hired staff. The agency
uses various staffing mechanisms, including personal services
contracts, to bring back retired foreign service officers to meet short-
term workforce needs and to mentor newly hired foreign service
officers.[Footnote 32] However, the agency does not specifically focus
on older workers in its recruiting or retention activities. USAID
officials told us that their retirees play a key role in helping new
staff learn institutional knowledge and new skills. All newly hired
foreign service officers have a mentor, who is typically a retired
foreign service officer. These mentors work closely with the junior
officers during their new staff orientation and initial training. Once
the junior staff receives his or her overseas assignment, the mentor
continues contact with the newly hired employee through telephone calls
and occasional visits. USAID officials told us that their mentor
program greatly helps junior staff become acclimated to the foreign
service and it is an effective means to engage retirees who have
essential skills and knowledge to pass down to new staff. In addition,
retired foreign service officers help the agency meet short-term
workforce needs. In one example, officials told us that a foreign
service officer had to leave an assignment in Haiti several months
before a replacement could arrive. USAID brought back a retiree who had
experience with and knowledge about Haitian culture to fill the job
assignment temporarily. According to officials, these retirees help the
agency quickly acquire critical skills and pass down institutional
knowledge. Because the federal retirees are contractors, the agency is
able to begin and end their service relatively easily.
Other Federal Agencies Have Developed Their Own Promising Practices to
Hire and Retain Older Workers to Meet Their Workforce Needs:
We interviewed officials in several agencies that have developed other
approaches to hiring and engaging older workers.
* Identifying and recruiting retirees with critical skills by using
technology. State has developed two databases to match interested
foreign service and civil service retirees with short-term or
intermittent job assignments that require their skill sets or
experiences. One database--the Retirement Network, or RNet--contains a
variety of information, including individuals' job experiences, foreign
language abilities, special skills, preferred work schedules, and
favored job locations. To identify individuals with specific needed
skill sets, officials match information from RNet with another database
that organizes and reports all available and upcoming short-term job
assignments. For instance, in 2004, the agency identified current and
retired employees familiar with Sumatra's culture and language and sent
many of them to Indonesia to help with the tsunami relief efforts.
According to officials, this technology has allowed State to identify
individuals with specialized skills and specific job experiences within
hours. Before these systems were in place, the search for individuals
with specific skills and experiences would have taken days or weeks,
and even then, the list of individuals would have been incomplete.
Because different personnel rules apply to foreign service and civil
service positions, the agency typically brings civil service retirees
on as contractors--nonfederal employees without any reduction to
earnings or annuities--and, in certain circumstances, may hire foreign
service retirees as federal employees who may earn their full salaries
while receiving their annuities.[Footnote 33]
* Hiring older workers through nonfederal approaches. EPA has designed
a program that places workers aged 55 and over in administrative and
technical support positions within EPA and other federal and state
environmental agencies nationwide. Instead of hiring older workers
directly into the government as federal employees, EPA has cooperative
agreements with nonprofit organizations to recruit, hire, and pay older
workers. Under these agreements, workers are considered program
enrollees, not federal employees. EPA's Senior Environmental Employment
(SEE) program started as a pilot project in the late 1970s and was
authorized by the Environmental Programs Assistance Act in
1984.[Footnote 34] According to EPA, there are approximately 1,525 SEE
enrollees--many of whom come from long careers in business and
government service--who offer valuable knowledge and often serve as
mentors to younger coworkers. Depending on their skills and experience,
program enrollees' wages vary, starting at $7.09 per hour and peaking
at $17.72 per hour. Using the SEE program as a model, the Department of
Agriculture's (Agriculture) Natural Resources Conservation Service
recently developed a pilot project called the Agriculture Conservation
Enrollees/Seniors (ACES) program.[Footnote 35] Officials from both EPA
and the Natural Resources Conservation Service (NRCS) told us that
their programs are crucial in helping agencies meet workload demands
and providing older workers with valuable job opportunities.
* Partnering with private firms to hire retired workers. In partnership
with IBM and the Partnership for Public Service, Treasury is
participating in a pilot project that aims to match the talent and
interest of IBM retirees and employees nearing retirement with
Treasury's mission-critical staffing needs. Working together, the three
organizations are designing a program that intends to send specific
Treasury job opportunities to IBM employees with matching skill sets
and experience; help create streamlined hiring processes; provide
career transition support, such as employee benefits counseling and
networking events; and encourage flexible work arrangements. Officials
are developing the pilot project within existing governmentwide
flexibilities that do not require special authority from OPM. As a
senior official suggested, designing such a project may reveal the
extent to which existing federal flexibilities allow new ways of hiring
older workers.
Agency officials at Agriculture, EPA, State, and Treasury told us that
in developing their promising practices, they faced significant
challenges, including negotiating new relationships with private
entities and obtaining legislative authority for the program. In
overcoming these obstacles, agency officials told us that they learned
valuable lessons that could be shared with other agencies to help these
agencies adopt similar strategies with less time and effort.
OPM Has Taken Actions to Help Agencies Hire and Retain a Skilled
Workforce, but Could Do More to Share Promising Strategies:
To help federal agencies hire and retain skilled workers, OPM provides
guidance, planning tools, and training, and often advocates changes in
human capital programs by developing legislative proposals for Congress
to consider. As components of these efforts, OPM has taken action that
address three areas of concern for applicants, particularly older
workers. First, it has begun to streamline the complex federal job
application process. In addition, it has developed two legislative
proposals--one would eliminate barriers to rehiring federal annuitants,
and another would make it easier for certain federal workers to work
part-time at the end of their careers. While these two proposals were
incorporated into legislation in 2007, efforts stalled before passage,
and it is unclear whether they will be reintroduced. Despite OPM's
efforts, the agency could do more to facilitate information sharing
between federal agencies.
OPM Provides Assistance to Agencies on Hiring and Retaining Skilled
Workers, Including Older Workers:
OPM provides guidance, planning tools, and training to help federal
agencies hire and retain the best qualified workers to fill positions.
OPM's efforts are focused on positions and merit, not people, as it
helps agencies attract workers who possess the right skills and
experience to meet agencies' workforce needs without regard to age or
other demographic variables such as sex or ethnicity. OPM encourages
federal agencies to market career opportunities available in the
federal government to talented individuals from all segments of
society, including older workers, as part of their overall recruitment
efforts.
In its role as human capital leader, OPM provides agencies with
guidance and technical support on how to use available hiring programs
and flexibilities, many of which are attractive to older workers, to
ensure the federal government has an effective civilian workforce. For
example, OPM has developed a handbook--Human Resources Flexibilities
and Authorities in the Federal Government--that identifies the many
human capital flexibilities and authorities currently available and how
agencies can address workforce challenges. In addition, OPM has
developed a guide called Career Patterns that is intended to help
agencies recruit a diverse, multigenerational workforce and has posted
the guide on its Web page. This guide presents career pattern scenarios
that characterize 10 segments of the general labor market according to
career related factors, such as commitment to a mission and experience.
The guide lists characteristics of the work environment that some
cohorts may find particularly attractive and related human capital
policies that agencies could use to recruit and retain potential
employees. For example, according to the guide's "Retiree Scenario,"
this cohort finds flexible work schedules, camaraderie, and work
aligned with their interests very attractive. Consequently, to recruit
and retain this segment, the guide advises agencies to offer part-time
work, flexible work scheduling, and telework, and to provide
opportunities for mentoring and meaningful assignments. Officials from
two of our three case study agencies stated they found information in
Career Patterns useful and inserted language from it in their job
announcements, but officials in the other agency said they did not find
it especially helpful. A senior human capital official in that agency
reported to us that Career Patterns did not provide the type of
information that was needed to develop new strategies in hiring a
multigenerational workforce.
In developing and disseminating guidance, OPM officials work with the
Chief Human Capital Officers Council (the Council),[Footnote 36] a
group of chief policy advisors on human capital issues representing
each of the 24 CFO agencies. OPM officials told us the need for
guidance often evolves from requests for information made by the
Council and OPM's agency liaisons. For example, inquiries from the
Council about how to request a waiver to rehire annuitants without
reducing their salaries led OPM officials to develop a template for
agencies to use in submitting these requests. OPM relies upon the
Council to communicate OPM policy and other human capital information
throughout their agencies. OPM officials see their relationship with
the Council and the agencies they represent as a partnership and
believe that they have a shared responsibility to ensure that the
latest guidance and promising practices are disseminated throughout
each agency.
To help agencies implement its guidance, OPM has developed several
support tools and has instituted training programs. For example, in
fall 2005, OPM made a decision-support tool available online to assist
agencies in assessing which hiring flexibilities would best meet their
needs. Known as the Hiring Flexibilities Resource Center, this tool
provides in-depth information on a variety of flexibilities. With
respect to training, OPM, in coordination with the Council, conducts a
Council Academy--a forum for council members to discuss federal human
capital issues. This academy meets several times each year to address
topics generated by the Chief Human Capital Officers (CHCO) and their
assistants. OPM also provides briefings and policy forums as well as
information on its Web site about a range of human capital issues,
including the use of flexibilities.
OPM Has Taken Actions That Could Address Three Areas of Concern but
Could Do More to Help Agencies Share Promising Strategies in Hiring and
Retaining Older Workers:
By reducing the burden associated with the federal hiring process and
by proposing legislation to make it easier to rehire annuitants and to
allow certain employees to work part-time at the end of their careers,
OPM has taken steps that would address problems in three areas that
have caused difficulties for older workers.
Frustration with the federal hiring practice has been well documented
and spans all age groups, including older workers. The Partnership for
Public Service reported that 57 percent of the older workers it
surveyed reported that applying for a federal job is fairly or very
difficult. The report noted that the federal job application process is
bureaucratic and confusing, with federal job announcements that often
run 10, 20, or more pages and require applicants to submit college
transcripts in very short periods of time.[Footnote 37] Similarly,
based on a recent survey of recently hired upper-level federal
employees, the U.S. Merit Systems Protection Board found that 39
percent of these new hires said they did not apply for other federal
jobs that they were interested in because of burdens and complexities
associated with the hiring process.[Footnote 38] The issues cited
included having to rewrite or reformat their resumes or the
descriptions of their knowledge, skills, and abilities, and having to
respond to lengthy questionnaires. Results of the survey also indicated
that the process was very lengthy, with 75 percent of new hires
reporting it took longer to be hired for their present civil service
position than their previous position.
In 2008, OPM began to implement its End-to-End Hiring Roadmap
Initiative, which will re-engineer the federal hiring process that has
frustrated job applicants. As part of this initiative, OPM created a
streamlined job announcement template for governmentwide, entry-level
accounting and secretarial positions and is in the process of creating
additional templates for other positions. The template will provide
agencies with standardized language and formats to guide the
development of announcements while allowing opportunities for
customization. The new templates will reduce the complexity and length
of traditional announcements for certain occupational communities by
eliminating many requirements that called for information beyond that
which is usually included in a resume.[Footnote 39] This initiative
also includes developing a process that ensures job announcements and
instructions are clear and understandable, notifies applicants that
their application has been received, and updates applicants on the
status of their application as significant decisions are reached. Other
parts of the initiative address integrating human capital activities
such as workforce planning, recruiting, hiring processes, security
processing, and orienting new employees into federal organizations.
OPM is also involved in other projects that address impediments in the
federal hiring process. For example, an OPM team is working with the
Partnership for Public Service on a project called the Extreme Hiring
Makeover. This project has united experts from the private and public
sectors to work with Education, the National Nuclear Security
Administration, and the Centers for Medicare and Medicaid Services.
These three agencies agreed to rely on private sector and public sector
firms to diagnose problems in recruiting and hiring processes and to
implement solutions.
With regard to rehiring annuitants, OPM submitted a legislative
proposal that would allow the heads of all federal agencies to rehire
retired federal employees on a temporary basis without reducing their
salaries or annuities and without obtaining prior OPM approval. To
advance this purpose, bills were introduced in Congress in 2007,
[Footnote 40] but were stalled before final passage. Like the
legislative proposal, the bills limit the amount of time that the
waiver may cover to:
* 520 hours of service performed during the period ending 6 months
after the date on which the annuity begins;
* 1,040 hours of service performed during a 12 month period; or:
* 6,420 hours of service performed during the lifetime of the
annuitant.
It is unclear whether this proposal will be reintroduced in the new
Congress. While the potential cost of the proposal has been debated,
neither OPM nor the Congressional Budget Office have estimated its
cost. Officials in several agencies have indicated that bringing
retirees back on a part-time basis to fill certain positions is less
costly than hiring new employees, largely because agencies do not need
to cover retirees' benefits costs. Also, these officials noted that
rehired annuitants can "hit the ground running," without orientation or
training. Despite these potential savings, other experts believe that
the additional costs associated with the higher salaries earned by
retirees, compared to those typically earned by newer workers, might
outweigh the benefits. These experts also see training and associated
activities as investments that will help agencies address future, as
well as present, workforce needs.
OPM has also taken steps that could make it more attractive for certain
federal workers to work part-time at the end of their careers--an
option of particular importance for workers interested in a phased
retirement. While all federal employees experience reduced annuities if
they choose to work part-time--an equitable outcome because they work
fewer hours over the course of their career--some workers are
disproportionately penalized. For those individuals who have full-time
federal service prior to April 6, 1986, and who work part-time at the
end of their careers, the annuity calculation does not give full credit
to the pre-1986 service. OPM's proposal would address this inequity in
the way federal annuities are calculated by fully crediting work
preformed on a full-time basis before 1986. For the past several
sessions of Congress, bills have been introduced to enact this change,
but none have passed.[Footnote 41]
Although OPM has taken steps to address areas of concern, it could do
more to disseminate information across the federal government on agency-
developed promising practices to recruit and retain older workers to
meet workforce needs. We have identified several agencies that have
developed their own promising practices, and officials in these
agencies believe others could effectively build upon these practices if
knowledge of them was more widely available. According to OPM, this
type of information sharing is a joint responsibility between the
agencies and OPM, and officials see the CHCO Council as the primary
means for such communication. However, to date, this information has
not been made widely available through the CHCO Council. And, while OPM
has other methods available--such as its human capital and electronic
government practices Web sites--that could be used to efficiently
package and broadly disseminate this information to a much larger and
diversified audience, it currently has no plans to do so.
Conclusions:
Today's workers are better educated, healthier, and are living longer
than workers of previous generations, and many look forward to working
beyond their normal retirement age in positions that they find
personally meaningful. Clearly, the federal government enjoys the
benefits of a workforce dedicated to public service and provides
workers with the opportunities for meaningful work--the ability of the
government to retain workers well past their retirement eligibility
speaks to this fact. The current economic crisis may cause even more
federal workers to stay in the workforce in the near term and forestall
the looming retirement wave. But, at some point, these workers will
retire, and focusing on the future, the federal government may need to
do more to ensure that when the retirement wave does occur, it is
prepared to tap the talents of the older workers who have the skills
they need.
At least three federal agencies have developed their own practices that
show promise in recruiting and retaining talented older workers who
have needed and specialized skills. Although other agencies might
benefit from this information, little attention has been paid to
sharing it with other agencies. While OPM officials see this kind of
information exchange as a shared responsibility between OPM and the
agencies, OPM, as the government's central personnel agency, is both
authorized and best positioned to take on this responsibility.
Recommendations for Executive Action:
To better assist agencies in attracting and retaining a highly skilled
workforce, we recommend that the Director of OPM develop a systematic
approach, which may include communicating through the CHCO Council, to
share information broadly across the federal government about agency-
developed promising practices in recruitment and retention of older,
experienced workers to meet their workforce needs.
Agency Comments and Our Evaluation:
We provided a draft of this report to HUD, OPM, SSA, and USAID for
their review and comment. OPM provided written comments which are
reproduced in appendix III. In addition, OPM, SSA, and USAID provided
technical comments, which we incorporated where appropriate.
In its response, OPM wrote that the agency already has tools available
on its Web site to assist federal agencies in attracting, recruiting,
and retaining talented workers, including older workers. Our draft
report cited these efforts, but we also noted that OPM's Web site does
not discuss the promising practices that have been developed by
individual federal agencies and, as a consequence, this information is
not readily available governmentwide. We continue to believe that the
widespread dissemination of agency-developed promising practices will
help federal agencies build upon the experiences of others in
developing strategies to meet workforce challenges, and therefore have
kept the recommendation.
We received e-mails from HUD, SSA, and USAID. In responding to our
report, both HUD and SSA agreed that disseminating this information
would be helpful. SSA further suggested that such sharing of promising
practices be incorporated throughout OPM's workforce planning support
rather than isolated as a special initiative.
USAID noted that it supports OPM's legislative proposal to make the
process easier for rehiring Civil Service annuitants. USAID views
rehiring annuitants as more cost-effective than using contract
mechanisms to re-employ retirees on a part-time basis because agencies
would avoid the additional overhead charges levied by contract
organizations. In addition, USAID supports the proposal because it
would better align the rules for civil service retirees with those of
the foreign service.
We are sending copies of this report to the Secretary of HUD, the
Acting Director of OPM, the Commissioner of SSA, the Director of USAID,
relevant congressional committees, and other interested parties. In
addition, the report will be available at no charge on GAO's Web site
at [hyperlink: http://www.gao.gov].
A list of related GAO products is included at the end of this report.
If you or your staff have any questions about this report, please
contact Barbara Bovbjerg at (202) 512-7215 or bovbjergb@gao.gov or
Robert Goldenkoff at (202) 512-6806 or goldenkoffr@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. Other contacts and staff
acknowledgments are listed in appendix IV.
Signed by:
Barbara D. Bovbjerg, Director:
Education, Workforce, and Income Security:
Signed by:
Robert N. Goldenkoff, Director:
Strategic Issues:
[End of section]
Appendix I: Objective, Scope, and Methodology:
Our objectives were to describe the (1) age and retirement eligibility
trends of the current federal workforce and the extent to which
agencies hire and retain older workers; (2) workforce challenges that
federal agencies face and the strategies they use to recruit and retain
older workers to help meet these challenges; and (3) actions the Office
of Personnel Management (OPM), as the federal government's human
capital manager, has taken to help agencies hire and retain an
experienced, skilled workforce.
Demographic Trends:
To describe demographic trends relating to the retirement eligibility
and aging of the federal workforce, we analyzed information on the 24
Chief Financial Officer (CFO) agencies from OPM's human resource
reporting system, the Central Personnel Data File (CPDF)[Footnote 42]
for fiscal year 2007. We analyzed data on the age, retirement
eligibility, occupations, projected retirement rates, and other
characteristics of the career federal workforce. Our analyses included
the following variables: agency, occupation, date of birth, service
computation date, pay plan/grade, and supervisory status. Using the
CPDF information, we analyzed the age distribution of career federal
employees at CFO agencies by age groupings (under 40, 40 to 54, and 55
and over). We also analyzed the percentage of career federal employees
hired as of the end of fiscal year 2007 who would be eligible to retire
from fiscal years 2008 to 2012, and the percentage of workers eligible
to retire in occupations in which the retirement rates exceeded the
governmentwide average. As a proxy for those occupations that may be at
risk due to high retirement eligibility rates, we selected occupations
with 500 or more employees as of the end of fiscal year 2007 that
exceeded the governmentwide rate of 33 percent by 50 percent or more.
We also used CPDF data to determine the extent to which agencies are
using specific strategies to hire and retain older workers. Based on
previous work, we have determined that the CPDF is sufficiently
reliable for the informational purposes of this report. For this
report, we defined older workers as those who are aged 55 and older.
To estimate the number of employees eligible to retire and the number
who actually retired, we determined eligibility rates for fiscal years
1997 through 2007 by applying retirement plan eligibility rules to data
in the CPDF using employees' age at hire, birth date, and retirement
plan. We determined past retirement rates by analyzing CPDF separation
data from the CPDF for fiscal years 1998 through 2007.
Strategies Available to Federal Agencies:
To report on how agencies make use of governmentwide flexibilities,
[Footnote 43] we conducted in-depth reviews of three agencies--the
Department of Housing and Urban Development (HUD), the Social Security
Administration (SSA), and the United States Agency for International
Development (USAID). We chose these agencies because they are among the
24 CFO agencies whose proportion of workers eligible to retire by 2012
exceeds the governmentwide average of 33 percent. These agencies also
represent a range of agency sizes. In addition, we chose to review SSA
not only because it will be facing a large number of possible
retirements, but at the same time, will be facing an increased demand
for its services. We also reviewed studies and conducted interviews
with experts in the area of retirement[Footnote 44], including members
of university-based retirement research centers, AARP, Partnership for
Public Service, the U.S. Merit Systems Protection Board, IBM
International, and various agency officials, to identify notable
approaches other agencies have developed to hire and retain older
workers.4 Through this work, we identified several agencies that have
developed their own innovative approaches and met with officials from
these agencies.[Footnote 45] To report on OPM's activities and
challenges, we augmented information obtained from our reviews of three
agencies by interviewing various officials at OPM and reviewing
relevant documents.
The Role of OPM in Helping Agencies Hire and Retain Experienced
Workers:
To address this objective, we interviewed officials at OPM and
interviewed other selected federal agencies and private sector experts.
Also, we reviewed previous GAO work relating to older workers and
federal human capital strategies. Our work at OPM included interviews
with key officials and reviews of OPM guidance, training materials,
legislative proposals, and other documents relevant to hiring and
retaining older workers, as well as documents on federal human capital
flexibilities.
We conducted our work from April 2008 to January 2009 in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
we obtained provides a reasonable basis for our findings and
conclusions.
[End of section]
Appendix II: Number and Percentage of Federal Workers without and with
Salary Reductions Re-employed by CFO Agencies in Fiscal Year 2007:
Table:
Agency: Agriculture;
Total number of employees: 104,975;
Total number of rehired annuitants: 224;
Number of annuitants without reduced salaries: 9;
Percentage of annuitants without reduced salaries: 4;
Number of annuitants with reduced salaries: 215;
Percentage annuitants with reduced salaries: 96.
Agency: Commerce;
Total number of employees: 41,155;
Total number of rehired annuitants: 62;
Number of annuitants without reduced salaries: 7;
Percentage of annuitants without reduced salaries: 11;
Number of annuitants with reduced salaries: 54;
Percentage annuitants with reduced salaries: 87.
Agency: Defense;
Total number of employees: 680,332;
Total number of rehired annuitants: 2,200;
Number of annuitants without reduced salaries: 1,930;
Percentage of annuitants without reduced salaries: 88;
Number of annuitants with reduced salaries: 264;
Percentage annuitants with reduced salaries: 12.
Agency: DHS;
Total number of employees: 166,820;
Total number of rehired annuitants: 1,081;
Number of annuitants without reduced salaries: 676;
Percentage of annuitants without reduced salaries: 63;
Number of annuitants with reduced salaries: 399;
Percentage annuitants with reduced salaries: 37.
Agency: Education;
Total number of employees: 4,352;
Total number of rehired annuitants: 0;
Number of annuitants without reduced salaries: 0;
Percentage of annuitants without reduced salaries: n/a;
Number of annuitants with reduced salaries: 0;
Percentage annuitants with reduced salaries: n/a.
Agency: Energy;
Total number of employees: 15,035;
Total number of rehired annuitants: 22;
Number of annuitants without reduced salaries: 1;
Percentage of annuitants without reduced salaries: 5;
Number of annuitants with reduced salaries: 21;
Percentage annuitants with reduced salaries: 95.
Agency: EPA;
Total number of employees: 18,092;
Total number of rehired annuitants: 18;
Number of annuitants without reduced salaries: 6;
Percentage of annuitants without reduced salaries: 33;
Number of annuitants with reduced salaries: 12;
Percentage annuitants with reduced salaries: 67.
Agency: GSA;
Total number of employees: 12,141;
Total number of rehired annuitants: 31;
Number of annuitants without reduced salaries: 0;
Percentage of annuitants without reduced salaries: 0;
Number of annuitants with reduced salaries: 31;
Percentage annuitants with reduced salaries: 100.
Agency: HHS;
Total number of employees: 73,778;
Total number of rehired annuitants: 101;
Number of annuitants without reduced salaries: 14;
Percentage of annuitants without reduced salaries: 14;
Number of annuitants with reduced salaries: 81;
Percentage annuitants with reduced salaries: 80.
Agency: HUD;
Total number of employees: 9,626;
Total number of rehired annuitants: 20;
Number of annuitants without reduced salaries: 1;
Percentage of annuitants without reduced salaries: 5;
Number of annuitants with reduced salaries: 19;
Percentage annuitants with reduced salaries: 95.
Agency: Interior;
Total number of employees: 72,999;
Total number of rehired annuitants: 149;
Number of annuitants without reduced salaries: 6;
Percentage of annuitants without reduced salaries: 4;
Number of annuitants with reduced salaries: 141;
Percentage annuitants with reduced salaries: 95.
Agency: Justice;
Total number of employees: 107,076;
Total number of rehired annuitants: 60;
Number of annuitants without reduced salaries: 15;
Percentage of annuitants without reduced salaries: 25;
Number of annuitants with reduced salaries: 41;
Percentage annuitants with reduced salaries: 68.
Agency: Labor;
Total number of employees: 15,477;
Total number of rehired annuitants: 41;
Number of annuitants without reduced salaries: 2;
Percentage of annuitants without reduced salaries: 5;
Number of annuitants with reduced salaries: 38;
Percentage annuitants with reduced salaries: 93.
Agency: NASA;
Total number of employees: 18,729;
Total number of rehired annuitants: 31;
Number of annuitants without reduced salaries: 2;
Percentage of annuitants without reduced salaries: 6;
Number of annuitants with reduced salaries: 29;
Percentage annuitants with reduced salaries: 94.
Agency: NRC;
Total number of employees: 3,769;
Total number of rehired annuitants: 95;
Number of annuitants without reduced salaries: 85;
Percentage of annuitants without reduced salaries: 89;
Number of annuitants with reduced salaries: 10;
Percentage annuitants with reduced salaries: 11.
Agency: NSF;
Total number of employees: 1,384;
Total number of rehired annuitants: 14;
Number of annuitants without reduced salaries: 0;
Percentage of annuitants without reduced salaries: 0;
Number of annuitants with reduced salaries: 14;
Percentage annuitants with reduced salaries: 100.
Agency: OPM;
Total number of employees: 5,819;
Total number of rehired annuitants: 29;
Number of annuitants without reduced salaries: 11;
Percentage of annuitants without reduced salaries: 38;
Number of annuitants with reduced salaries: 18;
Percentage annuitants with reduced salaries: 62.
Agency: SBA;
Total number of employees: 5,016;
Total number of rehired annuitants: 56;
Number of annuitants without reduced salaries: 47;
Percentage of annuitants without reduced salaries: 84;
Number of annuitants with reduced salaries: 9;
Percentage annuitants with reduced salaries: 16.
Agency: SSA;
Total number of employees: 62,560;
Total number of rehired annuitants: 199;
Number of annuitants without reduced salaries: 11;
Percentage of annuitants without reduced salaries: 6;
Number of annuitants with reduced salaries: 185;
Percentage annuitants with reduced salaries: 93.
Agency: State;
Total number of employees: 10,700;
Total number of rehired annuitants: 63;
Number of annuitants without reduced salaries: 41;
Percentage of annuitants without reduced salaries: 65;
Number of annuitants with reduced salaries: 22;
Percentage annuitants with reduced salaries: 35.
Agency: Transportation;
Total number of employees: 54,315;
Total number of rehired annuitants: 62;
Number of annuitants without reduced salaries: 6;
Percentage of annuitants without reduced salaries: 10;
Number of annuitants with reduced salaries: 55;
Percentage annuitants with reduced salaries: 89.
Agency: Treasury;
Total number of employees: 116,912;
Total number of rehired annuitants: 178;
Number of annuitants without reduced salaries: 101;
Percentage of annuitants without reduced salaries: 57;
Number of annuitants with reduced salaries: 73;
Percentage annuitants with reduced salaries: 41.
Agency: USAID;
Total number of employees: 1,370;
Total number of rehired annuitants: 11;
Number of annuitants without reduced salaries: 8;
Percentage of annuitants without reduced salaries: 73;
Number of annuitants with reduced salaries: 3;
Percentage annuitants with reduced salaries: 27.
Agency: Veterans Affairs;
Total number of employees: 255,376;
Total number of rehired annuitants: 614;
Number of annuitants without reduced salaries: 266;
Percentage of annuitants without reduced salaries: 43;
Number of annuitants with reduced salaries: 320;
Percentage annuitants with reduced salaries: 52.
Agency: Total for CFO agencies;
Total number of employees: 1,857,808;
Total number of rehired annuitants: 5,361;
Number of annuitants without reduced salaries: 3,245;
Percentage of annuitants without reduced salaries: 61;
Number of annuitants with reduced salaries: 2,054;
Percentage annuitants with reduced salaries: 38.
Source: GAO analysis of CPDF data as of September 2007.
Note: Data do not include foreign service employees.
[End of table]
[End of section]
Appendix III: Comments from the Office of Personnel Management:
United States Office Of Personnel Management:
The Director:
Washington, DC 20415
February 9, 2009:
Barbara D. Bovbjerg, Director:
Education, Workforce, and Income Security Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Bovbjerg:
Thank you for providing the U.S. Office of Personnel Management (OPM)
the opportunity to comment on the Government Accountability Office
draft report, "Older Workers, Enhanced Communication Among Federal
Agencies Could Improve Strategies for Hiring and Retaining Experienced
Workers." We appreciate the opportunity to provide you with comments
about this report.
In relation to statements on pages 7, 8, 33, 43, and 44 concerning the
dissemination of information from OPM on agency-developed practices for
hiring older workers, OPM has tools available on our website to assist
agencies in attracting, recruiting, and retaining talented citizens,
including older workers, for their workforces.
Technical comments to the draft report are enclosed. Unless otherwise
noted, the suggested revisions are meant to provide technical accuracy
and conform to terminology applicable to the Federal service.
Please contact Mr. David Cushing on (202) 606-4660 should your office
require additional information.
Again, my thanks to your office for providing this opportunity to
update and clarify information in the draft report.
Sincerely,
Signed by:
Kathie Ann Whipple:
Acting Director:
Enclosure:
[End of section]
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Barbara D. Bovbjerg, (202) 512-7215 or bovbjerg@gao.gov Robert N.
Goldenkoff, (202) 512-6806 or goldenkoff@gao.gov:
Acknowledgments:
In addition to the contacts listed above, Dianne M. Blank (Assistant
Director) and Kathleen D. White, (Analyst-in-Charge) supervised the
development of this report.
Cheri L. Harrington and Christopher T. Langford made significant
contributions to all aspects of this report. In addition, Belva M.
Martin, Clifton G. Douglas, Mary Y. Martin, Nicholas C. Alexander, and
Isabella P. Johnson contributed to significant portions of the report.
Jessica A. Botsford provided legal support; Gregory H.Wilmoth assisted
with design, methodology, and data analysis; and Susannah L. Compton
provided writing assistance. Karen A. Brown, Lise Levie, and Ronni
Schwartz verified the information in this report.
[End of section]
Related GAO Products:
Social Security Administration: Service Delivery Plan Needed to Address
Baby Boom Retirement Challenges. [hyperlink,
http://www.gao.gov/products/GAO-09-24]. Washington, D.C.: January 9,
2009.
Human Capital: Workforce Diversity Governmentwide and at the Department
of Homeland Security. [hyperlink,
http://www.gao.gov/products/GAO-08-815T]. Washington, D.C.: May 21,
2008.
Older Workers: Federal Agencies Face Challenges, but Have Opportunities
to Hire and Retain Experienced Employees. [hyperlink,
http://www.gao.gov/products/GAO-08-630T]. Washington, D.C.: April 30,
2008.
Office of Personnel Management: Opportunities Exist to Build on Recent
Progress in Internal Human Capital Capacity. [hyperlink,
http://www.gao.gov/products/GAO-08-11]. Washington, D.C.: October 31,
2007.
Older Workers: Some Best Practices and Strategies for Engaging and
Retaining Older Workers. [hyperlink,
http://www.gao.gov/products/GAO-07-433T]. Washington, D.C.: February
28, 2007.
Highlights of a GAO Forum: Engaging and Retaining Older Workers.
[hyperlink, http://www.gao.gov/products/GAO-07-438SP]. Washington,
D.C.: February 28, 2007.
Office of Personnel Management: Key Lessons Learned to Date for
Strengthening Capacity to Lead and Implement Human Capital Reforms.
[hyperlink, http://www.gao.gov/products/GAO-07-90]. Washington, D.C.:
January 19, 2007.
Office of Personnel Management: OPM Is Taking Steps to Strengthen Its
Internal Capacity for Leading Human Capital Reform. [hyperlink,
http://www.gao.gov/products/GAO-06-861T]. Washington, D.C.: June 27,
2006.
Redefining Retirement: Options for Older Americans. [hyperlink,
http://www.gao.gov/products/GAO-05-620T]. Washington, D.C.: April 27,
2005.
Human Capital: Opportunities to Improve Executive Agencies' Hiring
Processes. [hyperlink, http://www.gao.gov/products/GAO-03-450].
Washington, D.C.: May 30, 2003.
Human Capital: OPM Can Better Assist Agencies in Using Personnel
Flexibilities. [hyperlink, http://www.gao.gov/products/GAO-03-428].
Washington, D.C.: May 9, 2003.
Federal Employee Retirements: Expected Increase Over the Next 5 Years
Illustrates Need for Workforce Planning. [hyperlink,
http://www.gao.gov/products/GAO-01-509]. Washington, D.C.: April 27,
2001.
Retirement Benefits: Modification of Civil Service Retirement Benefits
for Part-Time Work. [hyperlink,
http://www.gao.gov/products/GAO/PEMD-86-2]. Washington, D.C.: January
9, 1986.
[End of section]
Footnotes:
[1] See GAO, Older Workers: Federal Agencies Face Challenges, but Have
Opportunities to Hire and Retain Experienced Employees, [hyperlink,
http://www.gao.gov/products/GAO-08-630T] (Washington, D.C.: Apr. 30,
2008).
[2] The Chief Financial Officers Act of 1990, or CFO Act, was passed to
improve the government's financial management. Among other measures,
the act created the position of chief financial officer for each of 24
federal departments and agencies.
[3] In broad terms, human capital flexibilities represent the policies
and practices that an agency has the authority to implement in managing
its workforce to accomplish its mission and achieve its goals.
[4] Throughout this report, when we refer to the federal workforce, we
mean the career federal employees in the 24 CFO agencies.
[5] These experts included members of university-based retirement
research centers, AARP, Partnership for Public Service, the Merit
Systems Protection Board, and IBM International.
[6] These agencies include the Departments of Agriculture, State,
Treasury, the Environmental Protection Agency (EPA) and the Nuclear
Regulatory Commission (NRC).
[7] For more information, see GAO, Redefining Retirement: Options for
Older Americans, GAO-05-620T (Washington, D.C.: Apr. 27, 2005).
[8] GAO, Human Capital: Succession Planning and Management Is Critical
Driver of Organizational Transformation, [hyperlink,
http://www.gao.gov/products/GAO-04-127T] (Washington, D.C.: Oct. 1,
2003).
[9] These agencies were the Departments of Commerce, Education, Health
and Human Services, Labor, Transportation, and the Treasury; the Equal
Opportunity Commission; SMA; and SSA.
[10] Department of Labor, Report of the Taskforce on the Aging of the
American Workforce, (Washington, D.C., February 2008).
[11] When we use the term "OPM's data," we are referring to data
supplied to OPM by the 24 CFO agencies and reported by OPM in the CPDF.
[12] Data are as of the end of fiscal year 2007, the most recent data
available.
[13] For information on retirement trends of federal workers who were
first eligible to retire between 1988 and 1997, see GAO, Federal
Employee Retirements: Expected Increase Over the Next 5 Years
Illustrates Need for Workforce Planning, [hyperlink,
http://www.gao.gov/products/GAO-01-509] (Washington, D.C.: Apr. 27,
2001).
[14] Rehired annuitants comprise more than 1 percent of the workforce
of only one CFO agency. In that agency, NRC, rehired annuitants
comprise 2.5 percent of its workforce.
[15] OPM may waive the requirement that the salary of re-employed
annuitants be reduced by the amount of their annuity on a case-by-case
basis for positions that the agency has exceptional difficulty filling,
for necessary temporary employment due to an emergency involving a
direct threat to life or property, or other unusual circumstance, or
OPM may delegate waiver authority to an agency.
[16] During corresponding periods, the number of federal retirees at
these agencies experiencing salary reductions declined.
[17] This authority was granted by the National Defense Authorization
Act for Fiscal Year 2004, Pub. L. No. 108-136.
[18] In addition to these agencies, the foreign service components of
State and USAID have had limited legislative authority to rehire
annuitants without reducing their salaries since 1980, but these
components do not fall under OPM's authority and are not included in
CPDF counts.
[19] This authority was granted by the Energy Policy Act of 2005, Pub.
L. No. 109-58.
[20] This authority was granted by the 2002 Supplemental Appropriation
Act for Further Recovery From and Response to Terrorist Attacks on the
United States, Pub. L. No. 107-206.
[21] The General Services Administration Modernization Act of 2006,
Pub. L. No. 109-313. This authority expires in December 31, 2011.
[22] The agencies that have reported to OPM that they are using this
authority are the Department of Energy; HHS; HUD; the Departments of
the Interior, Labor, Treasury, and Veterans Affairs; USAID; the
Consumer Product Safety Commission; EPA; Executive Office of the
President; Federal Trade Commission; General Service Administration;
National Labor Relations Board; and the Millennium Challenge
Corporation. OPM does not have information on the number of employees
who return to federal service under this provision.
[23] SSA field offices are located across the United States as well as
in the Virgin Islands, Puerto Rico, and Guam.
[24] GAO, Social Security Administration Field Offices: Reduced
Workforce Faces Challenges as Baby Boomers Retire, [hyperlink,
http://www.gao.gov/products/GAO-08-737T] (Washington, D.C.: May 8,
2008).
[25] This count represents information from October 2008.
[26] USAID defines its mid-level employees in the civil service as GS-
12 to GS-14.
[27] For more information on the impact of past hiring freezes, see for
example GAO, Foreign Assistance: Strategic Workforce Planning Can Help
USAID Address Current and Future Challenges, [hyperlink,
http://www.gao.gov/products/GAO-03-946] (Washington, D.C.: Aug. 22,
2003).
[28] GAO, Social Security Administration Field Offices: Reduced
Workforce Faces Challenges as Baby Boomers Retire, [hyperlink,
http://www.gao.gov/products/GAO-08-737T] (Washington, D.C.: May 8,
2008).
[29] GAO, Human Capital: OPM Can Better Assist Agencies in Using
Personnel Flexibilities, [hyperlink,
http://www.gao.gov/products/GAO-03-428] (Washington, D.C.: May 9,
2003).
[30] GAO, Older Workers: Federal Agencies Face Challenges, but Have
Opportunities to Hire and Retain Experienced Employees, [hyperlink,
http://www.gao.gov/products/GAO-08-630T] (Washington, D.C.: Apr. 30,
2008).
[31] HUD and USAID are in the early stages of similar workforce
planning efforts.
[32] Examples of staffing mechanisms that USAID uses include personal
services contractors, who provide specialized technical assistance in
designing and managing programs, and a cooperative administrative
support unit, which provides mid-to senior-level technical leadership
in the fields of population, health, and nutrition.
[33] According to State officials, the department has received
permission from OPM to rehire civil service annuitants without reducing
their salaries for specific civil service positions, such as those
located in Iraq or for work in support of processing passports. State
can hire back foreign service retirees on an intermittent schedule with
full salaries and annuities on the Secretary's authority.
[34] Pub. L. No. 98-313.
[35] NRCS developed ACES under the authority of section 2701 of Title
II of the Farm Security and Rural Investment Act of 2002, Pub. L. No.
107-171.
[36] The Chief Human Capital Officers Act of 2002, Pub. L. No. 107-296,
Title XIII, requires the heads of 24 executive departments and agencies
to appoint or designate Chief Human Capital Officers (CHCO). This act
established a CHCO Council to advise and coordinate the activities of
members' agencies on human resource related issues. Each CHCO serves as
his or her agency's chief policy advisor on all human resources
management issues and is charged with selecting, developing, training,
and managing a high-quality, productive workforce.
[37] Partnership for Public Service, A Golden Opportunity: Recruiting
Baby Boomers Into Government (Washington, D.C., January 2008). We found
the survey methodology used by the Partnership for Public Service to be
sufficiently reliable for our use.
[38] U.S. Merit Systems Protection Board, In Search of Highly Skilled
Workers: A Study on the Hiring of Upper Level Employees from Outside
the Federal Government (Washington, D.C., February 2008). We found the
survey methodology used by the U.S. Merit Systems Protection Board to
be sufficiently reliable for our use.
[39] These announcements are for positions in the law enforcement,
information technology, patent and trade, and acquisition communities.
[40] S. 2003 and H.R. 3579. 110th Congress.
[41] For the most recent bill, see H.R. 2780 (2007).
[42] The State Department discontinued submitting personal data to OPM
for foreign service personnel in March of 2006.
[43] In broad terms, human capital flexibilities represent the policies
and practices that an agency has the authority to implement in managing
its workforce to accomplish its mission and achieve its goals.
[44] These experts included members of university-based retirement
research centers, AARP, Partnership for Public Service, the Merit
System Protection Board, and IBM International.
[45] These agencies include the Departments of Agriculture, EPA, State,
and the Treasury
[5] These agencies include the Departments of Agriculture, State,
Treasury, the Environmental Protection Agency (EPA) and the Nuclear
Regulatory Commission (NRC).
[End of section]
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