IRS' Use of Special Hiring Authorities Could Be Leading to Skills Gaps, IG Says

Chances are applicants for information technology positions at the Internal Revenue Service haven’t interviewed for their positions or demonstrated their skills and the agency is pushing to keep it that way despite recommendations from the inspector general’s office. 

A June 2 inspector general report found that of 335 individuals the IRS hired for IT during fiscal year 2020, the vast majority—84%—are deficient in one or more “mission-critical” skills for their position. 

“While it is unlikely that all skill gap deficiencies can be eliminated, interviews and hiring assessments may allow the IRS the opportunity to hire individuals who possess more of the mission-critical skills required,” the auditors wrote.

Due in part to demands created by tax legislation in 2017, the IRS used surge and direct hiring authorities to staff roles in critical information technology and cybersecurity as many of its more experienced employees in the space prepare to retire. The agency was trying to fill 2,427 positions in two years, and the special hiring authorities allow circumventing aspects of the competitive process. 

The report divides the IT workforce into seven functions: applications development, enterprise operations, user and network services, enterprise services, strategy and planning, cybersecurity, and the enterprise program management office. Among the 14 mission-critical skills considered are acquisition, data analysis, cybersecurity and software, although software was not included in the IRS’ skills gap reports. 

Additionally, not all of the seven IT functions participate in a skills gap mitigations. “As a result, there could be more skills that need to be addressed,” according to the report. “This further supports the need for IT organization management to review and assess all mission-critical skill gap reports for their staff.”

The IRS agreed with the inspector general recommendations that the agency should develop policies to track and review all the related data, addressing formal and informal training as needed, and that all IT functions be mandated to participate in skills gap mitigation. The agency also agreed it was important to make greater use of retention incentives for employees with unusually high or unique qualifications. This mechanism was only used twice since 2015 due to budget constraints, the agency said. 

But the report found that within the next three years, 619 employees with expert-level skills will be eligible for retirement. “There are no other employees with these expert-level skills in the IT organization,” the report said, noting 25 of those individuals work in cybersecurity. 

“[Human Capital Office] and IT leadership will approach the administering of retention incentives from a strategic viewpoint by analyzing available data including ‘retirement eligible’ employees with unusually high skillsets, particularly those who have a history of working significant additional hours beyond their tour of duty to accomplish critical deliverables,” IRS said in response to the recommendation.

But the agency disagreed with recommendations to conduct interviews and skills assessments to reduce the likelihood of hiring unqualified individuals into IT positions.

Interviews, in particular, would also “reduce long-term employment and performance challenges and costs for the IT organization,” the IG said. The report added: “The recommended hiring assessments allow the potential IT organization employee to demonstrate skills and experience because they are based on actual simulations. We believe that the demonstration of skills is a better assessment method than answering questions.”

But management rejected those recommendations arguing a need for flexibility and that the IT organization is “meeting its business needs,” according to the report.

The IRS noted some nuances to the report’s findings. “For example, ‘procurement skills’ are absolutely needed by some IT personnel and is flagged as a mission critical skill,” the agency said. “However not every IT employee needs to have knowledge at an expert level in procurement skills. Each manager ensures that they have the right mix on their team to cover the skills needed and these managers may not need each individual on their staff to be expert in every area.”

But the inspector general’s report found that almost a quarter of the fiscal year 2020 IT hires—24%—have deficiencies in all of the mission-critical skills for their position.

The implementation date for recommendations the IRS did agree to is June 15, 2022.