Study: Exec pay hurts recruitment

A "war for talent" being waged among private companies could increase the drain of the federal senior executive work force, and the government likely will fail to meet the challenge of recruiting and keeping high-level workers, according to a study released last week.

The study, conducted by the consulting firm PricewaterhouseCoopers, reveals that salary issues especially threaten to undermine the quality of the government's senior work force. Senior federal executives are not paid nearly as well as their private-sector counterparts, the result of a "convoluted maze of a system," said Ian Littman, a partner with the firm.

The study was based in part on a phone survey of 347 randomly chosen members of the Senior Executive Service, a cadre of career and appointed federal agency leaders. It found that many of SES' 5,600-some members have salaries that are not commensurate to their job titles and the size of the staffs they manage, compared with similar executives in industry.

The intense demand for executives with technical expertise also looms as a potential "crisis" for the government, said Mark Abramson, executive director of PricewaterhouseCoopers' Endowment for the Business of Government.

As information technology continues to develop at a frenetic pace, "there will be more and more jobs in those categories," which will tempt senior technical executives to leave public service at an increased pace, he said.

Janice Lachance, director of the Office of Personnel Management, said in a news release that OPM "will use [the results of the study] to move forward on SES reform. The attitudes and values of our executives are important to the administration's efforts to make the SES stronger."

The Internal Revenue Service is one agency that has responded to the IT brain drain. In an effort to retain chief information officer Paul Cosgrave, who oversees the agency's computer systems, the IRS pays him $174,500—the same as Vice President Al Gore.

But Cosgrave's case is an anomaly. By setting caps at what are—by corporate standards—low salaries for senior positions, the pay system for most federal executives has undergone what the study calls "compression," meaning that any increase from the base SES salary is minimal. Only two other government workers earn the same salary as the vice president. The next pay level, for cabinet secretaries and select legislators, is $151,800. Agency heads make $125,900. That leaves the bulk of senior executives—agency heads, assistant secretaries and deputy assistant secretaries—making $125,900 or less.

But most of the survey respondents said a significant increase in salaries is not likely. While 72 percent of the respondents said that better pay would enable the government to recruit and keep talented executives more easily, only 5 percent believe the government will do anything to change the pay structure.Carol Bonosaro, president of the Senior Executives Association, said she wasn't surprised by the survey's results. "One could characterize it as the oldest story ever told," she said. "Pay was one of the driving reasons behind the creation of the association in 1980, and here we are, almost 20 years later, still talking about pay."

She said the association's attention to pay has led some people to characterize the organization as "Chicken Little, running around saying, 'The sky is going to fall.' " But if the government insists on maintaining the status quo, "the sky is going to fall," Bonosaro said.

Ted Gonter, who spent 33 years working for the federal government in a variety of departments, retired from federal service two years ago at age 55 to join SRA International Inc., a Fairfax, Va.-based IT consulting firm. Leaving government, he said, was a "no-brainer."

His annual income increased significantly, he said, because his salary with SRA is supplemented with significant retirement payments from the government.

"That's why people leave," he said. "Why stay with the federal government if I can make $180,000 or $200,000 or more in a combined wage situation? The government isn't going to be able to pay that salary."