Workforce changes in store

The Bush administration has decided to give federal managers more flexibility in how they hire, recruit and retain workers, but with that freedom comes a requirement better performance from those workers.

Strategic human capital management, or people management, is crucial to achieving President Bush's 14-point management reform agenda, which he released Aug. 25. Bush said he wants a citizen-centric and results-oriented government.

The problems, according to Bush, are that the federal workforce is shrinking in numbers and aging, the layers of bureaucracy are increasing, and there is a mismatch between the skills that workers have and the skills they need to deliver services to the public. In addition, personnel policies, compensation and hiring processes are outdated.

As a result, agencies must reduce the number of layers and managers, and increase the number of employees who provide services to citizens. "It's not so much an increase or decrease, it's a case of minimizing the hierarchical structures," said Sean O'Keefe, deputy director of the Office of Management and Budget.

Competitive sourcing, where the government competes with the private sector to determine who delivers services more efficiently, may help in this area, O'Keefe added.

The administration plans to introduce legislation after Labor Day that would help agencies capitalize on flexibilities and cut red tape. And with these changes would come "clear expectations of improved performance and accountability," according to the Bush agenda.

One bill would bring together workforce-related legislative authorities, such as pay-banding and demonstration projects, and make it easier for agencies across government to apply them. It would also require agencies to budget the unit cost associated with an employee, including health care and retirement, instead of computing those costs separately. Another bill would ask Congress for fast-track authority to remove existing laws that hinder effective management for example, one prohib.iting the Agriculture Department from closing or relocating rural state offices.

The American Federation of Government Employees supports "any way" that helps the government work better, but is "cautious" about the proposed changes because the group did not help draft or review the legislation, said Magda Lynn Seymour, communications director at AFGE. One thing is clear, however. "AFGE is not in favor of thoughtless downsizing for the sake of downsizing because we look at that as replacing federal employees with contracting employees," she said.

It's important that agencies "right-size" their workforce, said Kay Coles James, director of the Office of Personnel Management. "There are no target numbers," she said. In addition, James said agencies may offer a new buy-out program that would help shift people into jobs where workers are needed most, helping to shape the workforce rather than cut it indiscriminately. Agencies must make better use of the tools they do have, such as recruitment and retention bonuses, James said. "With proper planning and budgeting, these flexibilities can be used effectively to attack the human capital issues," she said.

But eventually the government needs to overhaul the civil service, James said. For instance, the government's compensation program "needs some serious tweaking," she said. "It was based on certain assumptions on the workforce, what attracts people to [government]. It would be hard to find people coming out of college today to think about working for any employer for 20 to 30 years."

Some of the other issues OPM is looking at include differentiating pay by locality and by occupation, rewarding people for their skills instead of time served, and alternatives to moving through the government's step structure.

In addition to any technical changes, government culture must change. "Fundamentally, we have to change the image of government," James said.