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. Thirty-three percent of federal career  employees on board as of the end of fiscal year 2007 will be eligible to  retire during fiscal years 2008 through 2012. Many workers projected to become retirement eligible by 2012 are  concentrated in certain agencies. As figure 3 shows, the agency rates range  from a low of 20 percent at the Department of Homeland Security (DHS)  to a high of 46 percent at four agencies—the Agency for International  Development (AID), the Department of Housing and Urban Development,  the Small Business Administration (SBA), and the Department of  Transportation (Transportation). Several of these occupations, such as air traffic controllers,  customs and border protection interdiction agents, and administrative law  judges are considered mission critical. Retirement eligibility will be especially pronounced among the agencies’  executives and supervisors (see fig. Federal Agencies Have a Variety of Options Available to Hire and Retain Older Workers, but Some Federal Practices Make It Difficult to Use These Options

Federal agencies have a range of flexibilities at their disposal to help them  engage and retain mission critical staff, including older, experienced  workers. While only one of the available flexibilities is largely focused on  older workers—dual compensation waivers—many, such as flexible and  part time work, are particularly appealing to older workers. A Case Study: How One Agency Uses Available Flexibilities to Address a Looming Retirement Wave

One of the agencies we reviewed—the Social Security Administration  (SSA)—is particularly at risk of losing a substantial portion of its  workforce at a time when it will experience unprecedented growth in  demand for its services. However, the proportion of administrative law judges  eligible to retire is far higher—about 86 percent will be eligible by 2012  and nearly all by 2017. Other Federal Agencies Have Developed Alternative Approaches to Hire and Engage Older Workers to Meet Their Workforce Needs

In addition to SSA, we interviewed officials in several other agencies and  learned that some have developed their own approaches to hiring and  engaging older workers. Federal Employment Has a Number of Attributes Attractive to Older Workers

Overall, the federal government is making progress toward becoming a  model employer of older, experienced workers. While there remain opportunities for improvement, OPM and  Congress are taking action to minimize the challenges faced in hiring and  retaining older, experienced workers. OPM and Congress Are Taking Steps to Minimize Challenges

As we discussed earlier, individual agencies have strategies that they can  use to address some challenges to employing older workers, but actions  from OPM, as the government’s human capital leader, and Congress play  pivotal roles in changing the landscape of rules regarding federal  employment. OPM has taken steps to provide agencies with guidance on how to use  available flexibilities and authorities. For example, in the fall of 2005, OPM  put a hiring flexibilities decision support tool online to assist agencies in  assessing which flexibilities would best meet their needs. OPM has also recently proposed legislation to Congress that would  enhance agencies’ ability to hire and retain older workers. Collectively, these measures will help  make federal agencies more competitive in the labor market for all  demographic groups. Appendix I: Scope and Methodology

Our objectives were to describe (1) the age and retirement eligibility  trends of the current federal workforce; (2) the strategies federal agencies  are using to recruit, hire, and retain older workers; and (3) our  observations on how these strategies position federal agencies to engage  and retain older workers. We also analyzed the percentage of  career federal employees on board at 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 where the  retirement rates exceeded the governmentwide average. Strategies Available to Federal Agencies to Hire and Retain Older Workers

To address this objective, we reviewed strategies available to federal  agencies to hire and retain older workers through governmentwide hiring  authorities and other flexible arrangements, we interviewed officials at  OPM and other selected federal agencies, including Labor, and we  reviewed previous GAO work relating to older workers and federal human  capital strategies.
Why GAO Did This Study

The federal workforce, like the nation's workforce as a whole, is aging. As experienced employees retire, they leave behind critical gaps in leadership and institutional knowledge, increasing the challenges government agencies face in maintaining a skilled workforce. We and others have emphasized the need to hire and retain older workers as one part of a comprehensive strategy to address expected labor shortages. The Office of Personnel Management (OPM), as the government's central personnel management agency, is responsible for helping agencies manage their human capital. The Chairman of the Senate Special Committee on Aging asked GAO to discuss (1) the age and retirement eligibility trends of the current federal workforce, (2) the strategies federal agencies are using to hire and retain older workers, and (3) our observations on how these strategies position federal agencies to engage and retain older workers. To address these objectives, we analyzed demographic data from OPM's Central Personnel Data File, and interviewed officials at OPM and selected federal agencies. OPM is taking action to address past recommendations related to better assisting agencies in using personnel flexibilities. GAO is making no new recommendations at this time.

What GAO Found

Governmentwide, about one-third of federal career employees on board at the end of fiscal year 2007 are eligible to retire between now and 2012. Many of these workers are concentrated in certain agencies. For example, nearly half of employees on board at the end of fiscal year 2007 at the Departments of Housing and Urban Development and Transportation, and at the Agency for International Development and the Small Business Administration, will be eligible to retire by 2012. The proportion of workers eligible to retire is also expected to be high in certain occupations, including those considered mission critical, such as air traffic controllers and customs and border protection agents, where more than half of the employees will be eligible at that time. Retirement eligibility will be especially pronounced among the agencies' executives and supervisors--over 60 percent of career executives are projected to be eligible by 2012. Federal agencies have a variety of flexibilities at their disposal to help them recruit and retain older workers, including using temporary hires to address short-term needs and rehiring retired federal workers. However, we found that agencies have not always been aware of the full range of available flexibilities. One agency we reviewed--the Social Security Administration--is particularly at risk of losing a substantial portion of its workforce to retirement and has used a variety of strategies to hire and retain older workers, including offering recruitment, retention, and relocation bonuses. Other agencies, such as the Environmental Protection Agency, have developed alternative approaches to attract experienced workers to meet their mission needs. Moreover, certain governmentwide flexibilities, such as flexible and part-time schedules, while not focused directly toward older workers, are particularly attractive to them. Overall, the federal government already has a number of characteristics that appeal to all employees and is making progress toward becoming a model employer of older, experienced workers. For example, federal employees can telecommute, work flexible hours, and receive health and retirement benefits that older workers find especially attractive. OPM and Congress are taking steps to minimize some challenges that agencies face, but opportunities for improvement remain. For example, OPM has developed online decision support tools to provide agencies with guidance on how to use available hiring flexibilities and retention strategies. Congress has legislation pending that incorporates OPM's proposals to enhance agencies' ability to hire and retain older workers by giving agencies the authority, without OPM approval, to rehire retirees without penalty. Agencies have a shared responsibility to pursue the full range of flexibilities and authorities available and to communicate this information within their own agencies. Collectively, these measures will help make federal agencies more competitive in the labor market for all demographic groups.