	Sustained Leadership Is Essential to Successful Human Capital Management

Top leadership in agencies across the federal government must provide  committed and inspired attention needed to address human capital and  related organizational transformation issues. We have reported that OPM has  made commendable efforts in transforming itself from less of a rule  maker, enforcer, and independent agent to more of a consultant,  toolmaker, and strategic partner in leading and supporting executive  agencies’ human capital management systems. To help support federal agencies with expanded responsibilities under the  Recovery Act, OPM has provided information, tools, and training to federal  agencies to help address these new human capital challenges and ensure  that agencies acquire the talent they need. For example, in March 2009,  OPM held an interagency forum on approaches to meet the Recovery Act’s  human capital management support requirements. In 2002, Congress  created the chief human capital officer (CHCO) position in 24 agencies to  advise and assist the head of the agency and other agency officials in their  strategic human capital management efforts. OPM works with the CHCO Council to develop and disseminate human  capital guidance and relies upon the council members to communicate  OPM policy and other human capital information throughout their  agencies. Strategic Human Capital Planning Is Critical to Addressing Workforce Challenges

Strategic human capital planning that is integrated with broader  organizational strategic planning is critical to ensuring that agencies have  the talent and skill mix they need to address their current and emerging  human capital challenges, especially as the federal government faces a  retirement wave. We have found that leading organizations go beyond a succession planning  approach that focuses on simply replacing individuals and instead engage  in broad, integrated succession planning and management efforts that  focus on strengthening both current and future organizational capacity to  obtain or develop the knowledge, skills, and abilities they need to carry  out their missions. In 2007, we testified that  much of the acquisition workforce’s workload and complexity of  responsibilities have been increasing without adequate attention to the  workforce’s size, skills and knowledge, and succession planning. The challenges agencies are facing with managing acquisitions,  including sustaining a capable and accountable acquisition workforce,  contributed to GAO’s designation of the management and use of  interagency contracting as a governmentwide high-risk area in 2005. Acquiring, Developing, and Retaining Talent Remains a Federal Workforce Challenge

Faced with a workforce that is becoming more retirement eligible and the  need for a different mix of knowledge, skills, and competencies, it is  important that agencies strengthen their efforts and use of available  flexibilities from Congress and OPM to acquire, develop, motivate, and  retain talent. In the areas of recruiting and hiring, OPM has, for  example, done the following. Individual federal agencies have also taken actions to meet their specific  needs for acquiring the necessary talent, while other agencies have faced  difficulties. For example, NASA has used a combination of techniques to  recruit workers with critical skills, including targeted recruitment  activities, educational outreach programs, improved compensation and  benefits packages, professional development programs, and streamlined  hiring authorities. Recently, we reported on selected federal agencies’  approaches to using older workers to address future critical gaps in  leadership, skills, and institutional knowledge. In addition to promoting high performance and accountability to foster  results-oriented cultures, leading organizations develop and maintain  inclusive and diverse workforces that reflect all segments of society. In helping to ensure diversity in the pipeline for appointments to the SES  as well as recruitment at all levels, it is important that agencies have  strategies to identify and develop a diverse pool of talent for selecting the  agencies’ potential future leaders and to reach out to a diverse pool of  talent when recruiting.
Why GAO Did This Study

In 2001, GAO identified human capital management as a governmentwide high-risk area because federal agencies lacked a strategic approach to human capital management that integrated human capital efforts with their missions and program goals. Progress has been made. However, the area remains high-risk because of a continuing need for a governmentwide framework to advance human capital reform. The importance of a top-notch federal workforce cannot be overstated. The federal government is facing new and growing challenges coupled with a retirement wave and the loss of leadership and institutional knowledge at all levels. The issues facing agencies are complex and require a broad range of technical skills that are also highly sought after by the private sector. This testimony, based on a large body of completed work issued from January 2001 through March 2009, focuses on executive branch agencies' and the Office of Personnel Management's (OPM) progress in addressing strategic human capital management challenges in four key areas: (1) leadership; (2) strategic human capital planning; (3) acquiring, developing, and retaining talent; and (4) results-oriented organizational culture. In prior reports, GAO has made a range of recommendations to OPM and agencies in the four areas. GAO is reporting on progress in addressing these recommendations and is making no new recommendations.

What GAO Found

Congress, executive branch agencies, and OPM have taken action to reform federal human capital management, but federal agencies are facing new challenges. The recent need to quickly hire staff to carry out and oversee the Troubled Asset Relief Program and expanded agency responsibilities under the American Recovery and Reinvestment Act of 2009 point to the need for sustained attention to help ensure that agencies have the right people with the right skills to meet new challenges. Top leadership in agencies across the federal government must provide committed and inspired attention needed to address human capital and related organizational transformation issues. OPM has made strides in transforming itself as a strategic partner to help lead human capital reform efforts. For example, at the agency level, OPM works with the Chief Human Capital Officers council to develop and disseminate human capital guidance and relies upon the council members to communicate OPM policy and other human capital information throughout their agencies. Integrating succession planning and management efforts that focus on strengthening both current and future organizational capacity to obtain or develop the knowledge, skills, and abilities agencies need to meet their missions continues to be important. For example, GAO has reported on a challenge in the acquisition workforce where the workload and complexity of responsibilities have been increasing without adequate attention to the workforce's size, skills and knowledge, and succession planning. Faced with a workforce that is becoming more retirement eligible and the need for a different mix of knowledge, skills, and competencies, it is important that agencies strengthen their efforts and use available flexibilities. Agencies have developed strategies to recruit needed talent, including turning to older experienced workers to fill knowledge and skills gaps. For example, the National Aeronautics and Space Administration has used a combination of techniques to recruit workers with critical skills, including targeted recruitment activities, educational outreach programs, improved compensation and benefits packages, and streamlined hiring authorities. In addition to promoting high performance and accountability to foster results-oriented cultures, it is important for agencies to develop and maintain inclusive and diverse workforces that reflect all segments of society. Agencies can benefit from strategies that offer a diverse pool of talent for selecting the agencies' future leaders and recruiting new employees so that agencies can get a wider variety of perspectives and approaches.