We and others have highlighted the need to hire and retain older workers  to address the challenges associated with an aging workforce. The Proportion of Federal Employees Eligible to Retire Is Growing

Across the federal government, the proportion of older and retirement- eligible workers is growing. For example,  within 5 years, 20 percent of employees at the Department of Homeland  Security (DHS) will be able to retire, while 46 percent of employees at  HUD and Transportation will be eligible. In 2007,  federal agencies hired almost 14,000 new workers aged 55 and older. For example, although the Department of Homeland  Security (DHS) has a low proportion—20 percent—of workers eligible to  retire by 2012, the proportion of workers eligible to retire now or by 2012  in its Federal Emergency Management Agency is currently about 33  percent, and agency projections indicate that about 58 percent of the  senior executives in this agency will be eligible to retire by 2012. Selected Agencies Face Common Challenges and Have a Variety of Strategies to Tap Older Workers to Meet Workforce Needs

The growing proportion of federal workers who are eligible to retire now  or in the near future presents challenges and opportunities for federal  agencies. Also, according to agency officials, all three agencies  have relatively few staff at midlevel positions to help pass down  institutional knowledge and skills to less experienced employees due to  past budget cuts and hiring freezes. Finally, they are all challenged in their  efforts to attract qualified staff with specialized skills. To address  these challenges, these agencies rely on older workers in different ways  and use selected governmentwide human capital flexibilities in addition to  their own strategies, to hire and retain older workers. Like the federal government as a whole, HUD, SSA, and USAID  have large portions of their workforces nearing retirement, and these  older, experienced workers may leave behind gaps in leadership, skills,  and institutional knowledge. While all three agencies rely on older workers to pass  down institutional knowledge and critical skills to less experienced staff,  HUD officials told us this is the primary way they actively involve older  workers. Agency officials told us that USAID tends to bring back its retirees as  contractors to fill short-term job assignments and to help train and  develop the agency’s growing number of newly hired staff. Other Federal Agencies Have Developed Their Own Promising Practices to Hire and Retain Older Workers to Meet Their Workforce Needs

We interviewed officials in several agencies that have developed other  approaches to hiring and engaging older workers. State has developed two databases to match interested  foreign service and civil service retirees with short-term or intermittent  job assignments that require their skill sets or experiences. First, it has begun to streamline the complex federal job application  process. OPM Has Taken Actions That Could Address Three Areas of Concern but Could Do More to Help Agencies Share Promising Strategies in Hiring and Retaining Older Workers

By reducing the burden associated with the federal hiring process and by  proposing legislation to make it easier to rehire annuitants and to allow  certain employees to work part-time at the end of their careers, OPM has  taken steps that would address problems in three areas that have caused  difficulties for older workers. And, while OPM has other  methods available—such as its human capital and electronic government  practices Web sites—that could be used to efficiently package and broadly  disseminate this information to a much larger and diversified audience, it  currently has no plans to do so. Appendix I: Objective, Scope, and Methodology

Our objectives were to describe the (1) age and retirement eligibility  trends of the current federal workforce and the extent to which agencies  hire and retain older workers; (2) workforce challenges that federal  agencies face and the strategies they use to recruit and retain older  workers to help meet these challenges; and (3) actions the Office of  Personnel Management (OPM), as the federal government’s human capital  manager, has taken to help agencies hire and retain an experienced,  skilled workforce. Strategies Available to Federal Agencies

To report on how agencies make use of governmentwide flexibilities, we  conducted in-depth reviews of three agencies—the Department of Housing  and Urban Development (HUD), the Social Security Administration (SSA),  and the United States Agency for International Development (USAID).
Why GAO Did This Study

The federal workforce, like the nation's workforce as a whole, is aging, and increasingly large percentages are becoming eligible to retire. Eventually baby boomers will leave the workforce and when they do, they will leave behind gaps in leadership, skills, and knowledge due to the slower-growing pool of younger workers. GAO and others have emphasized the need for federal agencies to hire and retain older workers to help address these shortages. Building upon earlier testimony, GAO was asked to examine (1) age and retirement eligibility trends of the current federal workforce and the extent to which agencies hire and retain older workers; (2) workforce challenges selected agencies face and the strategies they use to hire and retain older workers; and (3) actions taken by the Office of Personnel Management (OPM) to help agencies hire and retain experienced workers. To address these questions, GAO analyzed data from OPM's Central Personal Data File, interviewed officials at three agencies with high proportions of workers eligible to retire, and identified agencies' promising practices to hire and retain older workers. What GAO Recommends

What GAO Found

The proportion of federal employees eligible to retire is growing. While this proportion varies across agencies, in four agencies--the Agency for International Development (USAID), the Department of Housing and Urban Development (HUD), the Small Business Administration, and the Department of Transportation--46 percent of the workforce will be eligible to retire by 2012, well above the governmentwide average of 33 percent. While these eligibility rates suggest that many will retire, the federal government has historically enjoyed relatively high retention rates, with 40 percent or more of federal employees remaining in the workforce for at least 5 years after becoming eligible. Beyond retaining older workers, in fiscal year 2007, federal agencies hired almost 14,000 new workers who were 55 years of age or older and brought back about 5,400 federal retirees to address workforce needs. The increasing numbers of retirement-eligible federal workers present challenges and opportunities. The three agencies we reviewed (HUD, SSA, and USAID) share common challenges. All have large proportions of employees nearing retirement, and according to officials, due to past hiring freezes all have relatively few midlevel staff to help pass down knowledge and skills to less experienced employees. Officials from all three agencies also told us that they have difficulty attracting qualified staff with specialized skills. To address these challenges, the three agencies rely on older workers in different ways. USAID brings back its knowledgeable and skilled retirees as contractors to fill short-term job assignments and to help train and develop the agency's growing number of newly hired staff. SSA uses complex statistical models to project potential retirements in mission critical occupations and uses these data to develop recruitment efforts targeted at a broad pool of candidates, including older workers. While all three agencies rely on older workers to pass down knowledge and skills to junior staff, HUD officials told us this is the primary way they involve older workers, due in part to the agency's focus on recruiting entry-level staff. In addition, some federal agencies have developed practices that other agencies might find useful in tapping older workers to meet short-term needs. For example, the Department of State has developed databases to match interested retirees with short-term assignments requiring particular skills. To help agencies hire and retain an experienced workforce, OPM provides guidance, including support tools and training, and has taken steps to address areas of concern to older workers. For example, OPM has initiated actions to streamline the federal application process and to eliminate barriers that deter some federal retirees from returning to federal service or from working part-time at the end of their careers. However, although some federal agencies have developed strategies that could be used effectively by other agencies to hire and retain experienced workers to meet workforce needs, this information is not widely available. And, while OPM has other methods available--such as its human capital and electronic government practices Web sites--that could be used to efficiently package and broadly disseminate this information to a much larger audience, it currently has no plans to do so.