The 2014 priorities of the American Federation of Government Employees and the National Treasury Employees Union, as described in a recent Washington Post Federal Eye column, reflect the harsh treatment of federal employees over the past three years. That would not happen in the private sector – not for three years. Corporate employers would know the price of alienating employees is high. Despite the severity of the recession, pay levels in other sectors have continued to increase. Successful companies treat employees as assets, not as a cost.
For 2015 NTEU apparently wants to “get the federal pay raise back on track,” whatever that means. There is unfortunately no reason to expect that to happen in the foreseeable future. Every employer needs to justify compensation costs, but that’s not possible currently for government. The methodologies used to assess federal pay are incomprehensible. There is broad misunderstanding – the Post reporter referred to “cost-of-living raises.” No one trusts the ‘gap’ estimates. Plus there are questions about the level of federal benefits. The impasse is likely to continue as long as the General Schedule system is sacrosanct.
There is agreement that lower graded jobs are better paid relative to market levels and that the salaries for jobs in GS 7 and higher are well below market. But the data compiled for the Federal Salary Council fail completely to identify jobs that are overpaid or underpaid. For every other employer that data is essential for salary planning.
In the same timeframe that the Washington media reported the 1 percent increase, articles in several business publications discussed the high demand for selected occupations. There are columns with titles like, “Math, Science and Computer Students: The Energy Sector Wants You.” A blog posted as I write carries the title, “Survey Finds That Tech Hiring Is getting Tougher in 2014.”
The pay levels for specialists with high demand skills – nurses, web developers, systems analysts, etc. -- will inevitably go up faster than market averages. For 2014 the typical employer is budgeting 3 percent for pay increases but many technology jobs will see increases in the 6 percent to 8 percent range, and those with the hottest skills (e.g., Java Development, SharePoint) can expect as high as 12 percent.
Companies are also placing more emphasis on the broader human capital issues. A recent global survey report by the Conference Board, “CEO Challenge, 2014” found that Human Capital was the leading issue. To quote from the report, “ . . .business leaders are working to optimize their greatest resource – their employees and those who lead them. This emphasis on people-related issues . . . is something companies can control, and can mean the difference between growing market share and simply surviving in 2014.”
Another survey this time of talent management professionals by the UNC Kenan-Flagler Business School found that 84 percent report the demand for high-potential talent has increased in the past five years. Those of course are recession years. Almost half (47 percent) of the respondents professionals stated that the current pool of high-potential talent does not meet anticipated future needs.
Simply stated, until something changes, federal agencies will not be able to compete for talent in high demand specialties. Of course a lot of people are still looking for jobs but it’s not at all productive to think in terms of generalities. The GS system and all its bureaucracy is a badly broken anachronism.
Federal agencies deal with far more complex and difficult problems than the typical employer. The need for ‘world class’ skills was made all too obvious recently by the problems with the Affordable Care Act website. The current efforts to overhaul procurement also highlight the need for well qualified specialists. Yes, private contractors can be brought in, but as a taxpayer I am strongly opposed to agencies paying $150,000 to $200,000 for specialists who would be paid less than $100,000 in the labor market.
But it’s more than pay. Far too many elected and appointed officials – as they say, on both sides of the aisle -- have never managed people in large organizations. It’s easy at the highest levels to focus on the numbers but the work to address the nation’s problems is done at the front line level. That’s where wounded veterans are treated and where disability claims are processed.
The need for civil service reform is dire. Agencies need flexibility to manage staff effectively. They need to invest in skills both for managers and the people they supervise. Recent research shows middle managers have more impact on organization performance than any other factor. Agencies also need specialists with the skills and experience to plan and manage large scale change initiatives.
Possibly the most important need is for evidence that agencies are well managed. It’s obvious there are a lot of skeptics across the country. Reform will need broad support.
To refute the critics, agencies need to give new emphasis to the policies and practices that influence performance. People will work very hard in the right environment. They want to be challenged, to grow and develop their capabilities, to be empowered to tackle problems, and to be recognized for their value. The recent history could hardly be more inimical to effective management.