The Office of Personnel Management has encouraged agencies to become more creative to recruit and retain talent. One reason for this is agencies are facing more pressure to put the right people in the right jobs for mission-critical priorities, but stricter budgets are making that harder to do.
A toolbox of 7 different incentives is at the disposal of agencies. According to a new study from the Government Accountability Office, agencies can use more help from OPM to use these incentives, and there isn’t much government-wide analysis on which incentives work best under which circumstances. Additionally, finding the right people to recruit proves difficult for many agencies.
There are 7 broad “special payment” authorities that agencies can use to help them compete for top talent and fill mission-critical positions or skills gaps:
- Special rates
- Recruitment incentives
- Relocation incentives
- Retention incentives
- Superior qualifications and special needs pay-setting
- Student loan repayment
- Critical position pay
According to a GAO survey of 27 Chief Human Capital Officers, less than 6% of more than 2 million federal employees in FY2016 received special compensation under at least 1 of these 7 pay authorities. Most of those employees received special pay rates, followed by retention incentives. Critical position pay incentives were rarely used, in part, because that authority is capped at 800 positions government-wide.
GAO wrote, “An OPM official said that over time agencies have relied less on these special rates due to the introduction of locality pay. For example, in its 2005 annual review of special rates, OPM reported that 14 special rates schedules would be terminated because higher locality rates applied at all steps of each covered grade.”
In total, agencies spent about $805 million to recruit employees, increase retention, and improve relocation incentives (3Rs), as well as student loan repayments between FY2014-2016. The most was spent on retention services (40%). GAO noted that spending on the 3Rs has risen since 2014. OPM placed a freeze on spending for recruitment and retention incentives in 2011 and just removed those caps at the end of last year.
Agencies told GAO that special payment authorities generally had positive impacts on agencies staffing and retention needs. More organizations are using the authorities to staff cybersecurity and Science, Technology, Engineering, and Math (STEM) positions than any other mission-critical area.
For example, the Environmental Protection Agency used a retention incentive to persuade a senior research analyst to stay. And, the Department of Homeland Security developed “a unique retention incentive plan that focused on specialized certification for employees in” IT and cybersecurity positions, GAO said.
More Resources Needed
However, most agencies said they lacked sufficient resources to use special payment authorities more regularly and budget constraints forced them to use incentives only to fill the most critical vacancies. More resources could help agencies use special pay authorities more effectively, but most departments said better training for managers would also help them to better use these programs.
“HHS noted budget constraints over the last several years have led to retirements and resignations among more experienced HR staff,” GAO wrote. “This resulted in a loss of institutional knowledge on complex pay and leave authorities, including those affecting special payments. HHS officials said the loss of experienced HR staff diminished the agency’s internal capacity to train remaining staff.”
There are some resources and tools OPM has provided to agency HR managers, so they can learn more about special payment authorities. OPM also collects data on how agencies are using those incentives but doesn’t use that data to better understand which authorities work best and how organizations can improve.
GAO wrote, “By not tracking and analyzing data on the use of special payment authorities, OPM and the CHCO Council do not have the information they need to help determine what potential changes may be needed, and have limited assurance that special payment authorities are helping agencies meet their needs and achieve recruit and retention goals.”
GAO recommended OPM analyze whether the 7 special authorities are meeting agencies’ recruitment and retention needs. OPM should also develop best practices for using each of the 7 incentives. They also recommended OPM set written procedures for assessing special payment authority requests that require the agency’s approval.
According to GAO, OPM took an average of 4-6 months to approve agencies special rates and critical pay requests.