A Time of Opportunity or a Time of Calamity?

An Aging Workforce: A Time of Opportunity or a Time of Calamity?

Robert M. Tobias

How agencies can seize the opportunity to fill the workplace with truly qualified employees and create a satisfying workplace that increases productivity.

Over the next five years, one of every five federal employees will retire. The government will have to replace those who retire, coupled with those who leave as part of normal attrition, in a labor market that is more competitive than it has been in 40 years. The government’s challenge is to attract and retain a talented, high-caliber employee who can meet the ever-increasing demands for improved productivity and better customer service. Meeting this challenge requires, at minimum, a management strategy combining workforce planning, aggressive recruiting, and identifying and addressing the critical elements of employee satisfaction that could improve agency productivity and public satisfaction. The tools and techniques to meet the challenges are known. The question is whether the will to act exists.

The Federal Workforce Is Aging

A recent Office of Personnel Management (OPM) study states that in 1999 approximately 25 percent of the workforce were eligible for voluntary or early-out retirement. Of course all of those eligible to retire in 1999 did not retire and all of those baby boomers who continue to move through the federal workforce like a rabbit through a python will not retire the moment they become eligible. But OPM and the General Accounting Office (GAO) project that about 20 percent–one in five, or approximately 281,000 employees–will actually retire by 2005, four short years from now.

Agencies often find it difficult to compete with the private sector to fill positions. This is due to pay and benefit disparity, the lack of initial training and long-term development programs offered, less opportunity for rapid advancement, and the demonization of federal employment by politicians of both parties for more than a generation.

Will the 281,000 positions be filled with mere “breathers” or with top agency choices–individuals who are challenged by the problems of government and want to be part of creating the solution? That is the question, and its answer will have an enormous effect on not only the federal government as an employer, but on the US society as the receiver of government services.

Workforce Planning

The first step to meeting the hiring challenge is effective workforce planning. A workforce plan is a basic document every agency needs to determine whom it should recruit for what job, now and in the future.

The new administration has recognized the importance of workforce planning. Office of Management and Budget (OMB) director, Mitchell Daniels, issued OMB Bulletin No. 01-07 (May 8, 2001) requiring every agency to prepare a workforce planning document for submission to OMB by the end of June. OMB has asked for the demographics of the current workforce, an accounting of skills needed to perform today’s work, a description of the agency’s expectations of future work, the skills that will be needed to perform the future work, and the strategies the agency has in place “to help ensure that the agency has, and will continue to have, a high-quality, diverse workforce.”

At a May 22 meeting of the Institute for the Study of Public Policy Implementation (ISPPI) at American University, Paul Barnes, deputy commissioner for human resources at the Social Security Administration (SSA), noted that when SSA did workforce planning, it found that 80 percent of the senior executives, grade 15s, and grade 14s are eligible to retire. Further, SSA projected that about 66 percent of its supervisors, 45 percent of the claims representative workforce, and 48 percent of the computer specialists would actually retire over the next 10 years.

Deputy Commissioner Barnes used the data to convince SSA management and OPM that SSA should be offering selected early-out retirements in order to start the replacement process now rather than waiting for “the retirement wave to swamp SSA.” Using this strategy, SSA has significantly “flattened its retirement wave” and spread its recruiting efforts over a longer period of time. Because it is replacing fewer employees over a longer period of time, recruiting and training new employees is more manageable.

Ron Sanders, chief human resources officer, Internal Revenue Service (IRS), told participants at the ISPPI meeting about the value of effective workforce planning. IRS has developed a plan that takes into account not only the projected vacancies from retirement and attrition, but also the internal movement of employees and the vacancies they create. For example, if 300 IRS revenue agent positions become available, the IRS can project how many internal applicants will be selected and what their current positions are. With these projections, the IRS knows how many revenue agent positions will be filled with internal applicants, how many must be recruited from the outside, and what internal vacancies must be filled. The IRS does not have to wait for the process to roll out before it begins recruiting, thus ensuring a smoother transition and a more manageable process.

Recruiting New Employees

Armed with the data from a workforce plan, agencies have completed the first step. They are positioned to know what they need and can create a compelling case that those being recruited are necessary workers with important work to perform. The next step is creating a recruiting program.

Most agencies have been absent from the job market and college campuses for six to seven years. Contacts with college campuses and college job placement programs have atrophied. Agencies must create a new recruiting program that includes new material describing its work in terms understood by college graduates. They must assign recruiters (agency executives, employees currently performing the work for which employees are being recruited, and a permanent cadre of recruiters or personnelists). Agencies must also decide how prospective employees should be evaluated (tests, interviews, or tests plus interviews), and what package of pay and benefits (including tuition remission) will be offered.

Managing a recruiting effort is no less a challenge than managing any other aspect of agency operations. In fact, it may be argued, as comptroller general David Walker stated in January 2001 when the GAO added human capital to the list of “high risk” government operations, that without a focus on human capital development, agencies risk mission failure. An unplanned approach will fail to yield the highly-qualified candidates agencies need to perform the ever more complex work of the federal government.

Improving Employee Satisfaction

Improving employee satisfaction is the third step to filling vacancies with highly-qualified candidates. Even if every agency is able to exceed its wildest expectations and hire all of the most desired applicants, how long will they stay with the federal government and how productive will they be? Will agencies hire their dream candidates only to see them walk out soon after they walk in? Improving employee satisfaction is the key to answering the question of how to keep good people. Improving employee satisfaction also has the important added benefit of improving employee productivity and public satisfaction. Agencies should be asking themselves several questions:

* Are employees challenged by the work assigned, are they provided the tools they need to perform their work, are they acknowledged for doing well, and are they counseled when their work needs to be improved?

* Does the agency work environment stimulate employees to give them discretionary energy? Discretionary energy is the additional effort employees may choose to give to an agency to accomplish agency tasks simply because they are motivated and challenged. The kind of workplace where employees love what they do enough to exert extra energy will attract the quality of employee the federal government needs. The kind of workplace that is also significantly more productive, because employees who are giving their discretionary energy are by definition doing and creating more.

Many managers know intuitively what actions they might take to create a workplace that inspires the gift of discretionary energy, but are reluctant to take action because they are not confident their actions will lead to a positive result. Fortunately, there has been a great deal of recent research concerning the specific actions managers can take to create employee satisfaction and improve productivity.

An IRS Case Study

As early as 1992 the IRS proved the connection between employee satisfaction and increased productivity. Five organizational development (OD) specialists hypothesized that if they conducted employee surveys to identify problems in the workplace, created a workplace that responded to the problems identified, assisted the managers in building teams, and facilitated better group dynamics and the resolution of employee problems, productivity would increase.

The OD specialists selected 12 IRS call sites to test their hypothesis and designated 10 other sites as a control group. At the 12 selected sites, employees and managers received training and assistance in process facilitation, problem solving, and team building. The OD specialists ignored the control sites. After two years, statistics showed significant increases in employees’ satisfaction with “management response to job problems raised by employees,” “technical training,” “ability to influence work schedule,” “support from co-workers,” “support from second level managers,” and “consistency of policies and procedures.”

Productivity also increased significantly in the selected sites. The selected sites’ productivity rose “five times as much as the nonparticipating sites”–an average of 7.7 percent compared to the control sites that increased an average of 1.5 percent. Of the 10 nonparticipating sites, four experienced an actual decrease averaging 8.5 percent. In the view of the researchers, “This result suggests that nonparticipating sites are both progressing at a slower rate and deteriorating at a faster rate.”

Gallup Organization Research

The Gallup Organization has also showed a connection between employee satisfaction and increased productivity. Gallup identified 2,500 business units in 24 high-performing companies in terms of productivity, profit, retention, and customer service. Interviewing 105,000 employees, Gallup then attempted to isolate and identify the elements of employee satisfaction contributing to the high organizational performance.

Study group leaders Marcus Buckingham and Curt Coffman of the Gallup Organization discovered 12 questions that, if answered positively by employees, reveal a higher performing organization. They reported in First Break All the Rules (published by Simon and Shuster in 1999) that the person with the largest influence on employee answers to the questions is the employee’s supervisor. They found that talented employees may join a company because of charismatic leaders, generous benefits, and world-class training programs, but the relationship with a supervisor ultimately determines how long an employee stays and how productive he or she is. The 12 questions identified by the Gallup Organization make clear what behavior must be changed by supervisors in order to generate employee satisfaction and high performance: when employees can rate a question “5” on a 5 point scale, they work in a high performance organization.

12 Key Answers in High Performing Organizations

* I know what is expected of me at work.

* I have the materials and equipment I need to do my work.

* At work, I have the opportunity to do what I do best every day.

* In the last seven days, I have received recognition or praise for doing good work.

* My supervisor, or someone at work, seems to care about me as a person.

* There is someone at work who encourages my development.

* At work, my opinions seem to count.

* The mission/purpose of my company makes me feel my job is important.

* My associates are committed to doing quality work.

* I have a best friend at work.

* In the last six months, someone at work has talked to me about my progress.

* This last year, I have had opportunities at work to learn and grow.

Management Follow-through

Every item, except for item 2, can and should be influenced by a supervisor or manager. For example, a supervisor whose employees give a low score to question 1 knows that he or she must initiate conversations with employees on a regular basis to ensure they know what is expected of them.

Dr. Max Larsen, senior vice president and division director in the Gallup Organization, at the May 2 ISPPI conference stated that organizations that use the questionnaire to increase employee satisfaction through changed managerial behavior also increase productivity. He also pointed Out that question 10 generated the most managerial incredulity. Dr. Larson explained that having a “best friend” at work is an indication of a workplace where employees know and socialize with each other, share important information, and trust each other as colleagues rather than competitors.

American Customer Satisfaction Index (ACSI)

If an agency wants a specialized model that is specifically designed to link employee satisfaction in their particular agency with increased productivity, it can engage Clues Fornell, the creator of the American Customer Satisfaction Index (ACSI). Mr. Fornell was asked by Sears to create a model to link employee satisfaction data with the ACSI customer satisfaction already being gathered by Sears. Sears managers wanted to understand what elements of employee satisfaction actually caused customer satisfaction and higher profits. Sears wanted “a set of nonfinancial measures that would be every bit as rigorous and auditable as financial ones.”

Fornell tested the 70 employee satisfaction elements being measured by Sears to determine which had the largest effect on customer satisfaction. Of the 70 tested, 10 had the highest impact. The more employees were satisfied, the higher the store customer satisfaction and store profits. Key factors included:

* the type and amount of work assigned;

* sense of accomplishment;

* pride in the job;

* compatible physical working conditions and supervisory treatment;

* hope for the future of Sears;

* extent to which the employee felt Sears was making the changes necessary to compete and had an understandable business strategy; and

* the belief that an understandable connection existed between the employee’s work and business success.

Auditable Link Between Employee Customer Satisfaction

An article on the model in the January 1998 Harvard Business Review reported that Sears could predict that a five point improvement in employee satisfaction would drive a 1.3 point improvement in customer satisfaction, which would result in a 0.5 percent improvement in revenue growth for Sears. If the Sears managers knew nothing about the store other than that it had increased its employee satisfaction by five points, revenue growth would be 0.5 percent higher than that of any store in the district where employee satisfaction scores failed to increase. Sears had created an auditable, nonfinancial measure.

The link between employee satisfaction and agency productivity is conclusive, and the surveys necessary to gather the employee satisfaction data are widely available or can be individually created.

Conclusion

Federal agencies are facing a tremendous opportunity. It is possible to develop workforce plans to predict when vacancies will occur in what occupation with a 99 percent accuracy rate. Then, an organization can create a recruiting effort that will appeal to prospective employees’ agencies need to hire, and gather the data necessary to create a workplace where employees want to give their discretionary energy.

The question now is whether the good data and excellent plans will be put into action. Dr. Jeffrey Pfeffer, professor of business administration at Stanford University, and author of The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action (Harvard Business School Press, 1999), indicates that the largest barrier to turning knowledge into action is when talk substitutes for action:

There is the tendency to treat talking about something as equivalent to actually doing something about it. Talking about what should be done,…isn’t enough. Something has to get done.

There is sufficient information now to know what must be done and how to do it. Will agencies seize the opportunity to fill the workplace with truly qualified employees and create a satisfying workplace that increases productivity? Or will that knowledge be ignored and by inaction create a calamity? Does the will to act exist?

Robert Tobias is director of the Center for Public Policy Studies at The American University. He is former president of the National Treasury Employees Union.

COPYRIGHT 2001 Bureaucrat, Inc.

COPYRIGHT 2008 Gale, Cengage Learning