Issue Briefs

Following is the section of OPM’s recently published strategic plan for 2018-2022 dealing with federal employee pay and benefit initiatives.

Goal 1: Transform hiring, pay, and benefits across the Federal Government to attract and retain the best civilian workforce

Goal Overview
A well-functioning 21st century Government requires a modern personnel system that allows Federal agencies to attract and retain talented applicants in Federal service. Many features and requirements of today’s Federal personnel system were designed nearly 40 years ago for work and a workforce that was very different from the enormous diversity and complexity of today’s Federal agencies, missions, and workforces. Because of this, there is broad consensus that key components of the current civil service system do not fully meet today’s needs.
As the Federal Government’s human resources agency, OPM has a unique leadership role in designing and promulgating regulations, policy, and guidance covering all aspects of the employee lifecycle from hire to retire. OPM is also responsible for administering Government-wide retirement and benefits programs that help make the Federal Government a competitive and attractive employer. In addition, OPM helps safeguard the integrity and trustworthiness of the Federal workforce by delivering efficient and effective background investigations and overseeing certain parts of the vetting processes they serve. In each of these areas of responsibility, OPM has a responsibility to drive modernization and to deliver highly effective services and programs that enable Federal agencies to meet their human capital needs today and into the future.

1.1 Drive improvements to the hiring process so agencies are able to hire the best candidate in a timely manner

The American people expect and deserve excellent service from the Federal Government. This requires a talented, highly skilled Federal workforce that is drawn from all segments of society. Federal agencies, hiring managers, applicants, and other external stakeholders consistently identified Federal hiring process reform as one of the most critical issues that OPM should address in its FY 2018 to 2022 Strategic Plan, stating that the process is too cumbersome and lengthy. Because of this, the Federal Government is losing qualified candidates to other entities. While OPM and other agencies have taken several steps to make it easier for individuals to apply for Federal jobs and to improve the quality and speed of agency hiring, agencies continue to experience challenges in the Federal hiring process that influences the Federal Government’s ability to attract or hire talented individuals from multiple sectors. In FY 2016, the average time to hire, from the moment the manager submits the hiring request to the HR office until the employee enters on duty, is 105.5 days.

Pursue legislative and regulatory reform to modernize the Federal hiring process.
Improve assessment practices to better evaluate applicants against job requirements.
Prepare HR professionals and hiring managers to collaborate effectively to improve quality hires.
Collaborate with Federal, non-profit, and academic partners to attract a diverse, talented candidate pool.

Performance Measures
Hiring manager satisfaction that applicants are referred in a timely manner and with the skills to perform the job

1.2 Achieve reforms to the pay system to drive performance excellence and greater responsiveness to changes in labor markets

External stakeholders identified modernizing the general schedule (GS) pay system as a strategic opportunity that can help to better attract and manage talent into the Federal workforce. The current GS pay system, which was created in 1949, is not focused on driving performance, and is not sensitive to changes in the broader labor market as would be desirable. Stakeholders have described the pay system as outdated and inflexible, “reflecting the needs and characteristics of the last century’s workforce—not those required for today’s complex, interagency challenges,” A New Civil Service Framework by Partnership for Public Service and Booz Allen Hamilton, 2014. A modernized compensation system would be more “market sensitive,” better enabling the Federal Government to recruit talent in a competitive labor market, and would help agencies more accurately and flexibly “reward performance, not just length of service.” This objective contemplates both 1) legislative reform (that is, developing and promoting a comprehensive legislative strategy), and 2) regulatory and policy reform.

Partner with agency stakeholders to identify concerns and priority areas for improvement related to pay and leave systems.
Identify and engage with nonpartisan groups, think tanks, key congressional leadership, and employee organizations to understand perspectives and pay and leave reform proposals.
Develop options for pay and leave reforms that address agency workforce management challenges and advance fair and competitive pay and leave systems that drive high performance and align with merit system principles.
Conduct a market-based study on leave to identify prevailing practices in the non-Federal workforce.

Performance Measures
This objective is most appropriately measured by milestones, which are scheduled events signifying the completion of a major deliverable or a phase of work

1.3 Reduce the complexity and costs to administer Federal employee retirement earned benefits by achieving and implementing legislative reform

Internal and external stakeholders identified modernizing the retirement defined benefits program as an opportunity to reduce the complexity associated with the program. The current retirement program is composed of the Civil Service Retirement System, established in 1920 under 5 U.S.C. 83, and the Federal Employees Retirement System established in 1987 under 5 U.S.C. 84. OPM is responsible for developing and providing more than 2.6 million annuitants, survivors, and family members benefit programs and services. Since the inception of the retirement program, many new statutory provisions have been enacted, requiring adjustments to regulations as well, which adds to the complexity of an already complex program. This objective contemplates both 1) legislative reform (that is, developing and promoting a comprehensive legislative strategy), and 2) regulatory and policy reform.

Conduct an analysis of current private sector retirement benefits and state and/or local government reforms.
Engage with Federal agency partners to identify areas for cost savings and reduce complexity in the current Federal retirement program.
Reform retirement benefits to meet the future benefit needs of the changing Federal workforce.

Performance Measures
This objective is most appropriately measured by milestones, which are scheduled events signifying the completion of a major deliverable or a phase of work

1.4 Improve healthcare quality and affordability in the FEHB Program with 75 percent of enrollees in quality, affordable plans

More than 90 percent of respondents to the 2016 Federal Employee Benefits Survey indicated that the availability of FEHB was “extremely important” or “important,” and more than two-thirds said that it influenced their decision to take, or remain in, a Federal job to a “moderate” or “great” extent. Consequently, a cornerstone of OPM’s efforts to fulfill its mission to achieve a trusted, effective civilian workforce must be to make sure that the FEHB Program provides a range of quality, affordable health insurance choices.
This is a challenging effort that will require deliberate, sustained focus. While annual premium increases under the FEHB Program are generally at or below those of large private sector employers, they tend to outpace cost of living pay adjustments for Federal employees. Increasingly, health care purchasers are seeking greater value by emphasizing the importance of quality of care received by enrollees. OPM has implemented a Plan Performance Assessment for FEHB carriers to incentivize them to improve clinical quality, customer service, and resource use for the more than eight million individuals covered by FEHB plans.

Increase the quality of healthcare received by enrollees in existing FEHB plans.
Increase the affordability of existing FEHB plans.
Improve the portfolio of available FEHB plans to increase the proportion that are quality affordable plans.
Improve the FEHB enrollment experience, to include enhanced enrollee decision support and greater efficiency in enrollment and premium administration.
Shape and respond to the regulatory and legislative environment to promote improvements in quality and affordability in the FEHB Program.

Performance Measures
Percent of FEHB enrollees in quality affordable plans