Issue Briefs

Following are excerpts from an OPM report on use of recruitment, retention and relocation incentive payments in 2008.

Overall, 47 Federal agencies paid 39,512 recruitment, relocation, and retention incentives worth more than $284 million, with an average incentive payment of $7,209 during calendar year 2008. This was comprised of 11,396 recruitment incentives totaling over $85.9 million (average payment of $7,543); 3,307 relocation incentives totaling more than $42.9 million (average payment of $13,000); 24,808 retention incentives (likely to leave the Federal service) totaling over $155.8 million (average payment of $6,284); and 1 retention incentive paid to an employee likely to leave for a different Federal position, worth $1,602. Agencies consistently reported using the incentives to accomplish strategic human resources goals.

The number of recruitment, relocation, and retention incentives increased by 21 percent, and the total amount paid increased by 37 percent between calendar years 2007 and 2008. More specifically, the number of and total amount paid for recruitment incentives during this period increased by more than 47 percent and 49 percent, respectively. The biggest percentage increases were for relocation incentives—the number of relocation incentives increased by over 67 percent, and the total amount paid increased by over 85 percent. The number of retention incentives increased by over 8 percent, and the total amount paid increased by over 22 percent.

In calendar year 2008, agencies typically paid recruitment, relocation, and retention incentives to employees in occupations critical to agency missions, such as health care, engineering, security, and information technology (IT). Agencies also used the incentives to fill positions at the grade or work levels one might expect: more than 55 percent of the recruitment incentives paid to General Schedule (GS) employees were used to recruit new employees into entry- and developmental-level positions (e.g., at GS-05, GS-07, and GS-09), and more than 77 percent of relocation incentives used for GS employees were paid to employees in intermediate- and upper-level positions (e.g., at GS-11, GS-12, GS-13, and GS-14). The use of retention incentives was spread over a wide range of grade or work levels, an indication that agencies are focused on making sure critical employees are retained at all work levels.

Agencies provided very positive responses regarding the effect these incentives had on recruitment and retention efforts. Most agencies reported no barriers to using these incentives; some reported the availability of funding represented a barrier to incentive use; others also reported it would be helpful to be able to pay recruitment incentives to recruit current employees in another agency and retention incentives to employees who are likely to leave for a different Federal agency in situations other than before the closure or relocation of an employee’s office, facility, activity, or organization.

Agency use of incentives and effect on recruitment and retention

To comply with congressional reporting requirements, OPM asked agencies to describe how they used recruitment, relocation, and retention incentives during calendar year 2008, including how incentive use improved recruitment and retention efforts. The following excerpts illustrate how recruitment, relocation, and retention incentives were used. However, these excerpts provide only summary information, selected examples, and anecdotes. OPM’s report is not designed or intended to provide detailed information on the content and administration of agency recruitment, relocation, and retention incentive plans and policies, nor does it provide determinations and justifications agencies made for authorizing the incentives.

Under the law and OPM’s regulations, recruitment and relocation incentives may be paid only when an agency determines a position is likely to be difficult to fill in the absence of an incentive. Similarly, retention incentives may be paid only when an agency determines that the unusually high or unique qualifications of the employee or a special need of the agency for the employee’s services makes it essential to retain the employee and the employee would be likely to leave the Federal service in the absence of a retention incentive (or likely to leave for a different Federal position when an employee is affected by a facility closure or relocation).

Of the 96 agencies that submitted reports, 47 agencies had used the incentives, and 49 had not. All agencies that used the incentives submitted narrative portions in their reports.

Departments cited the use of recruitment, relocation, and retention incentives most often for the following reasons:

To target specific occupations presenting particular hiring or retention challenges for reasons such as competition from the private sector for a skill set or an overall shortage in the workforce of a particular skill set;

To resolve specific hiring and retention problems in particular regional areas, such as to address difficulties in recruiting employees to work in high cost-of-living areas, overseas, or in remote or undesirable locations, or to address skills imbalances in particular regions or areas;

To meet a very specific staffing challenge or as a tool to ensure agencies have the workforce (be that one employee or many employees) necessary for the accomplishment of an important agency mission; or

To retain employees likely to retire from the Federal service when the agency has a special need for the employees’ services.

It is also interesting to note that some Departments commented on how their use of recruitment, relocation, and retention incentives changed in calendar year 2008 due to the change in economic conditions. Retention incentives are being phased out or terminated at some Department of Energy locations because their employees are unable to sell their homes and relocate or retire. On the other hand, the Departments of Interior and Veterans Affairs have increased their use of relocation incentives for employees who are required to relocate given the housing conditions in 2008.

Conclusion

As evidenced by the information in this report, recruitment, relocation, and retention incentives are important human resources tools that help agencies attract and retain employees for a model civilian workforce. Agencies consistently reported using the incentives to accomplish strategic human resources goals.

Further, in calendar year 2008, agencies typically paid recruitment, relocation, and retention incentives to employees in occupations critical to agency missions, such as health care, engineering, security, and information technology. Agencies also used the incentives to fill positions at the grade or work levels one might expect: more than 55 percent of recruitment incentives paid to GS employees were used to recruit new employees into entry- and developmental-level positions (e.g., at GS-05, GS-07, and GS-09) and more than 77 percent of relocation incentives used for GS employees were paid to employees in intermediate- and upper-level positions (e.g., at GS-11, GS-12, GS-13, and GS-14). The use of retention incentives was spread over a wide range of grade or work levels, an indication that agencies are focused on making sure critical employees are retained at all work levels.

While the 3Rs are important pay flexibilities, we must ensure the money spent on these incentives is being used effectively and only when necessary to support agency mission and program needs. The two memoranda issued by OPM to agencies are important first steps in guaranteeing every incentive payment is used appropriately and within the scope of the law and OPM’s regulations, as well as in ensuring the benefits of the incentives are worth their cost to the Government.

OPM will continue to provide leadership and guidance to assist agencies in strategically using the 3Rs authorities to attract and retain well-qualified, high-performing Federal employees.