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U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

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Trends Impacting Federal HRM Environment

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The start of the 21st century is a pivotal time for the Federal human resources management (HRM) function. Cost pressures, increased attention to customer satisfaction, and emphasis on recruitment, retention, and productivity all serve to heighten awareness and scrutiny of the significant role HRM plays in advancing the mission of Federal agencies.

The implications of these escalating pressures on HRM as a profession have caused a fundamental re-thinking of the ways in which Federal HRM offices do business. This segment presents an overview of the following most significant trends driving changes in the Federal HRM environment and the case for strategic human capital management.

The trends impacting the Federal HRM environment point to the need for the Government to re-envision and clarify the HR role and to articulate its expectations for individuals serving in this role.

A Focus on Accountability and Results

The American public is demanding all segments of Government demonstrate accountability for specific outcomes. Managers and supervisors are increasingly under pressure to align the work of the organization more closely with mission objectives and to establish the business cases for all expenditures.

Over time, several initiatives have evolved to address the need for accountability and results. Each initiative builds on its predecessor and further delineates the requirements for achieving accountability and results.

As agencies meet Government Performance and Results Act of 1993 (GPRA) requirements, HR offices have assumed a critical advisory role in helping management plan, develop, organize, guide, and evaluate mission-oriented programs. This role involves describing how HR management and development will contribute to achieving strategic goals and objectives.

OPM recognizes agency leaders are responsible for strategic human capital management and is leading the Government’s initiative to help agencies be successful in that endeavor.

The Chief Human Capital Officers Act of 2002 (CHCO Act) established CHCOs who advise and assist agency leaders in carrying out their responsibilities to select, develop, train, and manage a high-quality, productive workforce in accordance with merit system principles.

To implement the recently enacted legislative provisions related to executive performance and accountability, OPM published amendments to 5 CFR 430 in July 2004. The amendments require agencies to obtain certification of appraisal systems covering executives. Under certified systems, the performance expectations for executives reflect their responsibility for organizational performance. Subordinate employees’ performance expectations must also reflect relevant program performance measures.

OPM, OMB, and GAO have collaborated to develop human capital systems, and OPM has created the Human Capital Assessment and Accountability Framework (HCAAF) to guide agencies toward implementing these systems.


Implications for Strategic Alignment

The need for increasing accountability and results requires HRM practices and programs be strategically aligned with the organization's mission requirements and:

  • Be relevant to the organizational challenges facing line managers.

  • Use measurement systems to assess how well HRM values, goals, and strategies are helping the organization accomplish its mission.

  • Be demonstrably effective and efficient as well as compliant.

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Increased Competition for Talent

Nationwide, there is a critical shortage of skilled workers in some occupations and geographic areas. Recruiting for highly technical occupations can be difficult. Employees with these high-demand skills can often choose from multiple employment offers and take advantage of their marketability to negotiate for flexibility, telework, and other desirable benefits.

In the face of increased competition for the same talent, the Government will be challenged to become an employer of choice and remain a competitive alternative to attract the skilled and talented workforce it needs to serve the American people. This is particularly true because the Government anticipates a wave of retirements during the next 5 to 10 years. Often those who leave Government service have the most experience and expertise, resulting in a dramatic loss of capacity.

Implications for Recruitment and Retention

The increased competition for talent means Federal agencies:

  • Must continue to rely on workforce planning and forecasting to ensure they have the right people, in the right jobs, with the right skills.

  • Need to use innovative recruitment and hiring strategies to identify and quickly select the high quality, diverse workforce they need now and will need in the future.
  • Need to concentrate on succession planning and leadership development programs so a pool of highly qualified replacements is available when experienced leaders leave.
  • Must be agile in their delivery of “just-in-time” training to meet rapidly changing responsibilities and assignments.
  • Need to create and sustain knowledge management systems to preserve expertise within organizations.

  • Must enable experienced members of the Federal workforce to assume new responsibilities and work in new ways as the Government proceeds with the transformation of the Civil Service.

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Changing Worker Values and Expectations

Today, in the majority of American families with two parents and school-aged children, both parents work outside the home. Many American families are headed by single parents, and more than half of all mothers with children under age 3 work. Baby boomers are described as the “sandwich” generation, simultaneously caring for aging parents and dependent children. The youngest members of the workforce often juggle work and school obligations.

As the number of dual wage earners and the number of families with single parents grow, workers’ stress levels go up while their capacity to manage all of their responsibilities goes down. A reality of today’s economy is most Americans constantly need to balance the demands of their work and non-work lives.

Studies of American workers confirm working people increasingly look for employers who offer flexible and family friendly workplaces. Virtual offices, flextime, family leave, telecommuting, and other innovative work arrangements reflect employers’ creative attempts to retain valuable employees who seek to find a balance between work and family life.

In addition, employees are not content just earning a good salary but are also looking for personal satisfaction and meaning in their work. Employees expect to be recognized quickly for the contributions they make on the job. Employees expect to receive opportunities for lifelong learning, which equips them with skills necessary to keep up with rapid change and helps them prepare for the potential of multiple career changes.

Implications for Flexible and Positive Workplace Environment

To meet these changing values and expectations and become an employer of choice, Federal agencies must:

  • Have the flexibility to implement new compensation and benefits concepts tailored to their business environments and strategic workforce requirements.

  • Offer a broad range of benefits and quality of worklife flexibilities that can be tailored to the unique, and changing, needs of employees.
  • Strengthen the leadership competencies of their managers in order to effectively motivate and inspire their current employees and a new, increasingly diverse generation of workers.

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A Shift in Roles

Because the management of human resources is becoming a strategic function, line managers are increasingly held accountable for directly delivering some HRM services. As line managers assume more hands on responsibility for managing all aspects of the workforce, human capital practitioners’ roles will also shift to increasingly complex roles such as business strategic partner, employee champion, and change agent.

Implications for Transformation of HR

The shift in roles requires:

  • Agencies prepare to operate an HRM system with fewer rules, tailored agency systems, expanded delegations of authority, and line management accountability for results.

  • Line managers be prepared to assume increasing responsibilities and accountability for HRM.

  • HR practitioners develop a new set of HRM competencies while also maintaining a strong knowledge of Federal human resources. Doing so will enable them to apply HRM principles to solve organizational problems and support line managers.

  • Performance development and performance management systems recognize these management responsibilities, enable managers to develop the skills and knowledge needed, and hold managers responsible and accountable for assuming new responsibilities.

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