Making the Federal Government an Employer of Choice

10/04/2001

Government Reform Committee Subcommittee on Technology and Procurement Policy

Chairman Davis, Ranking Member Turner, Members of the Subcommittee, my name is Colleen Kelley and I am the National President of the National Treasury Employees Union (NTEU). As you know, NTEU represents more than l55,000 federal employees across 25 agencies and departments of the federal government.

Thank you for allowing NTEU to present testimony concerning changes that we believe must be made in the federal government's compensation package to make the federal government an employer of choice. As the President of the Nation's largest independent federal employee union, and on behalf of the dedicated men and women of the federal government, I am pleased to share NTEU's thoughts today.

The recent terrorist attacks affecting New York, Washington, Pennsylvania -and indeed the Nation as a whole - showed people around the world that civil servants at every level of government are decent, hard-working men and women committed to doing the best job possible despite the circumstances.

These tragic attacks have generated an increased interest in public service - for the moment. Unfortunately, as we know too well, until we repair its underlying problems, the federal government will not become an employer of choice. Federal agencies are in a contest with state and local governments and private sector employers for bright, talented, committed employees; a battle we have steadily been losing.

For too long, too little attention and too few resources have been spent on the federal government and its employees. Inadequate pay and benefits remain the primary obstacle to retaining highly qualified individuals and recruiting the federal workforce we will need for tomorrow.

Reasonably priced health care benefits and competitive pay used to help entice young people to dedicate their careers to public service. No more. The widening pay gap coupled with skyrocketing health care premiums precludes many prospective employees from even considering federal government service.

Federal Employees Health Benefits Program (FEHBP) rates recently announced by the Office of Personnel Management (OPM) are almost 50% higher than rates employees paid as recently as l998. During this same time period, federal salaries increased an average of l3%. There is little question why the federal government faces a human capital crisis.

Mr. Chairman, the hearing you have convened today seeks to explore the need for better pay, recruitment and retention strategies specifically for the federal government's information technology and acquisition workforces. NTEU believes that the very same factors that prevent individuals from seeking federal employment in the information technology and acquisition fields, prevent qualified applicants from seeking federal employment in general. We urge you to address this government-wide problem without delay.

It is important to note that special, higher pay rates have been implemented for entry and developmental level information technology (IT) employees over the past year. To some degree, the pay problems affecting the information technology and acquisition workforces have already begun to be addressed. As you know, in January of 200l, OPM established higher basic pay rates for several IT specialties including computer engineers, computer scientists and computer specialists. These government-wide pay increases ranged from 7 to 33 percent.

What still must be addressed is the pay gap facing the rest of the federal workforce. According to the Bureau of Labor Statistics, in some parts of the country, the gap between private and public sector pay is as much as 30%. The Federal Employees Pay Comparability Act, which was designed to close this gap between private and public sector pay, has been on the books for l0 years now. It has never been fully implemented; even during times of budget surpluses. Yet, as we know, for most prospective employees, the most critical element in deciding whether or not to accept a job is salary.

Unfortunately, the Administration's response to this crisis has been to not only propose, but continue to insist on - even in the face of bipartisan Congressional opposition - a 3.6% federal employee pay raise for 2002. As you know, the House and Senate Budget Committees adopted bipartisan language as part of the FY 2002 Budget Resolution making clear that federal employees should receive an amount that is at least 4.6% next year. In addition, both the House and Senate Fiscal Year 2002 Treasury Appropriations measures contain recommendations for a 4.6% pay raise for the federal workforce next January.

Nonetheless, the Administration continues to press for only a 3.6% raise for federal employees. This is not reflective of an Administration that takes the human capital crisis seriously.

There is really very little mystery surrounding the federal government's inability to attract young people to federal service. Frankly, Mr. Chairman, a decision to fully implement FEPCA and provide federal employees with compensation that mirrors that received by their private sector counterparts would do more to address recruitment and retention in the federal government than all of the federal government's other incentive programs combined.

Mr. Chairman, you have been a steady champion of fair pay for federal employees and for that, NTEU applauds you. But, Mr. Chairman we need you to do more. It is time; it is actually well past the time for us to repair the federal pay system. How much longer can we put this off and still expect the federal government to attract and retain the best employees?

As you know, acquiring and keeping employees with the best skills is a challenge for all employers. It is particularly so for federal agencies that are hamstrung by restrictive funding levels and forced to shuffle resources between competing priorities and from one account to another. This is precisely the situation agencies have faced in recent years and face once again for Fiscal Year 2002. Until the President and Congress realistically budget for discretionary funding levels that at least meet current needs, agencies will not be able to meet the challenges they face.

As the Chairman knows, federal agencies currently have a wealth of flexibilities available to them, yet they do not have the resources to fund these programs. There are programs on the books that permit agencies to offer retention allowances of up to 25% of salary, bonuses of up to 25% of basic pay, performance awards, student loan repayment awards, incentive awards and even bilingual awards.

In December of l999, the Office of Personnel Management reported that overall, only 0.l4% of all Executive Branch employees received recruitment, retention or relocation incentives (3Rs) in Fiscal Year l998. Recruitment bonuses were given 0.3% of the time. Relocation bonuses were given to l.0 percent of employees and 0.09% of employees received retention allowances. Less than l/4 of l% of the federal workforce received any form of recruitment, retention or relocation incentive in Fiscal Year l998.

When asked what the most common impediments were to greater use of these types of incentives, not surprisingly, agencies cited budgetary constraints. (See: The Three R's - Lessons Learned From Recruitment, Retention, and Relocation Incentives) Agencies simply are not being given the resources necessary to fund the very programs and incentives that might actually help put them on the road to solving the human capital crisis. It makes little sense to offer this range of incentives to agencies, encourage them to use them to solve their human capital crises, yet provide them with no money or resources to accomplish the goal.

Adequate and stable agency funding coupled with appropriate pay, benefits and incentives are the keys to insuring that the federal government is able to attract, hire and keep the best employees. There is a federal pay law on the books, but it is not funded. There are flexibilities and demonstration project authority and a virtual laundry list of programs available to federal agencies to deal with the recruitment and retention problems they face, but they, too, are not funded.

The problem, Mr. Chairman, is not a lack of options, it is a lack of resources. What is needed is a willingness on the part of the Administration and Congress to provide the resources necessary to get the job done. Until a decision is made to provide federal agencies with funding levels that reflect their missions and their needs, the federal government's recruitment and retention problems will persist.

Thank you again, Mr. Chairman, for this opportunity to provide testimony. I want to state again that NTEU appreciates the attention you give these important matters and looks forward to working with you to provide solutions. Together, I hope that we will be able to begin to address the severe problems the federal government faces.