Uncle Sam’s HR Department Needs Help

The Office of Personnel Management needs comprehensive reform and needs to be raised to cabinet-level status. Here’s how a Biden administration could fix this crucial but little-discussed office that staffs the government.

Joe Biden promises a return to an honest, competent federal government. For that to happen, the government must be adequately staffed with experienced civil servants empowered to push forward his policy agenda, should he win. Without an experienced team, even the best appointees will struggle.

The state of the federal workforce is not good.  Pay freezes, attacks on government unions, and a drumbeat of hostile, often racist messaging about “lazy” civil servants have made it hard for the federal government to attract and retain top talent. The COVID-19 pandemic has exacerbated physical risks to the civil service, and Republicans have stalled hazard pay to front-line federal employees.

A fetish for privatization drives these attacks. Overreliance on contractors to administer critical services has been bad for veterans and hurricane survivors, among others. Contracting has shifted jobs from unionized, merit-based civil service roles to underpaid, temporary workers, who are squeezed so that K Street and Dulles Corridor executives can earn fat profits.

And to cap it off, the federal civil service is heading for a demographic iceberg. As of 2017, one-third of the federal workforce was eligible to retire by 2022, including nearly half of the Department of Housing and Urban Development and the Environmental Protection Agency.

To address these challenges, a Biden administration must kick off major hiring on Day One. The new president will need to repair relationships between agencies and their career employees, which have frayed under Donald Trump. Doing this requires reforming an underappreciated, beleaguered agency — the Office of Personnel Management (OPM).

OPM serves as the federal government’s HR department. As part of this responsibility, OPM oversees federal hiring and workforce policy. It creates and maintains the job classifications for the civil service system, sets qualification standards for those positions, and tracks whether employees are happy. If fixing the government will require quickly hiring talented people, OPM is positioned to do this.

A Good Idea Cut Short

OPM’s roots are in the civil service reforms of the 19th century. Triggered by President James Garfield’s assassination at the hands of a disgruntled office seeker, Congress created the Civil Service Commission (CSC) to enshrine the selection of federal employees based on merit.

As the federal government transformed into a massive employer with broad regulatory and welfare responsibilities, the CSC’s narrow focus on candidate selection became increasingly ill-suited to meet the growing demands of recruiting and maintaining a skilled, diverse workforce. Congress created the Office of Personnel Management in 1978 to align personnel management more closely to administration policy while still protecting the merit system.

Unfortunately, this new ambitious personnel agency came into existence just as the Reagan era’s hostility to government flowered. This reversal caused an explosion of contract hiring that often proved inefficient, even as K Street and the Dulles Corridor prospered.

Under Obama, OPM took some steps to remedy problems with retention, but severe challenges remained. The watchdog Government Accountability Office (GAO) has flagged the government’s human capital management to be a high-risk issue since 2001. It has also concluded that the current job classification system creates an outdated network of narrowly defined positions.

The Trump Administration’s Attacks

 In 2018, the Trump administration used these challenges to try and eliminate OPM and divide its functions among several agencies. The most sensitive portion, handling personnel policy, would be brought into the White House, presumably subjecting civil servants to the same “standards” the Presidential Personnel Office uses to “vet” appointees. (The same high bar that led to the selection of Vinnie Viola, Andrew Puzder, Sean Spicer, and others.) The HR services would have been merged with the General Services Administration, which has broad authority over contracting, but no focus on personnel. Not surprisingly, the administration provided no evidence that combining OPM and GSA would improve personnel outcomes.

Even after a Republican Congress blocked the merger, the Trump administration continues to push it despite its own lawyers’ advice. Though the merger is stalled, the mere suggestion, combined with the appointment of hostile leadership like acting director and former Heritage Foundation operative Michael Rigas, has caused damage. OPM employees report low morale as the threat of a merger hangs over them.

The OPM We Need

 The Trump administration’s power grab shouldn’t obscure that many of OPM’s numerous challenges predate Trump. Fixing them will require vision, energy, and commitment from the next administration. Immediate steps to rebuild OPM would include:

 Improve USAJOBS.GOV

When an applicant using the USAJobs portal—the main gateway for federal hiring–sees a position at the State Department with an “0905” Attorney job code, at a “GS-13” salary, under an “excepted” hiring authority, with specific qualifications language, they see OPM’s handiwork.

Unfortunately, USAJobs cannot be used to recruit, to the frustration of managers and applicants. Instead, applicants need to be directed to a specific posting and apply separately for each job. But with investment and small policy changes, USAJobs could create a superb pool of talent. Its revamping will make it easier to fill the thousands of vacancies for existing and new roles with promising candidates.

 A Better Compensation System

OPM can also grow the talent pool by increasing pay and benefits where possible. Opportunities include extending health and retirement benefits to federal employees who don’t currently receive them. OPM can also expand COVID hazard pay for those employees required to work during the pandemic.

Along with these immediate changes, a Biden administration should propose laws to ensure that federal employees can’t be used as pawns in a government shutdown or future budget fights. That won’t be easy, but the proposal would serve as a signal to both current and potential employees of the administration’s positive intent toward the civil service.

Streamlining and energizing agency use of existing hiring authorities

To hire, a federal agency needs legal permission, known as a “hiring authority.” Along with the traditional competitive service, Congress and OPM have given federal agencies a bewildering array of other hiring authorities. Some authorities come with fewer employment protections but often make it faster to find and hire the right person.

In 2016, GAO identified an astonishing 105 different authorities used to make at least one hire, even though 90% of hires were made using the 20 most popular ones. A 2018 OPM follow-up confirmed that many managers don’t understand the crazy quilt of authorities available.

A Biden OPM has to help agencies become nimbler. OPM can assign desk officers to serve as experts for each agency. As part of their responsibilities, these desk officers can help find the hiring authorities and develop the job postings that agencies can use to re-staff quickly. A few new desk officers can go a long way to fixing up hollowed-out agencies.

OPM should also assess the pace of competitive hiring and consider temporarily lifting caps on fast ways to enter federal employment, like entry-level hiring programs. This move will help bring new talent if competitive hiring cannot keep up. To avoid damaging the civil service, policymakers must consult with government unions and make only temporary changes tied to specific hiring needs.

Quickly refill the career service ranks.

OPM should allow agencies with a critical need or facing a severe shortage of candidates to waive some rules by using the “direct hire” process. Using this authority circumvents protections and preferences, but it isn’t inherently an attack on the civil service. It can be a way to quickly hire applicants into long-term career positions with civil service protections. If used judiciously, it is a tool that can rebuild the civil service. To date, this authority is mostly available to hire government-wide for positions in IT and STEM. It should be temporarily expanded.

The Biden administration should issue an Executive Order declaring critical hiring needs across the workforce. COVID justifies such a declaration. The order should require that OPM work with agencies to identify critical offices and career positions that have been particularly neglected. As it identifies these positions and offices, OPM should assess whether applicants with veterans’ preferences have been given a fair opportunity to apply.

 Returning the civil service to its merit-based, competitive hiring roots.

OPM should limit excepted and direct hire authorities–ways for an agency to hire without following the usual rules of the competitive service–.after it has refilled the civil service ranks, create a central way to oversee those authorities, and shift hiring back to the competitive service.

To protect the civil service, the Biden administration should take in contracting and put it under OPM’s control. The real beneficiaries of these contracts aren’t taxpayers but consulting executives and the politicians they support and those they hire.

Empowering OPM can put the brakes on contracting and even reverse some of its mushroom-like growth. Today, there is no unified oversight of whether a contract is for “inherently governmental services,” a type of work that must be performed by civil servants. Each agency contracting officer makes this decision with little guidance. The Biden administration should grant oversight authority to the OPM Director, in concert with other interested agency heads.

Such a delegation would build on the Obama administrations limiting roles that may be contracted. OPM should also lead an interagency review of contracts that may violate existing federal guidance.

Growing OPM’s capacity and staffing

Despite her attacks on OPM, the office’s acting director, Margaret Weichert, did make a good point when she testified that OPM is understaffed. Fewer than 200 employees support IT systems that buttress a $2.4 trillion retirement and benefits balance sheet. Without meaningful growth, OPM will never be able to fulfill its mission.

The Biden administration should direct OPM to build a plan for scaling itself up. Presidential appointees should seek increases to match this plan, starting with the first omnibus budget bill in February 2021.

 A leader willing and empowered to do the work.

The Biden administration should empower the OPM Director, elevating the role to Cabinet rank and giving it oversight of the entire federal workforce.

Today, there are swaths of federal employees, like the entire Peace Corps, outside OPM’s purview. The Biden administration should consolidate government-wide personnel strategy and oversight under the OPM Director. This consolidation will help OPM become a real resource for hiring government-wide.

A path forward

Just like expanding the Supreme Court, empowering OPM instead will be branded as a Democratic power grab. But Democrats must resist that characterization and fight this battle on their terms—strengthening our government and getting more, not less, value for taxpayers. The OPM Director must be willing to champion muscular government in response to cheap criticism. The office needs a talented administrator who can lead the complex agency into a new era. Progressives should scrutinize the nominee for the OPM Director in the same way they might the EPA Administrator. They should insist this nomination is fast-tracked like top cabinet positions. With what needs to be done, every second and every hire count.

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Yevgeny Shrago

Yevgeny Shrago is a visiting fellow at the Revolving Door Project at the Center for Economic and Policy Research.