Pwc Federal Human Capital Management: The waves of changes

The Waves of Change in Federal Human Capital Management

www.pwc.com/publicsector

1 PwC Public Sector Publication

We are pleased to present this publication about the impact of change on federal human capital management. This publication provides narrative feedback from interviews and surveys with a sample of human capital professionals and agency leaders in three federal agencies. We are grateful for the time and insights of these federal leaders. Their perspectives were essential to create an informed and balanced summary of today’s changes and the resulting human capital challenges and innovations. While the conversations with these three agencies provided a foundation for discussion, we recognize that they do not encompass all of the complexities and unique issues across the federal workforce.

The intention of this publication is to initiate continued dialogue with federal agencies about the impact of change on federal human capital management and how agencies can effectively manage that change. We look forward to expanding this dialogue and including more agencies and perspectives in the future.

Acknowledgements >

2 The Waves of Change in Federal Human Capital Management

5I. The Waves of Change in

Federal Human Capital Management

9II. Recruitment and Hiring

15III. Knowledge Management

and Retention

20IV. Appendix

1Acknowledgements

4Executive Summary

22PwC Team

Contents >

Features


and engage in active relationship development with diverse partner organizations.

3. Leverage technology to access candidates through online social networks, portals and virtual job fairs.

4. Do additional research before making an offer.

5. Embed new hires more firmly in the agency through onboarding.

Knowledge Management and Retention 1. Build a knowledge retention strategy

driven by senior leadership.2. Identify and capture transactional

knowledge.3. Leverage technology, such as Web 2.0,

to manage knowledge.4. Engage leadership and use

narrative practice to facilitate knowledge transfer.

Summary of Key Findings• The economic crisis has resulted

in enlarged applicant pools and temporarily delayed retirements. Yet, skill shortages still exist in specialized federal jobs.

• Agencies are challenged to find ways of selecting and onboarding the best candidates out of growing applicant pools.

• Agencies are not fully prepared for the impact of impending Baby Boomer retirements, although some have engaged in knowledge management efforts.

• Participants expect an increase in federal civilian employment among veterans returning from active duty, yet there are barriers that may hinder their integration.

Conclusions/RecommendationsThis report includes the following suggestions, based on PwC’s experience, methodologies and practice models: Recruitment and Hiring 1. Evaluate skills, competencies,

temperament and values needed for optimal fit with the position and the agency.

2. Build a strong agency brand

Major changes over the past several years have had a tremendous impact on organizations and their management of human capital. As PwC assists federal agencies in developing and implementing innovative approaches to human capital management, we decided to take a closer look at the impact of two specific changes: social and demographic (four generations in the workforce and veterans returning from active duty), and the global economic crisis. We gathered perspectives, through survey and interviews, from some of our key federal agency contacts (both human capital professionals and agency leaders). These insights, while not necessarily representative of all agencies, provide a foundation for continued dialogue about how to manage the impact of change today and prepare for the next wave of inevitable change in the future. This publication is intended to be a catalyst for dialogue in federal agencies about effective human capital management in times of change. It is designed for human capital professionals, agency leaders, managers and supervisors.This report is organized in two main sections: 1) recruitment and hiring, and 2) knowledge management and retention. Within each section, the impact of the two major changes previously mentioned is discussed, along with innovative approaches used by agencies today.

Executive Summary

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Next Steps

We recognize that change is dynamic and that the needs and issues faced by federal agencies will continue to evolve. We hope that this publication provides a framework for federal human capital professionals to prepare for and manage change and that the recommendations can support their success during the change process.

If you would like to share an agency innovation or success story about managing the waves of change in federal human capital management, please contact one of our team members listed in the back of this publication.

Four Generations in the Workforce “Future generations will continue to be significantly different and firms and institutions who adapt fastest will capture the highest-quality employees.”

– Millenial featured in PwC’s 2008 report Millennials at Work

I. The Waves of Change in Federal Human Capital Management


provide additional insights through an online survey and face-to-face interviews. This qualitative process provided valuable insight and perspectives about the current changes in human capital management. Selected quotes from those conversations are found throughout this report. The main questions discussed through this process included:1. How do the forces of change (social

and demographic shifts, and the economic crisis) impact the recruiting and selection of the federal workforce?

2. How do these same forces impact knowledge management and retention?

3. What innovative approaches have been successful in attracting, onboarding, and managing the knowledge of a capable federal workforce?

Through this process, we also collected testimonials from participants who described their challenges in attracting, developing, and retaining specialized talent. We also collected examples of successful approaches to capture mission-critical tacit knowledge, while dealing with system constraints like security and antiquated federal requirements, particularly during times of change.To complement the survey and interview findings, we have added PwC’s practical recommendations based on our experiences helping public and private sector organizations address complex human capital management issues.

• Generation X and Y workers are filling the positions vacated by retiring Baby Boomers; four generations are now working side-by-side in the federal workforce for the first time.

• Military personnel are returning from active duty and are transitioning back into the civilian workforce.

• The global economic crisis has exacerbated the pressure on agencies to change the way they do business.

• The role of government is changing and the public has heightened its scrutiny of federally funded programs and has higher expectations of federal agency performance.

These factors challenge today’s federal agency leaders, human capital officers, and managers as they work to attract, select, develop, and retain talent to perform mission-critical functions. This paper explores how today’s federal agencies can ride the waves of change with agility — turning them into opportunities. Agencies that develop and deploy innovative solutions to their recruitment, selection, knowledge management, and retention practices can realize significant improvements in operational efficiency and effectiveness resulting in cost savings, higher employee retention and productivity, and a reduction in lost knowledge.

Developing This Report

PwC’s human capital and change management specialists (who work specifically with federal agencies) prepared this report based on their experiences in supporting federal clients. We also engaged a small group of federal human capital and agency leaders to

Recruitment and HiringIt has never been more essential for federal agencies to staff the right people in the right positions — and to retain them and their valuable knowledge.Federal agencies perform many critical functions, often working behind the scenes and with little recognition. They protect the public from global health threats, design renewable energy, develop and launch missions into space, perform breakthrough scientific research, respond to collapsing financial institutions, provide safety oversight of our air transportation system, defend our nation against terrorism, safeguard our food supply, ensure quality education, operate the world’s largest postal system, address major social problems, and perform countless other functions vital to our quality of life and our nation’s progress. Now, more than ever, the ability to perform these vital missions relies on a human capital management system that is decisive, responsive, accountable, and agile. Human capital management is a major business priority for federal agencies. Waves of recent change have had an impact on the federal workforce and the way human capital is managed. These recent waves of change include:• More than 50 percent of the

current federal workforce is eligable for retirement by 2012, taking with them critical knowledge when they leave.

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Recruitment and Hiring“There is no other priority more important than making the federal recruiting and hiring process as transparent, efficient, effective, and user-friendly as possible, from the perspective of both job applicants and the federal agencies that need these critical skills in order to accomplish their missions.”

– John Berry, Director of the U.S. Office of Personnel Management (OPM) May 2009 Testimony to Senate Subcommittee on Oversight of Government Management

1 “4 Generations in the Workplace” http://www.clemson.edu/t3s/workshop/2010/TASC%20Pres/4%20Generations%20In%20Workplace%20TASC%202010.pdf. Traditionalists were born before 1946, Baby Boomers were born between 1946 and 1964, Generation X was born between 1965 and 1980, and Generation Y (also referred to as Millennials) was born after 1980.


Figure 2: Four generations in the workplace.

The Forces of Change

Social and Demographic ChangesMany social and demographic changes influence the face of today’s American workforce. Recruiting, hiring, and knowledge retention efforts should complement the nation’s progress toward a diverse and inclusive workplace culture. This means that agencies must take into account unique attributes like the concurrence of four generations in the workplace and the transition of active duty military personnel to the civilian workforce.Four Generations in the Federal WorkforceFor the first time, people from four generations are working side by side in the federal workforce. Generational differences between these workers present challenges and exciting new opportunities in the workplace. As the mix changes, with fewer Traditionalists in the workplace and a rapidly exiting Baby Boomer generation, there is a strong need to bridge generation gaps and find new approaches to hire, develop, and retain talent and knowledge. A 2010 Clemson University study in Figure 2 revealed that Traditionalists made up 6.5 percent of the civilian workforce, Baby Boomers 41 percent, Generation X 29.5 percent, and Generation Y 22.5 percent1.

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Figure 1: Forces of change influencing federal human capital management.

The two forces of change, as shown in Figure 1, have had an impact on management of federal human capital.

2 Iraq and Afghanistan Veterans of America at www.iava.org.3 US Department of Labor.4 HireVetsFirst, located at www.hirevetsfirst.gov. 5 Bureau of Labor Statistics, www.bls.gov.


Subsequently, there remains a shortage of applicants with specialized skills in these mission-critical areas. As attitudes about work are shifting in favor of more job security, people have begun to reconsider the relative security of government work over the economic gains of the private sector.The challenges and opportunities of the economic crisis are pushing agencies to seek innovations in selecting top talent to sustain mission capacity.

good employees because they possess attributes of teamwork, leadership, commitment, and technical skill4. As veterans returning from active duty face challenges in the shrinking job market, federal civilian employment could be an ideal fit for those looking to find viable work and continue to serve their country.

Economic CrisisThe Bureau of Labor Statistics reported in January 2012 that the national unemployment rate was at 8.3 percent. Although this figure is down from 10 percent unemployment during the peak of the recession in December 2009, it is still significantly above historical averages5. The global economic crisis has had mixed impact on federal human capital management. The instability and reduction in private sector jobs have boosted the applicant pools for federal agencies. In addition, many people who planned to retire from federal service have decided to continue working in response to declining retirement account values.

At the same time, there is a continuing need for highly specialized talent. Agencies must compete with the private sector for high-demand talent in science, technology, and healthcare.

More than half of the agency leaders we talked with in preparing this publication indicated that generational differences have a moderate or significant impact on their human capital management. Some respondents described these differences as a source of conflict, while others described them as a catalyst for progress. In perspective, these differences of opinion about the impact of multiple generations in the federal workforce highlight the variations in readiness for a multi generational workforce across agencies. One agency described how a group of 300 young professionals created their own employee network to build the skills and knowledge they needed to advance in a multi-generational workforce.

Veterans Returning From Active DutyMilitary personnel transitioning back to civilian life have reported difficulties finding jobs — not only due to current economic conditions, but also due to social stigma from employers who do not recognize the value veterans can bring2. In fact, unemployment rates for Gulf War veterans have been higher than their non-veteran counterparts3. However, employers who have a consistent practice of hiring veterans feel that veterans make

Economic Crisis

In January 2012, the unemployment rate nationally was at 8.3 percent. Although this was a decrease from 10 percent unemployment in December 2009, the unemployment rate for government workers actually rose to 4.2 percent in January 2012 as an additional 276,000 workers lost jobs in the government sector.

– Bureau of Labor Statistics (BLS)

Recruitment and Hiring “In short, the federal hiring process is often an impediment to the very customers it is designed to serve, in that it makes it difficult for agencies and managers to obtain the right people with the right skills, and applicants can be dissuaded from public service because of the complex and lengthy procedures.”

– GAO testimony, April 2009

II. Recruitment and Hiring


However, agency leaders we talked with for this publication also indicated a distinct disadvantage grounded in current federal hiring regulations, a mixed public perception of the federal government as an employer, and lack of access to innovative recruiting technologies.Federal hiring processes have gained the attention of the administration, which has enrolled the OPM and the Office of Management and Budget (OMB) to help drive change to enhance overall recruiting and hiring effectiveness. As the federal government also sharpens its focus on overall operational efficiency, it is not surprising that recruiting and hiring are viewed with such a critical eye. Recruiting and hiring effectiveness is central to an overall human capital strategy and, thus, agency-wide operational effectiveness. To be successful, agency recruiting efforts need to result in new hires that meet management and mission-specific criteria in terms of skills, numbers, and representation and are committed to the agency’s success. Challenges such as cumbersome agency security measures, strict conflict of interest requirements, or other policy-related constraints have affected agencies’ ability to onboard top talent.

organization. This requires a program that finds the right person at the right time, connects them to a position that takes best advantage of the individual’s unique strengths and interests, and places the individual within an organization culture that is compatible with the individual’s values. Agency leaders we talked with in preparing this publication consistently stated that recruiting, selecting, and hiring employees is a critical challenge. These narratives are consistent with an emerging trend that impacts a range of employers nationwide, including, but not limited to, the federal government.PwC’s 11th Annual Global CEO Survey found that 62 percent of organizations surveyed believe that, to compete for talent, they need to change the way they recruit, motivate, and develop their employees. Moreover, only 43 percent of CEOs believed their human resources organization is equipped to deal with any change required to compete for talent.The federal government’s advantage is that it can promote a unique employee value proposition grounded in the agency’s mission. In that regard, the government may be better positioned to attract prospective employees with certain backgrounds, like veterans.

A strong and comprehensive recruitment program (to include recruiting, selecting, and hiring employees) provides agencies with a valuable asset: talented workers who can execute the agencies’ strategies and support the mission. The ability to identify the best qualified candidates for a particular job requires recruiters to discern and prioritize the skills and attributes necessary for the job. While proper candidate skills are important, equally important is finding candidates who fit the agency’s culture and values. High-performing recruiters know the personality type, work style, and values of the employees most likely to succeed in the organization and design their selection and hiring processes to focus in on these characteristics.The demand for effective recruiting takes on an increased sense of urgency against the backdrop of demands for organizational accountability and performance. PwC believes in measuring recruiting program success not simply by the percentage of accepted offers or the cost to hire, but ultimately by the effectiveness of the new hire in the

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Recruitment and Hiring “One of our main challenges is the antiquated Merit Hiring System.”

“We have a ton of people interested, but lack a good way to figure out who is best qualified in a fast way. Standards aren’t the same for every job. Supply and demand is going to catch up and [we] will not have enough of a pool of applicants.”

– PwC Waves of Change Interview/Survey Participants


federal application process7. Although TAP is available to all military personnel separating from active duty, fewer than 30 percent use the program8. Although federal civilian employment may be a viable option for new veterans returning to the civilian workforce, the federal hiring process has been described as a barrier for veterans, as it has been for other applicants as well. It can take an average of four months or longer from the time an application is submitted to when a job offer is made9. As such, the 180 days of support available through TAP may not provide sufficient time to navigate the federal hiring system and make a seamless transition to federal civil service.OPM has specifically called out the placement of veterans into federal jobs

as a key strategy to “recruit and hire the most talented and diverse federal workforce possible to serve the American people10.” On November 9, 2009, President Obama even signed an Executive Order to promote the employment of Veterans in the Federal Government. Through partnerships with veteran support organizations and government programs, agencies can fulfill this call from OPM to integrate a skilled group of Americans who have already made a commitment to serve our nation.

Veterans Returning From Active Duty: An Opportunity for Targeted RecruitmentAgencies have a tremendous opportunity to enhance their workforce by developing targeted initiatives to recruit and hire veterans returning from active duty. Many of the men and women who served in active duty possess the personal attributes and technical skills that agencies need. Commitment to country and appreciation for accountability, leadership, and communication are among the strengths that they bring. Agencies can benefit from a number of programs specifically designed to support veterans in their transition from active duty to civilian employment.For instance, the Transition Assistance Programs (TAP) is a partnership between

the Departments of Defense (DoD), Veterans Affairs (VA), Transportation (DOT), and Labor (DoL) and provides employment and training information about the transition to civilian employment to active-duty members of the armed services and their spouses who are within 180 days of separation or retirement6. TAP includes job search assistance, résumé and cover letter preparation, interview preparation, and other career transition services, to include coaching on navigating the

Social and Demographic ChangesFour Generations in the Workplace: Discovering Age-Appropriate Recruiting MethodsFederal agency missions can be a tremendous asset for attracting the Millennial generation to the workforce. As the very purpose of the agency is often associated with social responsibility, this can be an advantage of government over private sector work. Approaches to recruiting multi-generational talent must recognize differences in how information is collected, relationships are established, and communication transpires. For instance, people in Generation Y are accustomed to instant communication, immediate response, and use of technology that enables interaction anytime, anywhere. Cutting-edge recruitment efforts incorporate this understanding and employ approaches that closely align with communication customs and cultural norms most relevant to their target applicant pools. Agencies find that mature workers are increasingly returning to the workforce or making career changes. These trends can greatly enhance agencies’ capacity by bringing existing experience and knowledge into the organization. Using approaches to recruit and select more seasoned workers that appeal to their generational norms, agencies are finding ways to accommodate the various considerations of generational differences in their recruitment processes.By establishing a strong recruiting brand and honing use of hiring practices like the Federal Career Intern Program, Student Temporary Employment Program, and the Student Career Experience Program, agencies are working to grow the workforce of the future in terms of numbers, qualifications, and representation. Improving recruitment also means becoming more effective at translating participation in such programs into permanent hires.

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6 Transition Assistance Online, http://www.taonline.com/TapOffice.7 TAP Training Manual, http://www.dol.gov/vets/programs/tap/tapmanualmar06.pdf.8 Employment Histories Report, Final Compilation Report: http://www1.va.gov/vetdata/docs/EmploymentHistory_080324.pdf.9 Analysis of the Current Federal Hiring Process: Why So Slow? http://www.govcentral.com/benefits/articles/9437-analysis-of-the-current-federal-hiring-process-why-so-slow.10 Office of Personnel Management 2010-2015 Draft Strategic Plan found at http://www.opm.gov/strategicplan/DRAFTStrategicPlan_20090729.pdf.

Social and Demographic Changes

88 percent of Millennials said they will choose employers who have socially responsible values that reflect their own, 86 percent would consider leaving an employer if values no longer matched their expectations.

– PwC’s report Millenials at Work

Social and Demographic Changes - Veterans “We have to change the overarching view of veterans. There has been a reluctance to hire veterans. I can’t figure it out. They are trained, skilled, and determined. They bring leadership skills. [The] military invested in human capital management long before the civilian federal workforce. They provide hands-on development and assignments. You have multiple veteran appointment programs to leverage.”

– PwC Waves of Change Interview/Survey Participant


and integrated agency recruiting program may:• Realize cost savings• Speed up the time for new-hire

productivity• Improve retention rates through better

employee assimilation• Simplify the application process to

attract more applicants• Reduce the cost of turnover• Increase operational efficiency• Provide better service levels for hiring

managers• Improve the consistency of the staffing

process• Satisfy internal and external interest in

enhancing retention and diversityInnovations in federal recruiting and hiring should focus on key business processes and the activities within each. Specifically, PwC suggests that efforts to reform and innovate recruiting and hiring-related policies and programs focus on advancing the agency’s ability to execute five key processes:1. Evaluate skills, competencies, temperament and values needed for optimal fit with the position and the agency.Leading organizations strive to hire the right person from the start, by first understanding what skills and responsibilities are required. They also establish hiring practices that help them assess which candidates are most suitable for the job, in terms of skills, competencies, temperament, and values.The Department of Homeland Security is an example of an agency that has made a commitment to match veterans with well-suited positions, enabling the agency to meet mission-critical needs. Leveraging a preference for hiring veterans while finding the right fit with culture, values, and capabilities will serve as an advantage for the agency and a benefit for veterans

profound effect on an agency’s ability to hire the right staff at the right time. Moreover, selected applicants may continue to seek other employment offers as they await a suitability or clearance determination.Lack of security reciprocity within and across many agencies further limits the federal government’s ability to optimize placement of qualified employees who seek to remain in civil service but wish to change agencies to satisfy other professional needs. PwC’s interview/survey participants noted that until the federal government finds a way to expedite the security process for prospective new employees (both internal transfers and external hires), agencies will continue to be at a disadvantage to private sector firms that are capable of onboarding new employees within a matter of weeks.

Innovations in Recruitment and Hiring An effective recruiting program enhances the quality and diversity of the applicant pool by reaching candidates via traditional channels (e.g., college fairs) and non-traditional channels (e.g., Web 2.0). In today’s era of enhanced focus on effectiveness and performance improvement, agencies throughout the federal government are under pressure to build and retain a diverse, highly skilled, and engaged workforce. OPM’s desire to reform the hiring process — paired with efforts to rebrand the federal employment experience — may remove, or at least lessen, current barriers to effective and efficient recruiting and hiring. Such efforts may also serve to limit the government’s vulnerability to changes in economic and political conditions from a talent management perspective.As a part of a comprehensive talent management strategy, a well-designed

The Economic Crisis: Changing the Way Job Seekers View Federal Employment The financial crisis has affected the job market significantly, forcing many to change careers or search for new work in increasingly larger pools of unemployed job seekers. In January 2012, the unemployment rate nationally was at 8.3 percent. Although this was a decrease from 10 percent unemployment in December 2009, the unemployment rate for government workers actually rose to 4.2 percent in January 2012 as an additional 276,000 workers lost jobs in the government sector.While these statistics show an increase in unemployment among government workers, it is significantly lower than unemployment rates of other industries, such as leisure and hospitality at 12.6 percent or construction at 17.7 percent. Among those unemployed, four out of ten have been without a job for 27 weeks or more11. Many laid-off workers are now looking to government jobs as alternative options.While the applicant pools have grown, the economic crisis has not alleviated the federal government’s challenge of recruiting and hiring employees with specialized experience or unique combinations of skills, such as cyber-security analysts, public health administrators, and those with a combination of foreign language skills and mission-critical competencies. However, the Department of Homeland Security, with a highly diverse workforce of approximately 220,000 employees12, finds that candidates with highly sought technical and scientific skills are now more willing to trade the stronger long-term salary potential of private-sector employment for the relative security of civil service.Other Recruitment and Selection Issues: Security MeasuresAn agency’s security measures can have a significant impact on the ability to successfully onboard new talent. After successfully navigating a protracted hiring process, it can take an additional few months or more for an applicant to clear an agency’s security process.Agency leaders we interviewed/surveyed for this publication noted that this additional processing time can have a

11 Bureau of Labor Statistics, www.bls.gov.12 Department of Homeland Security, www.dhs.gov.

Economic Crisis “We are seeing PhD candidates who have 10+ years [of] experience in engineering, chemical and other science backgrounds, applying for entry level positions. Yet, we are having trouble leveraging it.”



organization after three years13. These programs can provide newly hired civil servants with valuable support to help them do their jobs and forge a strong and positive relationship with new colleagues and leadership. In this way, investment in onboarding can provide agencies with a cost-effective means of protecting the organization’s recruiting investment.

4. Do some additional research before making an offer.To offset the time required to interview, test, and clear job candidates, OPM and agencies should develop a talent-selection process that focuses on more rigorously evaluating job candidates and eliminating unqualified job seekers early in the process. The danger lies in inadvertently eliminating someone who would actually be good at the job. To avoid this possibility, the recruiters at leading organizations know exactly which traits are important for the position and which traits are merely desirable.To ensure that they have selected and hired the best candidates, recruiters are trained to carefully consider all applications and weigh the merits of each individual, follow established policies and procedures during the interview process, thoroughly check each candidate’s background, and deliver job offers in a consistent manner. Desirable candidates complete an abbreviated security pre-screening so that valuable agency resources are focused on hiring and onboarding candidates capable of passing a security clearance. 5. Embed new hires more firmly in the Agency through onboarding.Similar to orientation — training that prepares employees to perform their jobs effectively — onboarding is a process, rather than a singular event. It introduces newly hired employees to the work they will be doing and the people with whom they will be working. Onboarding also helps newly hired employees understand the culture and operation of the organization.While it can be tempting to skimp on the costs required to operate an onboarding program, leading organizations understand that the time and cost spent on onboarding exercises are a worthwhile investment. Employees who are onboarded are almost 70 percent more likely to remain with the

transitioning to civilian employment.2. Build a strong agency brand and engage in active relationship development with diverse partner organizations.Organizations that apply best practices know the importance of their employees for mission success. They tend to adopt a forward-thinking talent management strategy that includes devoting a great deal of time and energy toward finding and selecting the right candidates.Federal agencies should look for creative methods of recruiting and hiring. Possibilities include the creation of an employment brand, reaching out to passive job seekers, building strong relationships with agency alumni, leveraging social networking, forging strong relationships with colleges and universities as potential sources of new talent, and revamping benefits and incentive programs to position agency jobs as the most desirable.Multi-generational approaches are needed to attract a multi-generational workforce. Traditional approaches to recruitment may still be effective for the Traditionalist and Baby Boomer generation, while the latest innovations are necessary to attract Generation X and Y workers. When building new approaches, it is important to retain what still works well.3. Leverage technology to access candidates through online social networks, portals and virtual job fairs.Technology has dramatically changed the way organizations recruit and hire. Technology investments that are closely aligned with organization and user requirements can help streamline these processes, increase the effectiveness of recruiting and hiring, and maximize recruiting and hiring investments.Among the biggest advances in human resources technology are electronic systems that include social networking, web-based job sites, portals, and job boards to attract applicants. To enhance efficiency, agencies can use technology in the recruiting and hiring process by conducting interviews by videoconferencing or holding virtual job fairs. This allows organizations to reduce both time and travel costs while maintaining access to a geographically broad labor pool.

13 Ganzel, R. (1998). Putting out the welcome mat. Training. March, p. 54-62.

Recruitment and Hiring “Security is the lynchpin. It negatively impacts our ability to recruit people. Candidates drop out of the pipeline because they can’t wait for their clearances to be adjudicated.”



teambuilding, and mission service activities. PwC aligned this ‘theory-to-practice’ program design to the Federal Acquisition Institute’s technical acquisition and general business competencies.Upon acceptance of the program design, PwC developed a program implementation plan containing implementation activities and timeline, performance metrics, and program scorecard. PwC supports execution and operation of the program by conducting intern training and development activities, briefing VA leadership on program progress and performance, facilitating intern development planning and performance feedback, and providing guidance to VA acquisition professionals acting as intern coaches, mentors, and supervisors.To assess program performance, PwC designed a success-measures framework and metrics scorecard for the Acquisition Intern Program. PwC supports the VA Acquisition Internship School in continuous monitoring of critical measures and metrics, and meets with program leadership on a quarterly basis to discuss program performance, accomplishments, and lessons learned. The program success-measures framework is aligned to the GAO Framework for Assessing the Acquisition Function as well as Malcolm Baldrige Performance Excellence Criteria. Impact on the Client’s BusinessPwC completed a design document for the Acquisition Intern Program that included program mission, vision, objectives, and competency model, as well as descriptions of all program components. Upon acceptance of the program design, PwC developed a program implementation plan containing implementation activities and timeline, performance metrics, and a program scorecard.Benefits realized from the program are:• After completing the program, individuals

possess the skills to act as trusted business advisors trained to support the VA’s mission.

• The program helps facilitate a robust dialogue regarding acquisition workforce development, succession planning, and continuous process improvement.

• Interns receive structured and consistent training, feedback, and performance reviews.

• The program helps the VA attract and retain new talent for the acquisition workforce.

• The program supports organizational knowledge retention and knowledge sharing.

The VA aspires to grow the Acquisition Intern Program to be ‘best in class’ and ultimately be used by other federal civilian agencies. Already, the VA has had preliminary discussions with other agencies regarding this possibility.

OverviewNew acquisition professionals are a critical element of the VA’s mission of caring for veterans and their family members, and the VA recognizes that investment in a well-trained federal acquisition workforce will improve its ability to meet mission needs through effective stewardship of taxpayer dollars.The federal acquisition community, including that of VA, has faced many challenges over the past few years. The acquisition workforce has dwindled to a shadow of what it was in the 1990s, with experienced acquisition professionals retiring or leaving the government for opportunities in the private sector. And new acquisition professionals are not entering the system at the rate needed to meet current demands.The work has become more complex and the workload larger, requiring a different skill set than before. If the government is to attract new talent, it must change its acquisition workforce from process managers to business advisors. Through the establishment of an Acquisition Intern Development Program, the VA hopes to address the growing skill shortage in its acquisition workforce and develop acquisition professionals as trusted business advisors possessing the technical, leadership, communication, and innovation skills to support the VA’s mission.Client’s ChallengePwC was engaged by the Department of Veterans Affairs to develop, implement, and execute an Acquisition Internship Program for the VA’s Acquisition Academy. The mission of the Acquisition Internship Program is to train and develop certified acquisition professionals to address the following challenges:• Growing skill shortage in the VA’s

acquisition workforce • Lack of a comprehensive internship

program to develop and maintain a well-trained federal acquisition workforce to meet its needs

• Inability to combine training with on-the-job experience to foster creative thinking and instill organizational values leading to retention in rising acquisition professionals

• Lack of bandwidth to identify and resolve areas for process improvements within its existing training programs

PwC’s ApproachPwC designed a three-year customized internship program comprising more than 50 components, including formal instructor-led FAC-C contracting courses, leadership courses, skill-building workshops, job rotations, coaching, development planning,

CASE STUDY:Veterans Affairs Creates Innovative Response to Acquisition Workforce Shortage

The following case study is one example of how PwC helps federal agencies apply innovative approaches to recruit and select the workforce of the future. This program at the Department of Veterans Affairs (VA) enhances the VA’s ability to meet the demands of the Obama administration with regard to contracting oversight, monitoring, and accountability, and to address the problem of the impending retirements of so many contracting officers.

Social and Demographic Changes “We are putting in place mentoring and coaching programs to gain value from senior leadership and tenured staff to transfer knowledge [to new workers].

This is an opportune time to seize the integration and maximize the time they are together.”


III. Knowledge Management and Retention


and development; and (3) poor planning, budgeting, and performance management.” This knowledge drain caused by retiring Baby Boomers became even more evident beginning in 2005 when the United States entered a demographic era where a member of the Baby Boomer generation turned 60 every seven seconds. This era will persist for the next 10 years18.The exodus of Baby Boomers is compounded by the increased mobility of the labor force, both within and between agencies. The average worker starting today will have 11 jobs in the span of his or her career19; and each year, roughly 60 million American workers will change roles within their current organizations. These retiring and mobile employees pose a major dilemma for federal agencies. When employees move or transfer into new roles, the knowledge gap created by their absence generates significant costs to the agency (financial and operational), but even more troubling is the potential loss of institutional knowledge. Agencies are sometimes unaware of the information their departing workers possess. These gaps in knowledge can fundamentally damage an agency’s ability to execute on the mission.

According to a Conference Board survey20, one-half of companies surveyed felt that their aging workforce presented potential knowledge vulnerabilities. Yet, just one-third had conducted workforce planning

unexpected. Among the issues explored for this publication, demographic changes were most significant, but the recent global financial crisis has also made an impact.

Social and Demographic ChangesFour Generations in the Workplace: Baby Boomer Exodus Threatens Knowledge RetentionGenerational diversity is one of the central knowledge retention issues facing federal agencies. During our interviews/surveys for this publication, participants expressed concern about the departure of core agency knowledge through retirements. Many feel unprepared as their succession planning efforts have not gone far enough.By 2012, more than 50 percent of the current federal workforce15, including 64 percent16 of senior management, will be eligible for retirement. There is nothing abstract about the loss of an organization’s institutional knowledge when such significant percentages are approaching retirement. These agencies face real consequences, both for their missions and the US citizens they serve.In 2000, the Report to the President: The Crisis in Human Capital identified that the “causes of the brain drain [included]17” (1) inability to compete with the private sector for talented employees; (2) insufficient commitment to training

Knowledge retention and knowledge loss occur on a continuum. This continuum ranges from short-term inability to access knowledge — such as when a subject matter expert is out of the office — to a long-term loss of knowledge due to retirement. Dr. Jay Liebowitz, professor at Johns Hopkins University’s Carey Business School and author of Knowledge Retention: Strategies and Solutions, stated, “Surveys consistently show that 80 percent of organizations, including public-sector entities, lack a formal knowledge retention strategy.”In a PwC study entitled The Crisis in Federal Government Succession Planning: What’s Being Done About It, research showed that “while many agencies have made progress in planning, considerable work remains to be done in implementing programs that will provide the agencies with the depth of leadership talent they need to fill vacating positions and equip them to train these leaders to meet the rapidly evolving demands of the 21st century14.” Although five years have passed since that research was performed, most agencies still do not have consistent practices to retain knowledge and transfer it to future leaders. Many forces of change have had an impact on the issue of knowledge retention, some foreseen, but some

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14 PwC, LLP, (2006) The Crisis in Federal Government Succession Planning: What’s Being Done About It.15 Office of Personnel Management, An Analysis of Federal Employee Retention Data.16 GAO-09-206, Older Workers in the Federal Government.17 Homeland Security and Governmental Affairs, www.hsgac.senate.gov.18 US Bureau of Labor Statistics, www.bls.gov.19 National Longitudinal Survey of Youth 1979, www.bls.gov/news.release/pdf/nlsoy.pdf.20 The Conference Board, July 2005, Managing the Mature Workforce, by Lynne Morton.

Retirement in the Government Sector

By 2012, more than 50 percent of the current federal workforce, including 64 percent of senior management, will be eligible for retirement.

– Office of Personnel Management (OPM)


short term. While these individuals are less likely to leave federal employment altogether, they are still moving between and within agencies, taking with them essential knowledge.

Innovations in Knowledge Management and RetentionAgencies have begun to employ innovative approaches to retain essential knowledge and capabilities in the federal workforce. PwC’s Knowledge Retention Framework©, as shown in the Figure 3, identifies four areas where agencies can bolster efforts to retain mission-critical knowledge.

The Economic Crisis: Resignations Slow, but Internal Movement is SteadySeventy-three percent of the agency leaders providing input for this publication indicated that the economic crisis has had a moderate to significant impact on their ability to retain the knowledge and talent they need to achieve their agency’s mission.These agency leaders also indicated that they had witnessed an increase in the number of people electing to defer their retirement due to the sagging economy, slowing the inevitable exodus of the Baby Boom generation — at least in the

studies to identify those vulnerabilities. PwC increasingly consults with federal agencies that are considering a knowledge retention program. Based on PwC’s experience, we know that to adopt a truly comprehensive, forward-looking knowledge retention program, agencies need to focus on the continual capture of knowledge from onboarding to retirement, embedding activities that preserve the agency’s institutional knowledge into the business process, and proactively integrating methods and activities that promote the transfer and flow to the remaining workforce.Veterans Returning from Active Duty: Keeping Valuable Knowledge in the Federal WorkforceRecently separated veterans have been recognized by private sector employers for their positive attributes, including leadership, work ethic, reliability, discipline, maturity, team player, integrity, problem solver, and project management skills21. These capabilities can be of tremendous value in the public sector as well. Agencies such as the Department of Defense and the Department of Homeland Security have found that these attributes are well aligned with their agency missions and that veterans are among the most viable candidates for their workforce.As discussed in the previous sections, agency hiring processes can be a barrier to the integration of skilled veterans into the federal civilian workforce. Although the military is part of the federal government, and the knowledge assets of military personnel are part of the federal human capital system, it remains challenging to transfer those assets from the military workforce to the civilian workforce. Capitalizing on opportunities to retain this experience would allow the federal government to realize a human capital investment of approximately $300,000 per soldier22 and serve the United States’ strategic interest to bolster economic prosperity23.

21 Employment Histories Report, Final Compilation Report: http://www1.va.gov/vetdata/docs/Employment_History_080324.pdf.22 USAWC Strategy Research Project, Increasing Army Retention through Incentives. March, 15, 2006: http://www. strategicstudiesinstitute.army.mil/pdffiles/ksil276.pdf.23 United States Army War College, Guide to National Security Policy and Strategy: Second Edition. Edited by J. Boone Bartholomees, Jr., Department of National Security and Strategy, page 396.

Economic Crisis “Most people now aren’t retiring when they are eligible due to job security and financial reasons. The main problem with retention is not people leaving the agency, it’s the internal turbulence — the movement from position to position.”


Figure 3: PwC Knowledge Retention Framework©.


Tomorrow’s Workforce, supports that “storytelling is another powerful tool for knowledge retention and transfer. Stories can supply context for organizational successes and lessons learned, and each story has the potential to personalize an issue by bringing it alive for listeners or readers. Stories are also an effective way to bridge generational gaps, communicate important information about an organization’s culture, and help employees develop a sense of organizational identity. In addition, the storytelling format allows experts and their audiences to participate in bilateral discussions, which is a benefit that one-way communication formats — such as lectures — cannot provide.”With a heightened attention to transparency and accountability, effective leadership is also needed to help federal workers demonstrate outcomes of their performance. Because much of the government’s work is qualitative, performance metrics that focus solely on numeric metrics can leave employees and their managers frustrated. Establishing accountability involves setting realistic and clear expectations for performance and providing the support needed to succeed.

and support programs that address knowledge retention through its unique ability to devolve authority, democratize information, and remove silos.As PwC’s clients’ initiatives encompass more components of knowledge management, we encourage them to begin to explore the possibility of integrating Web 2.0 into the capture, transfer, retention, and creation of knowledge. For instance, Web 2.0 could support knowledge retention activities through all levels, from expert to novice. Agencies can leverage various formal and informal networks for strategic decision making, innovation, and problem solving.Web 2.0 could also increase data analysis efficiency, transparency, and reuse of assets, as well as eliminate duplication of effort through the sharing of lessons learned. This ability for transparency is a theme in the current Obama administration carried over from the campaign activities that successfully leveraged Web 2.0 technologies and social networking as never before.4. People and Behaviors: Engaging Leadership and Using Narrative Practice to Facilitate Knowledge TransferFederal agencies must recognize and mitigate the looming challenges of the departing Baby Boomer generation and adapt to the mobile aspects of the new generation of workers entering the workforce. Agencies that capitalize on these changes will have an advantage over those that discover their problems only through the pain of diminished production — or worse, mission failure.Government leaders play an important role in setting the tone and morale of the workforce. The 2011 Best Places to Work rankings of federal agencies noted that “for the sixth time in a row the primary driver in the federal space is effective leadership24.” As the government experiences these changes, leadership must demonstrate the value for knowledge transfer and development of the workforce.A 2008 American Productivity and Quality Center (APQC) study, titled Retaining Today’s Knowledge for

1. Strategy and Policy: Building a Knowledge Retention Strategy Driven by Senior LeadershipWork is increasingly knowledge intensive and managing that knowledge is a key business driver. Forward-thinking senior leaders understand this. One of PwC’s clients, James Alexander, Internal Organization Development Consultant with USDA’s Food Safety and Inspection Service, pointed out in an April 17, 2009 article published in Federal Computer Week that in order to launch their knowledge retention initiative they “had the backing of senior leadership and this was a critical factor in moving forward with knowledge retention. A knowledge retention program represents change, and change induces resistance. So it’s important to get the backing of senior management to help overcome that resistance.”2. Business Process: Identifying and Capturing Transactional KnowledgeOne agency leader we interviewed for this publication described the use of Standard Operating Procedures (SOP) as one way they plan for changes in the workforce composition. Identifying and capturing transactional knowledge into clear steps has led to less reliance on verbal exchange and greater likelihood that responsibilities can be assumed by someone beyond the current incumbent. Leaders should support the investment of time to collect and document operating practices, as part of a streamlined business processes effort, because it will save time and improve quality in the long run.The management and retention of knowledge must be an integral part of how the agency operates. The transfer and documentation of transactional knowledge is a basic need for all types of organizations, yet it is often overlooked.3. Infrastructure and Technology: Leveraging Technology, such as Web 2.0, to Manage KnowledgeWeb 2.0 is the term widely used to describe the social software that enables people to interact and share information through various media such as blogs, wikis, social networking, and mashups. Web 2.0 can empower knowledge workers

24 The Best Places to Work: www.bestplacestowork.org/BPTW/analysis


PwC developed knowledge retention templates and deployed them to rapidly address individual knowledge retention needs, standardize the process for collecting individual knowledge, and reduce the risk of lost knowledge to the agency. PwC deliverables included continuity binders, social network mapping, and multimedia case studies.Once the pilot was complete, PwC expanded the methodology to incorporate additional departments, group-level knowledge capture, and additional deliverables, including standard operating procedures, process mapping, technical papers, and methodology documentation. PwC also expanded the program to include professionally facilitated knowledge-transfer coaching sessions and knowledge-transfer workshops.PwC then developed a program-level comprehensive evaluation strategy, implementation plan, and critical success factors with qualitative and quantitative data to help FSIS measure the success and effectiveness of the program in meeting its objectives.

Impact on the Client’s Business• The FSIS Legacy Program has enabled

FSIS to collect important mission-critical knowledge held by the selected experts and groups.

• USDA FSIS now has an evaluation strategy that has enabled them to demonstrate the value of the program to the agency.

• USDA FSIS’s timely identification and retention of knowledge has led to smoother transitions from the agency subject matter experts and their replacements.

• USDA FSIS’s documentation of processes has allowed procedural discrepancies to be discovered and corrected, leading to more efficient operations.

• The program was described in an article titled Plugging the Brain Drain in the April 20, 2009 issue of Federal Computer Week magazine.

FSIS is the public health agency in USDA responsible for ensuring that the nation’s commercial supply of meat, poultry, and egg products is safe, wholesome, and correctly labeled and packaged. Within FSIS, the Office of Outreach, Employee Education, and Training provides consolidated access, resources, and technical support for small and very small plants to better assist them in providing safe and wholesome meat, poultry, and processed egg products.

Client’s ChallengeFederal agencies are faced with a loss of productivity, misplaced knowledge, and increased risk to the organization as employees retire, separate, or are promoted. Federal agencies are increasingly adopting knowledge management systems to generate, capture, and disseminate mission-critical information.USDA FSIS contracted with PwC for the development of a knowledge retention program strategy and roadmap to address the brain drain of retiring Baby Boomers and the need to manage knowledge proactively to mitigate the loss of important experiential and technical knowledge from mission-critical operations.

PwC’s ApproachPwC conducted the FSIS Legacy Program needs assessment to define a Knowledge Retention Roadmap. The needs assessment was based on the PwC Knowledge Retention Methodology©, interviews within the agency, and a leading-practices study with four similar federal agencies.PwC provided USDA FSIS senior leaders with the Legacy Program roadmap, including recommendations on a comprehensive knowledge retention program addressing the immediate concerns of the retirement of the Baby Boomer generation as well as the longer-term goal of continuous knowledge capture and transfer from onboarding to retirement.FSIS kicked off the Legacy Program with a pilot that focused on the collection of mission-critical knowledge from individual subject matter specialists.

CASE STUDY:USDA FSIS – Putting Knowledge Retention Into Action

The following case study is one example of how PwC helps federal agencies apply innovative approaches to capture, retain, and transfer mission-critical knowledge. The program at the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) enhances the agency’s mission and helps to address the problem of the impending retirements of so many of their key personnel.


throughout the improvement process helps clients reduce the “rumor mill” and fear or apprehension about changes.

StrategyPwC helps agencies develop, design, and implement their human capital roadmap, enabling them to achieve their strategic agency goals. The firm’s holistic approach consists of a framework for staffing decisions and resource allocations based

Communications and Stakeholder ManagementEssential to managing change, PwC helps agencies effectively manage relationships with internal and external stakeholders throughout the change process. PwC’s change management approach is designed to be transparent, engaging, and provide people with information they need to prepare for changes. Our frequent communications with stakeholders

How PwC Supports Federal Agencies in Effectively Managing Change and Human Capital

Today’s challenges present opportunities for federal agencies as they find new ways to recruit, select, and retain the people and knowledge necessary to fulfill their missions. PwC helps federal agencies address a range of human capital challenges.The human capital wheel shown in Figure 4 identifies the support PwC provides to federal agencies. With deep and broad human capital management capabilities, PwC helps federal agencies remain proactive and well positioned during times of economic, political, or social change.

Change ManagementPwC’s change management support services — driven by people and process improvement — help organizations develop agility and create a competitive edge. We help leaders determine which core processes create the most value, align around them, and communicate a shared vision throughout the organization.PwC’s change management approach helps federal agencies:• Develop organizational leadership

and foundational sponsorship• Identify and remove barriers

to change• Develop the employee buy-in

required to ensure an effective transition to the new environment

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IV. Appendix

Figure 4: Human Capital Processes.


clients in the United States and across the globe. The PwC Knowledge Management Framework includes three phases:• A thorough assessment• A clearly defined vision and strategic

plan• An actionable implementation planEach phase is focused on three tactical components: key activities, tools, and outcomes.

Succession ManagementPreparing for tomorrow today, PwC’s process of planning for the development and placement of people in senior executive positions includes work to establish, maintain, and nurture the entire pipeline of leadership talent. PwC helps agencies appropriately prepare for succession in leadership by supporting the following:• Identification of executive positions

critical to the success of the organization

• Assessment of current and aspiring leader capabilities

• Development of recruiting and leadership development programs to attract and grow leaders

• Creation of an organizational strategy to retain key leaders

• Identification of strengths and opportunities for development within the executive ranks

• Definition of the critical competencies leaders need to help meet current and future challenges

• Design of systems to evaluate individual progress in moving through the development process

• Recruitment strategy needed to attract well-qualified employees

• External factors impacting the workforce now and in the future

• Mission-critical positions• Existing bench strength

Learning and DevelopmentPwC helps agencies to assess, develop, and/or enhance learning and development investments. The approach aligns learning and development programs with the mission, goals, and overall human capital strategy of the organization and addresses near- and long-term critical challenges the organization is facing. By measuring success against key measures, PwC helps clients understand how well their current learning and development strategy is achieving desired outcomes.The firm also helps clients assess staff skills against organizational, functional, and role-specific competency standards and identify strategies to close gaps. New-hire onboarding, use of technology, and development of customized training solutions to support new change initiatives are proven approaches PwC uses to strengthen client organizations.

Knowledge ManagementPwC has a robust offering in knowledge management that includes the capture, transfer, organization, and sharing of tacit and explicit knowledge to address mission-critical issues, such as knowledge retention.To meet the challenges of today’s dynamic and performance-driven business environment, a knowledge management program is an essential enabler. PwC has a flexible knowledge management framework that has been developed internally and then used at numerous

on an organization’s mission, strategic plan, resources, and the workforce objectives.

Organizational DesignPwC’s organizational design approach supports the achievement of agency objectives by aligning the organizational structure with the organization’s mission and strategies. Structure is a key enabler in the alignment of strategy, people, process, and technology. It coordinates work processes; determines people’s roles, competencies, performance measures, decision rights, and reporting relationships; and enables information flow, all in line with the direction of the strategy.PwC clients have experienced the following benefits:• Increased levels of coordination

between and within units• More efficient work flow• More responsive decision making• Measurement and incentives to focus

and motivate desired behavior• Increased retention of top performers• Improved levels of customer

satisfaction

Workforce PlanningPwC helps agencies develop a framework for strategic workforce planning that considers and integrates the following:• Workforce needs and characteristics• Actions taken to link recruitment,

development, and training decisions to workforce priorities

• Human capital policies and practices needed to address gaps in the workforce

• Skills needed to accomplish the agency’s current and future goals


PwC Team

Editorial and Graphics Support:Kathryn FavaPublic Sector PracticePublication Design and Graphic Designer

Joigie Hayes, SPHRPublic Sector PracticeChange Management

Kristen ReedWriter/EditorInternal Firm Services

Patrizia SomavillaPublic Sector PracticePeople and Change

Key Contributors:Sonia Alvarez-Robinson, SPHRPublic Sector Practice People and Change

Chris Houchin, MBAPublic Sector Practice People and Change

Denise Lee, CKMPublic Sector Practice Knowledge Services Organization Lead

Tina Muller, CKM, PMPPublic Sector Practice Knowledge Management and Retention

Key Project Support and Leadership:Scott McIntyreManaging Partner, Public Sector Practice

John VerdereseManaging Director, US Talent Management Leader

Christine AyersPrincipal, Public Sector Practice Advisory Services Practice

Michael FlentjeDirector, Public Sector Practice Human Capital Capability Network Lead

We take pride in the concept of connected thinking. For this paper, we drew support and expertise from agency human capital experts and PwC staff with varied experience and knowledge from around our firm. A core group of PwC staff worked to produce this publication. These team members include:

Key Contacts

Richard RodmanPrincipal Public Sector Practice (703) 918-1007 [email protected]

Renee RomulusDirector Public Sector Practice (703) 599-5220 [email protected]

JR MiloneSenior Associate Public Sector Practice (202) 841-9839 [email protected]

© 2013 PwC. All rights reserved. “PwC” and “PwC US” refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

www.pwc.com/publicsector

Pwc Federal Human Capital Management: The waves of changes

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