Budget constraints are top of mind for agency chief human capital officers. And with good reason. CHCOs say they are feeling the effects of the budget crunch, particularly in recruiting, retaining and training employees, according to an exclusive Federal News Radio survey.

Federal News Radio sent the anonymous survey to 47 agency CHCOs over the summer and received 12 responses, more than a 25 percent response rate.

Budget squeezes key HR priorities

Nearly all of the respondents (91 percent) said budget constraints had affected their agencies.

Ninety percent of respondents cited employee training, 75 percent listed recruiting and 36 percent listed retaining employees as being impacted by the tighter fiscal times.

Altogether, nearly 79 percent of respondents said the budget crunch had affected recruiting efforts at least a moderate amount.

“We are no longer able to recruit new employees in a timely manner to effect a smooth transition of knowledge,” one of the CHCOs commented. “We use salary lapse to fill other needs, often leaving positions vacant longer, which adversely affects those who must carry a heavier workload and reduces productivity/performance of the mission.”

More than 53 percent said their agency’s training programs had been affected by budget constraints at least a moderate amount.

Workforces also shrinking

The diminishing resources mean many agencies and their employees, including HR professionals, are forced to do more with less, said Eugene Hubbard, head of the National Science Foundation’s Office of Information and Resource Management.

Hubbard joined In Depth with Francis Rose to discuss the survey results.

What is the biggest HR challenge facing your agency? (Click to enlarge)

Hubbard said NSF hasn’t been “overly impacted” by budget constraints just yet. In fact, over the past few years, the agency’s full budget has increased slightly. However, the operating budget, which includes funding for employee salaries, has actually declined in real terms, he said.

“And that does cause some concern,” Hubbard said. “So, we are always looking for … the efficiencies that we can obtain. How can we make things work just as well but maybe a little cheaper?”

Recruiting and retaining have taken on increasing importance because many agencies’ workforces are shrinking.

Half of the CHCOs said the size of their agency’s workforce had declined in fiscal 2012, with most respondents (87 percent) citing attrition as the key driver. Sixty-seven percent of respondents cited early-retirement offers and 37 percent cited buyouts. Respondents could select more than one answer.

CHCOs attuned to low morale

Shrinking budgets, resources and workforces are all taking a toll on employee morale, according to the survey. All of the respondents agreed budget constraints had hurt morale, but were split evenly when asked to what extent — limited, moderate or great.

Where has your agency made the most progress? (Click image to enlarge)

CHCOs are clearly attuned to the morale issue and its effect on retaining a strong workforce. When asked to name their No. 1 human-resources challenge, 41 percent of respondents said the two-year pay freeze and proposed cuts to employee benefits had made it harder to recruit and retain talented employees.

“It goes even beyond the cash,” Hubbard said, citing travel reductions and cuts to conference spending and attendance.

Often, the antidote to stunted morale is to appeal to employees’ sense of public service, Hubbard said.

“Hey, I’m not going to make you rich in the federal government,” he said he tells employees. “But I can give you a good, solid job that will have meaning and value to you and and to the public.”

There were also some bright spots to the survey.

On average, the area of greatest progress was in improving agency-union relations, cited by more than 66 percent of CHCOs.

That appears to bear out the success of the labor-management councils, first launched in the 1990s, and revived by President Barack Obama.

Fifty-eight percent of respondents said the greatest HR progress came in making the agency workforce more diverse and accepting of differences. Another 58 percent said streamlining the hiring process had seen the most progress.

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