The future of OPM

Jeff Neal, former chief human capital officer at DHS, explains how the incoming administration should best use the Office of Personnel Management.

This column was originally published on Jeff Neal’s blog,, and was republished here with permission from the author.

Last week, I wrote a post titled “What Should the Next President do With OPM?” Now that we know the next president and Congress will be in the hands one party, that becomes a more important question. Why? Because divided government tends to lead to maintenance of the status quo and unified government leads to the opposite. In the past 8 years, we have seen many proposals in Congress that never went anywhere because there was certainty that President Barack Obama would veto them.

The next Congress is far more likely to make changes in the civil service, because they are unlikely to face threats of a presidential veto. Whatever those changes might be, they will require an Office of Personnel Management that is effective and can turn statutory changes into regulations and policies that work. That means paying attention to OPM is even more important. Last week, I said I thought OPM should be far more focused on policy and advisory services. I said I thought OPM should stop competing with industry and should get out of the background investigation business. This post is going to address how that should happen, and why it is important for a more conservative government to care about the civil service at all.

Let’s start with why a conservative should care about the civil service. For that, I decided to talk with my ICF colleague Andrew LaVanway, who used to work for a conservative member of the House Appropriations Committee. His take was that “efficient government is key to economic competitiveness. Even the strictest constructionist can agree that America’s success in the global economy depends — at least in part — on the efficient operations of government. Regulation needs to be responsive, transparent, and savvy in weighing multiple interests. Procurement must be dollar-wise and keen to advances in technology and processes. On the whole, the speed of government decisions must keep reasonable pace with the speed of change and creative destruction in the economy as a whole — both to speed progress and to maintain a basic level of credibility. Transforming the enterprise will take better people, with better skills, working in better systems, and for better leaders. For that to happen, we need an independent agency focused on transformational human capital.”

I agree that the government needs an independent agency focused on transformational human capital. That means OPM, although reduced in size by removing the background investigations and eliminating some other programs, should remain an independent agency. In talking with people about this post, I heard a lot of competing ideas. Here are a few, and why I think they are wrong:

  • Move OPM into GSA. This is the single most common idea I heard. The idea is that the General Services Administration is responsible for other administrative functions, such as federal buildings, procurement and IT. They sell common services to agencies, and are well-positioned to do that for human capital. The argument is bolstered by the fact that GSA is the contracting office for OPM’s HCATS contract. All of those are true, but for me the bottom line is that people are more critical than buildings and systems, and the agency that is responsible for federal human capital should not be buried in another agency. It diminishes the value of the people who do the government’s work.
  • Move OPM into the Office of Management and Budget. OMB has a team (the Office of Performance and Personnel Management) that engages with OPM on human capital issues. The problem is that even a greatly reduced OPM is far larger than OMB and growing OMB that much is probably a political non-starter. It would also put more operational work in OMB, and OMB is not really intended to be engaged in operations.
  • Do away with OPM entirely. Getting rid of OPM would result in a balkanized federal workforce where agencies spend a lot of money developing their own HR policies and programs (far more than they spend now). Higher costs and an every agency for itself approach would make things worse, not better.

So, if we keep OPM, but make it more focused, how do we make certain it can actually get the job done? Part of the current problem is that OPM is not organized and resourced to get policy results and provide advisory services. OPM has far fewer people than necessary working critical policy issues. The ones they do have are often called upon to respond to OMB/White House initiatives, taking them away from longer-term needs. That means the same people who are expected to work on long-term strategic issues are often asked to do day-to-day work with short deadlines as well. And they do not have enough of them. The agency devotes as many resources to some overhead functions as it does to governmentwide human capital policy and programs. I have seen this type of structure in many agencies. It typically develops over time and with no bad intentions. The solution is to decide that certain functions are core and they get resourced no matter what. That means they are not subject to across-the-board cuts, they are are not given other tasks to perform, and they get resourced ahead of overhead functions, lesser priorities, and everything else. Deciding to organize that way is hard and it tends to ruffle feathers. I know, because we did that at DLA.

When I joined the Defense Logistics Agency as its HR director, DLA HR was like a small version of OPM. We struggled to get our work done, we had no strategic focus, got little respect from our customers, and were generally viewed as providing poor service. We did not have too few people. In fact, we actually had too many. The problem was that we were not organized for results. One area that was almost completely unresourced was strategic human capital programs. To solve that problem, I carved out a number of positions and created an organization to do nothing but strategic programs. They did not respond to congressionals, get tasked with quick turnaround projects or do anything that would detract from their core function. The result was that they delivered. They created a leader development program that was identified by the Partnership for Public Service, an entry-level training program that became the agency’s primary source of new hires in mission critical occupations, and more. The credibility we earned in through their work caused agency leaders to ask HR to get involved in every major initiative in the agency. We created another team to focus entirely on such initiatives. Those two teams were incredibly successful.

I believe part of OPM’s solution to its problems is to do something similar to address the governmentwide policy issues it faces, and to allow it to respond effectively to White House initiatives. That means carving out resources from its existing funds to staff a strategic programs team and a team to respond to OMB/White House initiatives. Doing that probably means taking resources from overhead functions and possibly from other OPM functions. That will hurt, but getting the most critical work done first is the only way to restore credibility to an organization that is struggling.

The other area where I believe OPM should change is in developing its own software. I understand that there are a lot of folks in government who believe that government-to-government services are the way to go when you have a function that is very specific to the federal government. That is why OPM runs its own job board (USAJobs) and its own talent acquisition system (USAStaffing). Having multiple job boards is probably a bad idea, so having only one makes sense. Talent acquisition systems are a different matter. There are several commercial products that have been tailored to the government’s requirements. My first thought was that OPM should simply get out of that business, but my thinking has shifted a bit. OPM should award contracts to all of the providers of widely-used talent acquisition systems, then sell them to other agencies using inter-agency agreements. That would simplify procurement of them and allow the market to sort out which systems and providers are best at meeting government needs, while removing the unfair advantage that comes from being able to buy government-developed products without competition. If OPM’s products are superior, and they win on a level playing field, so be it. If they are not and they lose, so be it.

One lesson I learned in many years in government is that this tendency in agencies to drift away from the reason they exist is all too real. An example was a component in DHS that got constant complaints about its ability to hire the people it needed. When we examined the HR office staffing, we found that only about 15 percent of the HR office was actually engaged in the hiring process. It was the most important problem they faced, yet they found other uses for 85 percent of their resources. Getting more resources is not the answer. Using the resources you have for the top priorities is the solution.

I know what the first response will be from many long-term government folks who know how the budget game is played. “If I do that, I won’t get money for my other programs!” That may be true, but at least the ones you keep would be done well. My experience was that earning credibility by doing a few things very well actually resulted in us getting more dollars, because agency leaders thought we would do something good with those dollars. And that is the solution for OPM as well.

Jeff Neal is a senior vice president for ICF and founder of the blog, Before coming to ICF, Neal was the chief human capital officer at the Department of Homeland Security and the chief human resources officer at the Defense Logistics Agency.

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