Federal pay for hard-to-fill jobs becomes an issue in improving economy

The 9-year struggle to fill federal jobs in North Dakota’s oil-boom towns offers a stark example to the rest of the government of just how hard it can be to keep federal workers when private employers beckon.

Officials at Minot Air Force Base first spotted trouble in 2006, Debra Warner, the Air Force’s director of civilian force management, told members of the Senate Homeland Security and Governmental Affairs Committee during a Oct. 22 hearing. Housing and other living costs were rising. Civilian workers, particularly those with blue-collar jobs on the base, began leaving for jobs in fast food restaurants, trucking companies and other new businesses.

But it took advocacy from Sen. Heidi Heitkamp (D-N.D.) before the Office of Personnel Management let the Air Force and other federal agencies in the Bakken region pay more to certain employees through a special salary rate. Air Force leaders came through with a 10 percent pay bump for employees excluded from that rate. All told, the service plans to spend an additional $600,000 on salaries this year. Its staffing level has risen by more than 2 percent, Warner said.

“That’s a long nine years of trying to fight for employees. How do we get more agile in making decisions across our structure, whether it’s the U.S. Air Force or any of our other areas, to be able to see this trend?” Sen. James Lankford (R-Okla.) said.

The Air Force made several mistakes that slowed down its fight for higher wages in the Bakken region, Warner said. It took years before the local base raised the issue with the Air Force in Washington. Then it proposed establishing the region as a “locality pay area,” a designation usually reserved for high cost cities like New York and San Francisco. That failed. It caused the Air Force to look again at the recruitment, retention and other incentives at its disposal. Working with OPM, it created a “toolkit” of options it plans to adopt for other hard-to-fill posts, she said.

That toolkit and the lessons learned through the Bakken experience should inform how agencies recruit federal employees nationwide, Heitkamp said.

“We can take the lessons and cooperation we see between OPM and the agencies here one step further to think about the new federal workforce,” she said. “The next challenge will be, even in places where people want to live, recruiting a federal workforce.”

Outside groups, including the Partnership for Public Service, have been calling for changes to the decades-old General Schedule system, arguing that it is ill-suited for today’s mobile workforce. But the pay systems work perfectly fine as long as they’re funded, representatives of federal labor unions told the panel.

“All the necessary tools are there for the federal agencies to recruit and retain the talented workforce needed to do the business of the American people. However, does that mean the federal pay system is working well? No, it absolutely does not,” said Bill Dougan, the president of the National Federation of Federal Employees. “The system is so completely starved of resources, there is no room for the appropriate flexibilities that have been built into the system to have their desired effect.”

Federal employees have spent three years with no pay raises, followed by two years of 1 percent raises and no locality pay. They stand to receive a 1 percent to 1.3 percent pay raise in 2016.

“Because of the pay freezes and woefully inadequate pay adjustments, nearly all the market-driven flexibility that was built into the [General Schedule] pay system has ground to a halt,” he said. “It doesn’t matter what pay flexibility exists when people don’t want to work for the federal government anymore,” he said.

Congress is sympathetic to federal employees’ pay situation, but it also has to grapple with the nation’s $430 billion deficit, Lankford said.

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