Human Capital Issues in the Financial Management Arena Survey Results and Findings March 12, 2009

1. Human Capital Issues in the Financial Management Arena Survey Results and Findings March 12, 2009 Presented by Ken Bresnahan, Partner Grant Thornton LLP OURPUBLICSERVICE.ORG

2. Four things CFOs should focus on in human capital management: Developing the right skills mix Recruiting and retaining talent Training the workforce Creating career opportunities

3. Are we back where we started? These were the same issues we tried to focus on in 1996. Has anything changed?

4. Positive Changes Individual agencies have taken steps to improve human capital management in the financial arena. • Internship programs • Effective training • Motivating the workforce BUT…

5. The Bad News from Grant Thornton’s 2008 CFO Survey Despite instances of progress, financial managers still cite human capital as the top concern by a 2 to 1 margin.

6. The Bad News from Grant Thornton’s 2008 CFO Survey

7. Primary human capital concerns from Grant Thornton’s 2008 CFO Survey Federal hiring procedures are too complex Looming retirements will cause “brain drain” Intragovernmental “churn” (i.e., competition among federal agencies for financial management talent)

8. Primary human capital concerns from Grant Thornton’s 2008 CFO Survey Low salaries leave government unable to compete for financial talent with the private sector—and with financial regulatory agencies within government. Too many compliance mandates create burnout

9. Solutions Local solutions: solutions that can be implemented quickly and are within a CFO’s span of control Global solutions: long-term policy changes that cut across management disciplines and affect the entire Federal government

10. Solutions (Local)from Grant Thornton’s 2008 CFO Survey Establish and invest in succession plans Cross-train and rotate staff Use intern programs Train employees to develop new skills Reduce non-value-added work

11. Solutions (Global)from Grant Thornton’s 2008 CFO Survey Streamline the federal hiring process Make it easier to re-hire annuitants Focus on quality-of-life flexibilities (e.g., telework, flextime)

12. Solutions (Global) Global solutions—and human capital concerns—mentioned in the CFO Survey mirror those mentioned by interviewees in all Grant Thornton surveys. Acquisition Defense Financial Information Officers Managers Technology

13. New Survey – Chief Human Capital Officers

14. CHCOs’ Advice to President Obama in the 2008 Survey Make people issues a presidential priority Create 21st century systems to support a 21st century workforce Improve our federal workforce by investing in the human resources workforce Don’t automatically hit the reset button on previous workforce reform efforts

15. General Schedule (GS) Pay System • Only 14% of CHCOs thought the Federal government should stick with the GS • 60% advocated for its gradual elimination • Do you think the GS pay system should be:

16. Alternative Work Schedules The most useful personnel flexibility, according to CHCOs, is the use of Alternative Work Schedules

17. Telework37% of CHCOs surveyed said telework is a very effective tool.

18. Direct Hire Authority Fewer than half (47%) of CHCOs said that direct hire authority as it is currently structured is useful to a great or very great extent.

19. Dual Compensation Waiver Authority (Authority to re-hire annuitants without forfeiting retirement benefits) CHCOs said this is the least useful personnel flexibility as currently structured because the process is to cumbersome.

20. What does this mean for the CFO Community? Think globally, but act locally. Local solutions: act on what you can implement and control, share best practices Global solutions: make use of government-wide flexibilities, communicate with other management disciplines within your agency and take an active role in the CFO Council