The report says the government could see a major labor crisis if it doesn't modernize. Study: Civil servant system outdated

The federal government is headed for a crisis, a new report warns, and without reforms, a homegrown problem threatens to derail everything from foreign policy, to entitlements, to food safety.

The problem is the way the government manages its more than 2 million civil servants, according to a report from the nonprofit Partnership for Public Service and government consulting firm Booz Allen Hamilton.


“We have a talent management system in government that is in most respects about 60-plus years old. The world has obviously changed dramatically in many, many ways and the system that manages the most critical aspect of government there is, the people, has not,” said Max Stier, president and CEO of the Partnership for Public Service.

The culmination of more than a year of research and interviews with experts and stakeholders including government agencies, labor unions and representatives from the private and nonprofit sectors, the report released Tuesday argues that the system governing the way civil servants are hired, trained, promoted and classified is out of date and disconnected from the modern world, and without corrections, the government could face a serious labor crisis.

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“Only 9 percent of the federal workforce is made up of people younger than 30 — compared to 23 percent of the total U.S. workforce,” the report says. “By 2017, nearly two-thirds of the Senior Executive Service, our nation’s career leadership corps, will be eligible for retirement, and about 31 percent of the government’s permanent career employees will be able to head out the door.”

The report identifies several problems with the way the federal workforce is managed, from recruitment to retirement. One major issue, the authors write, is that the current system was designed when most government jobs were clerical. Now, nearly two-thirds of government jobs are “knowledge-based” and administrative, but the government can’t compete with the private sector for the nation’s best talent.

“Unable to compete for and retain some of the high-end skills and lacking the capacity to handle many critical day-to-day tasks, the government often has to look to outside contractors for the intellectual capital and know-how that is needed,” the report said. “There also is an absence of clarity and consequence regarding individual and organizational performance. Top performers seldom receive sufficient rewards, poor performers are rarely fired or demoted, and managers are not held accountable for how well they manage employees or the outcomes of the work they oversee.”

If the government wants to be able to attract and retain the nation’s top talent, the report argues, comprehensive changes need to be made.

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For one, the authors recommend changing the way government employees are paid.

“There’s been a big political debate with a lot of heat around whether federal employees are paid too much or too little, and the truth is, they’re paid the wrong way,” Stier said. “We’re having the wrong conversation. We’re saying let’s pay our employees basically the way every other effective organization in the country does it.”

Workers should be paid based on their occupation and private-sector rates, not based on classifications that no longer fit the range of government jobs, the report said. To accomplish that goal, agencies and offices should have more flexibility to work within an overall budget cap, rather than Congress passing across-the-board raises or adjustments.

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Along those lines, the General Schedule classification system should be completely overhauled, the report recommends, with the GS-1 through GS-15 classifications being replaced with five more understandable categories, from entry level to senior executives.

Another important reform, Stier said, is changing the way agencies can hire, including a simple change that would allow agencies to hire candidates that other agencies reject. Other suggested reforms include more flexibility in hiring standards, more responsibility for agency leaders and a better applicant assessment system.

If reforms don’t happen, the future of the civil service could be bleak, Stier warned.

“The inability to bring in the millennials and new talent is incredibly problematic for the present and the future,” Stier said. “This has huge implications for everything our country. This is the most important organization we have, and if we’re not treating the talent right, it’s failing our talent and failing our country.”

While the report’s authors acknowledge that change on this scale won’t happen overnight, and while they don’t offer a legislative proposal, they say the goal is to begin a conversation about making much-needed changes to the government’s workforce.

“I think we have to see action here. As I said, what this is about, it’s about the ability of our government to meet our needs, and they are obviously immense and complex and virtually any issue of the day is at risk here,” Stier said. “Our goal here is to spark the right conversation, to get the stakeholders together and to move forward on change.”

In addition to the report released Tuesday, the Partnership for Public Service will host a panel discussion with “current and former government leaders” to continue the conversation about reforming the civil service Wednesday morning.

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