GWU Study Provides Valuable Insights on Troubling SES Turnover Trends
A May 14, 2014 report entitled, "Increasing Separations of Career Senior Executives: Effects of a Baby Boomer Workforce and Recommendations for Growth," prepared by a group of graduate students of the George Washington University's Trachtenberg School of Public Policy in cooperation with the Senior Executives Association, provides important insights into why increasing numbers of career Senior Executives are leaving the federal government.
The report was prepared as the students' "Capstone Project," the culminating course in fulfilling the Trachtenberg School's requirement for receiving a Master Degree in Public Policy. The students opted to study the topic of Senior Executive turnover in consultation with SEA and conducted a broad range of independent research, including surveying current and former SES members of the Association on a wide variety of issues. In addition to a broad literature search and the survey of SEA members, their research also relied upon and wide range of data extracted from OPM's public data bases (e.g., FEDSCOPE).
Upon reviewing the findings of the report, SEA President Carol Bonosaro commented, "SEA thanks the GW Capstone team for their timely research and detailed report. The results of their study confirm many of SEA's long-standing concerns about how inadequate compensation and appreciation for the contributions of career executives is accelerating the exodus of some of government's most talented and needed leaders as well as discouraging interest among high-performing GS-14s and 15s in pursuing SES jobs in today's environment. The current Congress and Administration need to realize that politics as usual will only exacerbate these trends, with the net result being a growing brain drain that hurts our government and the American people it serves."
The report's Executive Summary cited several factors that have contributed to higher rates of separation among career SES in recent years including federal personnel policies, pay compression, suppression of SES performance awards, the negative impact of sequestration and more baby boomers in the SES workforce reaching retirement age.
The full report can be found at https://seniorexecs.org/images/SEA-GWU-Report.pdf and contained the following detailed findings and conclusions:
The Separations Rate Among Career SES is Increasing: Throughout most of its existence, the career SES workforce has maintained a relatively stable turnover rate. Yet, in recent years, there has been a notable increase in the separation rate of SES members. According to the GWU report, from FY 2009 to FY 2013, the overall SES turnover rate increased from 7.2% to 9.8%, while the raw number of SES employees leaving government rose 44%. As part of this trend, since FY 2009, the career SES quit (i.e. resignation) rate has increased from 1.1% to 1.5% while the retirement rate among career SES members has climbed from 5.8% to 8.0%. Among those SES who left government during the FY 2009 to 2013 timeframe, 79% exercised optional retirement rights, 14% resigned, 4% accepted early retirements and 3% left under other circumstances.
The report contrasts sizable increases in the SES turnover rate with a relatively stagnant government-wide turnover rate in the non-SES workforce during the same period. It cited a 2012 Congressional Research Service report entitled, "The SES: Background and Options for Reform," that noted, "the turnover of senior executives can lead to "loss of knowledge and/or skills; deterioration in organizational loyalty among employees; and a vacancy in the agency that may take some time to fill." The GWU report also warns: "By 2016, over one third of the federal workforce will be eligible to retire, including 3 out of 5 senior executives. Further, many senior managers and aging baby boomers who held onto their jobs during the economic downturn may now consider retirement in the near future."
Pay Compression and Reduction in Pay for Performance Funding are Major Disincentives: The report indicates, "pay issues are often cited as a disincentive for joining the Senior Executive Service and/or as a primary reason for separation from the federal government. While there has been a persistent gap in wages between SES positions and executive jobs in the private sector, the divide has widened in recent years partly due to government pay freezes and salary compression. As a result of pay caps on SES positions, there is a financial disincentive for GS-14s and GS-15s to apply for senior executive positions."
In addition to pay freezes and salary compression, the report notes that a government-wide 50% reduction in available funding for SES performance awards (i.e., SES bonus pool funding) has further diminished SES compensation. The report also states, "Presidential Rank Awards - which represented the most lucrative pay for performance opportunities for the SES - were suspended by President Obama in 2013. These awards could amount to 20-35% pay of an individual's salary."
Survey of SEA Members Provides Compelling Insights: Working with SEA, the GWU study team designed detailed survey questionnaires seeking insight into SES retention and separation dynamics.
Survey responses were received from 261 SEA members currently working in SES positions and 273 members who formerly served in the SES. Highlights of survey results, as featured in the report, include:
• Large percentages of former SES employees cited, "feeling of purpose and job satisfaction" and "feeling [of making] a positive difference" as "extremely important" job characteristics that they considered while seeking or continuing in their former federal positions.
• Former SES employees most often cited "frustration with leadership" as what most-contributed to their leaving as well as "frustration with the current Administration and/or Congress and/or lack of progress within the Federal government as a whole." Other major reasons cited for leaving included diminished pay and performance awards as well as a desire to pursue employment in the private sector.
• Current SES employees responding to the survey who indicated they intended to leave the federal government in the next three years also cited similar frustrations with the current Administration and/or Congress, gridlock government and poor leadership within their agencies as major reasons. Other major reasons for planning to leave included inability to receive or to be considered for performance bonuses or other merit-based awards as well as diminished ability to receive or be considered for pay increases.
• When asked, in open ended questions, what changes and improvements need to be made to the SES system to attract and retain high quality career executives, both former and current SES respondents focused on the need to improve: SES pay for performance, appreciation for their contributions, and support for their roles. They also cited the need to improve relationships with political appointees within their agencies and members of Congress as well as expanded professional development opportunities.
In referring to the views of current and former SES on changes needed to the current system, the report notes, "Overall, a great sense of frustration with the executive and legislative branch political climates, as well as the idea that the SES has become politicized, is present throughout the responses." The report further shares some quotes from survey respondents including the following from a former SES: "There cannot be improvement until the political parties disabuse themselves of the firm belief that [the] SES is the enemy."
The report further cautions, "As baby boomers reach retirement age, the goal of government agencies should be to extend their tenures while mentoring and training new talent (as many survey respondents suggested) to assume the role of a Senior Executive, thus reducing the chance that productivity will drastically decrease during the transition period between Senior Executives."
In terms of moving forward, the report suggests some near term actions, including:
• Creating more incentives that make the SES system more attractive and rewarding for both SES and GS-15 employees who may choose to aspire to the SES. Locality pay for SES employees is specifically cited as a needed action.
• Creating internal agency incentives for baby boomers to continue working and mentoring beyond their retirement-eligible age so they can help prepare high-potential employees to replace them when they leave government.