COMMENTARY

For federal pay, the answer hasn't changed

Howard Risher, a private consultant, was the managing consultant for the studies that led to pay reform in the Federal Employees Pay Comparability Act of 1990.

Last month’s House hearing on federal pay, titled “Are Federal Workers Underpaid?”, was more than interesting political theater. The tone of the questions from Republican representatives sent a very clear message: They are serious about controlling the federal payroll.

However, despite the solidly partisan rhetoric, there is reason to believe the two sides can agree on a solution that should be good news to the federal IT community: switching to a more flexible, market-sensitive salary system.

Democrats argue that federal employees are undervalued and underpaid. The Republicans, relying on analyses by conservative think tanks, contend that federal employees are paid above market levels. So far, neither side has produced convincing evidence to support its argument.

As the economy recovers, technology jobs are expected to increase much faster than other jobs, according to the Bureau of Labor Statistics. It projects that the U.S. workforce will grow by 8 percent by 2018, while the projected growth in technology jobs is 20 to 30 percent. That will push technology salaries up at a faster pace. The budgeted increases for IT specialists are already higher than for other professionals.

That’s been true for decades, of course. In some years through the 1990s, technology salaries were increasing so rapidly that companies were forced to grant multiple increases each year.

Realistically, the General Schedule system will never be competitive in the market for technology specialists. Pay information compiled by the National Association of Colleges and Employers shows that the average graduate in a computer-related field has a starting salary of roughly $60,000. By comparison, the GS-7 Step 1 salary for such jobs in the Washington, D.C., area is $42,209, and jobs in several cities pay less than $40,000.

The problem is compounded by the rigid, multirung career ladders and step increases imposed by the GS system. Technology is a field in which brilliant young superstars can progress rapidly, commanding high pay and increases that are well above average. The steady and predictable movement through the GS grades is the antithesis of the career opportunities offered to high-performing specialists.

Rapid changes in technology in the 1990s and the implications for workforce management prompted the CIO Council in 2001 to ask the National Academy of Public Administration to “examine alternative pay systems...that would allow chief information officers to compete successfully for scarce talent in a market-driven, performance-based environment.”

As is its custom, NAPA reached out to experts. The organization delivered its report, which is available on the CIO Council website, in August 2001 — and after the shock of the following month's terrorist attacks, the report was quietly shelved and forgotten.

But despite dramatic differences in the economy, the problem has not changed. The first of 10 NAPA recommendations is to establish a market-based pay-for-performance compensation system. The second is to allow for flexibility in the treatment of individuals and occupations. Those two ideas are the foundation for nearly every IT salary system.

Yes, federal agencies have made mistakes when implementing new pay systems. It is also clear, however, that across-the-board freezes or pay cuts could undermine agency IT operations. Technology specialists tend to be mobile, and the best ones can always find new job opportunities. They might even be able to replace themselves by going to work for a government contractor — at a higher salary. Therefore, any decisions made without the benefit of solid evidence could have costly long-term consequences.

About the Author

Howard Risher is a private consultant who specializes in pay and performance.

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Reader comments

Fri, Apr 8, 2011

I recommend that ambitious IT grads or early career people NOT to go into the government. I spent a while in the banking industry as a consultant and then employee and then consultant again, and saw that the longer an IT person had been with the bank, the further behind their market value they earned. That was verified to me when one of our seasoned and very sharp guys got bought by another bank for several times his salary at ours. Gov IT is no different, I'm starting to realize. The IT kid-turned-Fed out of college has a very defined career path with little chance to rise above - just like the banking industry. Young IT talent isn't looking for SAFETY - it's looking for OPPORTUNITY. The OPPORTUNITY in gov't IT is for contractors; not feds. There is one heck of a price to pay for that safety, young IT people; the price is STAGNATION. I entered gov't IT at the top of GS-dom after a long private sector career, in a field that's in increasing demand (for specialists; not newbies) and made the conscious decision to trade potential late-career reward for late-career safety (or the perception of quasi-safety as it's turning out to be). I was paid at my legitimate market value when I joined the fed; I came over at the full documentable salary that was below the GS-15 cap as is fed policy. Now potential increases have stopped for a long time and I'm now portrayed by the wet-behind-the-ears crop of political demagogues as an evil budget-breaker. It's all part of the risk-reward equation, I suppose. Young IT aspirants should realize that even the gov't is becoming less of a safe haven for them than it once was, and is probably the worst place to go to develop an IT career. Take your hotshot talents (seriously - compliment intended) and sign on with a gov't CONTRACTOR. Then you benefit from whatever stability there is in your company's gov't contracts (along with the ever-present risk of a work stoppage), haven't locked yourself into a well defined but stagnant fed IT career, and can hop from one IT contractor to the next to pump up your market value as you build your skills and marketability. The fed needs your talent as a contractor because its own people are too busy keeping the lights on to excel like you will have to in private industry just to keep your job. Then decide LATER if you want to look at the fed to finish up once you've climbed the latter. Unless, of course, you become one of those who owns a successful beltway bandit contracting company, then you've gotten where you want to be, anyway! All my best to each of you.

Fri, Apr 8, 2011 RayW

"The problem is compounded by the rigid, multirung career ladders and step increases imposed by the GS system. Technology is a field in which brilliant young superstars can progress rapidly, commanding high pay and increases that are well above average. The steady and predictable movement through the GS grades is the antithesis of the career opportunities offered to high-performing specialists."

I agree with that. As a former non-government industry worker, I started out with more pay and increased my pay lead over GS level workers every year. When I came to the federal government after 18 years I was way above my peer group on the pay scale (5 steps on the average) and I was not in the higher paying fields of engineering, although NSPS did help close that gap for many folks.

There are only two easily measured areas that I see the government worker being ahead (in the good direction) of the industry worker (this is in the technical fields like engineering) and that is annual leave (15-50% depending on years of service and the company) and job security (despite our elected officials overall greed and incompetence). Most other intangibles are too corporate and locality dependent to say who is better or worse.

So, I like the government job since I know that I have a job. I may not be getting the higher pay now to buy toys that my counterparts on the outside are, but I do not worry about a layoff as much either...and when you are over 50 and not a big wig in management, that is a good thing.

Fri, Apr 8, 2011 Scott Washington, DC

We tried major pieces of this with NSPS. And those who would rather have a tenure based system with job security and no tie to performance outscreamed those who rather be paid and advanced based on performance. This only reinforced the stereotype of the typical government employee and union respresentation. Until you can separate those who just want to put in their 40 hours and do their basic job (which is perfectly acceptable and what they are paid to do) from those who want to advance and display superior performance, this problem will remain.

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