Rand identifies workforce-planning risks

Civilian Workforce Planning in the Department of Defense

The Defense Department would like to improve its strategic workforce planning, but several factors, including the DOD budget process, could prevent Pentagon officials from using data analysis and centralized planning to meet its civilian workforce needs.

That is the conclusion of a new report from Rand’s National Defense Research Institute (NDRI), a federally funded research center. The report, “Civilian Workforce Planning in the Department of Defense,” states that DOD is living with the negative consequences of more than a decade of downsizing and restructuring.

“The relatively inflexible, top-down policies that guided the defense downsizing in the post-Cold War era have left most organizations in the DOD with a dearth of midcareer or journeyman-level workers to replace those who are now retiring,” the report states.

Acquisition, in particular, is an area in which DOD and civilian agencies face a deficit of skills and experience. “We’re very worried about the acquisition workforce,” said Carl DeMaio, president of the Performance Institute, a think tank that focuses on government accountability. “The reductions in force of the 1990s had a catastrophic effect on the government workforce. Unfortunately, we did a lot of buyouts, and we bought the wrong people out.”

The National Security Personnel System (NSPS), with its pay-for-performance approach and new workforce management rules, is supposed to give DOD officials greater flexibility in eliminating critical skills gaps in the civilian workforce, said Susan Gates, a senior economist at NDRI and a principal author of the new report. But, she added, “there are a lot of things they can do, absent NSPS, to shift workloads across the organization.”

The report describes the success the Tennessee Valley Authority has had with centralized workforce-planning efforts that began in 1991. As a result, the agency has used cross-organizational placement and employee retraining as alternatives to job cuts in local organizations within TVA.

The Rand study tried to answer the question of what central role the Office of the Secretary of Defense could play in workforce shaping, given the limitations of DOD’s workforce database, the Defense Civilian Personnel Data System. That database has limited value for centralized planning because it lacks information about employees’ competencies and skills, the report states. It could be modified, however, by adding fields for skill codes, a recommendation that Rand made in the report.

More important, the report’s authors found that basic supply-and-demand workforce-planning models do not match the challenges DOD managers face. At all levels in DOD, workforce-planning efforts are constrained by having a total number of allowable civilian work years and a total wage limit for civilian employees.

Projecting workforce demand is an even more difficult challenge for DOD, according to Rand. Two existing data resources for estimating demand are manpower estimate reports (MERs) and most efficient organization (MEO) reports. DOD program managers responsible for major acquisition programs submit MERS, which estimate the demand for military, civilian and contractor workers during the life cycle of a particular program.

Other sources of demand-side data are MEO reports, which agencies produce when they submit a competitive sourcing bid under the Office of Management and Budget’s Circular A-76 rules. MEOs and MERs have similar limitations in that they cover only small portions of DOD’s civilian workforce of about 700,000. But the cost of collecting better data to predict future workforce demands would be considerable and might outweigh the benefits, the report states.

Rand found that the DOD budget process often prevents local managers from doing effective workforce planning, and it suggested that strategic workforce planning would be ineffective without a departmentwide commitment to fully fund well-documented workforce demands.

The authors conclude that certain occupations at DOD, such as data systems management, might be good candidates for centralized coordination, but others would not.

Strategic workforce planning backed by data on skills and competencies has a practical and immediate application in DOD. The report notes that the Naval Air Systems Command, for example, plans to reduce its civilian workforce. According to Rand, “Data on skills and project experience may help the organization target voluntary early retirement authorization and voluntary separation incentive payments toward individuals whose skills are no longer needed or are in excess supply.”