For federal pay, the answer hasn't changed

Despite the latest partisan rhetoric, there's reason to believe that Democrats and Republicans could come to terms on a more flexible, market-sensitive federal salary system, writes consultant Howard Risher.

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.

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