The federal workforce faces a number of critical challenges that must be addressed to fulfill the increasingly complex demands placed upon federal agencies. For example, the looming retirement bubble will require the replacement of a significant portion of the federal workforce, and the technical skills required in today's workplace demand advanced employee training efforts.
Accordingly, during the next four years, improving federal human resource (HR) systems will be critical. To provide the level of service our public expects from the federal government, we must address significant HR issues. These issues include compensation, federal recruitment and selection, training and development, and employee and labor relations.
Strategic Compensation Policy
The issue of federal pay has taken on renewed importance in recent years. Mirroring discussions taking place at the state and local levels of government, policymakers and independent researchers have devoted a great deal of attention to comparing federal employee pay rates to those in the private sector, as well as to strategies for ensuring that federal HR management systems can recruit and retain the best and brightest candidates to meet the mission goals of the future.
Perhaps the most contested issue in recent federal pay discussions concerns the proper methodological approach for both comparing federal and private sector pay rates and providing annual pay increases to employees. The Federal Employees Pay Comparability Act of 1990 (FEPCA) requires the U.S. Federal Salary Council to make annual pay rate recommendations to the president's pay agent based upon salary survey data provided by the Bureau of Labor Statistics (BLS). With comparability estimates constructed from a survey of occupational salaries in the private sector, BLS data has consistently highlighted that, on average, federal employees working in the General Schedule (GS) system tend to be substantially underpaid compared to their private-sector counterparts. But when disaggregated by grade level, lower graded employees tend to be overpaid, while higher graded employees are generally underpaid.
The 2010 BLS estimates in Table 1 highlight the distinct break in federal pay comparability for those employees in grade levels higher than GS-7, with higher graded employees experiencing pay gaps of up to 31 percent in some cases.
Table 1. Federal General Schedule Wage Gap (March 2010) Grade BLS - GS Average BLS - Estimated Annual Pay Estimated Comparable with Locality Percent Pay Annual Pay ($) Adjustment (4) Gap with Locality Adjustment (%) 1 20,092 23,608 -14.89 2 20,916 25,011 -16.37 3 24,819 28,199 -11.99 4 29,129 31,849 -8.54 5 33,096 35,585 -6.99 6 39,239 40,135 -2.23 7 44,227 44,594 -0.82 8 51,733 51,616 0.23 9 58,621 53,683 9.20 10 71,859 60,481 18.81 11 76,990 65,205 18.07 12 102,496 78,939 29.84 13 110,770 94,632 17.05 14 147,581 112,266 31.46 15 167,877 1 34,320 24.98 Weighted 70,330 61,313 14.71 Average Source: Data provided at the October 29, 2010, Federal Salary Council meeting in Washington, Li C. Estimates reflect the difference between comparable federal and private sector salaries using data from the National Compensation Survey. Final …