CHAPTER 11 ________________________________
Maximizing Public Organization Talent Strategically and Systemically

People—their knowledge, skills, and abilities—are a primary focus for most senior leaders today because of people’s unique ability to help organizations succeed. No longer are systems and processes the differentiators for organizations; these are becoming commodities. Today, in the knowledge economy, people are the differential advantage when it comes to organizational performance. Government agencies, just like private-sector firms, must be strategic about managing and leveraging their talent for maximum results.

Skills Gap

At the same time, there is a growing skills gap in the workforce. Organizational leaders point out that their number-one concern is finding the right people to fill a growing list of vacant positions—a list that has only grown longer during the economic crisis that began in 2008.

The American Society for Training and Development (ASTD) defines a skills gap as a significant difference between an organization’s skill needs and the current capabilities of its workforce. It is the point at which it is very difficult to achieve strategic goals because the right employees with the right skills are not in the right positions at the right time.

There are many reasons for the skills gap in addition to the state of the U.S. economy. Some estimates predict that as many as 60 percent of federal workers will be eligible to retire over the next decade. At the same time, federal jobs, which account for about 2 percent of the U.S. workforce, are multiplying under the Obama administration. And, while retirement has been postponed by many federal employees because of the economy, the federal government still faces many challenges in filling its leadership pipeline. A U.S. Office of Personnel Management (OPM) Federal Human Capital Survey, administered to more than 210,000 federal workers in 2008, showed that only 42 percent are satisfied with the policies and practices of the senior leaders of their agencies.

Adding to the skills gap is the fact that jobs are changing. Many require higher levels of technical or professional skill than in the past, while educational attainment lags the need for these skills. A study by the National Center on Education and the Economy projected that by 2020, the U.S. economy will be short several million workers with at least some college experience.

Four Key Skill Areas

In a white paper, Bridging the Skills Gap, ASTD reported four key areas in which skills are the most lacking:

• Basic skills—the three Rs (reading, writing, and arithmetic), customer service, communications, and business acumen

• Technical and professional skills

• Management and leadership skills such as supervision, team leadership, goal setting, planning, motivation, decision-making, and ethical judgment

• Emotional intelligence.

For decades, organizations have developed employees’ skills through traditional practices such as succession planning, mentoring, coaching, and training. Now there is increasing pressure for better performance and less time to achieve results, and these old practices are being called into question. Organizations find that they cannot muster the talent they need when they need it to achieve their goals.

It is not just individual organizations or sectors that are suffering from the skills gap. Communities, states, regions, and entire nations pay a heavy price when they cannot find or equip workers with the right skills for critical jobs.

Workforce Composition

The composition of the workforce itself is changing in ways we have never experienced and for which many institutions are unprepared. According to the Bureau of Labor Statistics (BLS), the size of the workforce in the United States in 2014 will be roughly 162 million. Estimates suggest that the Net Generation, one name for the youngest generation of workers, for whom the Internet is as much a part of their lives as the air they breathe, will make up 47 percent of the workforce in 2014.

Stereotypes of the Net Gens—they can’t make a decision, they don’t want to “pay their dues,” they ignore hours and dress codes, and they expect constant feedback—strike fear in the hearts of many managers. But Don Tapscott, a consultant on organizational transformation, writes in his book Grown Up Digital, “The evidence is strong that Net Gens are the smartest generation ever. Raw IQ scores are climbing by three points a decade since World War II, and they have been increasing across racial, income, and regional boundaries.”

Tapscott adds: “As employees and managers, the Net Generation is approaching work collaboratively, collapsing the rigid hierarchy, and forcing organizations to rethink how they recruit, compensate, develop, and supervise talent.” Meanwhile, the large-scale retirement of baby boomers has not happened as expected, making some succession plans obsolete.

Integrated Talent Management

In reality, organizations will always experience a skills gap if they are staying ahead of shifting conditions in their environment and the changing expectations of their constituents. The key to achieving success under these circumstances is to have systems and processes in place to connect talent to strategy and goals. Achieving such a balance between workforce and mission makes it more challenging than ever to equip organizations with the skills they need in an increasingly global, virtual, and changing world—which must be done faster, with fewer resources.

These days, it is not enough to simply hire smart people and develop their knowledge and skills. The organization must fully understand its employees’ capabilities and ensure that they are applied to maximum effect. With a change in the presidential administration and new challenges on the horizon, now is the time for agencies to be strategic about finding, developing, engaging, and retaining key talent. This is a time for organizations’ learning function to become more efficient and effective, taking a leading role in managing talent and linking it to strategic organizational goals.

ASTD recommends an integrated approach to managing talent in an organization. Integrated talent management strategically unites all human capital functions to maximize organizational effectiveness. Such an approach integrates the processes for acquisition, recruiting, and development into one effort with a common goal: a workforce capable of optimal performance.

Eight Recommended Strategies and Tactics

An ASTD/i4cp (Institute for Corporate Productivity) study examined a diverse group of organizations to discern the best practices of effective talent management programs. Following are the talent management strategies and tactics most strongly associated with success, as well as recommendations for organizations interested in improving their talent management programs and systems:

• Drive talent management from the top of the organization to ensure that senior management supports it and to prevent the work from falling into silos.

• Ensure that talent management efforts support key agency strategies.

• Align all components of talent management to support optimal performance.

• Manage talent management with a long-range perspective but with the ability to respond to changes in capability requirements as needed.

• Keep the emphasis on talent, through good times and bad.

• Nurture a talent-oriented culture.

• Use talent-management metrics.

• Cultivate the skills needed to manage talent effectively.

Lessons from the Economic Crisis

Few industries are immune to the effects of the global recession that began in 2008, and few anticipated the breadth and depth of the economic crisis. Unprepared, many companies in trouble reacted from the gut, cutting their workforce first and realizing too late that their competitive advantage—their top talent—had walked out the door.

Organizations that have been shaken but not brought down by the economic crisis are those that already understood the value of their human capital. A study by ASTD and i4cp, Learning in Tough Economic Times, shows that 38 percent of companies surveyed are placing more emphasis on learning during this economic downturn. When the time came for belt tightening, they already knew what capabilities they needed to be more productive, innovative, and goal-focused. And they had processes in place to find, hire, assign, and keep the talent they needed most.

These organizations responded quickly by taking actions such as leveraging technology to design, deliver, and account for employee learning and development. Those responsible for employee development didn’t hesitate to move training out of the classroom and to pare down training content to the essentials to achieve increased efficiency and effectiveness. They ensured that every learning program, however small, supported a key goal in some way—or it didn’t survive.

Leadership

One of the toughest challenges of the current economic crisis is that leaders must act even when they don’t know what is coming next or how long recovery will take. But one fact is certain: old ways of doing things are not coming back. This is especially true in the public sector. The Obama administration is asking federal agencies to undertake meaningful change and strengthen their performance. What leadership practices will be most effective for such an undertaking?

Booz Allen Hamilton, collaborating with Steve Kelman, a professor of public management at Harvard’s Kennedy School of Government, gathered evidence about the success and failures of government executives who tried to bring change to their agencies. The resulting study, called What It Takes to Change Government, was released in July 2009.

Six Leadership Best Practices

Among the lessons learned about the practices of leaders at successful agencies were:

• Pursue just two or three goals.

• Get a running start by being proactive.

• Use a strategic planning process, but don’t overdo it.

• Manage within the organization, not just at 50,000 feet.

• Use performance measures.

• Consider reorganizing, even if there is resistance.

One surprising finding, according to the report’s authors, was that many agencies ignored basic management practices. For example, all federal agencies are required by law to have performance metrics, but not all agencies use them. In this study, only the managers who used metrics worked at the successful agencies, including the U.S. Government Accountability Office (GAO) and the Internal Revenue Service (IRS).

The Impact of Web 2.0

Managers, learning leaders, and human capital officers face one additional and significant factor in transforming their organizations into learning organizations and managing their talent for maximum effectiveness: Web 2.0 technologies. These technologies and tools, especially those that enable employees to collaborate, connect, and learn informally, will be a major force for change in all types of organizations.

While most institutions have become very adept at providing formal learning and remain relatively committed to employee development regardless of the economic or political cycle, the majority of learning at work today is informal and often occurs outside the purview of managers or training professionals. On their own, using familiar Web.2.0 tools such as wikis, blogs, and social networking software, employees have embraced informal peer-to-peer knowledge sharing.

ASTD’s research team completed a study in early 2009 to understand how training and development professionals were employing Web 2.0 to provide learning tools in their workplaces. The study found that the vast potential of Web 2.0 technologies has not been realized by most organizations’ learning functions. And while many are still becoming familiar with these technologies, the majority of respondents believe that their learning functions will use Web 2.0 technologies more during the next three years.

Why are organizations adopting these technologies? The most widely reported reason—cited by 77 percent of the respondents—was to improve knowledge sharing. The second most widely cited reason was to foster learning in the organization.

When looking at how to boost adoption of Web 2.0, ASTD’s study found that middle managers are most likely to be responsible for introducing Web 2.0 technologies into the organization. Younger workers are more likely to use Web 2.0 applications on the job, whether management wants them to or not, according to a 2008 Symantec survey. Informal learning and networking with Web 2.0 technologies has a strong grassroots component, as employees deploy tools they already use for non-work activities to get around roadblocks to collaboration and just-in-time learning in their organizations.

Six Web 2.0 Best Practices

Based on ASTD’s research, three strategies will increase the likelihood of success in creating an effective learning function with Web 2.0: increased investment in learning-related Web 2.0, encouraging wide participation in using these technologies for learning, and gaining top-level support for their use. Here are six best practices for implementing Web 2.0 technologies:

• Perform sufficient advanced planning before rolling out a new technology.

• Train employees in using the tools, and communicate how they should be used.

• Build controls to ensure integrity of content, processes, and measurements.

• Don’t control usage so much that it prevents participation and erodes trust.

• Allow enough time for the new technologies to take root.

• Secure senior-level commitment.

Together, managers and learning professionals can drive adoption of this game-changing technology and quantifiably demonstrate its effectiveness.

Unprecedented Opportunities

As conventional wisdom tells us, exceptional challenges can open up exceptional opportunities. The skills gap, the economic crisis, and the power of Web 2.0 will force change on the public and private sectors, ready or not.

Seven Key Human Capital Steps

The current challenges have pushed human capital to the forefront in many government agencies. Chief human capital officers and senior learning professionals have an opportunity to demonstrate their value as never before by taking these steps:

• Invest in employee development and commit resources to learning initiatives that support goals and strategies.

• Create an environment of continuous learning and provide appropriate learning and development opportunities.

• Benchmark organization-wide learning against best practices.

• Recognize and reward learning and development that supports current and future skill needs.

• Integrate human capital functions and processes to manage talent strategically.

• Take action to identify and close the skills gap.

• Engage senior leadership as teachers, mentors, and champions.

These challenges present a unique opportunity for public managers and leaders in employee training and development to develop a highly knowledgeable, skilled workforce capable of delivering exceptional public service and helping private-sector organizations compete in the global economy. There has never been a more important time to leverage talent and unite all human capital management functions to maximize organizational effectiveness.

Results of the 2008 Federal Human Capital Survey¹

According to the executive summary of the 2008 Federal Human Capital Survey (FHCS), the survey “focuses on employee perceptions regarding critical areas of their work life, areas which drive employee satisfaction, commitment, and ultimately retention in the workforce.” The survey, to which more than 210,000 federal employees responded, paints a picture of steady progress but shows there is still much work to be done, especially with regard to the talent pipeline.

The FCHS measures four indices: leadership and knowledge, results-oriented performance culture, talent management, and job satisfaction. The 2008 results showed small increases in all four indices, with job satisfaction rated highest. Respondents gave government agencies’ ability to bring in and retain talent moderate ratings. Only 44.9 percent of respondents agreed that their work unit is able to recruit people with the right skills. The lowest ratings were given to government agencies’ ability to create a culture that “instills a results orientation and rewards employees for performance.” Less than one-third (31.4 percent) of the government workforce believes differences in performance are recognized in a meaningful way, and only 39 percent say they are satisfied with their opportunity to get a better job in their organization.

The Nuclear Regulatory Commission Ranks First in the Best Places to Work in the Federal Government²

For the second time, the Nuclear Regulatory Commission (NRC) was rated by its employees the best place to work in the federal government. The Best Places to Work³ index provides an assessment of employee satisfaction and commitment in federal agencies. The rankings are based on the U.S. Office of Personnel Management’s (OPM) 2008 Federal Human Capital Survey, which has been administered every two years since 2002. It is particularly noteworthy that both the NRC and the U.S. Government Accountability Office were ranked first and second, respectively, in 2007 and significantly improved their scores in the 2009 index to maintain their high rankings.

NRC employees mention that challenging and interesting work, access to training courses and professional development programs, and a focus on work-life balance are some of the reasons they enjoy working at the NRC.

Notes

1. U.S. Office of Personnel Management, “2008 Federal Human Capital Survey,” (Washington, D.C., 2008), http://www.fhcs.opm.gov/2008FILES/2008_Govtwide_Report.pdf (accessed September 18, 2009).

2. Nuclear Regulatory Commission, “Making Our Mission Yours,” 2008, http://video.nrc.gov/Player.aspx?Event=376 (accessed September 18, 2009).

3. The Best Places to Work in the Federal Government rankings are produced by the Partnership for Public Service and American University’s Institute for the Study of Public Policy Implementation (ISPPI). More information can be found at www.bestplacestowork.org.

Recommended Resources

American Society for Training and Development. “Bridging the Skills Gap.” (white paper, Alexandria, VA, 2006).

American Society for Training and Development. “Learning in Tough Economic Times: How Corporate Learning is Meeting the Challenges.” (research study, Alexandria, VA, 2009).

American Society for Training and Development. “Transforming Learning with Web 2.0 Technologies.” (research study, Alexandria, VA, 2009).

American Society for Training and Development and Institute for Corporate Productivity. “Talent Management Practices and Opportunities.” (research study, Alexandria, VA, 2009).

Mader, Dave, Jeff Myers, and Steven Kelman. “What it Takes to Change Government: Successfully Executing Ambitious Strategies in Government.” Booz Allen Hamilton, 2009. http://www.boozallen.com/media/file/what-it-takes-change-gov-viewpoint.pdf (accessed September 18, 2009).

Tapscott, Don. Grown Up Digital: How the Net Generation is Changing Your World. New York: McGraw-Hill, 2009.

U.S. Office of Personnel Management. “2008 Federal Human Capital Survey.” Washington, D.C., 2008. http://www.fhcs.opm.gov/2008FILES/2008_ Govtwide_Report.pdf (accessed September 18, 2009).