[Senate Hearing 110-706]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-706
 
                 LEADING BY EXAMPLE: MAKING GOVERNMENT
             A MODEL FOR HIRING AND RETAINING OLDER WORKERS

=======================================================================

                                HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             APRIL 30, 2008

                               __________

                           Serial No. 110-27

         Printed for the use of the Special Committee on Aging



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html


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                       SPECIAL COMMITTEE ON AGING

                     HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon                    GORDON H. SMITH, Oregon
BLANCHE L. LINCOLN, Arkansas         RICHARD SHELBY, Alabama
EVAN BAYH, Indiana                   SUSAN COLLINS, Maine
THOMAS R. CARPER, Delaware           MEL MARTINEZ, Florida
BILL NELSON, Florida                 LARRY E. CRAIG, Idaho
HILLARY RODHAM CLINTON, New York     ELIZABETH DOLE, North Carolina
KEN SALAZAR, Colorado                NORM COLEMAN, Minnesota
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           BOB CORKER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     ARLEN SPECTER, Pennsylvania
                 Debra Whitman, Majority Staff Director
            Catherine Finley, Ranking Member Staff Director

                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening Statement of Senator Herb Kohl...........................     1
Opening Statement of Senator Gordon H. Smith.....................     2

                                Panel I

Robert Goldenkoff, director, Strategic Issues, U.S. Government 
  Accountability Office, Washington, DC..........................     4
Barbara Bovbjerg, director, Education, Workforce, and Income 
  Security Issues, U.S. Accountability Office, Washington, DC....     5
Nancy Kichak, associate director, Strategic Human Resources 
  Policy, Office of Personnel Management, Washington, DC.........    35

                                Panel II

Thomas Dowd, administrator, Office of Policy Development and 
  Research, Employment and Training Administration, U.S. 
  Department of Labor, Washington, DC............................    41
Max Stier, president and CEO, Partnership for Public Service, 
  Washington, DC.................................................    55
Chai Feldblum, co-director, Workplace Flexibility 2010, 
  Washington, DC.................................................    66

                                APPENDIX

Prepared Statement of Senator Susan Collins......................    99

                                 (iii)

  


LEADING BY EXAMPLE: MAKING GOVERNMENT A MODEL FOR HIRING AND RETAINING 
                             OLDER WORKERS

                              ----------                              --



                       Wednesday, April 30, 2008

                                        U.S. Senate
                                 Special Committee on Aging
                                                    Washington, DC.
    The committee met, pursuant to notice, at 3:03 p.m. in room 
SH-430, Hart Senate Office Building, Hon. Herb Kohl (chairman 
of the committee) presiding.
    Present: Senators Kohl and Smith.

               OPENING STATEMENT OF SENATOR KOHL

    The Chairman. Good afternoon to one and all. We would like 
to welcome our witnesses, and we thank them for their 
participation.
    We are here today to discuss how we can make the Federal 
Government a model for hiring and retaining older workers. 
Instituting policies that allow older Americans to continue 
working if they so choose has been a priority of mine, and 
Senator Smith's as well, for a number of years. It is not the 
flashiest topic that these hearing rooms have seen, and it 
doesn't always garner the most attention, but the issue of 
older workers is no less important to each of us and, indeed, 
to the entire country.
    Last year, this Committee held a hearing to consider what 
effect the retirement of the baby boom generation will have on 
our Nation's economy. We had the Federal Reserve testify that 
with tens of millions of baby boomers retiring, the impending 
labor shortage would largely slow the growth of our economy. 
Such a slowdown will lead to a lower standard of living for 
everyone.
    I said a year ago, and I will say it again today, with the 
retirement wave upon us, we must encourage employers to adopt 
policies now to attract and to retain older workers. It is 
possible to craft common-sense policy to create a win-win 
situation for both older workers as well as the companies that 
employ them.
    Today, we will turn the spotlight on our own backyard, 
focusing on what the Federal Government is doing to hire and 
retain older workers, what policy changes would help them to do 
it better, and what the private sector can learn from the 
improvements that we want to make.
    Well, why the Federal Government? Because nowhere is the 
foreseen labor shortage more pronounced than within the 
workforce of our Nation's largest employer. Over the next 5 
years, more than half a million permanent full-time Federal 
employees, which is about one-third of the full-time Federal 
workforce, will be eligible to retire. Over the next 10 years, 
more than 60 percent of the Federal workforce will reach 
retirement age.
    Perhaps working longer seems like a no-brainer. If you want 
to continue working past retirement age, then simply do not 
retire and keep going to work every day. But what may be 
surprising to many is that there are often financial, 
bureaucratic, as well as personal barriers to doing so. For 
instance, a percentage of hard-earned Social Security benefits 
may be forfeited for some who continue to work, and the 
opportunity to take advantage of delayed-retirement Social 
Security credits is limited.
    Additionally, many older Americans desire increased 
flexibility in the workplace after they have hit retirement 
age. Some would like more time to travel and pursue hobbies, 
while others find themselves with care-giving responsibilities 
for a loved one later in life.
    Unfortunately, the barriers to continuing to work part-time 
are even more burdensome. They include loss of healthcare 
coverage, a decrease in pension earnings, and for some 
Government employees, a hefty penalty under the Civil Service 
Retirement System.
    I have found that there is not one simple change that would 
address all of these problems. Yesterday, our Ranking Member 
Gordon Smith, Senator Conrad, and myself introduced the 
Incentives for Older Workers Act, which would address many of 
the barriers that I have talked about. This is in addition to 
two bills that I introduced last year, which would offer 
expanded healthcare coverage and training to older workers as 
well as incentives to employers.
    We have an outstanding panel of witnesses today. We would 
like to thank them again for their participation.
    We now turn to the Ranking Member Gordon Smith for comments 
he would like to make.

           STATEMENT OF SENATOR SMITH, RANKING MEMBER

    Senator Smith. Thank you, Senator Kohl.
    To all of you, welcome. It is good to have you here, and 
this is a very important topic if we are to keep the Federal 
Government on a steady keel and use all the talent that we have 
in our older Americans who are Federal employees.
    The United States is about to experience an unprecedented 
demographic shift with the aging of the baby boom generation. 
According to the Census Bureau, in 1980, individuals age 50 and 
older represented 26 percent of the population. By 2050, this 
is expected to rise to 37 percent.
    In my home State of Oregon, residents 65 and older are 
expected to comprise 25 percent of the State population by 
2025. This will make Oregon the fourth-oldest State in the 
country.
    The aging of our population will have significant impact on 
many aspects of our society, including our labor market. A 2007 
Conference Board study reports that current retirement trends 
could create a U.S. labor shortage of 4.8 million workers in 10 
years.
    According to Dr. Preston Pulliams of Portland Community 
College, speaking at last year's older workers hearing, 53 
percent of Oregon businesses report that it is extremely or 
very likely that their organization will face a shortage of 
qualified workers during the next 5 years as a result of the 
retirement of the baby boomers.
    We also must be concerned with a possible ``brain drain.'' 
Our workforce will be losing some of our most experienced 
workers, many of whom have skills and knowledge that will be 
difficult to replace. However, the effect of these trends can 
be mitigated if older workers decide to stay in the workforce 
longer.
    Therefore, I commend Chairman Kohl for holding this 
important hearing, focusing on our Nation's largest employer, 
the Federal Government, and how it can become a model for 
hiring and retaining older workers.
    To this end, I am pleased to be working with the Chairman 
on a number of initiatives. He mentioned one of them. We 
introduced a bill yesterday, along with Senator Conrad, that 
addresses the older worker issue. Specifically, the bill will 
provide incentives to older Americans to stay in the workforce 
longer, encourage employers to recruit and retain older 
workers, and eliminate barriers to working longer. These 
proposals are particularly important since, according to AARP, 
79 percent of baby boomers plan to work in some capacity during 
their retirement years.
    In addition, I am pleased to be joined by Senator Kohl and 
Senator Voinovich to request a Government Accountability Office 
report focused on workplace flexibility in the Federal 
Government. Flexible work arrangements are a priority for older 
workers. Therefore, we have asked the GAO to review the Office 
of Personnel Management's implementation of workplace 
flexibility programs and examine barriers and opportunities to 
expanding work/life programs.
    Again, I thank all of our witnesses for being with us 
today, and I look forward to having a productive discussion 
with you.
    The Chairman. Thank you, Senator Smith.
    Our first witnesses will share joint time today. Barbara 
Bovbjerg as well as Robert Goldenkoff are both with the U.S. 
Government Accountability Office. Ms. Bovbjerg is the director 
of Education, Workforce, and Income Security Issues while she 
oversees evaluative studies on aging and retirement income 
policy. Robert Goldenkoff is the director of Strategic Issues 
and is responsible for studies aimed at transforming the 
Federal workforce.
    Our next witness will be Nancy Kichak with the U.S. Office 
of Personnel Management. Ms. Kichak is currently the associate 
director of Strategic Human Resource Policy, where she leads 
the design, development, and implementation of human resource 
policies. Over the last decade, she has held several positions 
within OPM and has been recognized for her exemplary service.
    Our last witness on the first panel is Thomas Dowd. Mr. 
Dowd is administrator for the Office of Policy Development and 
Research at the Department of Labor. He has over 20 years of 
experience with employment and training programs at the 
national, regional, State, and local levels. He is here to 
explain the department's role as the leading agency for the 
interagency Task Force on Aging Workforce.
    So we welcome you all here today, and Ms. Bovbjerg, we will 
start with your testimony.
    Ms. Bovbjerg. Well, in fact, Mr. Goldenkoff will start us 
off.
    The Chairman. All right.

  STATEMENT OF ROBERT GOLDENKOFF, DIRECTOR, STRATEGIC ISSUES, 
     U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC

    Mr. Goldenkoff. Thank you.
    We have submitted our written statement for the record, and 
I do want to thank you, Mr. Chairman and Senator Smith, for the 
opportunity to be here today to discuss the Federal 
Government's employment of older workers.
    As you know, the Federal Government, like the Nation's 
workforce as a whole, is aging. As these experienced employees 
retire, they may leave behind critical skill gaps that could 
hamper the ability of agencies to provide responsive government 
to the American people in the years ahead.
    We and others have pointed out that older workers are a 
largely untapped national resource that could help the 
Government address this potential brain drain, as older workers 
often bring to the job knowledge, experience, and productive 
work habits.
    In our testimony today, we will first discuss demographic 
trends in the current Federal workforce. Second, we will focus 
on the strategies Federal agencies are using to attract and 
retain older workers. Third, we will provide our observations 
on the possible effectiveness of these strategies. Our 
testimony is drawn from a broad range of prior reports as well 
as our recently completed work.
    With respect to demographics, Government wide, about one-
third of Federal career employees onboard at the end of Fiscal 
Year 2007 will become eligible to retire by 2012. However, some 
agencies are at greater risk of higher retirement rates than 
others. For example, at four agencies, nearly half of the 
employees onboard at the end of Fiscal Year 2007 will be 
eligible to retire over the next 5 years. The agencies include 
HUD, DOT, the Agency for International Development, and the 
Small Business Administration.
    Certain occupations, including those considered mission 
critical, might also have relatively large numbers of employees 
become eligible for retirement in the next few years. For 
example, more than half of the air traffic controllers and 
customs agents onboard at the end of fiscal year 2007 will be 
eligible to retire by 2012. Likewise, over 60 percent of career 
executives are projected to become eligible to retire during 
the same timeframe.
    This looming retirement wave highlights the need for 
agencies to examine how these trends will affect them and 
develop appropriate succession plans. Too often, however, 
agencies do not conduct the strategic human capital planning 
needed to address their current and emerging workforce 
challenges.
    I will now turn it over to Ms. Bovbjerg, who will discuss 
the remaining topics.

STATEMENT OF BARBARA BOVBJERG, DIRECTOR, EDUCATION, WORKFORCE, 
  AND INCOME SECURITY ISSUES, U.S. GOVERNMENT ACCOUNTABILITY 
                     OFFICE, WASHINGTON, DC

    Ms. Bovbjerg. Thank you.
    Let me turn now to what Federal agencies are doing to tap 
the older workforce. We looked at the Social Security 
Administration, where they face looming shortages in critical 
positions at precisely the same time that the aging population 
overall will file for benefits. Significantly, 62 percent of 
SSA executives are eligible to retire today, and 80 percent of 
current SES members will be eligible in 5 years.
    In response, SSA is using a range of OPM-sponsored 
flexibilities to attract and retain older workers. For example, 
the agency offers recruitment and retention bonuses when needed 
and considers new employees' private sector service in annual 
leave compilation. SSA also offers various workplace 
flexibilities, like Flexiplace, and actively recruits retired 
members of the military.
    However, not all flexibilities are utilized. A phased 
retirement program is rarely used because of financial 
penalties that apply, and what was once an active program to 
re-employ annuitants has been largely discontinued.
    Other agencies have taken alternative approaches. EPA and 
USDA use nonprofit organizations to recruit, hire, and pay 
older workers to come to work for these agencies after 
retiring. This is a means of avoiding the re-employed annuitant 
problem. Treasury is developing a project with the Partnership 
for Public Service and IBM to match retired IBM employees with 
Treasury's skill needs. While these do not require special 
authorization from OPM, they are being carried out only in 
pockets of the Federal Government and, thus, are not widely 
used.
    So, how effective are the Federal Government's strategies? 
We believe the Government is making progress. OPM provides 
guidance to agencies on how to use available flexibilities and 
authorities, including an online resource center. Many of the 
flexibilities Federal agencies offer fall within the AARP 
criteria for best employers.
    Also, Congress has taken action to address retirement risks 
in specific occupations, such as acquisition-related positions, 
and as you noted, bills are pending that could help agencies 
look to older workers without financial penalty.
    Still, improvements are needed. Agencies, with OPM's help, 
must plan better, take advantage of flexibilities already 
available to them, and share information on promising 
practices. OPM, meanwhile, must continue to provide leadership 
and support in these same areas. Collectively, these measures 
can help make the Federal Government a model employer for all 
demographic groups and ensure that the untapped expertise of 
older workers is utilized.
    That concludes our statement, Mr. Chairman. We will welcome 
your questions.
    [The prepared statement of Ms. Bovbjerg and Mr. Goldenkoff 
follows:]

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    9The Chairman. Thank you, Ms. Bovbjerg.
    Ms. Kichak.

STATEMENT OF NANCY KICHAK, ASSOCIATE DIRECTOR, STRATEGIC HUMAN 
 RESOURCES POLICY, OFFICE OF PERSONNEL MANAGEMENT, WASHINGTON, 
                               DC

    Ms. Kichak. Thank you Mr. Chairman and Senator Smith for 
holding this hearing to highlight the benefits of hiring older 
Americans and for inviting me to share with you some of the 
steps the Federal Government as an employer is taking to 
attract and retain experienced workers.
    As our workforce ages, we have become keenly aware that a 
growing portion of today's workers are becoming--eligible to 
retire with each passing year. The Office of Personnel 
Management (OPM) has been working with Federal agencies to 
develop effective human capital strategies to plan for the 
future. We are diligently continuing our efforts to recruit and 
retain older workers with essential expertise. Many of these 
older workers want to continue working and still have many 
productive years ahead of them.
    Although there is always room for improvement, I think it 
is fair to say the Federal Government compares very favorably 
to the private sector in employing older workers. Our data show 
that 24 percent of the Federal workforce is over age 55, 
compared to 15.4 percent in the civilian labor force. One of 
the reasons for this is Federal employee benefits are 
attractive to older workers. For example, Federal employees who 
are covered under our health program can continue that coverage 
into retirement as long as they participate in the program for 
at least the 5 years immediately before they retire.
    Other workplace flexibilities the Government offers, such 
as flexible schedules and telework, are attractive to a wide 
variety of employees, including many older workers. OPM 
developed the Career Patterns initiative, which entails 
reviewing individual positions to assess their potential for 
using workforce flexibilities to recruit the broadest pool of 
applicants, including older workers.
    We recognize that facilitating the re-employment of 
retirees with critical skills is an essential element of any 
strategy to optimize the employment of older workers. 
Currently, Federal agencies can rehire retired civil servants, 
but generally their salaries are reduced by the amount of their 
retirement annuities. We have developed a legislative proposal 
that would allow agencies to rehire annuitants on a part-time 
or limited-term basis under certain conditions without the 
salary offset.
    We want to especially thank Senator Collins, who is a 
member of your Committee, for her introduction of this proposal 
as S. 2003, along with Senators Warner and Voinovich. We also 
want to thank the Partnership for Public Service and the 
National Active and Retired Federal Employees Association for 
their support of this measure. We hope that other members of 
this Committee will decide to co-sponsor the bill as it moves 
through the legislative process.
    We believe this legislation is necessary to encourage 
experienced retirees to continue their service part-time for a 
limited period, while providing them the same advantage as 
retirees from the private sector, who do not need to give up 
their pensions to accept Federal employment. This proposal is 
carefully drafted to make such re-employment attractive to 
annuitants, easy for agencies to use, and unlikely to be 
abused.
    In addition, we have proposed a statutory amendment that 
would remove the penalty in the calculation of the high 3 years 
average salary on which annuities are based, which results from 
part-time services at the end of the career under the Civil 
Service Retirement System. Our proposal would remedy this 
unfortunate situation, thus eliminating the potential adverse 
effect of part-time service performed late in an employee's 
career.
    Senator Smith and Chairman Kohl, we very much appreciate 
that you included this proposal as part of S. 2933, which was 
introduced yesterday. We look forward to working with you as 
this bill progresses through the Committee process. Both of 
these legislative initiatives are important to our efforts to 
make the Federal Government a leader in employing older 
Americans.
    All of the efforts I have described--our record of 
employing older workers, our benefit programs, and our 
legislative initiatives--demonstrate that the Federal 
government as an employer understands and values the particular 
contributions that mature workers can bring to the workplace. I 
am confident the Federal Government will continue to be an 
attractive employer to older workers.
    Thank you again for inviting me, and I will be happy to 
take any questions.
    [The prepared statement of Ms. Kichak follows:]

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    The Chairman. Thank you, Ms. Kichak.
    Mr. Dowd.

   STATEMENT OF THOMAS DOWD, ADMINISTRATOR, OFFICE OF POLICY 
       DEVELOPMENT AND RESEARCH, EMPLOYMENT AND TRAINING 
    ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, DC

    Mr. Dowd. Thank you.
    Mr. Chairman and Senator Smith, I am pleased to have the 
opportunity to testify before you today on the hiring and 
retention of older workers in the Federal Government.
    The aging of the baby boomer population has many 
implications for the U.S. labor market, including possible 
labor and skill shortages. Employers will be challenged to find 
and train replacements as some of their most experienced 
workers retire. This has also important implications for the 
Federal workforce.
    For the past several years, the department has undertaken 
efforts to address the broader implications of an aging 
workforce. Encouraged by the leadership of this Committee, the 
Employment and Training Administration launched an interagency 
effort to focus on the aging and retirement of the baby boomer 
generation and its impact on the workforce.
    The Task Force on the Aging of the American Workforce began 
meeting in May 2006 and brought together senior representatives 
from nine key Federal agencies that affect the lives of older 
Americans--the Departments of Commerce, Education, Health and 
Human Services, Labor, Transportation, Treasury, Equal 
Employment Opportunity Commission, Small Business 
Administration, and Social Security Administration.
    The task force elected to focus on three main areas, the 
first being the opportunities and needs of employers in 
recruiting, hiring, training, and retaining older workers; the 
challenges in identifying the opportunities for older workers 
to increase their workforce participation; and third, laws and 
regulations that may function as impediments and disincentives 
to continued employment.
    The task force examined the key issues within these three 
areas and developed strategies to address these issues. In 
February 2008, the task force report was released, expressing 
strategies that could address the most significant issues 
related to the aging of the American workforce. In March, the 
task force reconvened to discuss how to prioritize and move 
forward with the strategies put forth in the report.
    Workgroups were established for each of the categories of 
the strategies, and since then, they have begun meeting to 
determine priorities, identify resources, and develop plans for 
the strategies.
    Although the task force report addresses a wide spectrum of 
workforce challenges and opportunities for the aging 
population, one of the task force strategies that is of 
particular relevance to today's hearing is to encourage Federal 
agencies to serve as models for the private sector by adopting 
these flexible employment policies.
    The task force recognized that it is expected that 40 
percent of the Federal workforce will retire between 2006 and 
2015 and that a new mindset is needed in the Federal Government 
to recruit and retain the talent that will be needed in the 
21st century. The strategy proposed by the task force embraces 
an approach suggested by the Office of Personnel Management by 
encouraging agencies to adopt and promote policy changes that 
facilitate the recruitment and retention of older workers.
    The task force suggested four possible initiatives, the 
first being that the task force member agencies could purchase 
the expertise of older or retired workers by, for example, 
entering into contracts with former Federal employees.
    Second, task force member agencies could expand their 
existing telework programs to ensure telework opportunities are 
available to their workforces, including Federal workers.
    Third, task force member agencies could work in partnership 
with OPM to provide information, technical assistance, and 
support on identifying best practices within the Federal 
Government for improving and increasing flexible and customized 
work options for older workers.
    Finally, task force member agencies could take additional 
steps to review their respective agencies' policies, programs, 
and regulations to identify barriers to flexible and customized 
employment opportunities for older workers and propose changes 
to ensure such opportunities are available. The Workgroup on 
Flexible Work Arrangements and Customized Employment has begun 
meeting to discuss how best to move forward with this strategy.
    Turning to my own agency, the Employment and Training 
Administration, like many Federal agencies, faces the effects 
of an aging Federal workforce, particularly due to possible 
retirements at higher grade levels. Even though many of these 
employees may not retire when they first become eligible, this 
represents a potentially significant loss of skills, expertise, 
and institutional knowledge that is critical to the operation 
of our agency and underscores the need for planning for these 
eventual retirements. ETA has begun focusing on succession 
management as one of the strategies, as other agencies have as 
well.
    Mr. Chairman, this concludes my prepared testimony. At this 
time, I would be pleased to answer any questions that you or 
other members of the Committee may have.
    [The prepared statement of Mr. Dowd follows:]
    
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    0The Chairman. Thank you, Mr. Dowd.
    Now we turn to Senator Smith for questions and comments.
    Senator Smith. Thank you, Chairman Kohl.
    Mr. Dowd, when Senator Kohl and I called upon the Labor 
Department to convene this interagency task force on older 
workers, one of the things we were interested in was the legal 
and regulatory barriers. I very much appreciate your report, 
but I didn't find a lot in it on those particular barriers, 
which are the kind of things that he and I, if we know about 
them, can change some laws, some statutes, some policies.
    I wonder if you have any other plans on the task force to 
address those issues and, if so, what kind of timing is there?
    Mr. Dowd. Yes. Thank you for the question, Senator.
    As with all workgroups, particularly of the interagency 
nature, it isn't always easy to get everyone to come around and 
agree to a final product that says we have found the definitive 
answer or suggestions that we might recommend to this 
Committee. Given that, the Department of Labor was asked and 
has been willing to take the lead on this and to ensure that it 
continues to move forward.
    Much of the focus really, as you suggest, perhaps was more 
around the workforce aspects. But we didn't ignore the legal 
and regulatory issues, and in fact, we created seven follow-up 
workgroups. One of those workgroups is the Legal and Regulatory 
Issues Workgroup.
    One of the things I can share with you is that we wanted to 
ensure and we want to convey to the Committee that the work of 
this task force is not done because the report is finished. In 
fact, we met in March and established these workgroups to move 
forward on these issues, and particularly the area of the legal 
and the regulatory, the Treasury Department has taken the lead 
for examining those issues. Within that workgroup is the SSA, 
HHS, EEOC, and two agencies within Labor, EBSA and the Office 
of Policy.
    Again, we want them to be able to continue to work on those 
issues so that we can come back to you with recommendations 
beyond just what is in the report itself.
    Senator Smith. Well, Tom, don't get me wrong. I am grateful 
for the report. I am anxious to know what Senator Kohl and I 
can do in terms of the lights that you bring to this, so we can 
change some policies. The sooner we do, the better off we are 
going to be so that we don't suffer the kind of brain drain 
that is projected in our Federal Government.
    Flextime, work from home, those kinds of things, if there 
are barriers, impediments, pension issues that we can address, 
heck, I am on the Finance Committee. He is on the 
Appropriations Committee. If we can't figure it out on those 
two committees, nobody can figure it out.
    But we need to get on it, and as soon as you have--and I 
would emphasize sooner than later--we would love to have that 
information.
    Mr. Dowd. If I could follow up, Senator? The Legal and 
Regulatory workgroup met this morning. They will meet again in 
May and will report back to the Taskforce in June. I think they 
are moving pretty speedily, given that their focus is on just 
those issues.
    Senator Smith. Well----
    Mr. Dowd [continuing]. From the report and being able to 
report back to you.
    Senator Smith. My question is not a criticism, just a 
request that we--the sooner we can get it, the better off the 
Federal Government is going to be in the years ahead.
    Nancy, I noted with interest the Partnership for Public 
Service and American University Institute for the study of 
Public Policy Implementation study that they did on Best Places 
To Work in the Federal Government. The Nuclear Regulatory 
Commission, the GAO, and the SEC top the list. I wonder what is 
so good about working at the GAO?
    Ms. Kichak. Well, these folks are from the GAO. They 
definitely look very happy to be working there. [Laughter.]
    Ms. Kichak. We do provide some of the data that helps 
determine the agencies that are ranked there. The ranking that 
is done is based on a job satisfaction index. They simply ask 
folks if it as a good place to work. We think it is because 
they have a very clear mission. They have very capable people 
who are at higher grades than some of the other agencies, and 
they are well funded and focused, and they indicate that it is 
a good place to work.
    Senator Smith. Every time I see Barbara, I just feel 
better. So if I could work with Barbara, I would like it, too.
    Ms. Bovbjerg. Well, I feel definitely better now.
    Senator Smith. What is so good about the GAO as a place to 
work? Are there any policies beyond just working with you that 
make it such a nice place?
    Ms. Bovbjerg. I know there are particular questions from 
the GAO employee satisfaction survey that we feed into the 
questionnaire about the best places to work. But I do think 
that it is a combination of people coming to us both to use 
their brains and to work to make Government better, and that is 
what we do. We try to give them the scope to do their work.
    We also provide transit benefits. We have flexible work 
hours. We, I think, are leaders in telework, and Robert might 
be able to comment more on that. But I think that we do try to 
be a model.
    Senator Smith. Are there things that you do that are models 
for other agencies of the Federal Government?
    Mr. Goldenkoff. I think certainly our flexible work 
arrangements. As Barbara mentioned, we have a telework policy, 
which won an award just a few weeks ago, onsite daycare and 
fitness facilities. We also encourage people to use and take 
advantage of these different flexibilities.
    Some agencies have the authority available--they all have 
the authority available, but they don't always encourage or 
manage to allow people to use them, whereas, at GAO, certainly 
we encourage that. Then also, as Barbara mentioned, GAO goes to 
great lengths to be a world-class professional services 
organization that happens to be in the Federal Government, and 
I think you see a lot of that reflected in the scores that we 
have.
    Senator Smith. As you have examined the private sector, are 
there some things that are happening there that might be 
transferable to the Federal Government that can help older 
workers work longer if they choose to?
    Ms. Bovbjerg. Well, we did have a forum. We convened a 
controller general's forum a couple of years ago, where we 
invited people from Government, including OPM and Labor, and 
academia, but also some of the employers who are on the AARP 
best employer list. We talked about best practices, and we also 
talked about the need for the Federal Government to be a model 
employer.
    What we came down--we also talked about flexible work 
situations. We talked about the right mix of incentives, 
benefits, focused on things that older workers appreciate, 
although I think nearly everyone there observed that everyone 
likes those benefits, just by the way. Telework isn't only 
desirable to older workers.
    One of the fundamental truths that everyone seemed to agree 
on come up with in the forum was that it is not a one-size-
fits-all approach, that each employer in a different industry 
has a different situation, a different demographic profile, and 
that it is really important to try to tailor your approach to 
your particular situation.
    Senator Smith. Sure. Barbara, as you look at the State and 
local governments, are they preparing for this? Do you have 
much contact with them where you could evaluate their systems 
and their regulations and their barriers to older workers?
    Ms. Bovbjerg. Well, I can assure you that in our most 
recent work on State governments, they are very, very focused 
on how they are going to pay for retiree health. That is a 
major focus of State governments as employers right now.
    Senator Smith. Is part of the answer to that to keep them 
working?
    Ms. Bovbjerg. It could be. Several years ago, we did try to 
look at what employers are doing for older workers, and there 
was more activity in the public sector than in the private 
sector at that time. In particular, there were some States who 
were taking actions to keep teachers, to get teachers who had 
retired to come back. They had these things called ``DROP 
plans,'' which is like the dual compensation waiver, 
eliminating the dual compensation rule in some way.
    You can put the retirement annuity in an account 
essentially, an individual account--for the person where it 
earns interest while they pay wages the person who is back at 
work. We looked in detail at a couple of States who were doing 
that and also found there were a couple of others that had 
eliminated the dual compensation rule and were trying to do 
something like what your bill would do with Social Security, 
trying to provide extra credit for working longer.
    So there are some things happening out there. I do want to 
say that was several years ago. So, it may be that there is 
much more than that going on now or perhaps less.
    Senator Smith. Well, thank you all very much.
    Thank you, Senator Kohl.
    The Chairman. Thank you, Senator Smith.
    Ms. Kichak, OPM's Career Patterns initiative offers many 
flexible work options that could be very useful tools in 
retaining experienced and skilled older workers in the 
workforce. What is OPM doing to promote the use of this 
initiative and to ensure that other agencies are taking 
advantage?
    Ms. Kichak. There are many ways that we are promoting 
Career Patterns. One way is that we have required every agency 
to look at positions they are about to advertise to see what 
career pattern would be appropriate and not just one, but how 
many different career patterns would be appropriate so that 
they can identify that when they recruit. So it is clear what 
workplace options--part-time, et cetera--are available.
    We also score agencies on that activity on the President's 
Management Agenda, so agencies need to pay particular attention 
to working in that area to get a good score. We also are 
working with agencies to incorporate Career Patterns into their 
strategic plans and into their succession planning, and many 
agencies are putting this on their Web site.
    We also have put on our Web site best practices of agencies 
in this area so that agencies can go there and see some of the 
strategies that work in this area.
    The Chairman. The Federal Government currently does a lot 
of recruiting on college campuses.
    Ms. Kichak. Yes.
    The Chairman. Would you outline the recruitment efforts 
that you employ to target older workers?
    Ms. Kichak. In addition to the college campuses, we ran ad 
campaigns, which the Government hadn't done before. Within the 
last few years, we ran the ``What Did You Do At Your Job 
Today?'' campaign to get people interested in Federal 
employment.
    We also do a lot of recruiting in veterans groups. We have 
initiatives going on right now at the hospitals that are 
discharging wounded veterans. Thus, that we are reaching out to 
that community. That is an older community. We also have 
special hiring authorities that can be used for bringing people 
on later in their career. One of those is for disabled 
individuals, special flexibilities to bring folks like that on.
    So, those are some of the things that we are doing.
    The Chairman. As we said in our statements, there will be 
enormous numbers of people retiring who work for the Federal 
Government over the next 10 years. Do you think the Federal 
Government has policies or is going to develop policies, put 
them in place, have them up and operating in order to deal with 
this tremendous loss of people over the next 10 years, Ms. 
Bovbjerg?
    Ms. Bovbjerg. I like to think that we can do that. I think 
we need to approach it with a more concerted effort. I applaud 
the approach of the Department of Labor's task force. I think 
that institutionalizing the collaboration among agencies is 
really important. But as Senator Smith noted, it is crucial to 
get to the statutory and regulatory changes that might need to 
be made because, as you know better than anyone, those things 
can take time.
    This is urgent. It is particularly urgent, as Robert 
pointed out earlier, in certain occupations. An agency that I 
look at for a lot of reasons, the Social Security 
Administration, is going to get it from both sides. They are 
going to lose a lot of very capable and experienced people and 
perhaps not be able to recruit the people they need to follow 
behind them unless they do something to try to encourage people 
to work longer.
    We need to move quickly. But I like to think that with 
leadership from OPM and from Labor, with agencies paying more 
attention to those flexibilities, with the support from the 
Committee on Aging and from the bills that we are considering 
now, that we could do it.
    The Chairman. Any other comments from anybody on the panel? 
Mr. Dowd.
    Mr. Dowd. I would only like to echo the thoughts of my 
colleague, and that is to say that we at Labor are very 
committed to continuing the effort with regards to not only the 
completion of the report, but continuing to work with these 
workgroups to get these things done on a variety of levels 
within all seven of those workgroup committees.
    I think that is really key to actually making progress, to 
answer your question that you just asked, if we just simply put 
the report on the shelf, then I don't think anything will get 
done. But we are certainly not doing that, and we are very 
committed to working with our colleagues at OPM and GAO and all 
the other agencies to make sure we keep moving forward because 
this is a fundamental issue.
    We need all the talent and we need all the workers we can 
get in America going forward to be competitive, and we 
certainly can't let up just because we completed a report.
    The Chairman. Any other comments? We thank--yes, Ms. 
Kichak? Go right ahead.
    Ms. Kichak. As you mentioned, we have lots of programs in 
place to prepare for the folks that are leaving, such as 
succession planning, et cetera. But nothing substitutes for 
being able to retain your experienced worker.
    You can do everything that you want to prepare to look for 
the same skills and to try to transfer the knowledge, but 
nothing equals being able to keep the person who has been in 
the field and has done it, which is why we would really like 
and appreciate any help on either of these proposals that will 
help us keep our folks in the office longer and helping us with 
our work.
    The Chairman. Very, very valid comment and certainly 
totally accurate.
    We thank you all for appearing, and at this point, we will 
turn to our second panel.
    Our first witness on the second panel is Max Stier. Mr. 
Stier is the president and CEO of the Partnership for Public 
Service, which is a nonprofit, nonpartisan organization 
dedicated to revitalizing our Federal Government by inspiring 
Americans to consider a career in public service. The recently 
launched Fed Experience initiative to encourage older Americans 
to resume careers with the Federal Government is an outstanding 
example of what he is trying to do.
    Our second witness is Chai Feldblum. She is a professor at 
the Georgetown University Law Center, where she directs their 
Federal Legislation Clinic. She also serves a co-director of 
Workplace Flexibility 2010, where she researches and promotes 
flexible work arrangements, including those utilized within 
Federal agencies.
    We appreciate the fact that you are here with us today, and 
Mr. Stier, we will take your testimony.

  STATEMENT OF MAX STIER, PRESIDENT AND CEO, PARTNERSHIP FOR 
                 PUBLIC SERVICE, WASHINGTON, DC

    Mr. Stier. Thank you very much, Mr. Chairman.
    I very much appreciate the opportunity to be here and to 
speak with you today. I think you have exactly the right goal 
of trying to make the Federal Government a model in employing 
older Americans.
    Jesse James once said, ``I rob banks because that is where 
the money is.'' The Federal Government needs to be looking at 
older Americans because that is where much of the talent is 
that the Federal Government desperately needs.
    Before launching into a quick conversation about some of 
the areas that I think this Committee could very effectively 
focus on, I want to take a second and step back and look at the 
general landscape because from our perspective, the talent 
system in Government is truly broken. The consequences are such 
that they are literally happening today.
    You don't have to pick up a newspaper very often, but to 
see instances in which the Government is not providing us the 
services that we need in order to be able to address the 
multitude of challenges from global warming to globalization. 
By and large, addressing these problems means ensuring we have 
the right talent in Government. As I said earlier, older talent 
has to be a key part of that equation.
    The system, I would argue, is broken in three primary ways. 
No. 1, much of talent, much of older talent simply is unaware 
about the opportunities that exist for them in Government. They 
want meaningful work. They can get it in Government, but they 
don't know that they can look to Government for it.
    No. 2, the hiring process is broken. It is too difficult. 
It is too complicated. It is nontransparent. It takes too long, 
and ultimately, in many instances, it fails to select the right 
person.
    Then, third, once an individual makes it through this 
process, they are often managed in a way that doesn't enable 
them to give of their best talent. So those are the three 
buckets of issues that this Committee, I would argue, should be 
focusing on in trying to fix the system.
    There are three primary places that I would argue that the 
Committee can best invest in trying to make a difference with 
respect to changes. First, I would argue that we need an 
applicant bill of rights, and this is focusing on the hiring 
process. In order for us to ensure that talented Americans and 
talented older Americans want to come into Government service, 
they need a system that is going to be clear. They need to 
understand what kind of opportunities are there and why they 
are exciting.
    It needs to be easy. Things like just submitting a resume, 
rather than a very challenging system you have to go in through 
right now, transparent so that they actually know where they 
are in the process. You may wait more time if you know it is 
going to take a particular period of time. But by and large, 
for many Americans applying for Government jobs, they have no 
idea. Their application enters a black box. They are given no 
information about where they are in the process.
    Then, finally, it needs to be speedy. Again, that is a 
place that OPM has been working on and a variety of issues, but 
we need to do more in that respect. Beyond the applicant bill 
of rights on the hiring process, we need to also ensure that 
the assessment process is improved because, again, fast or 
slow, if you hire the wrong person, it doesn't much matter.
    Second area I would focus on is on the area of metrics, and 
Senator Smith referenced the Best Places To Work rankings. It 
is actually produced by American University and the Partnership 
for Public Service, and it is ultimately based on the work that 
OPM does. The OPM is actually the entity that produces the 
Federal Human Capital Survey on which the Best Places to Work 
rankings are based.
    This is incredibly valuable data that has not existed 
previously, and the old adage that you can't manage what you 
don't measure is absolutely true. By actually providing data, 
both for the public and for managers in Government, you can 
drive change that will make a very big difference and make 
Government more effective.
    We have a lot of data in Government, but we don't always 
have the right data, the data that will enable managers to make 
the right decisions. The Best Places to Work says two things. 
First, you need to focus on leadership, and you need to focus 
on mission. On mission, the Federal Government stacks up very 
well against the private sector. On leadership, it does not.
    So, again to the question that Senator Smith asked, what 
makes a best place to work? It is organizations that have had 
very effective leadership, and we need to see a heavier 
emphasis on that in Government.
    We also need to see other metrics, and the primary one that 
I would argue would make the biggest difference in Government 
is a real metric around talent. I mentioned earlier that older 
workers provide a very valuable talent resource for Government. 
Unless the Government understands what kind of talent it is 
getting and that it can get better talent from older workers, 
we won't actually incent the behavior to try to recruit those 
folks in. So that would be No. 2.
    No. 3, you mentioned the pilot project we are working on 
called Fed Experience. Our belief is, again, that the way 
things need to be changed in Government, there are a lot of 
good ideas, but the greatest challenge is implementation. You 
really don't know what the real issues are until you actually 
do try to implement it. We have, as a starting point, gotten 
IBM to sign on as a corporate partner, along with the 
Department of Treasury--and we expect other Federal agencies 
will follow suit--where we are going to have a concentrated 
effort to drive experienced talent from the private sector into 
the Federal Government at older worker levels.
    IBM is going to allow us to market directly to their 
existing retirees and soon-to-be retirees, help those folks and 
train them to understand the Federal processes and improve the 
hiring process to allow them in to be effective.
    This is a win-win-win. A win for the talent. MSPB has done 
a research report that shows that older workers in the Federal 
Government say that they prefer the jobs they are in in the 
public sector over these they used to have in the private 
sector. It is a win for the Government that desperately needs 
the help. It is a win for the American people who will benefit 
from a more effective government.
    Thank you very much.
    [The prepared statement of Mr. Stier follows:]
    
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    8The Chairman. Thank you, Mr. Stier.
    Ms. Feldblum.

STATEMENT OF CHAI FELDBLUM, CO-DIRECTOR, WORKPLACE FLEXIBILITY 
                      2010, WASHINGTON, DC

    Ms. Feldblum. Thank you. Good afternoon, Chairman Kohl.
    My name is Chai Feldblum. I am a law professor at 
Georgetown University Law Center and the co-director of 
Workplace Flexibility 2010.
    I have submitted long written testimony, and many 
appendices. In fact, I want to particularly thank Marcy Karin, 
who is a supervising attorney in my clinic, for shepherding 
that work through.
    But let me just make three main points here from the 
testimony. First, any creative and effective system to engage 
older workers in the Federal Government has to include a 
specific and focused effort on increasing workplace flexibility 
in the Federal workplace. Workplace flexibility cannot be the 
tagline. It needs to be the headline. The data shows all this.
    I think the data shows that older workers either need to 
work or want to work, and they don't want to work in the same 
way. As you noted in your opening statements, as did Senator 
Smith, they might need to be doing care giving of themselves or 
others. They might want to do volunteer work or community work. 
They want to hang out with their grandkids. They want flexible 
work arrangements.
    At Workplace Flexibility 2010, we have a broad definition 
of workplace flexibility of which one component, the one most 
relevant to today's hearing, is flexible work arrangements, 
what we call FWAs. That way you know you are in Washington, you 
have got an acronym.
    So FWAs include, for us, flexibility in scheduling, 
flexibility in perhaps reduction of hours, and flexibility in 
terms of place. All that comes in under FWAs. If this 
Committee, if Congress cares about enhancing employment 
opportunities for older workers in the Federal Government, it 
needs to have a specific focus on enhancing FWAs.
    Second point, here is the good news. You have heard it 
already here. The Federal Government is ahead of the curve in 
this area. Unlike many private employers, the Federal 
Government already has a fair number of FWAs available in the 
workplace, which was basically generated at two points in time. 
In the 1970's, the influx of women into Federal employment and 
the energy crisis resulted in a bunch of laws being passed to 
encourage FWAs and, more recently, with the impending 
retirement crisis. Again, my written testimony describes that 
in detail.
    So that is the good news. I mean, Congress, the agencies 
have realized that, in this case, older workers want good jobs 
that have FWAs. But here is the third point and the most 
critical. There is so absolutely much more that the Government 
can do. Congress, the agencies working together to, in fact, 
make flexible work arrangements work well.
    Here are just three things to think about that draw on the 
unique capacity of Government. All of it requires strategic 
thinking ahead. One, Government is able not only to implement 
new workplace policies, it has the capacity to self-assess, 
critique. I mean, OPM, GAO, congressional hearings, there is a 
wealth of opportunities to do that critique and assessment, but 
it needs to be done in a focused, strategic way on workplace 
flexibility.
    The testimony I handed in is a result of 5 years of work, 
of different students' times finding stuff. It shouldn't take 
that long to actually find all of that data. So the Government 
should assess the data, collect it, have an easy access portal.
    Two, the Federal Government is huge. You know that. Now 
that means it is a beast that is sometimes hard to move, but it 
also means that it offers an incredibly rich opportunity, given 
the widely varied jobs that it has. Here is a key point we have 
discovered in 5 years of focusing on workplace flexibility. 
Flexible work arrangements, FWAs, they don't work well on 
autopilot. They don't take just because you offer them. It 
needs--flexible work arrangements need to be integrated into 
the culture of the workplace, and that requires training and 
education.
    All of the data shows it works well if you have got a 
manager who understands how to do it. It works well if 
employees have understanding of the expectations. Now 
Government has the resources to do this, not unlimited 
resources, especially in tight economic times. But resources to 
do education and training, if carefully managed, could make a 
huge difference.
    Third and finally, the Federal Government can export its 
experiences, its best practices. Again, this is an area ripe 
for public/private partnership, either the types of 
partnerships that Max's group is doing, which is actually a 
project together, or a project in exporting the best practices.
    In conclusion, at Workplace Flexibility 2010, we look 
forward to the day when FWAs and other forms of workplace 
flexibility are the simple, ordinary, and accepted ways of 
doing business in our country. Congress and the Federal 
Government can take the lead in building this type of model 
workplace for the 21st century. This type of model workplace 
will not only help retain older workers in the Federal 
Government, it will ultimately help all workers better manage 
their work and lives if flexible work arrangements become 
embedded in the basic culture of how we do work, and that would 
be a good thing to happen.
    Thank you.
    [The prepared statement of Ms. Feldblum follows:]

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    3The Chairman. Thank you, Ms. Feldblum.
    Mr. Stier, the Partnership for Public Service does do 
extensive research to rank the best agencies for older workers. 
Can you tell us a little bit about which agencies receive the 
highest ranks and what policies made these agencies so friendly 
to older workers? Could they be duplicated throughout the 
Federal Government?
    Mr. Stier. I think Chai got it right, and that is that, by 
and large, what is good for older workers is good for all 
workers. Therefore, if you look at our rankings of Federal 
agencies, you will see that there really isn't a whole lot of 
variation overall in terms of employee satisfaction on our 
rankings. The same agencies are at the top. The Nuclear 
Regulatory Commission is No. 1 for all of its workforce. It is 
No. 1 for our workers over 40.
    There are about 11 agencies that you will see some 
substantial variation between sort of over 40 and under 40, but 
the reality is that they have to do a lot with individual 
cultural issues more than anything else.
    Again, what Chai said I think is exactly right, and that is 
that what all workers are going to want is a work environment 
in which they have meaningful work, in which that their skills 
are valued, in which they have leadership, where they can see 
what they are doing, how it is connected to the overall mission 
of the organization. Beyond that, there are obviously a variety 
of different support mechanisms that agencies can create. But 
fundamental is to make people understand that their work is 
valued and that their work is meaningful.
    I think, is the key, and it is a place where the Federal 
Government does well in some instances, certainly around the 
mission orientation, but has a lot of work yet to do in others. 
Again, as I mentioned, the primary area is around leadership 
development. The Federal Government has very, very low rankings 
when you ask Federal workers about their perception of 
leadership, and this includes both political and career 
leadership.
    Very importantly, when you benchmark that against the 
private sector, those ratings are incredibly low. The private 
sector is almost double the approval of the public sector 
around leadership issues. It is the issue that if you improved 
on would have the greatest impact on overall engagement of the 
Federal workforce. So, it is absolutely vital.
    The Chairman. What issue did you say would have the?
    Mr. Stier. Leadership. Focusing on leadership talent. 
Focusing on the ability of frontline managers all the way to 
the top of house to provide the environment, to provide the 
direction to their employees to enable them to give of their 
discretionary energy, to do the best possible.
    The question was asked about GAO as to why it is that it is 
No. 2 on our Best Places To Work ranking. What is clear is that 
they have had superb leadership. In part, it has something to 
do with the fact that they have had leadership of longer 
tenure. Dave Walker, who just stepped down, spent 10 years as 
the leader, obviously, at GAO.
    I think one of the unique challenges the public sector, and 
in particular the Federal Government, faces is that it has 
short-term political leadership that is not incented to focus 
on the long-term organizational issues that the Federal 
Government faces. So, again, I think this is an area where this 
Committee and Congress can play a very important role in 
providing that long-term attention to organizational health.
    Political leaders coming in an executive branch are not 
rewarded for focusing on organizational health. They need to 
be. If there are no metrics to understand organizational 
health, it only makes it worse, and part of our argument here 
is that we need to make sure we have those metrics to 
understand how healthy Government is from a real-time 
perspective.
    Right now, we have lagging indicators, public failures, 
response to Hurricane Katrina. We don't have anything else, and 
that is a real problem.
    The Chairman. Well, then what are the characteristics of 
leadership that tend to drive people out?
    Mr. Stier. Well, again, and the old saw is that people 
don't leave jobs, they leave their boss. There are 
dissatisfiers, and there are satisfiers. Certainly, the 
characteristic that I think probably is most core is for 
leaders to be successful in keeping talent. I agree with Nancy 
that their first order of business is to keep the good talent 
that they have--yet there is no prioritization on it.
    So, by and large, managers in Government are not either 
assessed or rewarded on the basis of how they manage their 
talent. That is fundamental. Unless folks understand what good 
management is, unless they are judged on that basis, unless 
they are rewarded on that basis, then it is the unusual manager 
who pays sufficient attention to it. That is endemic in the 
Government, and I think it is a major, major problem.
    The Chairman. Do you agree with that, Ms. Feldblum?
    Ms. Feldblum. Yes, and actually, I am thinking about it in 
the context of the research we have seen on flexible work 
arrangements. People have sometimes a sense of how they do 
jobs. You come. You show up. There is this face time. There is 
a rigidity around it.
    When flexible work arrangements work well, it is because 
the supervisor has energized the office, all the folks there, 
to say we can get this job done well and still do it in a way 
that will accommodate, will manage, will facilitate whatever is 
going on in your lives. Be it care-giving or you want to get 
another training. It is so important to have continued training 
in some of these areas.
    So if you have a manager, a leader who says this is 
important, that is the first step. Now there are a few things 
you have got to do here. No. 1, as Max says, you have got to 
incentivize the manager to want to do that. I mean, I still 
remember reading just about a year ago in the Washington Post, 
some manager said, ``Well, I am getting rid of the alternative 
work schedules. Part-time just won't work here.''
    I am thinking, OK, there is a little education that clearly 
needed to have happened. Right now, for that person, it wasn't 
going to work. But across the Government, it is working, right? 
So this is both the challenge and the opportunity of how big 
the Government is. It is working well in some places.
    We have to figure out how to find those folks, bring them 
to training and education to other agencies. I mean, we have a 
law that says they can offer it FEFCWA, Federal Employees 
Flexible and Compressed Workweek, blah, blah, right? We have a 
law that says they can offer it. We have OPM that says they are 
supposed to offer technical assistance, but there is not much 
more coherence behind it.
    As opposed to saying this is our headline. We are going to 
make workplace flexibility work. We are going to find where it 
is working. Then we are going to have a panel where we bring 
other supervisors and employees, and then 2 years later, 
someone who was in the audience will be up on the panel, 
training the next one.
    But it has got to be a combination of incentivizing the 
managers to want to do it, giving them the resources to do it, 
and saying this is a big deal to get this done right.
    The Chairman. Would you say that some of the best managers, 
some of the best motivators and leaders or the majority of 
them, simply because of the attractiveness of the private 
sector in so many ways, not the least of which is financial, 
but the best are found out there, and it is harder to find them 
and retain them in the Federal workplace?
    Mr. Stier. I don't think so. I think that the Federal 
Government has unique advantages that enable it to recruit and 
retain some of the very best talent, some of the very best 
management talent. Most people are more motivated by meaningful 
work. Most people want to make a difference.
    Certainly the Federal Government does not stack up well in 
certain professions on the financial categories, but it 
compares well in other categories. For older Americans, 
healthcare is of extreme importance, and that is what our 
research and everyone's research shows. The Federal Government 
offers an incredible benefit with respect to healthcare, 
particularly for those at the backend of their career. If they 
spend 5 years in the Federal Government, they can have 
healthcare for the rest of their lives.
    The point is that the Federal Government has intrinsically 
what it needs to attract the right talent. It needs to do a lot 
of work to ensure that the American public understands those 
opportunities because, right now, it is not on the radar 
screen. Older Americans, only 11 percent, say they have any 
real familiarity with Federal Government jobs.
    The same for younger folks as well. It is not on the radar 
screen. When they learn about it, the more they know, the more 
they like it. That is very powerful because, obviously, there 
is a solution there. You can market better, and you will 
actually see benefits.
    Nancy mentioned that OPM is starting to do some 
advertising. Think about the military versus the civilian side. 
On the military side, we have spent billions of dollars 
ensuring that we have the right talent going into the military. 
We have not had anything remotely close to that kind of 
investment on the civilian side.
    Yet ensuring that we have the right talent in the civilian 
side of Government is vital for our physical security as well 
as a lot of other things. So we have not, I think, invested 
appropriately in ensuring that the talent knows about these 
opportunities.
    Again, I would go back to my schematic. You have got to 
make sure that those entry processes, the hiring process allows 
you to bring that talent in and then to manage them 
effectively. This is a system problem, though. You won't fix it 
by simply doing one thing.
    I think Chai is right as well. You won't fix it simply by 
passing laws. You have to ensure that you create incentive 
systems that allow for these laws to be used effectively, and 
part of that is increasing transparency and having the right 
data points and allowing the right people to know about it and 
which will, itself, generate change.
    Our Best Places To Work rankings, Hank Paulson at 
Department of Treasury, held a day-long session in which he 
brought together all of his top managers to talk about how to 
improve their rankings in the Best Places ranking. Senator 
Kempthorne did the same thing.
    These things could not happen but for the fact that they 
are being ranked against each other and that the data exists. 
It is a very powerful. Tim Zagat, who started Zagat's Guide, 
got it right. That is very powerful stuff, and we need to see 
how to apply that power to driving the kind of change that we 
want in Government.
    Ms. Feldblum. Like that Zagat survey for Federal employees. 
But actually, I agree that there is talent, talented managers, 
passionate managers in the Federal Government. I mean, I have 
seen managers in the private sector who have gotten it, that 
integrating flexible work arrangements into their enterprise is 
going to help their bottom line.
    We have survey after survey that actually shows that, and 
in fact, in terms of some of this data collection of the 
Federal Government doing its own collection and assessment, I 
think this is ripe for a public/private partnership in the 
research, data collection because there is some very 
interesting stuff going on in the private sector.
    So, yes, there are some very passionate, smart managers in 
the private sector. But I think what the Federal Government has 
going for it is that mission piece. We are here to serve. We 
are not here to increase the bottom line. We are here to serve. 
There are a lot of people in the Federal Government who are 
energized by that.
    It is about finding those folks, telling those stories, 
having it as part of a strategic, coherent plan of finding 
them, telling the stories, giving them the incentives. That is 
why I say it can't be the tagline. This workplace flexibility 
needs to be the headline.
    When I read the interagency task force report, I was struck 
by two things. One, as a group that has been running a phased 
retirement working group for a year and a half now and really 
digging into the statute, the regs and ERISA, the code, we have 
a good sense of the complexities around the statues and regs 
that need to be addressed, and they really did just do a little 
nod of it should be looked at.
    But the second reaction I had was workplace flexibility was 
there, but not highlighted in a way that I think could be much 
more effective, much more effective.
    The Chairman. So you both would say we, at the Federal 
level, are or are not, for the most part, a model of 
flexibility to encourage people to stay? We are or are not?
    Ms. Feldblum. I don't think you are yet in a way that the 
American public understands. I think there is a lot going on 
and a lot more going on in the Federal Government actually than 
in a lot of private sectors. But it is not marketed well to the 
outside. The private sector, one of the things that it knows 
how to do is market itself. So they market their flexible work 
arrangements.
    I think there is significant potential. It is not being 
leveraged yet in the way that it can be.
    Mr. Stier. I agree 100 percent, and the only thing I would 
add is also to address your prior question as well. That is 
that the hiring model in the Federal Government historically 
has been a career model. Someone would come in, spend 30 years, 
and then retire.
    The way the talent markets have changed and the way the 
demographics are currently existing for the Federal Government, 
the Federal Government has to move from that career model to 
what I would describe as a ``career builder'' model. I think 
the Career Patterns notion that OPM has presented is exactly 
the right approach to be thinking about multiple forms, 
multiple channels into public service.
    It is still the case, however, that that paradigm shift 
hasn't really occurred in practice in the Federal Government, 
and it needs to. So if you look at older workers, in particular 
more experienced workers, by and large, we are not seeing that 
much talent flow from the outside coming in. Again, you have 
those series of issues, series of problems that you will need 
to address in order to make that happen.
    Part of it is the marketing, but part of it is also going 
to be a culture change within Government. I think it is a very 
important culture change because right now we have a very 
insular workforce, and as a result, we don't benefit from the 
variation of ideas, the experimentation, the knowledge that 
exists by having multiple organizations contribute to a single 
organization, in this case the Federal Government's ability to 
get stuff done.
    That is true even within the Federal Government, where you 
have a lot of talent that stays put in single agencies or 
single pieces of agencies. The Senior Executive Service was 
originally created as a management group that was supposed to 
move across Government and be transportable. That, by and 
large, does not happen. Part of it is that, again, there has 
not been the incentive for those folks to move around.
    In the intelligence community, they have just adopted the 
joint duty model that the military has already adopted. So if 
you want to be promoted, you need to move around. I think those 
are the kinds of things that you could do to, again, promote 
the movement of talent in Government that would be quite 
constructive.
    We have huge opportunities, but they have not all yet been 
realized.
    The Chairman. Good comment. Any other comments either one 
of you would like to make on this topic?
    Ms. Feldblum. Marcy Karin, the attorney I mentioned, put 
together a timeline for me, which I would like to actually 
submit, again, as another appendix. But it was a really 
fascinating timeline from 1978 to now of stuff the Congress has 
done and agencies has done in this area.
    I just want to say that the Senate Aging Committee has 
been, in fact, an incredible catalyst for a lot of good work. 
Now, it needs to then connect with Finance, Homeland Security, 
Government Affairs, et cetera. But I have to say, reading that 
timeline said to me that what this Committee is doing is 
exactly right, and it is really about taking it now to the next 
step and moving with other committees, and Workplace 
Flexibility 2010 certainly stands ready to work on that.
    You can see I created this in 2004, and I put 2010 into the 
title of my organization to indicate that I didn't have ideas 
and policies now, but I was trying to facilitate a process that 
would get us someplace in 2010. I certainly hope this is a 
committee we will be able to keep working with to get to where 
I hope we get to.
    The Chairman. Well, on that high compliment for the Aging 
Committee, I think it is a good time to take what we have and 
thank you for being here. You have added a lot to the debate. 
We all know there is a big challenge ahead. I think that 
working together, we can accomplish a lot.
    So appreciate you being here. Thank you all for being here.
    Mr. Stier. Thank you very much.
    [Whereupon, at 4:13 p.m., the hearing was adjourned.]


                            A P P E N D I X

                              ----------                              


                 Statement of Senator Susan M. Collins

    Today's hearing highlights a critical issue: the challenge 
to effective and efficient government operations as waves of 
Baby Boomers in the federal workforce reach retirement age.
    In 2006, the Office of Personnel Management reported that 
about 60 percent of federal white-collar employees and 90 
percent of its federal executives would become eligible for 
retirement in the next decade. Retirements from the federal 
workforce have averaged more than 50,000 a year for the past 
decade, so we can only expect that the outflow of experienced 
and skilled employees will grow substantially.
    Today's witnesses from the Government Accountability Office 
will discuss their new study of the issue, which should provide 
valuable guidance for Congress as we consider ways to mitigate 
the impact of a demographic storm surge of retirements. In 
GAO's March 2007 review of the issue, we were advised that:
    Today and in the near term, the federal government is 
facing a retirement wave and with it the loss of leadership and 
institutional knowledge at all levels. Agencies not only face a 
fiercely competitive market for talent but hiring is also 
affected by uncompetitive salaries in some critical occupations 
and lengthy hiring processes.
    Our witnesses from OPM and the Department of Labor can 
provide additional insight into agency and policy options for 
addressing this workforce issue, and describe the work of the 
interagency task force on the aging workforce. The second 
panel, with witnesses representing the Partnership for Public 
Service and the Workplace Flexibility 2010 project at 
Georgetown University, can offer additional ideas to encourage 
older Americans to work in the Federal government and to help 
develop national policy promoting workplace flexibility.
    If the federal government can retain more of these older 
workers and attract others into federal service, it can ease 
the disruption of this demographic crunch and deliver benefits 
to taxpayers. Human-resources research has repeatedly shown the 
benefits of older workers in terms of their organizational 
knowledge, ability to work independently, commitment, 
productivity, flexibility, and mentoring ability.
    Making good use of their talents is, therefore, not 
charity. It is common sense and sound management. Federal 
agencies recognize the value of older workers, as witnessed by 
the fact that nearly 4,500 retirees have been allowed to return 
to full-time work on a waiver basis.
    Agencies could make use of even more federal annuitants for 
short-term projects or part-time work, but for a disincentive 
embedded in current law. The law mandates that annuitants who 
return to work for the federal government must have their 
salary reduced by the amount of their annuity during the period 
of reemployment.
    Last August, I introduced S. 2003, cosponsored by Senators 
Warner and Voinovich and referred to the Committee on Homeland 
Security and Governmental Affairs, to correct this problem. It 
provides a limited opportunity for federal agencies to reemploy 
retirees without requiring them to take pay cuts based on their 
annuity payment.
    Removing this disincentive to retiree service is a priority 
for OPM, and such a reform has also been endorsed by the 
National Active and Retired Federal Employees Association, the 
Federal Managers Association, the Partnership for Public 
Service, and the Council for Excellence in Government.
    To prevent agencies from relying too much on annuitant 
service to the exclusion of succession planning and bringing 
younger people into federal agencies, my bill would limit the 
calendar-period and lifetime hours that retirees could work. 
These limits will give agencies flexibility in assigning 
retirees to limited-time or limited-scope projects, including 
mentoring and collaboration, without evading or undermining the 
waiver requirement for substantial or full-time employment of 
annuitants.
    The bill would have no adverse financial impact. Reemployed 
annuitants would be performing work that the agencies needed to 
do in any case, but would not require any additional 
contributions to pension or savings plans. Meanwhile, the costs 
of their retiree health and life insurance benefits would 
unaffected by their part-time work. Even without making any 
allowance for the positive effects of their organizational 
knowledge, commitment, productivity, and mentoring potential, 
their reemployment is likely to produce net savings.
    Other statutory measures to promote workforce flexibility 
and to make more effective use of experienced older workers--
especially in the current period of unusual demographic 
transition--may need to be considered as well.
    I commend the Chairman and Ranking Member for organizing 
this important and constructive hearing. If federal agencies 
and Congress will take creative and effective steps to address 
the heavy outflows of experienced older workers from federal 
service, we can minimize any disruptions in efficient 
operations and in services for the public.

                                 
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