The Business of Government Hour


About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Kay Coles James interview

Friday, April 12th, 2002 - 20:00
Kay Coles James
Radio show date: 
Sat, 04/13/2002
Intro text: 
Kay Coles James
Complete transcript: 

Wednesday, December 5, 2001

Washington, D.C.

MR. LAWRENCE: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the Endowment by visiting us on the Web at

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation today is with Kay James, the Director of the Office of Personnel Management. Good morning, Kay.

MS. JAMES: Good morning, Paul. Thank you for having me.

MR. LAWRENCE: And joining us in our conversation is another PWC partner, Nicole Gardner, good morning, Nicole.

MS. GARDNER: Good morning, Paul. Good morning, Kay, it's a pleasure to be here.

MR. LAWRENCE: Well, Kay, perhaps you could begin by describing for our listeners what the Office of Personnel and Management's missions and its activities are.

MS. JAMES: Well, thank you, and I appreciate the opportunity to do that. As a brand-new director of the Office of Personnel Management, I've had many opportunities in recent days answering questions from friends and relatives and coworkers; what is OPM and what are you doing anyway?

The office, and the way that I always describe it that best helps people to get their hands around it is, if you were the CEO of a major corporation, you would understand that probably one of your most important team members would be the senior vice president for human resources because that's the person that's going to focus on getting the right people for you to get your job done. And I am the President's senior manager for human resources in the federal government.

The Office of Personnel Management is tasked with the strategic management of human capital for the federal workforce. We have some core things that we do that I think are so important for people to understand.

First of all, if you're a retired federal employee, it's our responsibility to protect those trust funds and to make sure you get your check on time.

If you're a current federal worker, it's our job at the Office of Personnel Management to make sure that you have access to the appropriate training and for your evaluation and for assisting your managers to know how -- and to help the managers, as well, to be good employees.

If you're a potential federal employee, it's our job at the Office of Personnel Management to make sure that we have appropriate recruiting tools available to us and to your agencies to get you into the federal workforce.

If you're a veteran out there, you need to know that a part of our mission at the Office of Personnel Management, is to enforce the law within the federal workforce for veteran's preference.

It's out job to make sure that the American have the best and brightest individuals that are available to them to come in and work in the federal government.

MR. LAWRENCE: Could you give us a sense of the number of employees at OPM and what their skills are?

MS. JAMES: Well, certainly. Currently, there are about 3,500, approximately full-time, part-time, and intermittent employees at the Office of Personnel Management; most located here in the Washington area, but others spread throughout the country.

These are people who have a broad range of skills. They are analytical, they are writers, they are communicators, they are HR professionals, they are clerks. We have a broad range of skill sets that are necessary in order to do the job that we do.

MS. GARDNER: Kay, could you tell us a little bit more about your role as the director. You said senior vice president of human resources. But what's a day in the life of Kay like?

MS. JAMES: The day in the life of Kay is extremely hectic right now, I can tell you that.

The director's job, you know, as is the case, I think, with any senior manager is to provide leadership. Yes, there are the day-to-day operations that need to take place. But in looking at the President's agenda, it's my job to drive that agenda. As you probably are very much aware, the President is the first President with an advanced degree in management. And, as a result of that, he came in with a very strong management agenda. And at the top of his management agenda, although they are not priority ranked, but number one right now is the strategic management of human capital.

So, on a day-to-day basis, what I have to do is to make sure that every employee within the Office of Personnel Management and every senior manager within the federal government comes to understand that they must be driving that agenda; that we have to look at, are we attracting and retaining the best and brightest to serve the American people?

Are we protecting the federal merit system? Are we protecting the trust funds? And, is, you know is the strategic management of human capital, in fact, on the top of everyone's agenda in government right now? And so I do that in a variety of ways through the written word; through oral communication; through being the cheerleader for the federal workforce; through pressing our issues, internally within the Administration, on Capitol Hill, and to be the advocate of the federal workforce every opportunity I have.

MS. GARDNER: This is a really mission-critical opportunity for you. How did you get there? Can you tell us a little bit about your career and how you arrived at this very important post?

MS. JAMES: Well, certainly, and I have found that I am probably the worst person in the world to ever have at a career fair to talk about how you plan your career, because mine was certainly unplanned.

I entered government as a policy advocate on behalf of certain things that I really felt strongly about and wanted to advocate on behalf of. I became involved in the political process because I thought it was important to go out and work for candidates that I admired and respected and whose policies that I agreed with.

Having done that the first time and the first presidential election that I ever worked in was that for Bush 1 or 41 and 43 -- no 41, let's get the numbers right. And having done that, it was amazing to me after it was over that I was approached by the transition team and said, you know, would you like to come in and help the President make his vision a reality for this country? And I was completely surprised, because I didn't realize that having gone out and worked for values and principles and for people that I admired and respected, that the next step would be, then, to come in and be a part of helping to implement those policies.

So, I was a little taken aback by that. But I responded to that because I think I feel very strongly in the citizen's responsibility to come in and to serve and I think that those individuals in the private sector have a responsibility that, when asked by our government to come in and serve; to do that for a period of time. And, yes, there are sacrifices to be made, but that's why they call it public service.

So, I came in as assistant secretary for the U.S. Department of Health and served in that capacity. Having done that for a while, went out and did something very interesting when I had the opportunity to be the chief operating officer for a new initiative, which was starting up in Washington at that time, the one-to-one partnership, which was a program designed to bring corporate America into partnership with those individuals within our community that needed mentoring. And so, it was a privilege to do that and I got the call to go back into government to serve in the White House Office of National Drug Control Policy, to be their coordinator for state and local affairs; serve the President there.

At the end of the Administration, went back in, then to the nonprofit sector and worked in a think tank. When I received the call from a newly elected governor that said, would you come to Virginia and help us do welfare reform and health care reform. And I had the privilege of serving a governor that I think it was -- it truly was a privilege to serve George Allen, he is quite an individual, a great deal of character and integrity. And I was able to serve him.

And after that, the joy of my life was being the dean of a school of government at Regent University, where I had the opportunity to be in the classroom and influence the next generation of potential leaders to go into government. And I was given the opportunity and someone posed a question to me: Kay, if you had the chance to spend two years doing exactly what you wanted to do, what would you design and what would that look like?

And at that time, I really saw, and it was prophetic in a way, I really saw an opportunity to go out and to encourage the American people about our responsibilities to be involved as citizens if we want good government. And so, I had the privilege of going to the Heritage Foundation and heading up their citizenship project for two years before getting the call from this President and being asked what I would like to do, how I would like to serve.

And in those conversations and through a series of meetings, it was determined that it was a good match for me to go to the Office of Personnel Management to be the President's chief personnel officer, to help him implement what he saw as one of his top priorities, the strategic management of human capital.

I believe that it's going to require, in order to be successful in that area, a consensus builder; an advocate; a leader; one who's not afraid to take risks; one who will push the agenda and I am delighted that the President has entrusted me with doing that on his behalf.

MR. LAWRENCE: You have a very interesting career. As I was keeping track, you worked in the public sector, in the private sector, in the nonprofit and you also have the unique experience of working at the state level and at the federal level. MS. JAMES: And there's even some corporate thrown in there that I didn't even mention.

MR. LAWRENCE: How would you contrast the culture at, say, the state level of government and at the federal level of government?

MS. JAMES: Well, I actually very much enjoyed the state level service, because, at the federal level, very often, what we did was do oversight of programs. At the state level, we actually ran the programs and had the opportunity to see, close up and personal, the decisions that we made and how they affected peoples' lives. And sometimes, I think it's good for policy-makers in Washington to actually have to go run some of the programs that we have oversight of and that we dole out the finances to.

MR. LAWRENCE: That's a good stopping point, we're out of time, so let's go to a break. Come back with us after our break, as we continue our conversation with Kay James, director of OPM. When we come back, we'll ask her about the human resources flexibilities contained in the new Freedom Through Management initiative. This is The Business of Government Hour. (Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with Kay James, Director of the Office of Personnel Management. Joining us is our conversation is another PWC partner, Nicole Gardner.

MS. GARDNER: Kay, President Bush, when he announced his reform package, included the Freedom to Manage initiative. Can you talk to us about some of the human resource flexibilities that's provided for in this initiative?

MS. JAMES: That particular initiative evolved out of the President's concern that managers have the tools they need to manage. And as we looked around government, there had been some interesting pilot programs and projects that had been tested and found to be excellent. And the President thought that we needed to expand those flexibilities so that they would be available to all agencies.

And so those flexibilities included things, like recruitment bonuses, the ability of a manager, if they saw a key individual and they wanted them a bonus to join federal service; that's something that's done in the private sector fairly often, and we wanted that flexibility for managers in government.

Retention allowances, where there's a key individual who is central to the core mission of an agency and we wanted to offer the agencies the opportunity to offer him or her a bonus in order to stay --special rates to offer salaries of a slightly higher rate to some key positions within government, as a tool for attracting and retaining the best and brightest.

We also wanted to make sure that we offered some of those things that we have to compete with the private sector for and the government ought to have the ability to do that. Things like academic degree training and being able to get reimbursed for that kind of training if it is essential to your job and helps you for your core mission.

There's always a favorite with federal employees, and employees anywhere and it should not be failed to mention, which is frequent flyer miles. The people sometimes find it amusing that, in federal government, that employees were not able to retain those miles after having stood in those lines and sat with their knees up against their chest on cross-country flights and, given it all, that they ought to be able to keep those frequent flyer miles.

We were also able to do something for our senior executives. And there was a very, sort of technical thing that prevented our some of our senior managers from receiving their entire bonus package within a calendar year if they bumped up against a salary cap. So the President wanted to give the flexibility to remove that cap so that they could receive them.

Those are some of the kinds of things that are wrapped up in that Freedom to Manage initiative. And, incidentally, I am very hopeful that we will see this broad base of support across party lines. You know, one of the pleasantries about this job is that the federal civil service has strong advocates in the House and the Senate on both sides of the aisle, Republicans and Democrats. And so, I am confident that in the interest of the federal workforce, these flexibilities will be granted.

MR. LAWRENCE: I guess I'm going to ask what are the goals of the legislation? And what I'm curious is, how do you think these flexibilities will impact federal agencies?

MS. JAMES: Well, the goal, you know, that the President has articulated is that he is very hopeful that this will push the decision-making down to the line managers. They need to be the ones to have the flexibility to determine if, in the situation that they're dealing with they want to offer a retention bonus; they want to offer a relocation bonus.

You know, sometimes when we have these hard and fast, rigid rules that are at the top of an organization and the manager on the line knows better than anyone when we need flexibility to sort of alter or depart from those rules. And so, that was the purpose. The goal is to push decision-making down to those individuals who are on the line who will be in a position to attract and recruit and retain the best and the brightest.

And I'm hopeful, that by giving mangers this greater flexibility, that they will be able to use that to address some of the shortages that we see happening on the horizon in the federal workforce.

MS. GARDNER: Kay, accountability is a big issue for managers, no matter whether you're in the private sector or the public sector. How is OPM working with the other agencies to build accountability into the HR processes to ensure that they're actually following through on some of the terrific things that you're talking about?

MS. JAMES: Well, every manager knows that if you want accountability what you do is you measure it and you set goals and then you measure whether or not those goals are attained. This President believes in that, as well.

So, this President has set up for all of his five key management agenda items, a scorecard. And so we have a matrix that we will be using with red, green, and yellow; red being, we're in trouble; yellow is, hmm, you're almost in trouble; and green is you're doing fairly well or okay.

And so with the strategic management of human capital, we're actually going to measure how we are doing in that particular area. And the Office of Personnel Management has been working and will be releasing this week to some of our federal agencies, some guidelines for what excellence looks like in this area. If you are doing this, this, this, and this, then you will be quite a far way along the path of achieving a green score in that particular area. So, that's how we know we're serious, because we're going to measure it.

MR. LAWRENCE: Give us a hint, I know the red, greens, and yellows aren't out yet. But give us a hint. Tell me if my perspective is correct. My sense is when you looked at the items on President's management agenda, human capital issues have been described as a crisis. Others, I don't think quite have that word. Is it correct to say that human capital should begin further back, I think? I mean?

MS. JAMES: Well, you know the term "crisis" may not have been applied to all of those. And I'm not sure, incidentally, that it should have been applied even to human capital. I think we have a human capital opportunity here and the right understanding of where the federal workforce is, I think, helps us to understand that. And I think we have some tremendous opportunities in the other areas as well.

But does human capital cut across all of those other management agenda items? It certainly does because you cannot begin to talk about financial accountability and competitive outsourcing and the other parts of the President's management agenda without understanding that if you don't have knowledge workers who are capable of either overseeing or managing those programs that none of them can be successful.

So, I think that the strategic management of human capital is a crosscutting issue that will determine the success or outcome of everyone of the other management agenda items.

There are those who have said that we are standing on a burning platform and that if we don't do something that this government is going to have very serious conditions. Now, that I believe to be the case.

But I think, interestingly enough, September 11 has sort of changed the environment in which we operate. As an example, one of the things that we saw as a huge detriment to attracting people to come into the federal workforce is the very low image that people have of their federal government and of the federal workforce. I think with the visibility that people have had in the last month or two of the federal workforce, the current data tells us that there is more trust in government and a heightened awareness of the kinds of work that we do. So that issue isn't quite as pressing as it used to be.

The other thing that we have seen is that, in certain job categories and with certain agencies, the applications have just doubled and, in some cases, tripled, so a larger problem that we are facing internally with OPM right now, is building capacity in order to deal with the influx of people who want to come into federal service. The other element that we've seen since September 11, is the number of patriotic retirees who are a wealth of experience and knowledge and wisdom, who have served their country with distinction, who have said, in this time of crisis, if my country needs me, I will return to federal service.

And we actually have a website set up where those individuals are coming in and we're getting enormous hits on that. And the applicant pool of retirees who want to return to federal service has been -- it's been really heartening, there are many, many patriots out there who are willing to serve their nation in this time of war.

So, right now, instead of the problem being quite how do we attract more people, the problem tends to be more how do we go out and target the right people and how do we process the overwhelming numbers that we are now seeing of people who want to participate in federal service and, quite frankly, as the economy continues to turn, whenever there's a downturn in the economy, people see the opportunity to work for the federal government, or state government, any government, as a little bit more security than going out and working for a startup company and/or a company that could be, potentially, having problems and doing layoffs.

And so, in a down turned economy people seek more security and, you know, quite frankly, as someone told me at holiday reception, you know, like, Kay, really I want to work for the federal government because if the federal government is ever in trouble, we're all in trouble anyway, so, I think there's a certain amount of security that people see, and so for all of those reasons, I see us right now, having a tremendous opportunity to identify and attract the best and brightest to serve their country in a time of war.

MR. LAWRENCE: Well, it's time for a break. Rejoin us after the break as we continue our discussion with Kay James, Director of OPM. We'll ask her how she manages and coordinates the relationship OPM has with the other government agencies. This is

The Business of Government Hour. (Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence a partner at PricewaterhouseCoopers and today's conversation is with Kay James, Director of the Office of Personnel Management. And joining us today is another PWC partner, Nicole Gardner.

MS. GARDNER: Kay, you've given us an incredibly refreshing and very forward-looking vision of what it means to be at OPM and in HR in the government today. But there are a lot of changes that are going to be happening. And can you sort of talk to us about how you're going to help the people in the other agencies and the HR world and, also, some of the challenges that you're facing?

MS. JAMES: Certainly, certainly. One of the tools that we have available to us for management is something called the Human Resources Management Council. And that's made up of the senior HR people from all across government. And, as we meet with that council, I continue to ask them about what kinds of tools do they need in order to step up to the plate for the new paradigm.

I also, as I am going out and challenging the managers that it is imperative, if you are going to be successful in accomplishing your core mission within your agency, you must spend somewhere between 40 to 60 percent of your time on the management of human capital.

Every executive that I have talked to, from the corporate world says, if I am successful, I am spending somewhere between 40 to 60 percent of my time on the strategic management of human capital. So, I am pressing them to focus on succession planning; to focus on what their organization should be structured like; what should it look like in order to accomplish the mission; to do long-term strategic planning about the people that you will need to accomplish your mission.

Having said that, then I have to turn to the HR community an say, if we are going to tell our senior managers that you must be involved in the strategic planning for your agency, then when you are invited to the table you must be prepared to talk the talk that will be happening around that table. In other words, HR people have to be strategic thinkers, not just folks who fill out forms and answer questions about benefits.

Personnel managers have to be long-term planners. They have to be very conversant with and be able to maneuver their way around a very complex budget document. Incidentally, a budget is nothing more than the price tag on the things you want to do. And if you're going to put a price tag on the things you want to do and you have a clear vision of what that is, you also have to know what kind of people you're going to need in order to get that done.

So, sitting at the table, making key decisions about what's going to happen within an agency, needs to be the chief financial officer, the chief human resources manager, the chief operating officers. These are the core players that need to be there. So, I'm telling our HR community that when invited in be prepared to do some heavy lifting.

MS. GARDNER: What kind of training are you offering them to get them to be able to be competent in doing what you're saying?

MS. JAMES: Well, as an example, we have coming up fairly soon some training for the senior managers all across government, not just HR professionals, on the President's management agenda, so that they will understand it. They will understand the scorecard, they will know what the measures are. And they will be able to come up with some strategic planning on how to do it. We've asked our Federal Executive Institute to begin to develop programs that will help managers, HR managers, but all managers to be conversant with the budget; to be conversant with long-term strategic planning techniques; to understand the implications of competitive outsourcing and what that means and what kind of knowledge worker. So we are revamping our training internally, as well, to make sure that the HR managers and, indeed, all managers, have the appropriate tools in their tool box to get the job done.

MR. LAWRENCE: Could you describe OPM's role in dealing with the other HR professionals in the other agencies of the federal government. I've heard it. I've heard different verbs used. I've heard regulate, I've heard monitor, I've heard coordinate; I'm just sort of wondering, when you talked about the council �

MS. JAMES: And the answer to your question, Paul, is yes. We do all of that. But we do it with a smile. Yes, we have oversight responsibility. And we have some statutory authority, which we are, you know, required to do in terms of monitoring and oversight. We also, however, view ourselves as counselors and as consultants to the agencies. And that may be may be even a little bit of a paradigm shift, as well.

You know, it's been interesting to me to talk to some of the senior managers in agencies and they say we are told that we can't do this and it's impossible to do this and it's because of OPM. I said, describe to me what your problem is and then what I have been doing around the agencies is putting together a team of experts that can help any agency and we will go in as consultants to say, explain to me what it is that you want to get done. We will help you within the context of the law, within context of the merit system protecting veterans' preferences, making sure you have a diverse community and workforce.

Within that context, we will help you get done what you need to have happen. And so, yes, we monitor, we consult, we have oversight, and all of those functions describe what OPM does.

MS. GARDNER: What are some of the challenges you have in terms of dealing with cross-cutting HR stakeholders in some of the other agencies? What are the challenges that you face and how do you address them?

MS. JAMES: Well, you know, it's interesting. Sometimes when you go out into middle America and people talk about the federal workforce, it's as though we're one -- and I even hear this sometimes in conversations and discussion on Capitol Hill and even within the Administration: the federal workforce. And, yes, there is some entity called the federal workforce. But I think you've hit upon something very important.

Can you imagine the difference in the kinds of work, the scope of work that's done at an agency like NIH and what's done at NASA? I mean, their missions and the types of work they do are so different. The kinds of workers that they need may be very different. And so, yes, while there is unity. Within that unity there is a great deal of diversity. And so I think OPM has to be nimble and flexible and while protecting the core vision and the core values of what the American people expect out of us, we have got to allow the flexibility of those various agencies.

It is really, sometimes, almost mind-boggling and you almost have whiplash as you move from one agency to another. And I think the, you know, if someone can understand the distinction between running a research institute and regulating a child care industry -- I mean, those are such different that sometimes it can be very mind boggling. And so I think the key to that is flexibility and a consulting role where we go in understand the work and the mission of that particular agency and figure out how to take the things that Congress has dictated and that are expected of us by the American people, and then translate that for that particular agency.

Therefore, there is never a dull moment and any person who works in the HR field at OPM has to be incredibly flexible to work in so many different work environments and to make the things that we do real and relevant in such complex and different arenas.

MR. LAWRENCE: Let me just ask a tactical management question: How do you communicate all these new ideas and the new initiatives? I mean, you simply can't meet with everybody. I know you're very busy, but there's just not that much time.

MS. JAMES: Well, you know, thank goodness for the technology age. We have an extraordinary website that we encourage people to visit and to use. We use the medium, like we are today, through radio and through television. The director has a very active public speaking schedule to get the mission out and to provide leadership.

But beyond that, it's done through many councils, like the Human Resources Management Council and others within the agency. We have taskforces. And probably the most effective tool is one that the President set up, which is the President's Management Council. And I think your listeners would be interested to know that the President has designated in every one of these agencies, a chief operating officer, who is responsible for the operations of that agency and we meet once a month and come together as a management team to talk about the issues that are relevant for running this organization. So, that is another vehicle that sort of drives the agenda and provides the leadership for getting this done.

MS. GARDNER: Kay, you mentioned the President's Management Council. And there are some important initiatives that have come out of that, the e-gov activities. What role is OPM going to play in improving the effectiveness and efficiency of the government?

MS. JAMES: E-government is a very good one to talk about, even as it relates to OPM, because we are tasked with providing leadership on several of those particular initiatives. The President has, as the lead on that, an extraordinary man by the name of Mark Foreman, who is providing the leadership on e-gov.

Our piece of that is, as an example, we have leadership on, and I'm almost embarrassed to say to your listeners that the federal government is still operating on a paper application system and that all of these very diverse agencies that I talked about, have their own independent systems. We have been tasked, as an example, with providing leadership on the e-government initiatives that will look at how we can centralize that, streamline it and make it more customer friendly and service oriented. But we have to do that on a variety of areas and e-gov is just one.

MR. LAWRENCE: Well, it's time for a break. Rejoin us in a few minutes as we continue our conversation with Kay James of OPM. In our last segment, we'll ask her about the impact of the expected retirement wave on the federal government. This is The Business of Government Hour. (Intermission)

MR. LAWRENCE: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner in PricewaterhouseCoopers and today's conversation is with Kay James, Director, of OPM. Joining us in our conversation is another PWC partner, Nicole Gardner.

MS. Gardner: Kay, you've got a great vision and a lot of activities going on. Can you tell us how you look back and say, what does success look like for Kay James and OPM?

MS. JAMES: Oh, good question. Well, I think there would be several measures for me. One, the President has made it clear, he's got his scorecard and he has delineated, you know, what looks like success from his perspective in each of those areas. So, when I see green marks down that card on the President's management agenda, I know that that's what success looks like.

There are other things that are important, as well. When someone applies to the federal government and it doesn't take six months to hear whether or not they have a job, that's what success looks like.

When employees who work for the federal government say, this is the best working environment that I could possibly have, that's what success looks like to me.

When the American people hold the federal workforce in high regard for the valiant patriots that they are and we can improve the numbers and the public perception about the federal workforce, that's what success looks like for me.

When OPM is operating as a world-class organization and people in the private sector are looking to us for best-practices, that's what success looks like to me.

MR. LAWRENCE: We've heard a lot in the press and from speeches about the expected wave of government retirement. And so I'm curious what kind of challenges this presents to OPM? MS. JAMES: It's a huge challenge, but not an insurmountable one. People sometimes get confused when we talk about the fact that we have this wave of retirements -- potential -- and let me just quantify it for you. You can imagine if you were taking over as a corporate CEO and someone told you that some 50 percent of your workforce could potentially be leaving in the next 5 years, what the implications of that for you would be. Well, that's somewhat the position that we're in right now.

Having said that, I'm not sure that those numbers will exactly pan out for some of the reasons that we talked about in one of our earlier segments. We're in a different and new environment. And all those individuals who are eligible for retirement, may not, particularly at the time when they are eligible.

But having said that, I do believe that we are losing knowledge workers, experience, skill, wisdom and that the federal government must, and every manager within federal government, not just the director of OPM must have, as a priority, how we are going to replace those workers. And so, we are developing strategies on an agency-by-agency basis in order to do that. But it is a huge, huge problem.

MR. LAWRENCE: What are some of those solutions, because I think, as you indicated, it's not just getting more bodies in, it's also the knowledge, as well?

MS. JAMES: That's exactly right, so we have to figure out how, within our current system or perhaps, even, with some major civil service reform, how to attract mid-level people from the corporate environment to come in and give some time to the federal workforce. We have to change our way of thinking about who a federal worker is. Because our system is designed, incidentally for someone to come in through an entry-level job, stay in grade and work hard and eventually, after 30 years, you know, reach some level of success, and then they retire.

Well, that's not what the workforce is like today. And so our system is not designed to be welcoming to someone who's coming in mid-career who's accrued vacation leave and a certain level of salary in their area of expertise. And so, we must look at some of those things to figure out how we change that to make it a welcoming environment, not just for the person coming right out of college or graduate school, but someone who's doing a mid-career job change.

MS. GARDNER: What are some of the key skill sets that you think are lacking in the federal workforce today that you need to develop frameworks for attracting? We've talked about, you know, the fact that people may not retire, but there's also the challenge of refreshing the workforce and making sure?

MS. JAMES: Absolutely and, you know, the good news is that we have a broad array of talented people who are currently working. We just need more of them. We need a knowledge worker. And what I mean by that, incidentally, is the old federal workforce was basically made up of clerks, in the very early days, who processed paper. Well, we don't process paper anymore. We have technology that does that. So we are looking for every job category that you could think of as a knowledge worker. We're looking for policy analysts; we're looking for individuals who know how to have oversight and do negotiations for contracts. We're looking for individuals who are scientists, who are attorneys, who are engineers. And a lot of times when people in those job categories are thinking about employment, they don't first think of the federal government.

We're looking for doctors, lawyers. We're looking for a broad array of individuals. Also, we're looking for the young person right out of college, who may want to start at a lower or mid-level and come in and have the opportunity to hone their skills, have new experiences before they may want to go out and do something else in four or five years.

That's a change. It used to be that someone came out and sought an opportunity where they knew they were going to be at the same place for the next 30 years. Our college graduates and grad school graduates are telling us now, maybe four to five years and then they're looking for something that could be interesting, where they could make a difference, where they could improve their skills, and then they'd like to go do something else. Our system is not designed to accommodate and reward that. We're not designed to accommodate and reward someone in their mid-career that wants to come in and serve their country, bringing their knowledge and expertise.

In fact, in many cases, not only do we not reward them for doing that but our system is designed, somehow, to discourage that. You know, through some of the things that are there, naturally, for ethical reasons, you know, in terms of stock portfolios that someone may have or accrued vacation, which they can no longer use. We actually do not reward people coming into federal government. In some cases it's very difficult and people can't, in many cases, make those kinds of sacrifices. We've got to address those issues.

MR. LAWRENCE: Well, what changes need to be made? In addition to the professions you described, one of the areas where we see a lot, both in the private sector, as well as the public sector, is the technology workers. They're difficult to attract, and then once you attract them, they need to be retained in special ways. And so, what changes can be made for those and the folks you described?

MS. JAMES: Sure there are several changes that we already have in place. You know, there is the opportunity to do special pay rates for certain job categories. We can pay retention bonuses when we see a very special person that we want to attract to federal government. We can pay relocation bonuses if we need to bring them here from Silicon Valley. There are things that we can do and those flexibilities are currently in the President's management agenda that we're hopeful that we'll get through Congress during the next session.

MS. GARDNER: Kay, I'm a young person, I've graduated from college, I'm thinking about my life and I'm thinking about, maybe I should consider public service. Talk to me about what does it mean to do that and why I should?

MS. JAMES: If you were a young person out there right now with a renewed sense of patriotism that exists within our country and many young people are, for the first time thinking, you know, I never thought about serving my country that way. Maybe I can't go fight on some distant battlefield but I can serve my country in some very concrete and real ways. And so, if you are a college student out there or a graduate student, I would say that one of the first things you need to do is to visit our Web site, which is There's some 16,000 opportunities to serve right there.

That is as important as serving in the military. It is called the civil service. We have our military forces and we have our civil service. And there used to be a time in our country when people saw that. Giving up a portion of your career to serve your country in the civil service was a noble calling. I think that we need to return that sense of nobility today. And I would appeal to you and your sense of service to say that you can serve your country, you can serve America by doing that.

Bring those skills, bring that creativity, and bring that energy that you have to the federal workforce. And when you do, you will find that there are some unique opportunities that you cannot find in the private sector.

There are things that the federal government does that no one else does. And so they will be unique and they will be different. You will be challenged, you will be stretched, and you will have the opportunity for training. You will have the opportunity to grow as a person and serve your country, as well.

And those opportunities are there, they exist. And so, I would appeal to you and to your sense of service, to your love of country, and for the opportunity for you to grow as a person and to develop your skills and to use your knowledge base for the good of the American people. And that's what I would say to you.

MR. LAWRENCE: Well, Kay, that's great. I'm afraid we're out of time. Nicole and I want to thank you for spending this time with us today.

MS. JAMES: Oh, thank you very much.

MR. LAWRENCE: And did you want to mention the Web site once more, in case I'm all wound up to join now?

MS. JAMES: I sure do. I hope that everyone will take the opportunity to visit, and spend some time there and look at the opportunities that exist to serve your country.

MR. LAWRENCE: This has been The Business of Government Hour, featuring a conversation with Kay James, Director of OPM. Be sure and visit us on the Web at There you can learn more about our programs and research and also get a transcript of today's fascinating conversation. Again, that's

This is Paul Lawrence, see you next week.

Kay Coles James interview
Kay Coles James

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