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.

Nancy Kichak interview

Friday, February 9th, 2007 - 20:00
"We provide direction on workforce planning, employment, pay, benefits, performance management, training policy, work-life programs, and labor relations."
Radio show date: 
Sat, 02/10/2007
Intro text: 
Human Capital Management...

Human Capital Management

Complete transcript: 

Originally Broadcast Saturday, February 10, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness.

You can find out more about the Center by visiting us on the web at

And now, The Business of Government Hour.

Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. Our special guest this morning is Nancy Kichak, Associate Director, Strategic Human Resource Policy, at the U.S. Office of Personnel Management.

Good morning, Nancy.

Ms. Kichak: Good morning.

Mr. Morales: And joining us in our conversation is Ed Vitalos, associate partner in IBM's human capital practice.

Good morning, Ed.

Mr. Vitalos: Good morning, Al. Good morning, Nancy.

Ms. Kichak: Thank you.

Mr. Morales: Nancy, perhaps you can start by giving our listeners a general overview of the history and mission of the U.S. Office of Personnel Management.

Ms. Kichak: Well, the Office of Personnel Management is very proud of its history. We're the successor agency to the Civil Service Commission. The Civil Service Commission was created in 1883 to end the corrupt spoils system, and to establish a merit-based civil service.

The assassination of President James Garfield in 1881 by a disgruntled jobseeker proved to be a crucial catalyst for civil service reform. One of the first commissioners of the Civil Service Commission, once it was established, was Theodore Roosevelt. He served for six years. If you come to the OPM Building at 19th and E Street, you will see a display of a desk and a typewriter and other things used by the commissioners of the Civil Service Commission during his era. So we call our building the Theodore Roosevelt Building, and we are very proud of our association with President Theodore Roosevelt.

In the late 1970s, there was a renewed impetus for the 20th Century approach to civil service reform, leading to the Civil Service Reform Act. At that time, Congress approved Jimmy Carter's reorganization plan. The plan abolished the Civil Service Commission and divided the functions into two agencies: OPM and the Merit Systems Protection Board. OPM continues to serve in that capacity. Its mission is to ensure that the federal government has an effective civilian workforce.

We accomplish our mission by providing human capital advice and leadership to the President and federal agencies, deliver human resource policies, products, and services, and ensure compliance with merit system principles.

Mr. Morales: Nancy, can you give us a sense of how OPM is organized, and give us a sense of the size of the budget, the number of full-time employees, and a sense of the geographic footprint and the interaction with other federal agencies on the matters associated with the federal workforce?

Ms. Kichak: Okay. OPM has seven major divisions: the Strategic Human Resource Policy Division -- we call ourselves SHRP, and that's the division I head. The Human Capital Leadership and Merit System Accountability Division -- a long name there. We call that HCLMSA. The Human Resources Products and Services Division, the Federal Investigative Services Division, and the Management Services Division, the Chief Financial Officer, and the Human Resource Line of Business.

Like every other agency, we also have a general counsel, congressional relations, communications. SHRP, again the organization that I head, leads the design, development, and implementation of merit-based human resource policies. We provide direction on workforce planning, employment, pay, benefits, performance management, training policy, work-life programs, labor relations; anything in the HR arsenal. We also have government-wide information systems that we provide direction to.

The Human Capital Leadership and Merit Systems Accountability Division leads the government-wide effort to transform human capital management so that agencies are held accountable for managing their workforce effectively, efficiently, and in accordance with merit systems principles. This division works closely with federal agencies, providing services, technical assistance, and current information across the range of human resource programs area.

Mr. Vitalos: Nancy, now that you have given us a good overview of what OPM does, could you just focus a little more on your own organization in terms of its size, budget, number of people that you have?

Ms. Kichak: Okay. I have a very small organization within OPM. I only have about 175 people working for me, but 175 people can do a lot of work. Okay? We have the Center for Talent and Capacity, and those are the folks that develop policies for hiring. We've done such things lately as category rating that help agencies when they hire folks group the candidates into categories so that you don't have to pick the top three anymore, you pick from the top category.

We have the Center for Workforce Relations and Accountability Policy folks. Those are the guys that work on our labor relations policy. And they've been very busy lately with the potential pandemic -- talking about what rights managers have to direct people to work at home or direct people to work at alternative work sites. I have a policy division that works on HR systems requirements, and they tell other agencies how to maintain the official personnel record, what format it should be in, what data it should have.

They've been very busy in the last year building requirements so that when we use other providers of HR services, they know exactly what requirements a provider must meet in order to sell their services to the federal government. I have a Leadership Policy division. I have a Pay and Leave Policy division. Those are the ones that give the instructions on leave under all sorts of circumstances, including when the government closes for snow, or when -- just very recently, the death of President Ford, we honored him with a day of mourning.

We have a division that works on performance management. You know, we've always done performance management in the federal government. But with new pay-for-performance systems, it's becoming more and more important that performance management be done well. I have a policy division that works on the policies for the Federal Employees Health Benefit program, and the retirement systems, and other work/life programs, telework, and things like that.

And then I have my data folks, and that's where my actuaries are. They negotiate the health insurance rates, and they report government-wide how many people are employed, what occupation they're in. So it's 175 people that do a lot of work.

Mr. Vitalos: Quite a bit. Now that you have given us a good overview of OPM and then the Human Resources Policy division, can you tell us a little bit about your career. Where did you start, and how did that path lead you to OPM?

Ms. Kichak: I started with NASA. I'm one of those folks who took a civil service exam, and based on the score, I was offered a job as a contract negotiator with NASA. And I spent a year there, and it was an exciting place to work. But I had wanted be an actuary. So after that year was up, I resigned my job at NASA and was going to work for a private company. And a person in the NASA organization who knew of my work came to me, and said, you know, the government needs actuaries, too, and my next-door neighbor and I talk about this when I mow the grass. And they are looking for actuaries at the Civil Service Commission. Would you be interested?

And of course, I already had a year in the government and I liked government service. So I went to the Civil Service Commission 35 years ago, and started studying to be an actuary. So I was the chief actuary at OPM until OPM reorganized and created the policy division about four years ago, and I was working there in charge of the entire data, not just the actuaries. And the head of policy became available, and I got the job, and I'm glad I did.

Mr. Morales: Nancy, I am curious. You've had a fantastic career with the government, but I always like to ask my guests -- how was your previous experience, these 35 years, prepared you for your current leadership role and shaped your approach to management and your leadership style?

Ms. Kichak: I think the fact that my main career prior to entering the policy field was in the actuarial field; a very highly financial-based, analytical-based profession, it helped me a lot. First of all, one of the things that we are dealing with at OPM, and I think throughout the government right now, is a very constrained financial situation. So I am able, as a leader, to focus more on budget than maybe previous managers.

The other thing is that coming out of the -- really the benefits area, as an actuary, I am bringing a fresh approach to the HR system. In other words, I know how government works because I've been there a long time. But when I look at HR policies and practices, it's new to me. So I have a different perspective than the folks who work for me who have a ton of experience. So new perspective from me, and good knowledge from them. I think it's a very good situation.

Mr. Morales: What are the federal government's strategic human capital priorities? We will ask Nancy Kichak, Associate Director of Strategic Human Resource Policy at the Office of Personnel Management to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Nancy Kichak, Associate Director of Strategic Human Resource Policy at OPM.

Also joining us in our conversation is Ed Vitalos, associate partner in IBM's human capital practice.

Nancy, your organization is responsible for the Federal Human Capital Survey. Could you tell us a little bit about how you use this survey, and discuss other ways you collect information to help improve the management of human capital?

Ms. Kichak: Yes. We surveyed in 2006 over 400,000 people. So we get a lot of information from the Federal Human Capital Survey. And we look at the results from it in four ways: we look at what it tells us about leadership; what it tells us about results-oriented performance; what it tells us about how we're managing our federal workforce; and we find out how much employees are satisfied with certain aspects of their job. We take that information and we give it to agencies, because agencies are the real site of transformation in -- of human capital.

And the agencies take those results and look at where they've done well and where they haven't done so well. We show them the comparison of their results to the government-wide average. We show them the things that they did best in and the things they did the worst in. And we show them where they've improved the most and where they've declined the most, so they get a wealth of information in these areas. And then they develop an action plan and go out and work with their employees to try to improve areas that they've identified that need improvement.

We're concerned at OPM about over-surveying, but it's always good to have information. So we do surveys on benefits alone to find out how employees like their benefits. We're doing surveys on child care subsidies to see if those are meeting the need that they were designed to meet. We do telework surveys to see if folks like their telework benefits, and if they're using their telework benefits. So those are the kinds of things we ask questions of the employees about.

Mr. Morales: Now, the Senior Executive Service performance-based pay system, which has been in effect since 2004 I believe falls under your purview. How does the SES certification process work? And can you discuss the connection between this effort and other pay-for-performance initiatives going on in the federal sector?

Ms. Kichak: I'm going to start with the connection for this pay-for-performance efforts and other efforts. This one is just something that's leading the way. It applies to all SES-ers. As you know, Senior Executive Service folks are the leaders in the federal government, and it's good to start with your leaders, because if it's good for them, then it's good for the employees. We at OPM set criteria that agencies must meet for their senior executive corps in order to be certified. They submit to us what their SES plan looks like, and show us how they've met the criteria.

Part of the criteria is that their performance plans for their senior execs must be aligned with the mission of the agency. You want your folks to be doing work that in some way supports what you're trying to accomplish. So we look at the performance standards, see if they've met the criteria, and if they have, we certify the system. If the system is certified, then the agency has authorization to pay senior executives in that agency above executive level III. So Senior Executive Service pay is capped at $154,600 if you're in a non-certified system, and $168,000 if you're in a certified system.

So you can see the incentive to get certified is very high, and almost all agencies are applying for certification. There are some agencies that only have maybe one or two execs and it's not worth their while to do so. We're hoping that this system will demonstrate that pay-for-performance is a good idea. We believe in pay-for-performance. And we've worked on legislative proposals in the past to get pay-for-performance government-wide, but frankly, right now, the Congress doesn't have much of an appetite for that.

We do have the NSPS -- National Security Personnel System. The DoD has. And they have legislation that allows them to do pay-for-performance. And they're implementing that, and it is also a very successful program. It's in phase two of implementation. Not everybody who's eligible has yet been converted. The system has had some court challenges, so it's not available to everyone. Right now if you're covered by a bargaining unit, you're not going to be covered yet under the NSPS system. So pay-for-performance is something that we think is a good idea.

We think the SES system will demonstrate that, and we'd like to get more history with that that shows its success. And there are other systems in the government that are doing pay-for-performance, but it's certainly not universal at this point.

Mr. Vitalos: Nancy, another new program at OPM is the Career Patterns recruiting strategy. Could you elaborate on Career Patterns in terms of how it differs from traditional recruiting, as well as how things like career pattern scenarios play into that framework?

Ms. Kichak: Career Patterns is one of our efforts to deal with the impending retirement wave for federal employees. We feel that we have to be more strategic in recruiting and retaining people for federal jobs, because just by the demographics of our population, we're poised to lose some very, very good people. And there's always strong competition for good folks. So Career Patterns is a way to identify different forms of employment, different things that will appeal to folks, and to make the agencies -- again the folks that are on the ground recruiting, aware of some of the ways they can structure jobs so they can appeal to a certain segment of the population.

For example, in Career Patterns, we are asking the agencies, do you want to hire a student? Is this job appropriate for a person just starting out, or a new professional, or mid-career, somebody at the end? Think about that. That way, you can target your recruitment to the folks that will best fit their job. We're also asking them to identify whether it's a job with high mobility or low mobility, and we're asking them to look at some of the flexibilities you have in the workplace. What about telework or work from home? What about part-time employment? What about alternative work schedules?

And if those are available, then use them as a recruiting tool and help you get the right person in to do the right jobs. That's the initiative we call Career Patterns. And we think it's appealing to a new workforce. We want to appeal to everybody. We want to appeal to the folks that are willing to do a 9:00 to 5:00 job, folks that want to move, folks that want to stay in place, folks that want to work in the office, and folks that want to work at home. And so we're just trying to make sure that all the flexibilities are on the table when we do our recruiting.

Mr. Vitalos: Very interesting. I recently heard the term called "career sculpting" in the private sector, and it sounds very similar.

One of the other major challenges that is facing all employers is rising health care costs. OPM has announced the premium rates for 2007 Federal Health Benefits Program. And the premium includes only a 1.8 percent rate hike, and that's the lowest since 1997. Can you give us some insight as to how this apparently low premium average increase was accomplished?

Ms. Kichak: Okay. Now, first of all, I am an actuary, so this is definitely my field. So you have to be careful that I don't get wound up and go on this topic for hours and hours. But we're profiting from some very, very good experience in the drug area. I think that frankly, the new Medicare drug program is doing a lot to educate people on the use of generics. We're finding more generics, more drug substitutions. So the trends that we estimated at the time that we set the 2006 rates didn't turn out to be real.

In other words, we overestimated the amount of money that was needed in 2006. So when we did our negotiations this past summer, we knew that we had reserves we could use to defray rate increases, and we used those reserves. This 1.8 percent increase follows a couple of years of much lower-than-average trends in the past. And I think the worst of the drug costs are behind us. That's been driving our costs for a very long time.

Mr. Morales: There's also been much talk about introducing consumer-driven health plans as a choice to the employees. Can you tell us about these plans, and give us a status on offering these plans to federal employees?

Ms. Kichak: Yes. We have two types of consumer-driven health plans in the FEHB -- the Federal Employees Health Benefits program. One kind is called the High Deductible Health Plan, where a health savings account is set up for you. That becomes your health savings account. If you don't use it for health care, it rolls over from year to year. Those plans are accompanied with a high deductible. High deductibles generally run around $800.

The idea is that you have $800 you have to pay out of pocket, and you have an account that is yours. And you have to decide whether you're going to spend that money in your account for health care or whether you're going to forgo certain services. Now, we don't want people not -- in order to save money, skipping things they need. So the deductible doesn't apply to certain well-care -- physicals and things like that. But before you take elective services, you have to decide if you're going to spend that money in your account.

The other kind of account has a health reimbursement account. And the only difference with those accounts is that although the account is set up on your behalf, if you ever dis-enroll, the money goes back to the program, not to you. The reason we have those is that they're a little cheaper since you don't get actual cash that you can carry with you the rest of your life if you don't use it, and because certain people that have Medicare coverage, et cetera, cannot have health savings accounts but they can be in plans that have health reimbursement accounts.

These plans are slow getting started. And we have over 4 million enrollees in the FEHB. Only about 25,000 of them are in these consumer-driven plans. But everything new starts out slow. So we have more plans every year since we started the program, and we think they're going to grow.

Mr. Morales: Interesting, interesting. Now, you've also implemented a new dental and vision insurance program for 2007. Can you describe how these programs work?

Ms. Kichak: Yes. We're really proud of our dental-vision. It became effective, required by the law, on December 31, 2006. And the first enrolments for the first open season are over 700,000. So it shows that employees and retirees really wanted dental-vision. The thing that makes it different than the regular FEHB is that the government does not make a contribution. This is 100 percent employee money paying the premiums. However, employees have the advantage that the premiums are paid pre-tax. So there is a tax advantage to them.

Our retirees do not have that same right under the tax code. We selected through a competitive process seven dental plans and three vision plans. Most of the dental plans are government-wide. We do have two of them that are local plans -- HMOs: GHI in New York, and Comp Benefits that is in the Mid-Atlantic region down through Florida. But otherwise, the plans that participate are nationwide. We ask -- and the plans agree, because there was a requirement, that there be no waiting periods. And the reason there are no waiting periods for services is we thought that would lock people in.

The hallmark of the benefit plans, the FEHB plans that we run -- and now these dental-vision plans -- are that every year there's an open season and people have choice. So there's no waiting, so that you can move freely, except for orthodonture. And that one is so expensive that we wanted to -- you know, the industry standard is that people stay in the area. The premium structure is a little different than for the FEHB. In the FEHB, we have a self-enrollment and a family enrollment. In dental-vision, we have a self, a self plus one, and a family. But it's been real popular. It's been more popular than we ever expected. And we're going to start to pay benefits and see how that goes.

Mr. Morales: That's fantastic. That's very fantastic.

How is the federal government managing an aging workforce? We will ask Nancy Kichak, Associate Director of Strategic Human Resources Policy at the Office of Personnel Management to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business Of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Nancy Kichak, Associate Director of Strategic Human Resource Policy at OPM.

Also joining us in our conversation is Ed Vitalos, associate partner in IBM's human capital practice.

Nancy, OPM leadership has been on record publicly on the challenge of the federal aging workforce. And we've talked a little bit about this in our earlier segment. Specifically, can you give us your perspective on this trend and its significance in the coming years?

Ms. Kichak: I think the federal government is like any other employer. We have a large group of people employed from the Baby Boom generation. It mirrors the demographics of the nation. And those Baby Boomers are getting ready to retire. We have -- as you just said, we've been on record of being concerned about this -- our director has talked about the retirement tsunami, and we've been working on preparing. We really have been able to cope with it in a lot of ways. Number one, it's happening gradually. I mean, we're definitely going to peak in retirements, we believe, between 2008 and 2010.

But it gets bigger every year. I mean, 2005 was bigger than 2004. So we've had some time to get ready for this. It's not like a cliff, it's a coming event. We have been working at this problem from two different angles. One, is there any way to retain the people that we have a little bit longer? And number two, how do we get new people in the door? So we're attacking it from both ends. We have some tools for retaining folks. We have retention bonuses that we can use. We can on very, very special occasions grant what's called dual comp waivers, which is a provision where if a person retires, they can come back to work under very limited circumstances and we will continue to pay their pension.

The law only provides for limited circumstances. So one of the things that we're working on right now within the administration is a proposal to be able to bring back retirees on a part-time basis and let them keep their pension. That will have to be legislated; it will have to get approval of the administration. It will have to go through the agency process. But we're very excited. We think that will help.

For those people who are at the end of their career and they don't want to work full-time anymore but they're not quite ready to completely hang it up, we think that's a good solution. On the other hand, as far as bringing in new people, we have a national ad campaign going that is making folks aware of federal jobs. We are targeting areas where there is higher unemployment, to try to get more applications into the federal government, and we're finding that that is a successful program.

Mr. Morales: Now, I understand -- and this may be related to the programs you discussed -- that OPM is interested in re-employing retired federal employees. Can you elaborate a little bit more on this?

Ms. Kichak: Right. Right now -- again, the laws are very restrictive. The law that we operate under lays out very specific criteria on when folks can come back and receive both their pension and employment. And we don't think that provides us enough flexibility, which is why we're working on the legislative proposal that I talked about sooner.

This is something that employees want. We hear about it all the time. The other problem we have is all of our programs are defined by law. Right now, there's an anomaly in the civil service retirement system pension law that if you go part-time at the end of your career, your entire pension is based on that part-time service -- under certain circumstances. So it is a disincentive for people to go part-time.

So we would like to have a way for people who want to retire to ease into retirement. We also want to retain people that aren't ready to retire.

Mr. Vitalos: We understand OPM has been very involved in getting federal agencies ready for a potential pandemic influenza. Can you tell us what you've been doing and is this something that agencies really need to be worried about?

Ms. Kichak: Number one, we're very proud of our work on the pandemic, because we have identified new flexibilities that will be able to keep the government running if we need to close government offices for an extended period of time. This is definitely something agencies need to be prepared for. And this is something that has been identified as a potential problem. Obviously, everybody hopes it doesn't happen --.and it would be quite frightening if it does.

But we've been warned, and we need to prepare. And OPM has prepared many guides, many fact sheets on policies and many ways for agencies to get ready. If you go on to our website, you'll see checklists that agencies should follow about getting their telework policies in place, reviewing their leave policies, talking to their employees about how they should deploy if there is a pandemic. The thing about a pandemic is, as we understand it -- and fortunately, we haven't had real-life experience with it in my career time -- it doesn't hit in the same way a hurricane does. You know, instantly. And so you can prepare for it. We have developed a policy on telling people to work at home and we will give them evacuation pay. In other words, evacuate the worksite.

What this does is it enables you to have the person work at home without having pre-established a telework office in the home. It allows folks that maybe do not have all the technology at home that you would normally require, to work at home using paper, pencil, and perform certain tasks. We want agencies -- and the President is requiring agencies to lay out a pandemic plan and show that they are ready. And our guides will help assure that you're ready from a human capital perspective. Have you done everything you can to get your employees ready?

OPM also has a guide for employees, a handbook that we're hoping agencies will give every employee -- we certainly are at OPM -- that tells employees what their responsibilities are under these circumstances. The point is to be able to keep the government running for extended periods of time when you can't go to the worksite because you may become infected at the worksite.

Mr. Morales: That brings up another topic that's come up in the last two areas we've been probing, and that's the area of telework. The government has had a telework program in place for a number of years. And OPM and agencies like GSA have given a lot of great guidance and resources to implementing those programs. But there still seems to be more opportunities driven by things like pandemic and potentially aging workers who want to stay off the Beltway a little bit. Can you give us your perspective on what potential there still is there, and do you see any barriers? Have the unions brought up any issues associated with telework, and where do you think it's going to go over the next few years?

Ms. Kichak: Telework is one of the hardest things we deal with. In getting ready for the pandemic, we issued a new telework guide, and the new telework guide this time addresses both management concerns and employee concerns. I think that telework is going to become more and more important in the federal government. It's a way to keep people off the Beltway, like you said. It's a way to send people home and have them work in a safe environment if there is an illness situation. It's also a management concern, because there are additional requirements that a manager must meet to make telework effective.

As we put in our guide, you must exercise a written telework agreement, so there is a clear understanding how your communication with the employee will occur. In other words, telework is working. And I think by and large, most employees know it. But the manager needs to know how they will get in touch with that employee. Will we work through telephone; will we work through e-mail, what hours will you be available? Are you -- in these days of flex-time, it's hard to call an employee at home at 7:00 in the morning. They might have been working a 9:30 to 6:00 schedule. So you don't want to call him at home at 7:00.

So our telework guide lays out that you have to plan these things, work these things out with the employees, set those times out so that you can do communication. But I think once that happens, once the employee and the manager have reached an agreement, there are just a wealth of opportunities available here. It's a career pattern thing.

I personally have been able to attract some very good people to my organization that work from home, and it's been a very productive relationship. In the administration of the Federal Human Capital Survey, 400,000 surveys were mailed out from San Diego. I have a person who is able to use the OPM website at the off-hours. Because he's in California, it's convenient for him and it's terrific for me. So telework has a lot of potential. There's definitely more that can be done, but there is a lot to be learned about how to make it effective. And we hope that the recent guidance we provided will lay that out.

The unions obviously are very supportive. They want this for every employee. And there are definitely certain occupations for which it doesn't work. As I always say, your doctor can't be teleworking when you have an emergency. So it's a good program, and we just have to work harder to make it effective.

Mr. Morales: Could you tell us a bit about OPM's recent initiative to formally collect and analyze data on the training federal agencies receive for their employees -- or offer their employees -- I'm sorry.

Ms. Kichak: Yeah. We just issued new requirements for agencies to report to us training data. That training data is going to go into a new data system we're building that's called the EHRI. And it's a data system with a lot of new capabilities, and so we're putting a lot of new data into it. We've asked the agencies to report employee by employee what training folks have had, whether it's management training or not, and how much it has cost, so that we can be more responsive to requests for what the government is investing in training. The bad news is that it will be a while before that data is available. First, the agencies have to build it and then we have to analyze it. And because those requirements are new, and agencies didn't have their systems built to transmit it, it will be at least until the end of next year before we start to receive it from most agencies.

Mr. Morales: How is OPM planning for the federal government's future staffing needs?

We will ask Nancy Kichak, Associate Director of Strategic Human Resource Policy at the Office of Personnel Management, to share with us when the conversation about management continues on The Business Of Government Hour.


Mr. Morales: Welcome back to The Business Of Government Hour. I'm your host, Albert Morales, and this morning conversation is with Nancy Kichak, Associate Director of Strategic Human Resource Policy at OPM.

Also joining us in our conversation is Ed Vitalos, associate partner in IBM's human capital practice.

Nancy, there have been many initiatives within the federal government, such as the establishment of the Lines of Business and shared services, which are changing the way government does business. Does this move to the LOBs and shared services have any ameliorating effects on the aging workforce issue?

Ms. Kichak: The HR Line of Business initiative helps us to do more services electronically, so that as more people retire, we don't have to replace as many. So in that respect, it helps us deal with this current retirement wave. The HR Line of Business is a new initiative where the federal government's many agencies identify a small number of agencies that specialize in services and use them so they don't have to repeat the purchase of software, certain services.

The one where we are very successful and is in full swing is e-payroll. We reduced the number of payroll offices in the federal government to a certain number, and then other federal agencies select that number. We are also starting that initiative for shared service, of shared services for HR offices. We have selected five shared service offices for HR. We are in the process of bidding out for private sector companies to also become on that list of potential shared service centers, and agencies are considering what the best way is for them to purchase their HR services.

Mr. Morales: Now, a couple of years ago, OPM launched the Information Technology Exchange Program, or ITEP, which enables government and the private sector to share best practices, and in fact, potentially employees, to enable both sides to gain a better understanding of each others' needs. Would you elaborate on this program and its success to date, and are there any plans to continue the program beyond its already established sunset?

Ms. Kichak: What we had really hoped that would happen when this program was set up by legislation was that there would be an exchange of IT employees between the private sector and the federal sector. To date, we've worked very hard to try and make that happen, but we haven't had any success. In other words, we have not sent any federal employees into the private sector, nor have any private sector employees come on an exchange program into the federal sector.

We haven't given up on this yet. In fact, we're very close, we think, to having our first success. We've been hampered by the fact that IT services are so hard to find, and those are such treasured employees that whoever has them wants to hold on to them. There are also some ethics issues: if a private sector company sends one of its employees to the federal government, does that prohibit them then from bidding on work? Does that prevent or create an unfair advantage? So we are still working with this program. We're still hopeful that we will have a vigorous exchange of employees. But you are right, the program does sunset on December 17, 2007.

We will recommend that it will be extended, because we think we're close to start getting some exchanges, but we're not there yet, so wish us luck on this one. We want this one to work out.

Mr. Morales: Absolutely.

Mr. Vitalos: We sure do. And while we're on the topic of technologies, from your perspective in the human resource field, can you cite the emerging technologies that you feel will have the greatest benefit to managing federal human resources?

Ms. Kichak: Well, I think one of the things that we're proud of is USAJOBS, a central place where you can go and find out about any single job that is available in the federal government, in the Executive Branch. That, number one, makes it easier for prospective jobseekers to know where to go. Now, we're working to improve that technology, because -- just because you find the job on USAJOBS doesn't mean that the resume that you filled out will necessarily be accepted by every single agency that has posted their jobs.

So that's one area where we still think we've got room for improvement. USAJOBS is encouraging more and more people to apply, because they can do it electronically. That means more applications come in, and that means that we have to evaluate them electronically. There are systems available that the personnel offices are using to rate these applications. They are continually changing. We think the shared service concept is going to reduce the number of technologies that will be purchased, and by reducing the number of technologies that will be purchased, you can improve them. If you are only going to have five products, then they can be five really top-notch products.

So that's what the Shared Service Centers, the HR Shared Service Centers that we talked about earlier, will do. It will reduce the need for every single agency to keep buying and modernizing and adjusting to changing issues, and it will allow a select number to specialize in that and become expert in it. So we think the Shared Service Centers pose a lot of potential for improving HR.

Mr. Morales: Beyond the pressing concerns that we discussed around the retirement wave, would you elaborate on other critical human capital issues and challenges facing the federal government within the next five to ten years? And Nancy, what advice might you give the next administration in facing these challenges?

Ms. Kichak: Well, I think the challenges that we face are getting the right person in the right job, and frankly, that's not really a new challenge. There's nothing surprising about that. But the federal sector jobs are very complex, they're very important, and it's important to get the right talent to do those jobs. I think the federal government needs to be flexible, and the federal government is controlled by some rules and regulations, so being flexible is a big challenge to us, but I think we're doing well on it. As we've discussed earlier, telework is a good example. Being ready for the pandemic is a good example, and we're doing that.

I think that we need to drive towards results, and in order to drive towards results, you need good performance management systems. We're working on that. We're educating HR professionals on performance management systems, holding seminars, providing more guidance, and I think that will help us drive towards results. We need to focus more on training, and we've done some things -- of course what we discussed earlier is just collecting training data. But how do you train people? And I think our new technologies -- e-learning -- that presents us new opportunities, and I think the federal government would be remiss if we didn't try to take advantage of those. We need to leverage technology in support of human capital management.

So you asked me what advice I would give to the next administration. I think that that is a challenge, isn't it? I think I would ask them to -- in these times of budget constraints, allow us to continue to invest in technology. I think that's where we get the biggest bang for our buck.

And if you don't have enough resources to keep your technology current, you're forgoing a good opportunity to get a lot more out of the resources available to you. I would suggest that any administration, and I think administrations recognize the talent of federal employees, appreciate the federal employees; they are committed. That's one of the things that our federal human capital surveys always show, is that federal employees are committed to serving the public, and they are committed to their jobs.

So they have good ideas, and they want the best for the nation and for the people they serve. So listen to your employees, they are an asset. That's why we call them human resources, they are a great resource.

Mr. Morales: That's fantastic. Nancy, on this same theme, it is very evident that you have a passion for public service, so I'm curious: what advice would you give to someone who is thinking about a career in public service?

Ms. Kichak: I would say if you want a career in public service, go for it. And you are going to get a lot out of it. Employees that work for the federal government by and large think the work they do is very important, and they think they're making a contribution. There are some things in -- when you work for the federal government, you do have to work within the rules and regulations of the federal government.

If you have a good government career, you can learn to do that. You know what the rules are, and you follow them. Benefits are great. Federal employees like their benefits, and they are good. So there are lots of reasons to work for the federal government. There are a lot of ways to contribute, and I think we need very good people in the federal government. There are very interesting jobs, and I certainly would recommend federal employment to anyone.

Mr. Morales: Great. Excellent. Thank you. Unfortunately, we have reached the end of our time. I do want to thank you for fitting us into your busy schedule today, but more importantly, Ed and I would like to thank you for your 35 years of dedicated service to our country.

Ms. Kichak: Thank you. If people would like more information about some of the things we talked about today, there's a lot of good information on our website,

Mr. Morales: This has been The Business Of Government Hour, featuring a conversation with Nancy Kichak, Associate Director of Strategic Human Resource Policy at the U.S. Office of Personnel Management.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business Of Government Hour, I'm Albert Morales.

Thank you for listening.

This has been The Business of Government Hour.

Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs, and get a transcript of today's conversation.

Until next week, it's

Nancy Kichak interview
"We provide direction on workforce planning, employment, pay, benefits, performance management, training policy, work-life programs, and labor relations."

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