Managers and Leaders as Human Capital February 2001

The Coalition for Effective Change (CEC) represents 32 managerial, executive and professional associations with a combined membership of about 600,000 current and former public employees. CEC is committed to the goal of assisting the federal government devise and implement constructive changes that lead to management improvements in government operations and services. For this reason, the Coalition is concerned that an announced goal to further "flatten the federal hierarchy.by not replacing 40,000 senior and middle managers who will retire over the next eight years." has the clear potential to cause more harm than good. (See "Getting Results from Government" published by the Bush Campaign).

OMB Bulletin No.01-05, dated January 30, 2001, states that "every department or agency head will be expected to develop a plan to meet the President's goal of reducing management ranks." It may well be that some federal departments and agencies do have more managers than needed and could benefit from a reduction. The OMB Bulletin appears to assume, without justification, that there is not a single department or agency that may have an appropriate number of managers or any that may even suffer from a management level spread too thin.

The CEC strongly believes that further review of the OMB directive is needed. An arbitrary goal is not an adequate substitute for sound management planning. The U.S. General Accounting Office (GAO), among other independent reviewers, has already soundly criticized the past actions of the Clinton Administration in making workplace reductions without adequate workforce planning. Surely the Bush Administration should not begin its tenure by making the same mistake.

The CEC urges the Bush Administration to consider carefully the fact that significant reductions in management have already been taken over the past eight years and the full effect of these reductions on government operations has not been determined. The CEC supports cost reduction and efforts to improve efficiency in government operations when it has been shown that such actions benefit the American public. However, the proposal to cut another 40,000 management and executive positions presents no factual basis for a conclusion that further reductions in management and leadership will result in benefits to the taxpayer or lead to more effective operation of the government. The plan instead simply assumes, without a supporting study or review, that the present management structure is not appropriate in any federal department or agency.

During the past eight years, approximately 78,000 managerial positions in the federal sector have been eliminated. In addition, since 1993 the number of federal executive positions filled by career appointees has been reduced by over 18 percent (from 7,387 to 6,055). These reductions, taken in a non-targeted fashion to reduce the number of federal employees, may have already damaged government operations in significant ways. In fact, many government leaders already report that the present state of the management structure has been rendered ineffective by the relentless cutbacks in managerial positions. After extensive review and analyses, GAO and Senator George V. Voinovich have concluded that the effective management of human capital in the federal government requires further investment in the work force rather than less. Without capable leaders and managers to help guide and direct that investment, more damage may be done.

The CEC believes in the improvement of government operations through well-planned and studied alternatives for change. The CEC proposes that the Administration undertake a review of the current management structure, agency by agency, to determine the appropriate level of managerial oversight and leadership needed to achieve agency mission and program goals. Following those reviews, each agency head should be held accountable for the reduction of managerial positions and/or the replacement of abolished positions where such change will benefit agency operations.

The effective management of human capital requires an analysis of skills needed against skills on board, as well as a succession management plan to recruit and develop the leadership skills needed for the future. Arbitrary staff reductions not based on good analysis of human capital needs hamper the ability of the Federal government to support the President and get the government's work done.

Leadership and management must not be perceived or treated as "unnecessary overhead" or a barrier to government's relations with its citizens. Rather, the Administration should respect and value those dedicated leaders whose actions implement and bring life to public policy.

The CEC stands ready to assist the Administration as it works to develop an efficient and productive federal workforce.

back to publications