oversight

Federal Workforce: Attrition Rates at Ex-Im Bank and Similar Agencies

Published by the Government Accountability Office on 1997-05-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States
General Accounting Office
Washington, D.C. 20548

General Government Division


B-275361



May 20, 1997

The Honorable Alfonse M. D’Amato
Chairman, Committee on Banking,
   Housing, and Urban Affairs
United States Senate

Subject: Federal Workforce: Attrition Rates at Ex-Im Bank and Similar Agencies

Dear Mr. Chairman:

This letter responds to your September 4, 1996, request for information on the
extent of employee attrition at the Export-Import Bank (Ex-Im Bank) and similar
agencies. Specifically, we agreed to determine the number of employees who left
Ex-Im Bank during the last 5 years, the number of these employees who were in
core professional positions, and how Ex-Im Bank’s attrition rates compared with
those of similar agencies. We also agreed to determine how many employees who
left Ex-Im Bank received retention allowances. Our results are summarized below,
and detailed information on turnover rates at the Ex-Im Bank, the United States
Agency for International Development (AID), and the Overseas Private Investment
Corporation (OPIC) are presented in Enclosure I.

BACKGROUND

The Ex-Im Bank’s mission is to assist U.S. exporters by offering a wide range of
financing at terms competitive with those of other governments’ export financing
agencies and absorbing risks that the private sector is reluctant to cover. Financing
and protection provided by Ex-Im Bank includes (1) loans to foreign buyers of U.S.
exports, (2) loan guarantees to commercial lenders providing repayment protection
for loans to foreign buyers of U.S. exports, (3) working capital guarantees for pre-
export production, and (4) export credit insurance to exporters and lenders
protecting them against the failure of foreign buyers to pay their credit obligations.




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Ex-Im Bank had a staff of about 440 employees in fiscal year 1996, and identifies its
core professional positions as economists, engineers, attorneys, business development
officers, financial analysts, and loan specialists. Prior to being authorized to use
retention allowances in fiscal year 1991, Ex-Im Bank officials expressed concerns that
the agency experienced difliculty retaining qualified staff because of its inability to
compete with private firms and some federal agencies in employee compensation. Ex-
Im Bank officials also cited concerns over high performing employees’attractiveness
to other employers as a primary reason for awarding retention allowances to almost
50 percent of its employees in fiscal year 1995. Ex-Im Bank officials continue to
believe that employee losses in core job series hamper the Bank’s ability to maintain
critical continuity of essential programs and policies because of the institutional
knowledge lost and the time required to hire and train replacements. Ex-Im Bank
officials said that unlike large federal agencies with a reservoir of personnel to
maintain continuity of programs and operations, Ex-Im Bank does not have such
resources to draw upon.

AID and OPIC have missions and employee occupations similar but not identical to
those of Ex-Im Bank. AID is an independent federal agency that manages foreign
economic and humanitarian assistance programs around the world and has several
objectives, including promoting broad-based economic growth. In fiscal year 1996,
AID had about 2,300 employees worldwide who worked with domestic and foreign
organizations and governments to assist in sustaining economic development in
foreign countries through financial aid and technical assistance.

OPIC assists in financing and insuring political risks for business enterprises in
developing countries. OPIC’s mission is to promote U.S. investment overseas. In
fiscal year 1996, OPIC had about 200 employees who assisted businesses to identify
and reach foreign markets through three principal activities: (1) insuring foreign
investments against a broad range of political risks, (2) financing businesses and
investment funds through loans and loan guaranties, and (3) engaging in outreach
activities designed to inform the American business community of investment
opportunities in developing countries.

Both AID and OPIC have professional and administrative employee occupations
similar to those of employees at Ex-Im Bank. These include economists, attorneys,
program analysts, business and industrial specialists, accountants, and secretarial staff.

AID had provided physician comparability allowances to six physicians during fiscal
years 1992through 1996, and OPIC had awarded one retention allowance during the

                                GAO/GGD-97-104R   Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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same period.’ AID and OPIC officials both said that they did not offer any other types
of retention incentives to their civil service employees during fiscal years 1992 through
i&6. AID officials said that they did not believe other retention incentives were
needed, and OPIC officials said that while turnover hampers productivity, they
believed the use of retention allowances would neither be fuIly effective nor
supportable under the current justification requirements.


RESULTS

During fiscal years 1992 through 1996, 220 employees left Ex-Irn Bank; 15 of these
employees had received retention allowances, 58 were in core professional
occupations, 38 were in noncore professional occupations, and 124 were in
administrative occupations.’ During this period, Ex-Im Bank had attrition rates for aU
of its employees that ranged from 0.4 to 12.7 percentage points lower than AID’s and
OPIC’s rates for alI their employees. (See fig. 1.1.)

During these five fiscal years, Ex-Im Bank also experienced lower attrition rates of
core professional employees than did AID and OPIC for employees in the same
occupational series. During fiscal years 1992 through 1996, Ex-Im Bank experienced
core employee attrition rates ranging from 7.0 to 17.9 percentage points lower than
AID’s and 3.7 to 22.0 percentage points lower than OPIC’s rates for the same
occupational series. (See fig. 1.2.)

Ex-Im Bank experienced losses of 7, 9, 15, 11, and 16 employees from its core
professional occupations during fiscal years 1992 through 1996, respectively.3 The


‘Physician comparability allowances are additional biweekIy payments for federal
physicians serving in areas or specialties with documented recruitig or retention
problems.
2Ex-Im Bank awarded 2,2,98, and 217 retention allowances in fiscal years 1992 through
1995, respectively. In fiscal year 1996, Ex-Im Bank had 200 retention ahowances in effect
until January 19, 1996, when the allowances were terminated. In March and April 1996,
eight of the allowances were reinstated and were in effect for the remainder of the fiscal
year.
3Ex-Im Bank’s core job series, which experienced the highest attrition rates over the 5
fiscal years, varied. Economists had the highest attrition rates in fiscal years 1992 and
1993, 16.7 and 18.2 percent, respectively. In fiscal years 1994 and 1996, business

                                GAO/GGD-97-104R   Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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number of employees in the core positions, however, remained relatively constant due
to new hires and transfers from other occupational series within Ex-Im Bank. During
fiscal years 1993 through 1996, Ex-Im Bank had 159, 184, 183, and 188 employees,
respectively, in its core professional occupations. In fiscal year 1992, Ex-Im Bank had
significantly fewer core employees-lag-but Ex-Im Bank also had 103 fewer total
employees at that time. (See fig. 1.3.)

The three agencies’attrition rates for their other employees-noncore professional and
administrative-varied in relation to one another during fiscal years 1992 through 1996.
Ex-Im Bank and AID had the highest rates in fiscal years 1992 and 1994, respectively,
and OPIC had the highest rates in the other 3 fiscal years. Ex-Im Bank’s higher
attrition rates for the other employees were primarily due to higher attrition rates for
its administrative employees. (See fig. 1.4.)


SCOPE AND METHODOLOGY

On the basis of discussions with the Committee staff and Ex-Im Bank officials, and
our knowledge of agencies’missions and workforces, we identified two agencies with
missions and employee occupations similar to those of Ex-Im Bank? To develop
information on the attrition rates at those agencies and Ex-Im Bank, we obtained and
analyzed raw data from Ex-Im Bank, AID, and OPIC dealing with employment totals,
separations, new staff hires, and reassignments by occupation for the period
October 1, 1991, through September 30, 1996. We did not verify this information with
agencies’source documents, such as personnel files.

Ex-In-t Bank’s Director of Personnel categorized its various occupational series as core
professional and other-noncore professional and administrative. We used these
categorizations for occupational series that were the same at AID and OPIC. When
either agency had a series not existing at Ex-Im Bank, we assigned it to the “other”
grouping and judgmentally placed it in either the noncore professional or
administrative category. We did this to provide a consistent grouping and comparison
of AID’s and OPIC’s occupational series with those of Ex-Im Bank.



development officers had the highest attrition rates, 16.1 and 14.9 percent, respectively.
In fiscal year 1995, general engineers had the highest attrition rates of 33.3 percent.
 !I’he U.S. Trade and Development Agency was not included because it had only 38
employees and therefore, the attrition rates could be misleading.
                                GAO/GGD-97-104R   Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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Also, to make the agencies’employee groups as comparable as possible, we compared
only civil service employees who were covered by title 5 of the U.S. Code. We did
this because AID had about 1,300 foreign service employees covered by title 22 of the
U.S. Code in fiscal year 1996 who had different benefits, such as retirement eligibility
at age 50 with 20 years of service. AID officials said that excluding foreign service
employees was appropriate because the ability to retire at an earlier age may be a
significant inducement for such employees to stay with AID at earlier years in their
careers.

In determining the agencies’attrition rates, we controlled for the effect of expansions
or downsizing by the agencies. To calculate the agencies’annual attrition rates by job
series and in the two groupings-core professional, and noncore professional and
administrative-for fiscal years in which buyouts and Reductions-in-Force (RIF) were
not effective, we first determined the number of full-time employees by series and
grouping at the beginning of each fiscal year5 We then determined the number of
employees who separated by series and grouping during each fiscal year and
calculated the percentages of total employees that the number of separated employees
represented.” To determine the annual attrition rates in fiscal years in which the
agencies’employees received buyouts or were RIFed, we deducted the number of
employees who took buyouts or were RIFed from the number of employees in each
job series at the beginning of the fiscal year and from the number of employees who
separated from the agencies7 Buyouts and RIFs inflate attrition rates because they
include positions that the agency has chosen to abolish. We then calculated the
percentages the remaining separated employees represented. We also did not include
replacement employees, such as new hires, in our attrition calculations because that
would deflate an agency’s attrition rate during a period of expansion. Including


5RIFs involve separating an employee from his/her position due to a lack of funds,
reorganization, or other reasons.
‘Employees retiring from the three agencies are included in the attrition rates. With the
exception of fiscal year 1996, as discussed above, the retirement rates at the three
agencies were similar. Ex-Im Bank’s, AID’s, and OPIC’s retirement rates as a percentage
of total separations for fiscal years 1992 through 1995, represented 15.0, 12.6, and 11.5
percent, respectively.

7AID conducted a major RIF in fiscal year 1996 after several years of downsizing. From
September 30, 1992, to March 31, 1997, the number of civil service employees in AID has
decreased by 383 employees from 1,659 to 1,276 employees. Neither Ex-Im Bank nor
OPIC had any RIFs during fiscal years 1992 through 1996.

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buyouts, RIFs, and replacements would have created a biased comparison of attrition
rates since Ex-Im Bank’s employment levels generally grew during the 5 fiscal years
and AID and OPIC experienced some downsizing.

We also compared the names of the Ex-Im Bank employees leaving the Bank during
this period, to the names of Ex-Im Bank employees who had received retention
allowances, to deterrnine the number of employees leaving the Bank who had received
retention allowances.

We did our work in Washington, D.C., from February to April 1997 in accordance with
generally accepted government auditing standards. We provided a draft of this letter
to the Acting President and Chairman of Ex-Im Bank, the Administiator of AID, and
the Acting President and Chief Executive Officer of OPIC for their review and
comment.


AGENCY COMMENTS

Ex-h-n Bank and AID provided written comments on a draft of this letter. Ex-Im Bank
said that our methodology used to determine annual attrition rates for core employees
does not fully reflect the Ex-Im Bank’s losses of these employees. Ex-Im Bank
believes that the attrition rates should be calculated using the total number of
separations during a fiscal year, including employees who receive buyouts, because
each employee who is lost affects Ex-Im Bank’s ability to carry out its mission. While
we do not disagree that the loss of an employee may affect an agency, we do not
believe that employees who receive buyout incentives to leave an agency should be
reflected in attrition rates in the same manner as employees who are not induced to
leave and leave due to reasons not within an agency’s control. In administering
buyouts, Ex-Im Bank had the authority to exclude specific occupational series,
including core series, and thus could control who received the buyout incentives to
retie. Thus, as discussed in our scope and methodology section, we purposely
eliminated from our calculations employees who took buyouts to minimize their
impact on attrition rates.

Ex-Im Bank also noted that our review included attrition figures through the end of
fiscal year 1996, and stated that based on current and projected losses of Ex-Im Bank
employees in core occupations, they estimated the attrition rate for core employees in
fiscal year 1997 will exceed 10 percent.




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AID expressed concern that we did not sufficiently highlight the fact that our attrition
rates do not include replacements. We have modified our scope and methodology
section to clarify this issue and have added a note to each of the relevant figures that
the rates do not include replacement employees. We also added a footnote, as
suggested by AID, pointing out that AID had a major RIF in 1996.

We received oral comments from the Directors for Legislative Affairs and Human
Resources Management, OPIC, on May 14, 1997. These officials agreed that the
information provided in the letter is accurate.

Ex-Im Bank, AID, and OPIC also provided technical comments, which we incorporated
in our letter where appropriate. Ex-Im Bank’s and AID’s comments are reprinted in
Enclosures II and III.




We are sending copies of this letter to the Ranking Minority Member of the Senate
Committee on Banking, Housing, and Urban AlYairs; the Acting Chairman, Ex-Im Bank;
the Administrator, AID; the President and Chief Executive Officer, OPIC; and other
interested parties. We will also make copies available to others upon request.

Major contributors to this letter were Larry Endy, Tom Davies, and Jeff Dawson. We
trust that this information satisfactorily responds to your request. If you have any
questions concerning this letter, please contact me at (202) 512-8676.

Sincerely yours,




L. Nye Stevens
Director
Federal Management
  and Workforce Issues

Enclosures - 3




                               GAOiGGD-97-104R   Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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ENCLOSURE I                                                                                          ENCLOSURE I
Figure 1.1: Comwrison of Attrition Rates for All EmDlovees at Ex-Im Bank. AID, and
OPIC, Fiscal Years 1992-1996

40       Percent




30

                                         25.3




20
                                                                                          15.9

                                                                       11.7

10




 0

            1992                  1993          1994           1995                1996
            Fiscal years



            0         Ex-lmBank
            @         ),I,,

            m         OPIC




 Note: Attrition rate calculations do not include replacement employees




                                                 GAO/GGD-97-104R      Attrition   Rates at Ex-Im   Bank and SimiIar   Agencies
     8
ENCLOSURE I                                                                                       ENCLOSURE I

Figure 1.2: Comwrison of Attrition Rates for Core Emr>loveesat Ex-Im Bank, AID,
and OPIC, Fiscal Years 1992-1996

40   Percent




30
                                     27.7




20




IO




 0

       1992                   1993          1994          1995                 1996
       Fiscal years



       u         Ex-lm Bank
       I;“:i:    AID

       m         OPIC




Note: Attrition rate calculations do not include replacement employees.




                                            GAO/GGD-97-104R      Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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ENCLOSURE I                                                                                       ENCLOSURE I
Figure 1.3: Total and Core EmDlovment at Ex-Im Bank for F’iscal Years 1992-1996


500    Number of employees

450

400

350

300

250

200

150

100

 50

  0

         1992       1993      1994      1995   1996
         Fiscal years

                   All Ex-lm Bank Employees

         I         Core Ex-lm Bank Employees




                                                GAOlGGD-97-104R   Attrition   Rates at Ex-Im   Bank and Similar   Agencies
  10
ENCLOSURE I                                                                                       ENCLOSURE I

Figure 1.4: Comwrison of Attrition Rates for Noncore and Administrative Emplovees
at Ex-Im Bank, AID, and OPIC. Fiscal Years 1992-1996

40   Percent




30



                                     22.4

20




IO




 0

       1992                   1993          1994          1995                 1996
       Fiscal years



       )         Ex-lm Bank
       mi        A,,J




Note: Attrition rate calculations do not include replacement employees.




                                            GAO/GGD-97-104R      Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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ENCLOSURE II                                                                             EXCLOSURE II
               COMMENTS FROM THE EXPORT-IMPORT BANK

                                     .T====-f                    -.=
                                         &M     k ANK
                                          Joasnf8O~z~EUORTS


                                            May 7, 1997



          United StatesGeneral Accounting Office
          Mr. L. Nye Stevens,Director
          Federal Managementand
            Workforce Issues
          Washington, D.C. 20548

          Dear Mr. Stevens:

              This letter respondsto your draft report to the Chairman,
          Committee on Banking, Housing, and Urban Affairs, Unite-dStates
          Senate,‘on Attrition Rates at Ex-Im Bank and Similar Agencies.

                The “Background’ section of the report, statesthat Ex-In officials
          believe employee lossesin corejob series hamperthe Bank’s ability to
          deliver services becauseof the institution knowiedge lost and the time
          required to hire and train replacements. We would like to emphasize
          further that staff lossesin mainline occupation serieshamperthe Banks
          abihty to maintain critical continuity of essentialprogramsand policies.
          Unlike large Federal departmentsand agencieswith a reservoir of
          support personnelto maintain continuity of programsand operations,
          Ex-Im Bank does not have the luxury of such staff.

                 We believe that the methodology used to determineannual attrition
           rates for core employeesdoes not frilly reflect the Bank’s losses. In
           fiscal years where the Bank offered buyouts, it appearsthat the number
           of buyouts in core positions has not been consideredin calcuiating the
           percentageof attrition. We believe that actual attrition rates better

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                                         SANK OFTHE UNITED STATES
                                811 VULHONTAYENU+N.W. Wmwxm.           0.C 20571
                                1 (&X3) 5654X&i (202) 565-3946 FAX: (202) 56%1380

                              GAO/GGD-97-104R           Attrition     Rates at Ex-lm   Bank and Similar   Agencies
12
ENCLOSCRE II                                                                      EXCLOSURE 11




       reflect the impact on the Bank and its operation. Virtually each and
       every loss in the mainline occupations impacts upon the Bank’s ability to
       carry out its mission.

             Your report includes figures up to September30, .1996. You
       should also be aware that thus far in FY 199’7there have been eleven
       (11) core professional lossesand ten (10) administrative losses in the
       Bank. We are currently projecting an additional loss of 8-10 core
       professional employeesbefore the end of the year, an attrition rate for
       core employeesof over 10%.

            Thank you for the opportunity to comment on the draft report.

                                                S,mcerely,


                                          -I JamesIS. Hess
                                          ?hief Financial Officer




                                           2




                              GAO/GGD:97-104R    Attrition   Rates at Ex-Im   Bank and Similar   Agencies
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ENCLOSURE III                                                                                     ENCLOSUREIII

      COMMENTSFROMTHEAGENCYFORINTERNATIONALDEVELOPMENT

          * . -.
          y!JJ
          wgw
       c 5%AGENCY        FOR
        bXERN.4llON.4L
        DEVELOPNENT
                                                                                  MAY I4 m-i'
                     L. Nye Stevens
                     Director
                     Federal Management and
                        Workforce Issues
                     US General Accounting   Office
                     Washington,    D. C. 20548
                     Attn:     Mr.    Thomas Davies,      Evaluator-in-Charge
                     Dear Mr.        Stevens:
                           I am writing    on behalf of J. Brian Atwood, Administrator,
                     U.S. Agency for International        Development  (USAID), regarding your
                     draft  report   "Federal  Workforce:    Attrition  Rates at Ex-Im Bank
                     and Similar   Agencies."
                            On first      reading,     USAID's Civil     Service     attrition       rates
                     looked overstated         in figures     1.1, 1.2 and 1.4 of the draft.
                     Through discussions           with Mr. Davies, Evaluator-in-Charge,                  we have
                     learned     that,    for purpose of this study,          attrition        represents
                     exits    only,    not net change (exits         plua replacements.)             This needs
                     to be highlighted         in the report      and on the figures           so that the
                     reader has a clearer           understanding     of what the data are
                     reporting.
                             USAID conducted a major reduction-in-force         (RIF) in Fiscal
                     Year 1996.       This makes USAID unique with regards       to the other
                     agencies     in this study.     This RIF happened after     several   years of
                     downsizing.       From September 30, 1992, to March 31, 1997, USAID's
                     Civil    Service   has gone from 1659 to 1276, a decrease of 383 or
                     23.1 per cent.        I would like this information    included     in the.
                     report.      It provides   necessary context.
                          .Thank you for providing             USAID with       the opportunity      to
                     comment on the draft   report.




                                                                  Linda N. Lion
                                                                  Deputy Assistant  Administrator
                                                                     for Human Resources



        (410118)                                320Txea~-F~Snerr,u.w..w~~mcro~D.C.20523

                                                GAOIGGD-97-104R     Attrition   Rates at Ex-Zm Bank and Similar     Agencies
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