Russell Klosk - The Obama Administration, 111th Congress, Talent Management, and You

Steve

Hi, this is Steve Hunt with People Performance Radio. We spoke with Russell Klosk for this week's interview, and actually this interview with Russell, who's the Business Director for RGS Associates, talks about some of the legislation and legal changes associated with the new presidential administration in congress, and how this could play on in talent management, and Russell shares a bunch of interesting ideas around some of the new legislation, the way the Government is both being run, as well as some of the new laws that are being considered and passed, including the Chief Performance Officer role that the Obama administration has put into place. Now, one of the changes that's happened since we've heard this interview is the original nominee for that has withdrawn their nomination, but the idea is still of having a Chief Performance Officer. Russell talks about how it really is a fundamental change in the way the US Government is being run, and very much an evolution and how we run our Government. He also shares much interesting observations about the Ledbetter Act, which was just signed into law, as well as some of the other legislation in the United States congress, and what that could mean for employees. So let's listen to Russell Klosk from RGS Associates.

Hi, this is Steve Hunt, you're here with People Performance Radio, and today we're talking to Russell Klosk, who is an HR Line of Business Director for RGS Associates, which is a company that does a lot of consulting to the federal Government around HR issues and other things as well, and Russell's going to be sharing with us some observations about how the new administration may impact talent management practices in the United States. So Russell, thank you very much for joining People Performance Radio.

Russell

And thank you for having me. As a starting point, during the first 100 days of the new administration, regardless of which political party is in power, the administration tends to lay out an agenda for how the intend to manage the federal workforce, which has reach into the private sector through any number of avenues, including the Department of Labor, OSHA, Department of Employment, etc. As an example of that, at the beginning of the Bush administration eight years ago, it was laid out in the President's management agenda, and the President's management agenda put in metrics and accountability measures across any number of federal initiatives, but in the human capital supply chain it looked at how were agencies measuring their workforce, how were they accounting for the diversity in their workforce, what were the demographics of their workforce, etc, and put in a quarterly reporting mechanism, that was the first time that had ever been done in the federal Government, and all indications are that that has now become institutionalized, and the current administration does not intend to change.

However, they do intend to put their own footprint on how they manage the federal Government, and for those that aren't familiar, three-quarters of the federal employment base sits in the executive branch, including all of the cabinet posts and secretaries, that people of Department of State, Department of Defense, Department of Homeland, Security, etc—those are all part of the executive branch and fall under the President's management.

Steve

So Russell, if I may, so what you're saying basically is, when a new administration comes in, they do make pretty significant changes right in the first 100 days, regardless of the administration, to how the federal workforce is managed, most of it which is under the President, and I guess the thought is, this is such an enormous workforce—how big is the federal Government?—I think people may not realize that, and how do you think that has an impact, does that impact the way talent management practices are done in the United States in general?

Russell

Well, it does, let me answer the first question first. The federal workforce, non-uniformed, is 3.2 million people, about 600,000 of which fall in the Department of Defense, which is the largest agency, Homeland Security is second, but then there's another million eight that are in uniform, and that's not counting the Reserve and National Guard components of the military workforce in that, because technically those fall under State Government, except when they're called up, and of course we're in a war footing at the moment, and so a lot of them have been called up, but as with any business, when you put a new executive in, they're going to put their footprint on how they manage the workforce, and the federal Government is no exception to that. The reality is how the federal workforce has always been managed has been a department by department view, so Department of Defense employees are Department of Defense employees; Department of Energy employees are Department of Energy employees, etc.

One of the interesting things that the Obama administration has proposed, and I'm using the word ‘proposed' for a lot of this, because congress has not been in session long enough to act on any of these initiatives as of yet, and almost all of them will require congressional approval, but one of the things he's proposed is actually treating the federal workforce as a holistic federal workforce, not to say that there aren't specialized things that might exist, for example, the Department of Interior isn't going to need people that know how to count how many missiles are in a foreign country, but for an accountant, for example, you're an accountant for the federal Government, and if your skills are best needed in the Department of Interior, that's fine, but you're a federal employee, and from a talent management perspective, if there's an initiative in the Department of Education where your skills are more needed, they're talking about shifting resources around the way private industry would to take advantage of that.

Steve

So it's kind of like breaking down the silos, in a lot of organizations they've really been able to make a lot of effort in the private sector to move people across departments and divisions, it sounds like the federal Government is trying to move more towards that.

Russell

Exactly, and trying to do some cross training, so that it operates in a way that it can be managed by someone looking at it and understanding the capabilities of the workforce, regardless of where that workforce sits. That's fairly common in the private sector, to differing degrees of success, depending on the size of the organization, but the federal Government has never tried to do that before. One of the things Obama has already done is name a Chief Performance Officer, which is a brand new cabinet level position that has never existed before, and given that person a holistic authority to say, how do we achieve maximum performance from our workforce, and from our supply team and from our different centers of excellence that exist within the federal workplace.

Steve

What do you think that person will actually do?—I mean, how much of an impact, because you've worked with the Government for a long time, a lot of experience with it, what's your sense in terms of creating this position, how they're actually going to affect the Government, because you mentioned earlier that the Bush administration put in quarterly reporting, which has had a big impact, it sounds like it's been institutionalized. When you look at the Chief Performance Officer, what do you envision that doing?

Russell

Normally I would say that the change management challenge facing that person is so daunting that they're ability to actually affect any kind of organizational effectiveness would be limited; however there are two factors that are at large that are impacting on that in a way that's never been seen before, one of them's the obvious one, which is the economic crisis the country finds itself in, and so anything that can boost that economic performance and help guide the country out of recession is going to get a whole lot of leeway from the congress, and so give that person authorities that may be unprecedented anywhere except for in the Drug Czar's office prior to this.

The second thing is that the federal workforce, and it's a microcosm of the private sector workforce, has a fairly serious demographic challenge in that, in the executive ranks, 85 to 90% of the workforce is already retirement eligible, and in the professional ranks it's somewhere between 60 and 70%. That's not to say they're all going to retire tomorrow, but the writing's on the wall, and sometime in the next three to eight years there is going to be a wave of retirements and so the federal Government is going to be faced with a Generation X and a Generation Y that together are not the size of the baby boom, and that are not attracted to federal service by and large, and so they're going to have to do more with less bodies and it creates knowledge management challenges and well as talent management challenges, and so that person is in a unique position to see what all of those are, and at least guide the massive resources the federal Government can bring to bear in a more effective manner, that and the screen for change that the last election represented would seem to say that that person is going to have some authority to do this, and that person being named prior to the inauguration, the authorities for that position have already been taken up in the 111th congress, they haven't passed yet, but they've already been taken up. I don't know that the previous administration, at least in the second term, had the political capital to push that through.

Steve

So if you might, I know it's very hard to do, I'm just curious, in two or three years how do you think the federal Government might be different in terms of how it's run? You've mentioned already more cross-departmental changes, but are there other things that you think might be different in terms of the kind of organization it's going to be?

Russell

So let's talk about one of the failures as an example, and this is one that will click to most people. Post 9/11, well actually on 9/11 when the Pentagon was hit, the Pentagon being a military command center, there were systems and processes in place to say, "If this building is taken out, how can we get it up and running somewhere else so that we can respond to the crisis?" From a technology point of view, part of that is, literally getting computers plugged into the classified networks and up and running, so that whoever is in command has access to all of the information that the federal Government is pulling in through its various sources. The DoD has a complex workforce between the military, civilian and contractors, but they don't have a holistic way even within the DoD of looking across that workforce and saying, "Who are the best ten or twelve system engineers and system administrators that we have?", let alone across the federal Government.

I think one of the changes that you'll see is that technologies will be brought to bear that allow the disparate talent management systems and performance management systems that exist within the federal workforce to talk to each other, so that a commander could sit down and say, "I need the nine guys that know how to do this, and I need them today, and I don't care where they work as long as they work for Uncle Sam", and be able to locate those people. That's not something that can currently occur.

Steve

So really you're probably seeing a pretty big investment in talent management technology within the Government itself?

Russell

And I think we're already seeing it, so the Department of Homeland Security—let me step back, two of the things that came out of the President's management agenda were an emphasis on performance management, and then this slow integration of a pay for performance kind of culture and compensating management system within the federal workforce. Now, so far DoD has gone forward with what they are calling the National Security Personnel System, NSPS, slowly but surely that is getting integrated, and they were given special authorities to do that. DHS took a step backward, they called theirs MaxHR, and they still have the authorities, but they ran into some severe labor relation issues and so they're going to pick it back up again during the new administration, and part of the evidence for that is there was a request for information, which is the precursor to a request for a proposal on the street about three, four weeks ago for a performance management system for the Department of Homeland Security, initially for the headquarters staff but scaleable for all 180,000 employees.

So initiatives like that, and one of the requirements in the RSI that it'd be able to talk to other federal systems are evidence that these things are moving forward, but there's a law that was passed that says, the rest of the federal Government has to move in that direction between now and 2012, so unless that law is repealed, financial considerations not being insignificant, but the other departments are going to have to start moving in that direction, and part of moving in that direction is not just redoing your processes, but also what kind of technology enablement you put behind it to allow the systems to talk to each other, and there's a major cultural shift.

Steve

I was just thinking that major cultural shift, but I would argue a positive one, it's good to hear that the Government really is, and I think sometimes people don't give the Government as much credit as they should get for really trying to improve their performance, you only hear about the things that don't work, not the things that do.

You touched on one thing which is, and I didn't know this, there's actually a law which I think would be surprising if it was repealed, requiring that the Government become more effective at managing its workforce, what about—if we can maybe shift the topic from what the new administration is doing in terms of changes to the federal Government and the workforce itself, to regulations like that—do you see some legislation coming out that's very likely to get passed under this new administration, that's going to have significant implications on companies in general in the United States in terms of what they're going to have to do around managing their workforce?

Russell

There's no way to predict all of the legislation that will take place in the 111th congress, but there are some things that have already started moving through. Last year the Supreme Court made a ruling in a case that's known as the Lucy Ledbetter case, and I don't remember who the other party was, but Lucy Ledbetter sued under the FMLA regulation for discrimination, she sued, it was a combination lawsuit under Title 5 of the Anti Discrimination Act, and under the FMLA provisions, saying that as a woman she was paid less for a professional position than a man was, solely because she was a woman, and the Supreme Court ruled according to the existing regulations, and so there are moves in both the House and the Senate at the moment, both have passed committee and are being debated on the floor, actually the Bill has passed the House already, it's being debated in the Senate this week, to correct that, but what that regulation's going to do, as the law stands in the committee drafts, is say that any instance of discrimination tabled can be used as that instance, so every time they pay you, another instance of discrimination has occurred, and it also opens it up as a class action.

Now, what's interesting about the law isn't that it's payroll, although that creates, if this discrimination occurred for say three years on a bi-weekly pay basis, you'd have literally a couple of hundred cases of discrimination that would then be brought by one individual, let alone by a class, but the law's retroactive, and so it can force companies to go back and prove that they weren't discriminating eight years ago, ten years ago, as evidence in court, and that would tend to favor the plaintive over the defendant, but the laws that are being proposed in the 111th congress look like they're a lot more employer-friendly than business-friendly, which is a dramatic change from how the last 20 years have flown.

Steve

I just wonder if I might, on that one, because it strikes me that, saying that differences in pay are acts of discrimination, I mean there's massive research showing that women are systematically paid less than men, and the research also says their performance is not less than men, they're just paid less than men, and you don't really want to get into that, but boy, suddenly you said, that's evidence of discrimination—my goodness, that's going to unleash a torrent.

Russell

Well, it does more, so as the law sits that passed the House, it breaks down some of the ways people currently pay people, and says, those are not valid grounds for differentiation in pay, so it takes out for example geographic disparity, so if you're paying someone which is fairly common practice right now, you would pay someone in New York City more than you would pay someone in say Buloxi Mississippi, because the cost of living and wages and penetrative market are more in New York. Now, if you're a large employer and have people across the country, that kind of pay disparity's not going to be legal under the current proposed law, they're going to say that seniority, experience and performance are the only legitimate differentiators in pay, and that any other differentiator would be illegal.

Steve

Who is advocating this, this just sounds crazy.

Russell

In the Senate, it's being proposed by Senator Ted Kennedy, in the House it's Nancy Pelosi herself that's sponsored the legislation, although there are a number of other sponsors, and this is still, I don't think they've scheduled the closure of vote in the Senate, so this is still months from seeing the conference committee to reconcile the two laws.

Steve

So what I'm really hearing is, now is the time to get really active, for people to really be paying attention to what the congress is doing, because this sounds like, it's funny, because you talked about some of the stuff that the executive branch is doing that sounds very positive from a talent management perspective, in terms of better performance technology, but within congress, if this one Bill here that you're talking about is any indication, whether it's passed or not, this is a good time to really pay a lot of attention to what's going on in congress if you're an employer, because that sort of law right there will just have massive, I would argue negative, consequences on businesses.

Russell

It would, and it was fast out of the gate, so it's one of the ones that's more likely to pass sooner rather than later. It's actually not the one that scares me though, there is a current Bill in the Senate …

Steve

Not really worried!—if that doesn't scare you, what does, Russell?

Russell

Well, Senate Bill Two, which Ted Kennedy proposed, is set for closure vote today, so they will vote on it either today or Monday, the House has not yet taken it up but they will once the Senate passes it; Ted Kennedy is tying his legacy tomb among other things that are changes in the FMLA, and from an employee point of view I agree with some of what he's trying to do, the scary part is the way the law is actually written, so what he's trying to do is, he's saying, for any employer that has more than 15 employees, they must provide at least seven paid days of sick leave in a year for those employees. It doesn't mean everyone has to take them, but they have to be provided and they have to be paid. That creates some problems for small business, the same way the changes in the minimum wage law do, but in and of itself, America can probably survive that one without much challenge. What's scary is, to correct things that have occurred in the past, and FMLA's a wonderful example, when FMLA was initiated, a lot of companies that had better leave policies lowered their leave policies and said, "Well now we're in compliance, we didn't have to be giving what we were giving", so to correct that they have defined very specifically how they define workforce in the law, they've passed a provision that says any employer that provides more than that can't reverse it to go to a lower standard, which takes the power out of the company's hands to say, "Well we used to give ten, but the market shifted, and now we don't have to", or, "We can't afford to give ten any more and that will drive us out of business, if everyone took their sick leave", and "We still have to give ten, even though the law only mandates seven", but what's even scarier, and this is the part that people should be paying attention to, if the law that passed the committee in the Senate and is set for debate on the floor defines a full-time worker as anyone that works more than 30 hours a week, or more than 1,200 hours in a year, and a part-time worker is anyone that works more than 15 hours in a week. Now, from an impact on that specific law, it's not so big, but that really redefines the workforce, and what is full-time employment and what isn't full-time employment, and since employers base decisions on who they give benefits to and who they don't give benefits to, and what kind of job security you have, etc, based on do you have a full-time position and a part-time position among other things, redefining what's a full-time position is a fairly large thing.

Steve

Yes, so basically it takes it from 40 hours a week to 30 hours a week?

Russell

But 1,200 hours is a lot less than 30 hours a week over 52 weeks as well.

Steve

Yes, that's a great point. Wow, so thanks for sharing this, because a couple of things that I'm hearing are that, one, the administration is doing some really interesting stuff that's really positive, but congress is doing some stuff that employers should really be paying a lot of attention to.

So are there any last things, so we can wrap this up, and Russell, hopefully I'd like to talk with you in about six months after congress has been in for a while, but some last things people should be looking about, as we're looking at these first 100 days?

Russell

Well, I'd like to emphasize, because I'm not a legislative aide at the end of the day, but these are what are proposed, and there's still a lot of work before anything ends up on the President's desk, and just because that's how they're sitting in committee, or being debated on the floor, doesn't mean that's the law that's actually going to end up on the President's desk for signature, but, for example, the sick leave law, Ted Kennedy's a fairly powerful guy, and he's tying his legacy to passing paid sick leave. There's another one out there, and I don't know if it has the legs to actually run through, because it's been debated before and it's never passed, but taking the FMLA, which provides among other things 90 days of paid leave for certain types of illnesses, from an unpaid to a paid leave status, and again from an employer point of view, looking just at maternity as an example, I think that you'd be hard pressed to find people that don't think paid maternity is a good idea from an employee point of view. From an employer point of view, not for a gigantic company like a General Electric, but for a small company, that could be the difference between being able to fund that position and not fund that position, and it could lead to further discrimination.

Steve

Well I think one thing in closing to the people listening on this, if you want to know more about some of this, Russell and I know each other through the Society of Human Resource Management, we've worked together, and SHRM actually has a very active group that monitors these things, and so joining SHRM, if you're not a member already, if you are, go in to the website and there's a place that keeps a lot of these legislative actions, and they actually will go and lobby on behalf of what makes sense for the HR business community, so there is a place, an organization that will help us, but I think the real message, Russell, that you've brought home is, we've put in a new administration, there's going to be change, some of this change good, some of this change maybe bad, depending on your perspective, but there's going to be change, a lot of it could be pretty darn significant, and better to act quickly now than just wait and react in a year or so. Is that a fair statement?

Russell

It's a fair statement, and whether it's through a formal lobbying effort or just writing your congressman, if you have an opinion the time to share it is while they're formulating the law, not after it's been passed, because it takes them a long time to undo them when they've made mistakes in the past.

Steve

Absolutely. Well Russell, thank you so much for spending time with People Performance Radio, and providing what I think is a very interesting and often overlooked perspective. We're all affected by the federal Government, obviously, but I think sometimes people don't really think about it as something that we can change, that's the whole purpose of a democracy, isn't it?—and we can, and I guess it's more stuff to be focusing on, both from an opportunity and worrying perspectives, so any last thoughts, Russell, before we sign off?

Russell

My last thought is that, when congress takes up things like this, it stands to reason that state and local legislature will as well, and that has as much impact on businesses as anything passed at the federal level, and that people should not just watch the one but they should watch all of them.

Steve

It sounds like I'm going to have to renew my subscription to see spam!

Well Russell, thank you so much for appearing on People Performance Radio, some great insights, and again we were talking with Russell Klosk who is the HR Line of Business Director for RGS Associates, and we will have a link to Russell's website, where you can, if you want to, contact him about more information, and Russell, thanks for appearing on People Performance Radio.

Russell

Thank you.

Speaker

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