OPM: Hiring, retention bonuses rose in down economy

Tuesday - 8/30/2011, 7:52pm EDT

Emily Kopp, reporter, Federal News Radio

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By Emily Kopp
Reporter
Federal News Radio

Even in a recession, agencies spent nearly $350 million in 2009 on recruitment, relocation and retention bonuses, with the largest share going to medical workers, engineers and patent examiners. Those findings were included in a report released Friday by the Office of Personnel Management.

The Defense and Veterans Affairs Departments far outspent others on incentives.

Nurses received the biggest share of hiring and retention payments, followed by other health care workers, engineers and patent examiners in 2009.

While a deputy executive director at the Morris K. Udall Foundation got $35,089 to stay on the job, the average payout was $8,079.

Inflexible pay system?

Partnership for Public Service Vice President John Palguta said these incentives are bound to become a political football when Congress returns to Washington next week.

"When you're under the gun to save every penny, you look at every expenditure," he said. "People are going to say, 'Here's a great area where we can save a lot of money.'"

Palguta said recruitment, relocation and retention incentives give federal hiring managers flexibility to compete for employees, who could make far more money in the private sector but would be paid within general schedule salary caps in the government.

"When you have an inflexible pay system that is not market sensitive, it's important to have some tools available in the form of these incentives that will allow you to level the playing field a bit," Palguta said.

The Energy Department, which ranked eighth in the number of incentives, was one of a handful of agencies that reduced its use of hiring and retention bonuses. But Chief Human Capital Officer Michael Kane defends the practice.

"There is no substitute for being able to say, "You have to move here and your spouse is going to have to quit their job and move with you and we can use a recruitment bonus to let them find a job. That closes a deal," he said.

Think corporate?

The agency has reduced its retention payments because it found that money mattered only in select situations. Kane says Energy uses payments to keep an expert working for a few more months in order to share their knowledge with others.

"Being able to tell the rest of a project team that I know this engineer has been recruited by the private sector, but we can keep him until can get another engineer on board or the rest of you trained and he can coach and mentor you for the next six months — that's invaluable to morale and a strength to the workforce," he said.

While governmentwide spending rose overall, the rate of growth has slowed dramatically since 2007.

It's about to come to a full stop. The White House has capped bonus payments for this year and next at 2010 levels.

"I'll be looking at tradeoffs in the size of the recruitment bonuses that I use and the number of people that I put under retention pay," said Kane. "It will force human resources and cabinet secretaries to look more corporately at how they use tools and incentives. That's not necessarily a bad thing."

Agencies can expect more monitoring too. OPM is finalizing regulations to increase oversight of recruitment, relocation and retention pay.

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