Federal agencies paid more than $280 million in bonuses in 2008 to recruit, retain and relocate employees, according to a new report from the Office of Personnel Management.
The report, released on Friday, found that 47 agencies paid more than $284 million in recruitment, retention and relocation incentives in 2008, with an average incentive payment of $7,209. This reflects an increase of more than 21 percent in the total number of incentives paid and an increase of more than 37 percent in the total incentive cost between 2007 and 2008, the report states. Most agencies reported using the hiring flexibilities to meet strategic human capital goals.
Agencies typically paid the "3Rs" bonuses to employees in occupations critical to agency missions, including information technology, the report found. Specifically, agencies paid out 970 incentives totaling $9.9 million to retain IT managers. Agencies also offered 199 incentives totaling $1.7 million to recruit IT managers, and 97 incentives totaling $1.2 million to relocate IT managers, according to the report.
Retention incentives were the most widely used tool, totaling $155.8 million and accounting for more than 70 percent of the overall bonuses paid out in 2007. Agencies also paid out 11,396 recruitment incentives totaling more than $85.9 million and 3,307 relocation incentives totaling more than $42.9 million, OPM found.
The Defense Department made the most extensive use of the three incentives, followed by the Veterans Affairs, Justice, Health and Human Services, Commerce and State departments.
Last month, OPM Director John Berry expressed concern that agencies may be overpaying to recruit and retain in-demand skills, particularly given the sluggish job market and an unemployment rate around 10 percent. In a letter accompanying the report, Berry noted that OPM has requested that agencies review their 3Rs programs to ensure that ongoing and new authorizations for payments to employees are used only when necessary. OPM also has requested that agencies review and update their 3Rs plans, as well as their approval and internal monitoring procedures to ensure they meet the requirements of law, he wrote.
"Recruitment, relocation and retention incentives are important human resources tools that help agencies attract and retain employees for a model civilian workforce," Berry wrote. "However, we must ensure the money invested in these incentives is used effectively."