The federal government is navigating several significant human capital challenges this year. Declining budgets, high employee turnover, inadequate succession planning, lack of key HR competencies, and gaps in agency leadership skills comprise the sector's top workforce management trials.

Bracing for Change: Chief Human Capital Officers Rethink Business as Usual is a report by The Partnership for Public Service and Grant Thornton LLP that summarizes federal leaders' views on the state of the public sector workforce. The fourth in a series of similar reports launched in 2007, its findings are based on in-depth interviews with 55 chief human capital officers (CHCOs) and other HR leaders.

Respondents explain how turnover in the federal government is increasing: More than half of the leaders interviewed for the first report five years ago have since left the government, and sectorwide retirements have increased by almost 25 percent in the past year.

Additionally, many of the individuals who will assume leadership positions once current leaders leave the government are not ready for these new roles.

However, leaders are resolved to address these challenges as necessary. "They are trying to determine not how to do more with less, but how to do business differently," explains John Palguta, vice president for policy at Partnership for Public Service. CHCOs are working with other managers in their agencies to set priorities, making investments in certain areas that may be costly but show a return down the line, and cutting back in other areas to offset such investments, Palguta says.

Collaboration is one way public sector leaders are learning to work in new ways. Agencies have begun to consolidate and share IT platforms to streamline data and increase the efficiency of internal processes. They are seeking opportunities to share resources across organizational and functional units and agencies, including training resources.

One of the goals of HR University (www.hru.gov)—federal government's "one-stop" human resources career development center—is to offer best-in-class HR training and establish a means for sharing resources across all agencies.

The U.S. Department of Agriculture (USDA) offers another example. The agency is working to consolidate its 14 management systems into one, and to expand a shared services model across the federal government and its own agency bureaus.

For example, despite resource constraints, USDA is not neglecting training and employee development but finding ways to do it more efficiently and effectively. This includes the establishment of three academies within a virtual university, with each focused on a different segment of the workforce and considered a key part of the department's succession planning efforts.

"I see this as a very productive evolution in thinking," notes Palguta. Doing more with less, however, only takes you so far, he adds. "You also need to maintain a certain level of investment in terms of people and training, and if you don't figure out the right balance, something will break."