Bill Kerr: Two years into the coronavirus pandemic, the list of challenges facing employers is long and growing: remote and hybrid work, pressure for progress on diversity, technological change, scarce talent, addressing workers’ collective interests, mental health, testing for a good-sized enterprise. These workforce issues are daunting in the context of the U.S. government and its 2 million-plus civilian workers.

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Bill Kerr. My guest today is Kiran Ahuja, Director of the U.S. Office of Personnel Management. OPM is one of those hugely important but less known agencies keeping the federal government running. It’s essentially the government’s HR department, handling everything from hiring to retirement benefits. OPM traces its history to the Civil Service Act of 1883, which took aim at the spoils system of political patronage. Appointed director by President Biden, Kiran is the first South Asian American and first Asian American woman to hold the post. She’s not new to OPM, having served as its chief of staff from 2015 to 2017. We’ll talk about modernizing the workforce and recruiting a new generation of civil servants. We’ll also talk about initiatives around diversity, accessibility, pay equity, and collective bargaining. Welcome to the podcast, Kiran.

Kiran Ahuja: Thank you, it’s great to be here.

Kerr: Kiran, why don’t you tell us just a little bit of background about yourself and how you came to become the head of OPM.

Ahuja: Yes, I’d love to. I decided growing up in the South and being exposed to just the challenges in the wake of the civil rights era that I wanted to be a civil rights lawyer. And I got a chance to work at the Department of Justice, and going through their honors program, a feeder program into the federal government, and it was a great experience. When you think about the kind of work you want to do, a lot of it has to do with where you think you can effect change, and for me, that road has taken me in and out of government. So I found myself back in at the beginning of the Obama Administration supporting and doing really advocacy inside the government for the Asian American and Pacific Islander community. It was really after being there for a number of years that I found myself being asked if I would take on a really daunting effort, which was to come into the Office of Personnel Management soon after several data breaches that took place that affected millions upon millions of individuals.

Kerr: So the harder the job or the harder the sell, the more likely you are to sign up.

Ahuja: I ran toward the fire. Yeah, it was definitely something I had to think about it for a minute there.

Kerr: So tell us a little bit about OPM’s chief functions, and how does it take the administration’s priorities and translate into practice?

Ahuja: Well, I think you said it well in the intro. We are the HR wing or arm of the federal government. It is a massive entity of 2 million-plus federal workers civilian side—that’s not even counting the postal service and certainly not the military. And we still engage with all of them. We manage the benefits for postal workers. So it’s an incredible entity. It has a very interesting history, but I think what we’ve learned is that even more so as we think about what we have all experienced through the past two years in the pandemic, the work we do in this agency has become even more important than ever before. We have the largest employer-sponsored health benefits program in the country, we a pretty significant retirement program, and then we are also really looking to, I think, do a much better job of what it means to bring people into the federal government. I think we win on mission. Oftentimes we don’t talk about that mission the way we should. So it’s a mix of both how do we keep the trains moving in this day and age. We are also very admittedly managing a federal government that has lost a significant part of its workforce in the last administration. Almost a third of it is eligible to retire. So what does that mean for us staying competitive, being a leader with all the other sectors that I’m sure I’m speaking to today.

Kerr: So as you move from the Trump Administration to the Biden Administration, how much does the OPM office itself change? Clearly some parts of keeping those trains running on time is going to be independent of administrations, but there might be other parts that do significantly look different post administration change.

Ahuja: There’s a very political side to the work, and that is how it chooses its leaders every time there is a new administration. And I think that is a challenge. My confirmation hearing wasn’t necessarily focused on my qualifications to run an organization. I think that becomes challenging for leaders, and that is part of the change in political administration. This organization was set to be merged with other agencies during the Trump Administration. So when I was on the transition team for the Biden-Harris transition effort, we learned what that impact had been. We had a huge loss in senior leadership—the institutional knowledge within that agency—and that’s what I’ve been focused on as a leader since I joined. I was nominated in February. I was not confirmed until the end of June. So I’m just into less than a year of looking to rebuild this agency. And with the fact that there’s so much of a focus on the workforce, we have a daunting task in front of us. So it’s you’re kind of building the plane while flying it, really.

Kerr: Yeah. Tell us maybe a little bit about some of those steps to rebuild. And continuing on some of the contentious confirmation hearings and so forth, how as a leader in Washington do you navigate these sorts of political and social polarization?

Ahuja: I joke that I started off wanting to be a litigator, and then I went to run organizations, and I’ll just let you know litigation doesn’t set you up to run an organization. But I think some of those skills also are just innate as a leader you certainly learn along the way. And so we’ve been very much focused on building the morale within our agency, building that morale across the federal government. One thing I’ll mention is that we brought back the Presidential Rank Awards, which is this cross-government effort where you recognize senior leaders for really significant work—of course, those who are doing amazing work to kind of address the pandemic, certainly a lot of work around climate change and other efforts. But this was something that was done away with in the prior administration. Again, I think there are small and big things you can do, both in your organization and collectively, to show your workforce that you do really acknowledge the work that they’re doing. Certainly for the federal workforce, we can’t compete on pay in the private sector, so what are the things that we are doing every single day? So these are the things that I talk about with leaders, not only within my agency, but across the government. I will say from the political side, it’s challenging, you know? So how do you manage the short term of what’s coming your way? Certainly what are the priorities for this president and vice president, but then also, how do you plan long term? How do you build sustainable vibrant high-functioning organizations?

Kerr: Yeah, so let’s maybe take the first part of what you’re saying. There was this kind of importance of mission, and it’s certainly very true for of the civil service and choosing to be in government. Talk a little bit about the ways that you can connect with talent, both younger and older, about the mission of the government.

Ahuja: Absolutely. I think we win on mission all the time. Where can you work on climate change and also like landing a rover on Mars and doing this kind of work related to the pandemic with the CDC and HHS, certainly a lot of our colleagues now in the Department of Treasury and State managing the conflict in Ukraine? I mean, these are the really significant things that are happening that we have our federal workforce working on. Our folks at the IRS have a daunting task in front of them going into tax season. First of all, let me say, I think we have to do a better job of how we promote the work that we do inside the federal government. I have always felt that as someone who’s been a career civil servant and also been now on the political side. We certainly haven’t made it easier to get into the federal government at times, and we hear that from young people. I’m going out talking to students at universities, and there’s not one portal to come into the federal government. There are dozens of agencies, and you have to kind of figure that out. So we have a work cut out for us, and that’s a priority for me. We give great benefits in government; people stay, which is great; but we also need to be thinking about how we bring in early career talent when that is way below the private sector. We’re at 7 percent of individuals 30 and under in the federal government. We want it to be attractive. We want to bring in kind of the new blood, the new talent, the set of skills that they have. So we have different programs that we’re promoting, we have a leadership program, we are creating new hiring paths. It’s an interesting combination of wanting to find ways to hold onto that institutional knowledge that is so valuable but create the pathways for young people. And they certainly demand different things, so we’re trying to think about it differently. I think for a lot of the federal workforce for employees that I work with, they pride themselves on the fact that they’ve been in an organization for 15, 20, 25, 30 years. That is not going to be the case, I think, for this generation coming in. So I think we have to be adaptable to those changes.

Kerr: So as we’ve worked through your to-do list, we started with data breaches and then we moved to thinking about keeping the staff of 2 million-plus there. Of course, in the modernization future-of-work context, there’s a lot of digital skills being AI ready, being competitive in those spaces. Talk to me about how you’re approaching some of those types of tasks.

Ahuja: Sure. So there are efforts within the federal government to determine where we are missing a set of skills in a particular occupation. We have to build the skills of our IT workforce. So there’s emphasis on training, there’s an emphasis on leadership, there’s an emphasis on cross movement in and out of the government, a greater emphasis around pay and knowing what we have to compete with in the private sector. The government is a bit behind in moving from legacy systems to cloud systems. That is the mix of not only the infrastructure that needs to be put within government knowing kind of all the regulations around cybersecurity, but it’s also related to the set of skills that we have in government. You see a lot of that workforce planning happening in each of the agencies. Because government is so highly regulated, it does place those challenges of how quickly we can move. And then how do we work through some of that so that we’re not always feeling a bit behind. I know this is an area of interest to Congress, because cybersecurity, the attacks that OPM felt, certainly those continue, and they get more sophisticated. So those are the balances we’re trying to manage. But I think, especially, in the IT space is where I think we’ve probably been most creative about how do we create opportunities for young people, for folks who want to try a real challenge, to come in for a little while and then go back out.

Kerr: Yeah, the world’s going to move fast on you and technology’s going to move fast. So making sure you’re in front of the issues is very important.

Ahuja: Absolutely. The president issued a cybersecurity executive order; he’s created kind of this area of focus in the White House, itself. So I think from my days of being at OPM, when we were an agency kind of out there a little bit, there’s a lot more infrastructure in place now to manage what that means. And you’ll see from some of the work of the president, it’s not only what we try to do in the federal government, but what we’re asking every industry to take on—both with the protections we need in place around cybersecurity, but also how do we become a workforce that is adaptable. I think we’re certainly thinking about not leaving anyone behind when it comes to a set of the workforce that needs to transition, maybe, from industries that are no longer kind of viable and vibrant.

Kerr: Yeah, you got both the inbound skillset…

Ahuja: Exactly.

Kerr: ... like the employers, the reskilling and upskilling, and then you’re adding in this extra coordination layer to the private sector and being a good interface there.

Ahuja: Right.

Kerr: Tell us a little bit about the administration’s sort of approach to diversity, and you’ve actually even expanded DEI to be DEIA, so maybe you can unpack the acronym and some of your activities there.

Ahuja: The president has really, at the outset, was very focused on equity. He issued what we titled is an “equity executive order” focused on how federal resources and services go out to communities. Are there certain challenges that certain underserved communities face in accessing those resources? And how can we kind of equalize the playing field there? For the DEIA executive order—diversity, equity, and inclusion, I think as we know it in the industry—we did add the A—accessibility—because there has been a real emphasis for some time around how we make the federal government a model employer around accessibility. So how do we ensure individuals with disabilities have opportunities in the federal government and can build their skills? And it’s like a whole of government initiative. I mean, we’re talking from hiring to onboarding to leadership—where we fall within kind of the ranks of leadership. So we may be doing well in some areas, but we do acknowledge that we don’t have the kind of diversity across the ranks and leadership. Why is that? We’ve given all the agencies baseline information for them to decide: Here’s your benchmarks. We’re asking all the agencies to create these strategic plans. And then OPM is working on a number of policy areas around pay equity. There’s a thing called “unpaid internships” in D.C., we’re known for it, and like moving away from that, because that speaks to the inaccessibility for a whole segment of our society that doesn’t come from a family that can support them without getting paid to get that experience, whether it’s in D.C. or elsewhere but in the federal government.

Kerr: We have a lot of listeners that maybe work in state and local governments and have, again, big workforces. Maybe give even just a little bit more tactical feel for what has been asked and then what kind of information you’re sharing and how you anticipate this benchmarking to play out.

Ahuja: Sure, I’ll give a perfect example. So for some time, the federal government does collect applicant flow data to say, “Okay, you’ve got a set of folks who are coming in, and then how do they fare through the whole hiring process until they’re onboarded?” A part of it is just acknowledging we do have these data points, we do have the mechanism to look at this information. What’s getting in the way? And also one thing that we’ve done—that I know is happening in the private sector, but I’d be interested to know if it’s happening in the state and local arena—is creating chief diversity officers. In government, it’s not been as common; you’ve got the whole segment of diversity and inclusion professionals, but they mostly sit in HR. Those individuals will be instrumental in the kind of practices that we’re talking about around looking at your baseline data and saying, “Okay, you have it; now we’re mandating you actually use it, or we are encouraging at least that you look at it.” So there’s that. They’re going to be looking at as well across the board we’ve given them data on, “So here’s your workforce. How do you fare in the leadership positions within your agency taking a look at what may be some impediments to why individuals aren’t moving up?” What feels really kind of incredible around the energy that’s there is that we’re creating these learning communities across like a 2 million-plus size workforce in all these different agencies. So there’s a lot to learn, but also just a lot to do as well.

Kerr: And it sounds like going all the way back up to where we began this podcast, some of it’s about the tactics and the implementation but a lot of it’s also just does the administration care about this?

Ahuja: Right.

Kerr: And does it show the 2 million-plus workforce that is caring about this and get people activated on it?

Ahuja: You’re absolutely right. I mean, if this is coming from the White House, it’s coming from the president. This is memorialized in an executive order. It’s got the attention of key folks. It does send a very, very strong signal to the rest of government. I think this is in response to this moment in time, as well to acknowledge where we are as a society, what we’ve seen with the George Floyd murder, the protests that we saw at the height of the pandemic. And I think, again, it’s not that these initiatives haven’t existed in government. I think we all see in the private sector and public sector this heightened awareness and emphasis on what it means to create a culture of belonging and inclusion.

Kerr: Let’s go back to the pay equity part. Beyond paying the interns and not having free labor, what are some of the other things that you’ve done? And does this fall in gender lines, racial lines, all of the above?

Ahuja: Absolutely. I think it’s gender and race when we talk about the pay gap, and I think some of that has become apparent in the data that we’ve been looking at and sharing across the federal government. If we think about the demographics in the country, we are becoming more diverse as we look at the age of our population. And certainly folks who are early in their careers represent a greater diversity in this country. So I think that in and of itself means that we’re going to further diversify our workforce. We have also been focusing on pay equity analysis of agencies, so they can, again, look to see how they’re faring. We’re also going to be issuing policies on what we want agencies to be doing. I think one thing that’s really interesting about the government is we’re quite equitable when it comes across pay. You’re not going to see where a CEO makes blank times what the lowest-paid person in your agency makes. It is highly, highly kind of stratified; it’s regimented in kind of how people get pay increases for all that reason. But what you find is, the challenge becomes looking at a person’s salary before they come in and basing their salary in government on what they were paid at their most recent or last job. Pretty much that follows you all the way through government. And so because of that, we see women and people of color who come in from state or local government versus the corporate sector and are already pegged the lower salary. So there are things we’re noticing and that we’re also trying to promote—not just in the public sector, but in the private sector—about not putting so much emphasis on a person’s prior salary.

Kerr: Yeah, the starting point and then if you’re having sort of very regular pay increases really matters a lot. What was that intercept that you set?

Ahuja: What then happens for a lot of folks who do see federal government as a really great livelihood is that, when they get to the time of retirement, there’s a big distinction of what your final payout is. There’s a thing called the “high 3s” in federal government when they base what they base your retirement on. So those high 3s basically calculate your benefit when you retire.

Kerr: Is that your three years of highest pay? Is that the high 3s?

Ahuja: Yeah. Yeah.

Kerr: That’s really important. So we’ve been speaking about these big demographic trends that are in the background, like the aging population, and one manifestation that we saw in the fall was that labor was getting some power, labor was getting some more voice to its actions. I think there was “Striketober” at one point in time. So just maybe share with us a little bit about how collective bargaining happens in the federal government, and are there any sort of adjustments or changes underway?

Ahuja: Absolutely. One of the main things the president wanted to do when he came in—literally this was like maybe the first three days of him being in office—was to reset the relationships between labor and the federal government or the management and federal government. So he issued an executive order, which rescinded a number of executive orders that the former president had put in place that was of a real challenge for unions and the federal government. So that was an important effort. And OPM plays a leadership role in providing technical assistance to the agencies. And so agencies have been revisiting their collective bargaining agreements. Certainly, there’s been a lot of the work that’s been happening around reentry—what we call reentry, kind of returning back to the office. Then most recently, the president also created a task force on worker organizing and empowerment, which is about building union density across the country. Being the largest workforce in the country, we should be a model employer. We should be a model employer when it comes to pay, when it comes to benefits, when it comes to diversity, equity, inclusion, and accessibility. And the president believes that strongly in the sense of the support for the workforce, which also means support for unions. So there are a number of strategies that we have included in this report that went to the president a few weeks ago, in early February—all the different ways that the federal government’s going to support unions. Seventy of those strategies, 10 of which are for the Office of Personal Management and how to build union density in the federal government, is like really simple things, like: How often do you communicate to individuals that are part of a union? How to get access? How to ensure that the union in that agency has the information of people coming in? The president wants to be the most pro-union president in this country and is trying to show that by his focus on his own internal shop.

Kerr: You mentioned along the way there telework. And the federal government, like most every other workplace, got thrown kind of remote. Where are you in terms of the reentry to the office? And what do you kind of see as the future scenarios?

Ahuja: Sure. I would say, just to level set, like more than 50 percent of the federal workforce never left the work site. But there was a significant portion of them that did very quickly. And I will say, I was one of those non-believers that this idea of like you could remote work or telework for a considerable amount of time, and that I wouldn’t get to see you as a manager that you were able to kind of perform your duties. I think we’ve all been proven wrong. You don’t lose productivity when you’re working offsite or you’re working from home or some other location. And I think it’s been a benefit, as there has been in other sectors, to employees to balance everything that goes on in our lives. So it’s kind of the whole of bringing your whole self to work kind of idea. I’ll say, for the federal government, what becomes a little more unique or challenging is that we also are in charge of a whole set of services and goods to the public. So now agencies are having to balance where, yes, they were able to actually shift very quickly, do a lot through telework and remote work. But there are a lot of things that didn’t happen. And there are backlogs like with the IRS also with OPM. We have a retirement backlog that’s due to the pandemic, that people weren’t able to kind of go into the office and access paper files. So we’re going to have to have some balance of hybrid work. So that’s what we’re in the midst of doing now. I think there’s now more of an appetite than ever before to say, “What are the technologies that we need in government to allow more of our workforce to service the public, but in a way that gives them the workplace flexibilities,” because we need to be able to compete with other sectors and we will lose folks, you know? One thing I’ll just say is we’ll never go back to what it was like before, that is for sure. And I think it was a huge leap for government. I mean, absolute huge leap. If you look at the stats of where we were pre-pandemic to where we are now, it’s pretty astounding.

Kerr: Huge leap, but I think many of our listeners would agree—and certainly it’s been some of the localized practice at HBS, Harvard Business School with some of the younger talent that we want to bring in—you’re not competitive if you don’t have some hybrid options or some greater flexibility toward the workplace.

Ahuja: Absolutely. I think a big question for us, though, in what we’ve been advising our colleagues is that, how do you create some equitability? So kind of create the process in the equitable fashion that you’re tying it to a position, and not whether you think that persons can succeed away from the office. Certainly, there are factors of how you make that decision. I think they’re also issues around equity of, usually it is the more technical, more professionalized occupations in an agency that have more ability to telework than those that are more clerical in nature, more front line. So I think that the challenge I think for us is where some positions are just inherently a lot easier.

Kerr: Yeah. Kiran, as the pandemic has dragged on, mental health concerns have become more and more acute. Tell us a little bit about your approach and what you tried to put in place to help employees on those fronts.

Ahuja: Sure, so there’s really two things or two vehicles. One is that, in the federal government, we have employee assistance programs. I think oftentimes you forget it’s there, and it’s available 24/7. And I think our hope is that, because of what we’re all dealing with, that people are utilizing and taking advantage of it. I think we’re also trying to pay more attention to what it means to ensure that those programs are vibrant and available and really have a set of resources that can address kind of the myriad of concerns. We have another program we’ve set up that’s focused on caregivers, because I think we’ve all realized which way—whether it’s children or older members of our family. And another thing I’ll mention is that within our health benefits program, which is the largest employer-based health program—8 million-plus—that we’ve really encouraged our carriers to promote telehealth opportunities where we can make some of this more accessible. I will say that this is of really big importance to the president. This is top of mind; he is a type of president who is hugely empathetic and has really asked us across the federal government, like, what could we be doing, knowing just the challenges we’ve all been facing both physically and mentally during this time.

Kerr: Maybe one final question is, as we think about a greater presence for remote work, hybrid work, how do you see the future of the federal government in terms of its spatial locations? There’s still this uncertainty as to whether some of the bigger cities will hold as much talent as they did before, can we distribute that out a little bit? What’s the kind of plans you have in place or the thoughts toward that future?

Ahuja: Sure. Well, first of all, 80-plus percent of the federal workforce is outside of Washington, D.C. We literally have a federal employee in every single county in this country. So right then and there, we have what we call regions, and all over across the country how the federal government kind of divides itself. So there’s real possibility and capability. I think we’re seeing a lot more of the agencies promote their job positions as remote or eligible or flexible around location or multiple locations. We’re having interesting conversations with our colleagues, the General Services Administration, that does everything around the federal buildings and footprint about how we can do some consolidation. One thing that’s interesting in the federal government is we have these skiffs, which is where we are able to review classified information. And so each agency has its own skiff. So how do you create a kind of universal skiff, where you can have multiple agencies go into one location that might be in some part of the country? And so just to give a little flavor of how government has to think about these things in different ways. So I do think there’s a real opportunity. I think a lot of our colleagues are very well aware that in order to compete, that we have to be able to embed these flexibilities into the learnings from the pandemic, and I think we see that happening. Across the federal government I think we will see it more. I think we will also have to revisit, from a legislative front, what might need to be some changes in the laws related to telework and remote work, which will kind of be next on the list.

Kerr: Kiran, maybe a final question—as both a practitioner and someone leading a very large agency, but also as someone who’s connected into the policy front—any parting advice for our listeners as they think about the future workforce issues and where they should be heading?

Ahuja: Goodness. You hear about the Great Resignation. I think there’s just been this question we’ve all asked ourselves about why we do what we do? Is it meaningful? What does it mean to our families and our friends and our communities? Oftentimes the work of OPM has not really been front and center and kind of been behind the scenes. But I think what we’ve been able to convince our colleagues and those empowering government is that if you don’t take care of your workforce... You know, your people are your biggest assets. And I think in a lot of ways we’ve taken that for granted. And I think that’s not the case anymore. So I’ll say for myself, and I know what’s incredibly important for the president, is the morale all of the workforce—equally, the morale of this country and how we’re feeling right now as we come out of this pandemic. I spend a lot of time thinking about what it means for people to give to a certain mission every day. How do we make it fulfilling? How do we acknowledge them in many different ways, the recognition piece? They’re looking for like what gives them meaning and drive, but also that they’re part of a great team and that they’re being acknowledged and valued for the work that they provide.

Kerr: We would certainly echo the sentiment that HR is not sitting over there as a place to punch the ticket or ensure compliance, but in the workforce of the future, it’s going to be front and center in both the big ways then also in those very small ways.

Ahuja: Absolutely.

Kerr: Yeah. Kiran Ahuja is Director of the U.S Office of Personnel Management. Thanks so much for joining us today.

Ahuja: Thank you, it’s been great chatting with you.

Kerr: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.