USAID's workforce system is broken. Can Samantha Power fix it?

Low morale and high vacancy rates, aid workers who say they are treated like office supplies, warnings against organized strikes, and a “virtual caste system” of inequitable hiring mechanisms. For years, the United States Agency for International Development has been warned that its workforce system is broken and that its leaders need a strategic vision for something more sustainable and better suited to advancing America’s foreign aid priorities. In recent months, those warnings have broken out into a string of workforce-related fires that have thrown parts of the U.S. government’s bilateral aid agency into disarray — even while it tries to sustain a massive humanitarian operation in Ukraine and safeguard health programs against the COVID-19 pandemic. USAID’s Bureau for Humanitarian Assistance — which is currently managing record amounts of funding in response to an unprecedented number of global crises — has been trapped in what one official described to Devex as a “death spiral” of low morale and staffing shortages. An effort to improve employment conditions in that bureau by offering contractors paid parental leave instead ensnared them in months-long paperwork battles with the agency’s bureaucracy. A USAID official told Devex that the employment processes for humanitarian contractors “differ in no way, in some cases, from procurement of office supplies or staplers.” Meanwhile, in USAID’s Bureau for Global Health, an attempt to transition large numbers of staff from one contracting firm to another devolved into a bitter fight over benefits, equity, and transparency. The situation got bad enough that some global health staff organized a collective “sick out” in December to protest the agency’s handling of their employment. That in turn prompted USAID’s head of labor relations to threaten legal and professional consequences for striking against the federal government. Not even a Thanksgiving video message from the award-winning writer, surgeon, and leader of the Global Health Bureau Atul Gawande — seen by Devex — could lower the temperature. “When it suits USAID, we are considered one and the same as the direct hires,” a global health contractor told Devex. “But they change their tune when it suits them to say otherwise, for example, when we ask for transparency around salary and benefit issues.” While these might look like isolated incidents that come with managing a large government bureaucracy, they are rooted in a systemic problem that is specific to USAID and that gets worse the longer it persists. Interviews with current and former contractors, USAID officials, and key members of Administrator Samantha Power’s leadership team reveal a foreign aid agency in an increasingly untenable position that threatens its ability to carry out its mission or make progress on key policy priorities — and a leadership team with a limited window of opportunity to fix it. “You cannot survive as an agency with a workforce [structure] that is fundamentally not fit for purpose,” said Dennis Vega, USAID’s chief of staff, in an interview with Devex. As head of USAID, Power has pledged to tackle this issue, which has outlasted previous administrations’ attempts to do so. Many feel her unique star power and stature within President Joe Biden’s administration have made this a make-or-break moment to solve one of the agency’s most intractable problems. But in doing so, Power and her team are attempting two difficult tasks, which some inside the agency believe to be at odds with one another. They are trying to strike a delicate balance between improving employment conditions for the agency’s existing workforce — even as they acknowledge that system is broken — while laying the groundwork for a more comprehensive overhaul. A 20-year ‘hodge-podge’ USAID’s current crisis is decades in the making — and rooted in a problem that experts have repeatedly warned about. The agency’s budget is divided in two parts: The program budget funds actual development work and humanitarian response efforts, while the operating expenses budget is supposed to cover the cost of doing that work, such as salaries and rent. It increasingly does not. While lawmakers have regularly approved more funding for the agency’s program budget in response to new priorities and crises, they have been less willing to appropriate corresponding increases for USAID’s operating expenses budget. USAID manages more than $25 billion a year, and emergency funding for Ukraine and COVID-19 response have pushed that number higher. Meanwhile, the agency’s operating expenses budget was about $1.7 billion in the 2022 fiscal year. “You cannot survive as an agency with a workforce [structure] that is fundamentally not fit for purpose.” --— Dennis Vega, chief of staff, USAID Since USAID has to get congressionally appropriated money out the door every year, it has had to find budgetary loopholes to bring enough people into the agency to administer its programs. With its operating expenses budget falling short, the agency has resorted to using program funds to fill its staffing needs. That comes with some serious downsides. USAID can’t hire career government employees such as foreign service and civil service officers using money from the program budget. So instead it has hired large numbers of “short-term” employees or contractors — or hired contracting firms to bring in their own employees to work inside the agency. The result is that USAID now relies on a workforce that has been cobbled together from more than 20 different hiring mechanisms that each come with different authorities, limitations, benefits, and management structures. Some bureaus — such as Global Health, Humanitarian Assistance, and Conflict Prevention and Stabilization — are now mostly staffed by people on term-limited contracts. Many of these hiring categories fall under different human resource responsibilities, meaning that USAID does not centrally manage its own workforce. For a long time the agency has even lacked the ability to account for what that workforce is — let alone strategically plan for something better. “I think we’re getting there,” Vega said. “We are in a much better place today than we were two years ago when we got here. I think we can say with much more confidence, ‘this is the entirety of our workforce’.” The agency’s current leadership acknowledges the risks posed by this arrangement. “This reliance on a hodge-podge of non-career and term-limited mechanisms … puts at risk the institutionalization and oversight of some of the Agency’s highest-priority initiatives,” USAID acknowledged in its 2022 “Transforming the Workforce Report to Congress.” They are not the first to draw this conclusion. In 2003, the Government Accountability Office published two reports titled, “Strategic Workforce Planning Can Help USAID Address Current and Future Challenges.” and “USAID Needs to Improve Its Workforce Planning and Operating Expense Accounting.” Since then the GAO and USAID’s Office of the Inspector General have published at least four more reports raising the same or similar concerns, with titles such as “USAID Needs to Improve Its Strategic Planning to Address Current and Future Workforce Needs” and “Strategic Workforce Planning: Challenges Impair USAID’s Ability to Establish a Comprehensive Human Capital Approach.” When USAID officials prepared transition briefing materials for the incoming Trump administration in 2016, they warned: “The current workforce system was built for a different era. Updates to this system have been ad hoc and short term.” Just last month, the latest peer review of U.S. government foreign aid by the Organization for Economic Cooperation and Development’s Development Assistance Committee found that “USAID does not have a global strategic workforce plan.” Power’s plan Vega, who plays a key role in coordinating USAID’s workforce efforts as chief of staff, said that Power and her team at USAID “have put together what I feel is a pretty comprehensive and strategic approach to dealing with this issue.” A key component is the Global Development Partnership Initiative, an effort to increase the number of career foreign service positions from 1,822 at the end of the 2021 fiscal year to 2,500 and career civil service positions from 1,511 to 2250 by 2025. That boils down to convincing U.S. lawmakers to approve increases in the operating expenses budget to support that many additional career USAID employees, Vega said. As part of the GDPI, Power’s team is also looking at changes to USAID’s recruitment and hiring practices to improve diversity among direct hire government employees, ensure they include people with skills the agency will need in the future, and give them the training and opportunities for promotion to succeed, Vega said. While it pushes for more foreign service and civil service employees, Power’s team is also aware that Congress is unlikely to go along with increases to the operating expenses budget “at a rate that will allow us to move completely to a permanent model,” Vega said. With that in mind, Power’s team wants to “mitigate the immediate issues while understanding that the long-term goal has to be for a permanent civil service and foreign service staff that is required for the mission of the agency,” Vega said. In other words, they are looking for ways to make a broken system a little less broken. One piece of that interim plan is to increase the number of staff employed under a hiring mechanism called foreign service limited. These are government employees with the corresponding benefits and authorities, but who are limited to five-year terms and can be hired out of USAID’s program budget. “We're trying to move to more direct hire mechanisms, even if they're term-limited, because overall they have better benefits and just are easier to manage for the agency and better for the individuals,” Vega said, acknowledging that this is an interim solution. “Our ultimate goal is to have enough career positions that we're really using term-limited positions as needed for surge capacity,” he said. Shared prosperity? But even with those efforts underway, USAID still faces the problem that has caused so much disruption in recent months. Many of the contractors and other “temporary” employees who have been brought in fill critical roles feel their employment conditions do not reflect the value they provide to the agency, and they want better treatment. None of this is news to Power and her team. “​​I will prioritize equity among our staff—regardless of whether they are hired as foreign service officers, civil servants, locally-hired foreign service nationals, or third-party contractors,” Power said in a November 2021 speech outlining her vision for the agency. She added that contract staff are “often dispatched to some of the world’s most dangerous places,” and “deserve basic benefits like retirement accounts, parental leave, and health and life insurance.” The question is: Will improving benefits for contractors and other non-career staff working inside the agency in the short term undermine the longer-term goal of moving USAID in the direction of a permanent workforce? The union representative for USAID’s foreign service officers has voiced that concern. “Institutional support contractors (ISCs) are not USAID employees. Foreign service limited (FSL) appointees are not career employees. They are all valued colleagues, subject matter experts, friends, dedicated professionals and passionate humanitarians. But they are not career Federal employees,” wrote Jason Singer, the USAID vice president of the American Foreign Service Association, in a staff message early last year. “Equity among individuals does not translate into equality of roles, benefits, or responsibilities among hiring mechanisms,” Singer wrote. Singer worries that putting all of these different hiring mechanisms on a level playing field risks eroding the incentives for people to seek or remain in career government positions. That message sparked its own internal conflict. More than 1,000 members of the USAID workforce signed onto a letter objecting to Singer’s message, charging that it “significantly undermines morale and cohesion within USAID.” “If we all have protections and benefits, the entire workplace benefits. We recognize that you are seeking improved protections and benefits for yourself and your colleagues; we see these efforts as parallel and intertwined,” they wrote in the letter to AFSA and Samantha Power and shared with Devex. Power’s team takes a similar view, according to Vega. “We work with countries to build inclusive societies, and a core part of that is helping people understand that increased opportunities for one group doesn't come at the expense of others,” he told Devex. To achieve their goals, USAID’s leaders are working to marshall support from powerful players in Congress and other parts of the Biden administration. Vega said Power has made clear with Secretary of State Antony Blinken, members of the White House Security Council, the Office of Management and Budget, and U.S. lawmakers that, “workforce is at the top of the priority list,” Vega said. “Everything else we're trying to do is impossible without a strong workforce,” he said. They must also answer basic questions about what it means to be a USAID employee and how the agency’s workforce should be designed to achieve its mission — questions that have gone mostly unanswered for decades.