Competing Visions of the Direct-Hire Authority Covered Under 5 U.S.C § 3304

What have been the results of direct hire authority in the federal government?

There is widespread agreement these days that Federal hiring is in need of repair. The criticisms abound: the process takes too long, is too complex, and often fails to produce quality candidates. The criticisms persist despite numerous efforts to reform hiring. Part of the problem is the “iron triangle” common to business processes; that is, there are inherent tensions among speed, cost, and quality, and in merit-based hiring, quality—which includes treating applicants fairly and identifying the best applicants—should not be treated as optional. 

To address inefficiencies in Federal hiring, the Government has created a number of alternatives to the competitive hiring process. One of these is the direct-hire authority covered under 5 U.S.C. § 3304(a)(3) (herein referred to as §3304 DHA). This authority was established by the Homeland Security Act of 2002 and streamlines competitive service hiring procedures for positions in which critical hiring needs or severe shortages of candidates exist. In MSPB’s research brief Direct-Hire Authority Under 5 U.S.C. § 3304: Usage and Outcomes, we look at how §3304 DHA is being used and some of the results. 

The good news is that there are many positive results. First, although usage of §3304 DHA has grown steadily since it was established in 2002, it accounts for a relatively small proportion of all competitive service appointments. The §3304 DHA has been used largely to fill positions where there is a critical hiring need or shortage of candidates, including medical, information technology, and acquisition occupations. So it appears that the authority is being used selectively, to supplement competitive hiring rather than replace it. Second, the demographics of §3304 DHA hires compare favorably with those hired through “regular” competitive service procedures in terms of race, ethnicity, and gender. Finally, Federal human resources (HR) representatives reported benefits such as improved applicant quality, improved timeliness, and increased satisfaction among hiring officials and new hires. 

The not-so-good news is that we may not all be on the same page about the role §3304 DHA plays in Federal hiring. As discussed in the brief, guidance from the Office of Personnel Management (OPM) indicates that while agencies should ensure applicants meet the qualification requirements, they should not assess for applicants’ level of qualifications. Rather, “agencies should assess applicants in the order in which the applications were received, and select any qualified applicant in an order that approximates order of receipt.” OPM officials stated that this guidance maintains objectivity in selection and reflects the statutory requirements that §3304 DHA be used only for critical hiring needs or a severe shortage of candidates, thus making hiring quickly extremely important. 

On the other hand, agency responses to our inquiries seem to indicate that reaching high-quality candidates is an important goal when using §3304 DHA. Many agencies reported expanding recruitment efforts, implementing additional assessments, and doing more to draw distinctions among applicants. This suggests that agency satisfaction with §3304 DHA derives from, at least in part, a perceived ability to hire better-qualified candidates—not just the ability to hire qualified applicants quickly. So it appears that OPM and agencies may have different views of how to use §3304 DHA and its place among hiring flexibilities. 

These differing views raise the question of whether direct-hire flexibilities should only be used for reasons of speed or scarcity or whether quality should also be a factor. This is a critical question facing Government policymakers. The research brief documents rapid growth in the number and use of direct-hire authorities not covered under §3304. This growth appears to demonstrate an underlying frustration with current competitive hiring procedures. If the growth and frustration continue, these other DHAs could become the primary means of hiring in some occupations or organizations. This reinforces the continued relevance of a 2006 MSPB recommendation that OPM, in consultation with Congress and stakeholders, develop a policy framework for hiring reform. That framework could address what outcomes can reasonably be expected from DHAs and how DHAs can best be used in conjunction with competitive hiring procedures.

James Tsugawa is the Acting Director of the Office of Policy and Evaluation with the U.S. Merit Systems Protection Board and has worked in the Federal human resources field for over 30 years.

This column was originally published in the U.S. Merit System Protection Board’s newsletter,Issues of Merit, and has been re-posted here with permission from the author. Visit www.mspb.gov/studies to read more of MSPB’s newsletters and studies on topics related to Federal human capital management, particularly findings and recommendations from their independent research.