How the VA closed a 66% pay gap between public and private IT jobs

Compensation budgets may have been largely in flux amid the past two years of inflation and economic uncertainty, but one area in which companies have not shied away from increasing pay is technology, particularly for information technology staff.

Little wonder then why HR leaders in the U.S. Department of Veterans Affairs Office of Information Technology were shocked when they became aware in late 2021 of an estimated 66% pay gap between technology and cybersecurity workers in the government and private sector, according to Nathan Tierney, deputy chief information officer and chief people officer at the agency.

Tierney had been part of an interagency partnership between the VA and other federal agencies, including the Departments of Energy, Health and Human Services, Homeland Security and State. In an interview with HR Dive, he explained how the federal government was able to move fast on its findings to implement a “special salary rate,” or SSR, to ensure IT personnel could receive pay equivalent to what they would find in the private sector.

Pitching a pay solution

Documenting the government’s pay problem constituted the first step in the agencies’ mission to improve pay, but the partnership had legwork to do to move the project forward. That began with documenting pay gaps not just for IT workers in the initially studied market of Washington, D.C., but also for workers across the U.S.

“Government kind of has a stigma that it takes a long time for the bureaucracy to drive change,” Tierney said. “That may be true in some places, but we had a phenomenal team that put together all the pay tables for [regions] across the country.”

By July 2022, the agencies had assembled their report and submitted it to the Office of Personnel Management, the government’s chief HR agency. “They looked at it, they loved it, and then on Jan. 11, which is actually my birthday, they approved a special salary rate,” Tierney said. The changes were finally implemented in July 2023.

Faced with the question of how to pay for the increases, the VA turned to the recently passed Promise to Address Comprehensive Toxins Act, or PACT Act, which increased benefits eligibility and treatment for veterans but also granted the agency funding to improve services departmentwide, including at the Office of Information Technology, Tierney said.

The implementation of the SSR had an immediate impact. According to Tierney, 99% of the VA’s IT staff received pay increases, with an average raise of 17% above their previous pay rates, or $18,000 annually.

“You look at the attrition drivers, money is always one of the top ones,” he said. “It’s not so bad if you jump ship and come over here. You’re not going to take a huge pay cut.”

‘Mission first, people always’

That the VA implemented the change in less than two years is also notable given that Tierney, by his own admission, does not have a traditional HR background.

After serving in the Army, he moved to the private sector and worked in a business innovation role and later as a chief operating officer before moving to the VA to become executive director of the agency’s Office of Strategic Planning and Analytics. Tierney then spent two years as the VA’s chief analytics officer before he “parachuted in” to tackle the agency’s recruiting issues.

“I’m not your normal HR guy, and I don’t even know what normal HR people do,” he said. “I just want to get stuff done, and one of the ways you get stuff done is you understand your people.”

Tierney and his team analyzed feedback from IT employees to create an employee journey map that highlighted the highs and lows of the employee experience. Through this exercise, the team discovered that pay was a primary driver of disengagement.

“I have a pretty simple mantra: people first, mission always,” Tierney said. “What I mean by that is if you have trust and transparency, if you unite people who are passionate about purpose, you’re going to accomplish great things.”

Going beyond pay

Despite its success, the VA is going beyond implementing pay increases for IT professionals by taking a critical look at its approach to hiring, which Tierney admits had been sloppy in recent years.

Like other federal agencies, the VA relied on the government’s USA Jobs website. Like other job boards, USA Jobs collects massive numbers of candidate resumes, creating an overly broad talent pool.

“The way we’re approaching and attracting talent was kind of flawed,” Tierney said. “You build it and you think they’re going to come, and a lot of people come, and that puts a burden on HR to sort through all of those resumes.”

The agency set about taking up a more analytical approach, using occupational questionnaires to screen candidates. “That’s been a fundamental shift in the mindset,” Tierney said. “We’ve worked on at least a couple of pilot [programs] over this year, and now we’re going to roll it out into adoption.”

He added that the Office of Information Technology also recently regained its talent acquisition authority after previously relying on the Veterans Health Administration, a subagency of the VA, to conduct those operations. “So now, under my team, I can build out a whole separate directory of HR specialists to help me do that function,” Tierney said. “I can go out and source talent in a different way than I did in the past.”