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This testimony discusses the federal government's strategic human capital management challenges, particularly in the information technology (IT) area. No management issue facing federal agencies could be more critical to the nation than their approach to attracting, retaining, and motivating people. Having enough people with the right mix of knowledge and skills will make the difference between success and failure. This is especially true in the information technology area, where widespread shortfalls in human capital have undermined agency and program performance. The federal government today faces pervasive human capital challenges that are eroding the ability of many agencies--and threatening the ability of others--to economically, efficiently, and effectively carry out their missions. How successfully the federal government acquires and uses information technology will depend on its ability to build, prepare, and manage its information technology workforce. To address the federal government's human capital challenges as a whole, GAO believes that (1) agencies must take all administrative steps available to them under current laws and regulations to manage their people for results; (2) the Administration and Congress should pursue opportunities to put new tools and flexibilities in place that will help agencies attract, retain, and motivate employees--both overall, and especially, in connection with critical occupations such as those in IT, and; (3) all interested parties should work together to determine the nature and extent of more comprehensive human capital (or civil service) reforms that should be enacted over time. These reforms should include greater emphasis on skills, knowledge, and performance in connection with federal employment and compensation decisions, rather than the passage of time and rate of inflation, as is often the case today.