Retiring Federal Reserve Board Chairman Paul A. Volcker, claiming the government is having an increasingly difficult time recruiting and holding onto high-quality officials, announced yesterday that he will head a new privately funded commission on public service.

The two-year commission, to be made up of "nationally recognized and public-spirited citizens," will seek to recommend ways to make government service more attractive, Volcker told the Senate Banking Committee in parting testimony.

Volcker, 59, announced on June 2 that he would retire after serving as eight years as head of the nation's powerful central bank. He is expected to stay on at the Fed until the Senate confirms his probable successor, New York business economist Alan Greenspan.

Volcker said he will serve, without pay, as chairman of a privately funded National Commission on the Public Service.

The nonprofit commission, in a statement, said that other members of the panel would include Elliot Richardson, former attorney general and defense secretary; Elmer Staats, former comptroller general; Robert Schaetzel, former U.S. ambassador to the European Economic Community; John Brademas, former House majority whip and now president of New York University; and former senators Edmund Muskie (D-Maine) and Charles McC. Mathias (R-Md.).