HR Service Delivery in the Federal Government: Are You Sourcing Ready?

According to a just-completed study by EquaTerra - conducted in association with IPMA-HR and the HROA - most Federal HR executives feel they are not sufficiently prepared to successfully identify, evaluate and execute on the best HR services delivery option for their agency's or department's unique needs.  As a result, they may never realize the true benefits of a solid sourcing strategy, such as greater control, capital outlay avoidance, reduced operating costs, and provision of better HR service delivery, regardless of whether those services are delivered via an internal shared services center or an external commercial service provider.
Key findings from the study - participated in by more than 25 Federal HR executives, 86 percent of whom have 10,000+ employees in their parent agency or department, and all of whom have been involved in some type of sourcing initiative - include:

• Meaningful Benchmarks and Data - 100 percent of survey respondents stated they lacked access to meaningful benchmarks for measuring the cost of HR services, and 80 percent noted they would like more and/or better information on their own costs and performance
• Business Case - 83 percent noted they would build a better business case for their service delivery transformation initiative if they had the opportunity to do it over again
• Provider Assessments - Nearly half admitted they had not conducted a detailed comparison of service providers, and over 60 percent indicated they would like more and/or better information on service providers, whether internal or external
• Transition and Change Management - Nearly 35 percent indicated they have little to no change management program or processes in place, and more than 65 percent stated they would place greater emphasis on transition and change management (internal communications) if they could start over
• Governance - 55 percent indicated their organization recognizes and emphasizes the importance of governance (managing operations once the contact has started); 55 percent felt they have adequate governance processes and procedures; and 30 percent noted they have effective governance software and systems
• Contract and Performance Management - 66 percent indicated they expend significant resources on this sourcing practice, yet 33 percent rank their output and satisfaction levels in this area as "poor"

Despite these facts, Glenn Davidson, Managing Director of EquaTerra's Public Sector practice, noted that significant directional assistance is increasingly available to those responsible for the HR function. 

Said Davidson, "Any effort to design and operate an effective HR sourcing process should start with a vision and design for renewing HR services linked to the agency's core mission.  It should then generate and sustain the necessary enthusiasm, focus and alignment, among the executive team and staff, for the future state of operations.  Next, an organization should identify and evaluate all HR service delivery alternatives.  And, finally, it should design and execute a roadmap for achieving transformation, including a designated, dedicated team capable of implementation, management and governance.  These best practices apply to both shared services and outsourcing-based transformation initiatives."
Davidson also noted that the Office of Personnel Management (OPM) and the General Services Administration (GSA) are beginning to provide needed advice and guidance to Federal HR executives.  For example, OPM soon will release two publications. One is designed to show agencies how to migrate to a shared services center in their effort to transform their HR functions.  The second is designed to provide guidance and tools that assist customer agencies to prepare for and manage a migration of their HR management operations to a shared services organization - e.g. migration roadmap, business case templates, and questions for conducting due diligence on service levels and pricing.

An EquaTerra-authored paper, entitled, "HR Service Delivery in the Federal Government:  Are You Sourcing Ready?", discusses the study findings, and also delivers comprehensive information and data on:  HR's Transformation Journey; the HR LOB's Role in the Transformation Process; real-world Federal HR Sourcing Experiences; How Federal HR Manages the Sourcing Process Today; Creating an Effective Sourcing Process; and Lessons Learned (from the front lines).  The paper is available by going to:

http://www.equaterra.com/kr/research/hr-service-delivery-in-the-federal-government-all.aspx