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Making US Public Sector HR Strategic: The Role and Value of Alternative Service Delivery Models
23 July 2008:
Washington, DC (July 23, 2008) – Public-sector HR executives stand poised and ready to deliver greater workforce productivity, lower human capital-related costs and the critical services needed by their constituencies. But efforts to transform HR into higher-performing organizations continue to be stymied by scarce resources, inadequate technology and an aversion to alternative ways of delivering traditional HR services, according to a recent survey by EquaTerra and Human Resources Executive magazine, which polled 450 HR professionals, 30 percent of whom work in the public sector.
“The study highlights the challenges public-sector HR faces in a time of diminishing resources,” says Neil Reichenberg, executive director of the International Public Management Association for Human Resources. “Progress is being made, but it’s clear HR departments need to develop innovative strategies and tools that enable them to become leaders in total talent management within their organizations.”
Equally troubling, public-sector HR continues to lag behind the private sector when it comes to being perceived as strategic to the organization. While 61 percent of respondents from commercial companies felt executive management viewed HR as a strategic asset, only half of the study’s public sector respondents felt they were perceived this way.
“When half of the respondents – HR practitioners themselves – believe they aren’t viewed by others as providing strategic value to their organizations, we’re in trouble,” said Glenn Davidson, managing director of EquaTerra’s public-sector practice and co-author of the white paperMaking Public-Sector HR Strategic. “This self-assessment signifies that, as a profession, we still have much work to do to demonstrate HR is more than a cost center. Effective capital management is the difference between a good and a great organization.”
One of the biggest stumbling blocks to moving the public-sector HR organization up the value chain may be its disinterest in alternative service delivery models such as shared services for transaction processing, the creation of consolidated centers of excellence for delivery of core services and the use of outsourcing for either HR information technology or HR business processes. Survey respondents scored each of these alternative service delivery models in the mid-to-lower end of a five-point scale.
Stan Lepeak, managing director of EquaTerra’s research business and co-author of the white paper, predicts, however, that public-sector HR organizations will follow the commercial sector over the next several years in adopting new methods of service delivery. “The benefits include greater overall efficiency and effectiveness and freeing staff to focus on the high-level, high-impact activities that are strategic to the organization’s success.”
Other key findings from the EquaTerra HR white paper:
- HR IT Operations Continue to Disappoint – The study shows fairly low satisfaction levels with HR IT applications and systems. On a 1-to-5 scale with 5 being most satisfied, public-sector HR IT was rated 2.64.
- Total Talent Management Top Priority – More than 70 percent of study respondents indicated becoming a leader in total talent management is key to making HR more strategic.
- Lack of Resources Barrier to HR Transformation – Half of public sector respondents cited lack of resources as the number one barrier to overall HR transformation, with lack of funds for HR IT transformation a close second.
- Public Sector Disinterested in Outsourcing Models – While it’s generally understood shared services, HR ITO and HR mission and business services outsourcing could free staff to become more strategic, public-sector organizations are disinterested in such models, particularly outsourcing.
- RPO Not Deemed Critical Talent Management Tool – Despite industry buzz, the adoption rate of Recruitment Process Outsourcing (RPO) among public sector organizations is glacial. Less than six percent of public sector respondents indicated their organization had implemented a RPO strategy, citing everything from costs to simply feeling a third-party could not understand their recruiting needs.
Download a copy of the report
Source: EquaTerra
