لتلت

1. HR Transformation
Oscar Jackson, IPMA-CP, President, &
Neil Reichenberg, CAE, Executive
Director, International Public
Management Association for Human
Resources (IPMA-HR)

2. International Public Management Association
for Human Resources (IPMA-HR)
Located in Alexandria, VA
Website - www.ipma-hr.org
Members are Human Resource professionals who work primarily
in the public sector
Over 8,000 members in more than 25 countries
IPMA-HR…Working Together on Behalf of the Public HR
Community
Programs, Products & Services include
Publications
Human Resource Center
Professional Development Programs and Conferences
Human Resource Certification Program
Employment Examinations

3. HR Transformation
Research project launched in 2006
Effort to obtain information from senior HR leaders
Three surveys conducted with several hundred
responses mostly from IPMA-HR members in the
United States:
HR Transformation Overview
HR Service Delivery
Aging Workforce
Results of the fourth survey on strategic recruiting
and staffing available soon
Results are on the IPMA-HR website,
http://www.ipma-hr.org

4. Public Sector HR Environment
Today, Public Sector organizations face numerous challenges in attracting and retaining a
quality workforce that can support and carry out their goals and mission.
As the impact of the aging workforce increases, Public Sector organizations must focus on
preventing the loss of important knowledge while developing new leaders and skilled
professionals.
Public Sector organizations are often less equipped to compete for talent with the private
sector.
The nature of Public Sector organizations and the political environments in which they
operate can restrain the use of new tools such as outsourcing or shared services models to
improve and transform HR service delivery and operations.
Human Resources Information Technology (IT) is clearly a challenge as Public Sector
organizations struggle with legacy systems and aging IT infrastructures.
HR Directors and Managers struggle to gain the support of the organization’s executive
leadership and to establish HR as a strategic partner.
Within organizations, efforts to transform and improve other areas may take precedent over
HR – yet another signal that executive leadership does not recognize the value of HR
improvements or see the alignment with overall organizational goals.
Cost remains a constant issue for HR operations in the Public Sector and HR professionals
must balance conflicting agendas when pushed to improve and advance service levels while
cutting costs and reducing budgets.

5. Key Findings – Survey #1
The survey results and analysis resulted in several interesting
points about HR transformation in the Public Sector:
HR Professionals recognize the connection between
improved and upgraded Information Technology (IT) and HR
transformation.
Management support is a key factor in pursuing HR
transformation.
HR Professionals recognize the importance of HR being
perceived as a strategic asset to an organization.
HR Professionals understand the value in Workforce and
Succession planning but clearly desire assistance in this
area.
Outsourcing is not the norm and is not readily recognized as
a key tool for HR transformation and improvement.

6. Information Technology in HR
How would you characterize your use of Information
Technology (IT) in HR?
26.7% Limited Use of IT in HR
42.7% Moderated Use of IT in HR
30.7% Comprehensive Integration of IT in HR
For overall satisfaction in IT, on average respondents
ranked systems and applications that support HR
operations low (3.19 mean score).
The low rank of systems and applications is
consistent with other results indicating the need for
upgrades and improvements in HR IT.

7. Perception of HR
When asked to rank on a scale from 1
(low/bad) to 5 (high/good), respondents
ranked leadership’s satisfaction with HR
service delivery as high:
59.8% ranked satisfaction at a 4.
14.8% ranked satisfaction at a 5.
This is the perception of senior HR leaders

8. HR Quality
When asked about quality within the HR
department, on a scale of 1 (low/bad) to 5
(high/good), respondents ranked:
People (HR Staff): Mean rank of 4.38
Processes: Mean rank of 3.76
Success in performing as a strategic asset to the
organization as a whole: Mean rank of 3.65
Perception of HR as not being a strategic
asset can serve as a barrier to HR
transformation.

9. HR Strategic Planning
When asked if they have an existing strategic plan,
55.1% of respondents do not have a strategic plan for HR.
44.9% do have a strategic plan for HR.
For those organizations that do have a strategic plan for HR,
72.8% have a multi-year strategic plan.
27.2% do not have a multi-year plan.
When asked if they have a multi-year budget,
78.5% do not have a multi-year budget.
21.5% do have a multi-year budget.
Despite identifying the challenge of being perceived as a
strategic asset to the organization, the majority of respondents
do not have an existing strategic plan for HR.
For those organizations that do have a strategic plan, this plan
appears to be comprehensive and covers a longer time frame.

10. HR Priorities
The top three priorities in HR:
• Manage benefit costs (i.e. workers compensation, pension,
health care)
• Align HR and workforce with organization’s objectives
• Workforce/Succession Planning
Bottom three priorities:
• Emulate advances in the private sector
• Reduce overall HR budget
• Reduce administrative costs/improve back office processes
When asked to identify any other priorities, responses were varied
and included improving safety, improving morale and implementing
performance measurement.
Respondents recognize the importance of workforce/succession
planning, a point confirmed throughout the survey.

11. 0
10
20
30
40
50
60
70
80
1 (not
aligned)
2 3 4 5 (closely
aligned)
Alignment of HR Priorities with Organization
N=181

12. HR Alignment With Organization
76.3% of respondents ranked at a 4 or
5 (closely aligned) when asked about
HR priorities alignment with
organization leadership priorities
Respondents view HR’s priorities as
being aligned with leadership’s
priorities, but does leadership share this
perception?

13. Efforts Undertaken to Improve HR
6.7%
7.9%
8.4%
8.4%
9.6%
11.2%
15.7%
19.7%
29.8%
32.6%
51.1%
77.5%
45.5%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Outsourced HR transactions
Other
Reduced size of staff
Centralized service delivery
Decentralized service delivery
Moved to a shared services
New HR Leadership
Replicate advances in private sector
Contracted with third-party admin
Hired additional staff
Reorganized Dept
Improved HRIT
Process Improvements
N=178

14. Measuring Success
How does your organization
measure success in
improvements in HR service
delivery?
74.4% Respondents said higher
customer satisfaction
40.9% Cost Reductions
39.8% Higher Retention
19.2% Other responses
including:
• Greater efficiency
• Greater accountability
• Speed of service
• Meeting strategic goals
• Employee
complaints/comments
• No measurement at this time
Customer satisfaction identified as
an important measure of success.
At the same time, when asked
about internal customer satisfaction
surveys,
63.2% do not conduct a survey.
36.8% are conducting surveys.
Of those that are, 46.8% conduct
surveys only as needed and 30.4%
conduct surveys annually.
How are organizations measuring
customer satisfaction?
What other measures are being
utilized?
Is measuring success a challenge?

15. Brand Identity
Does your organization have a
“brand identity” as an employer
in the marketplace:
46.7% said NO
34.6% said YES
18.7% said ‘Don’t Know’
For those respondents that said
YES, when asked about the
primary elements of their brand
identity the top three responses
were:
32.8% Pride & Values of
working in the public sector
21.9% Great Place to work
10.9% Job Security
For those respondents that said
NO or ‘Don’t Know’ regarding
brand identity, when asked
about the primary purpose of
establishing a brand identity:
60.5% said a brand identity
could help with recruitment
18.4% Retain Talent
10.5% Workforce
Succession Planning

16. 9%
13%
14%
15%
19%
22%
23%
28%
30%
33%
38%
39%
41%
47%
0 10 20 30 40 50 60 70 80
Respondents
Benefits
Recruitment
Orientation
Training / Employee Dev
HR IT
Payroll
Job Candidate Testing
Comp Administration
Retirement Plan Mgmt
Workers Comp
Workforce Planning
Union Contract Negotiation
None as of now
Other
What HR functional areas have already been transformed?
N=160

17. HR Transformation
The following activities are important to
improving HR effectiveness now & in
the future:
Process improvements
Implementation of new IT
Cut costs
Shared services
Outsource services

18. 3
19
38
63
43
0
10
20
30
40
50
60
70
1 (not
important/valuable)
2 3 4 5 (extremely
important/valuable)
How important is HR transformation to your future plans?
N=166

19. Value of Transformation
The majority of respondents see value in HR
transformation for their organization’s future plans.
At the same time, when asked why transformation
isn’t important to their organization, respondents
cited management’s perception of HR not being a
strategic partner (48.2%).
Management’s support of transformation and
recognition of transformation as having value is
identified as a key enabler for transformation and a
common barrier.

20. 47.6%
31.5%
23.4%
16.9%
16.1%
16.1%
15.3%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Lower cost options
New Management
Turnkey solutions
Nothing
Vendors more knowledgeable in PS
Lower risk options
Union Support/Collaboration
What could make your organization reconsider
HR transformation?
N=124

21. 48.2%
42.0%
29.5%
15.2%
13.4%
12.5%
10.7%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
HR not viewed as a strategic partner
Too Expensive
Executive Apathy
Not needed
Seen as vendor hype
Other
Union opposition
Why is HR transformation not important?
N=112

22. HR Transformation
When asked why organizations don’t consider HR
Transformation important, most common response
was HR not being viewed as a strategic partner. As
mentioned earlier, the majority of respondents
indicated their HR department or area does not have
a strategic plan despite respondents influence over
strategy.
Management support and executive apathy, in
addition to the organization’s culture, play an
important role in transformation, a theme apparent
throughout the survey.
Cost appears to be a primary driver in decisions
about pursuing transformation.

23. 10%
12%
19%
20%
21%
32%
32%
69%
0% 10% 20% 30% 40% 50% 60% 70%
Lack of funds
Lack of management support
Poor IT systems
Lack of skills / capabilities
Other
Apathy
Union Opposition
Not needed
Major Barriers to Transformation
N=165

24. 8%
8%
15%
19%
25%
34%
55%
68%
0% 10% 20% 30% 40% 50% 60% 70%
Strong management support
Strong internal skills
Appropriate funding levels
Highly integrated IT systems
Shared services
Other
Outsourcing
Union support
Key Enablers to HR Transformation
N=157

25. 4%
9%
12%
17%
20%
23%
26%
30%
30%
39%
43%
43%
48%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Workforce Planning
IT
Training / Employee Dev
Comp Admin
Recruitment
Benefits
Job Candidate Testing
Payroll
Orientation
Retirement Plan Mgmt
Workers Comp
Union Contract Negotiation
Other
What HR areas need the most transformation & improvement?
N=169

26. Dangers of Unsuccessful
Transformation
When asked about the likely outcomes if HR
transformation goals are not met, respondents
indicated:
Inability to deliver core HR services (56.1%) or core
organizational services (46.5%)
Out of control costs (29.9%)
Inability to recruit new staff (28.7%)
Reductions to budget (15.9%)
Other responses (12.1%) include loss of department
credibility, less efficient/less quality services, duplication of
efforts and low employee morale. Results reiterate
respondents’ perception that transformation is important
especially in service delivery.

27. Outsourcing and Shared Services –
Survey #2
Outsourcing and Shared Services remain often unrecognized but
potentially effective tools for HR transformation within the public sector.
Survey findings:
Satisfaction levels with Outsourcing and Shared Services seem
overwhelmingly positive yet they are still not considered viable tools for
transformation.
Past success with these tools does not translate to future plans to shift
additional functions towards these models. However, this may be more an
issue of planning than a comment on the tools themselves.
Performance measurement continues to be a key challenge. While many
indicators of success are commonly identified, few seem to be actually
measured.
Cost is an interesting factor in the decision-making process. Internally, it is
not a widely recognized measure of success but gains importance in the
context of selecting or measuring a service provider or alternate solution.

28. Outsourcing As A Tool for
Transformation
When asked to rank their perception of
Outsourcing as a tool for transformation:
Mean response: 2.8 on a 1 – 5 scale
Outsourcing not recognized as viable tool for
transformation.
For those that ranked Outsourcing high, the
following were named appealing factors:
Expertise of Vendors (90%)
Speed (69%)
Did not have the necessary expertise in-house
(69%)

29. Shared Services As A Tool for
Transformation
Shared services involves a common provision of
services available to a number of users. Activities are
usually transferred to a shared services center.
When asked to rank their perception of Shared
Services as a tool for transformation:
Mean rank: 3.1 on a scale of 1 - 5
Ranked only slightly higher than Outsourcing.
For those that ranked Shared Services high, the
following were named appealing factors:
Access to advanced technology (67%)
Ease in management (54%)
Do not have the necessary expertise in-house (49%)

30. Outsourcing Trends
When asked about their overall experience with
Outsourcing:
53% said the process to implement outsourcing was
relatively easy and they were very satisfied with the results.
41% said the process was challenging but they were very
satisfied with the results.
Only 1 respondent said it was still too soon to tell.
For those that have used Outsourcing, satisfaction
appears to be overwhelmingly high.
Sample size is small which was anticipated based on
results of previous surveys.

31. HR Function Areas Currently Outsourced
0 2 4 6 8 10 12
Workers Compensation Administration
Retirement Plan Management
Benefits
Training / Employee Development
HR Information Technology (IT)
Payroll
Union Contract Negotiation
Job Candidate Testing / Evaluation Services
Time and Labor Management
Other
Compensation Administration
Workforce Planning
Recruitment
Orientation
Respondents
N=18
61%
56%
50%
28%
28%
22%
22%
17%
17%
17%
6%
6%
6%

32. HR Areas Considered 'Off-Limits' for Outsourcing
0 1 2 3 4 5 6 7 8
Orientation
Compensation Administration
Benefits
Recruitment
Payroll
Workforce Planning
Union Contract Negotiation
Workers Compensation Administration
Job Candidate Testing / Evaluation Services
Training / Employee Development
HR Information Technology (IT)
Time and Labor Management
# of Respondents
N=9
78%
67%
56%
56%
44%
33%
33%
33%
33%
22%
22%
22%
22%

33. Future Outsourcing
When asked about the likelihood the organization would
outsource additional functions:
53% said the organization is very likely to outsource other
functions.
41% Neutral.
Only 1 respondent said the organization was less likely to outsource
additional functions.
Functions most likely to be outsourced in the future:
Benefits
Retirement Plan Management
Training/Employee Development
Workers Compensation Administration
Only 29% have every brought an outsourced function back in-
house

34. Trends in Shared Services
Shared Services is a more widely recognized tool for transformation
and improvement in HR but is still not accepted as the norm.
When asked about their overall experience with Shared Services:
35% said the process to implement shared services was relatively easy and
they were very satisfied with the results.
47% said the process was challenging but they were very satisfied with the
results.
6% said the process was relatively easy but were unsatisfied with the
results.
4% said the process was challenging and were unsatisfied with the results.
8% said it was still too soon to tell.
Satisfaction with Shared Service is very high despite almost half
identifying the process as challenging.

35. Current Shared Services
0 5 10 15 20 25 30 35 40
Benefits
Training / Employee Development
Recruitment
Orientation
Workers Compensation Administration
Retirement Plan Management
Compensation Administration
Job Candidate Testing / Evaluation Services
HR Information Technology (IT)
Payroll
Workforce Planning
Union Contract Negotiation
Time and Labor Management
Other
# of Respondents
N=49
73%
69%
67%
61%
59%
57%
57%
57%
55%
51%
43%
39%
18%
10%

36. HR Areas Considered 'Off-Limits' for Shared Services
50%
31%
31%
31%
31%
27%
23%
23%
23%
15%
15%
12%
12%
0 2 4 6 8 10 12 14
Payroll
Benefits
Compensation Administration
Orientation
Union Contract Negotiation
Workers Compensation Administration
Retirement Plan Management
Job Candidate Testing / Evaluation Services
HR Information Technology (IT)
Workforce Planning
Training / Employee Development
Recruitment
Time and Labor Management
# of Respondents
N=26

37. Future Shared Services
When asked about the likelihood the organization
would move additional functions to a shared services
model:
57% said the organization is very likely to move additional
functions to a shared services model.
36% Neutral.
6% said the organization was less likely to move additional
functions to a shared services model.
Functions most likely to be moved to shared services
in the future:
Benefits, Payroll, Retirement Plan Management,
Compensation Administration, Job Candidate Testing,
Training/Employee Development, HR IT and Time and Labor
Management.

38. Service Provider Satisfaction
When asked to rank overall satisfaction with
service providers utilized for outsourcing or
shared services solutions:
Mean rank: 3.7
Only 5% ranked satisfaction low at a 1 or 2.
30% ranked satisfaction at 3 (neutral).
65% ranked at satisfaction high at a 4 or 5.

39. Outsourcing & Shared Services:
Lessons Learned
Based on past outsourcing and shared services decisions, what
would these organizations have done differently?
Established a service level agreement (36%)
Negotiated a better price (29%)
Conducted additional research on options (29%)
Stronger commitment to change management (26%)
Selected a different service provider (26%)
Most important attributes in selecting a service provider:
Cost/Pricing
• 33% ranked as most important & 31% ranked as second most important
Service Provider’s reputation & demonstrated success
• 42% ranked as most important & 19% ranked as second most important
Specializes in the public sector
• 18% ranked as most important & 24% ranked as second most important

40. 2%
3%
6%
8%
8%
13%
18%
18%
23%
32%
37%
58%
0 5 10 15 20 25 30 35 40
# of Respondents
Lack of funds
Politics
Not needed
Lack of management support
Poor IT systems
Other
Union Opposition
Unmotivated Staff
Apathy
Lack of skills / capabilities
Failure in previous attempts to outsource
Failure in previous attempts with shared
Barriers to Outsourcing & Shared Services Solutions
N=65

41. 4%
6%
14%
18%
22%
28%
29%
42%
43%
51%
0 5 10 15 20 25 30 35
# of Respondents
Union support
Other
Highly integrated IT systems
Success with previous shared services efforts
Strong internal skill sets and capabilities
Budgetary restrictions
Demand for superior services
Success with previous outsourcing efforts
Appropriate funding levels
Strong management support
Enablers to Outsourcing & Shared Services
N=65

42. Measuring Success
Most common indicators of success in
Outsourcing or Shared Services:
Improved efficiency/speed of service (89%)
Improved customer satisfaction (76%)
Meeting strategic goals/targets (69%)
Despite the importance of measuring
customer satisfaction:
More than half of all respondents (63%) do not
conduct an internal customer satisfaction survey.
For those that do, for 45% the satisfaction survey
is conducted annually.

43. Aging Workforce – Survey #3
There has been much debate and speculation about the aging
workforce in recent years and more specifically, on the potential
impact on Public Sector organizations.
Past research suggests that a high percentage of current Public
Sector employees in some countries are likely to retire within
the next five years. Many of these same employees often hold
key leadership positions and have extensive institutional
knowledge.
This study seeks to better understand the potential impact of
the aging workforce, while at the same time examining what, if
anything, organizations are doing to prepare and position
themselves for the future.

44. Key Findings
Most organizations report an adequate capacity to track
employee eligibility for retirement.
The majority of organizations report that approximately a
quarter of their employees will retire in the next five years. In
isolation, the retirement figure does not appear daunting, but
coupled with average turnover rates, the aging workforce
continues to present a challenge to these organizations.
The aging workforce and its potential impact are not urgent
concerns for organizations.
More than half of responding organizations anticipate changes
in demographics that will likely lead to increases in demand for
services. Automation and advanced IT will play a key role in
meeting increasing demands for service.
The management of institutional knowledge and the capture of
this knowledge also remain challenges for organizations.

45. 2%
69%
26%
2% 0%
0% 1-25% 26-50% 51-75% Over 76%
Percentage of Employees Currently Eligible for Retirement
N=289

46. Potential Impact of the Aging
Workforce
Respondents were asked to rank their organization
management’s perception of the potential impact of the aging
workforce on the ability to achieve overall mission.
On a scale of 1-5, with 1 being low concern and 5 being
high/urgent concern, the average response rank: 3.2
Respondents were also asked to rank the level of concern about
the following issues:
Managing Workforce, Recruiting, Hiring: 3.6
Achieving Mission Goals and Objectives: 3.2
Employee Development & Training: 3.4
Succession Planning: 3.4
Capturing Institutional Knowledge: 3.5

47. Potential Impact of the Aging
Workforce
Top Three Concerns when thinking about the potential impact of the aging
workforce:
First Concern: Delivery of quality service
Second Concern: Attracting talent/Recruiting new hires
Third Concern: Identifying new leadership/filling management roles
Other Areas of Concern:
• Succession Planning
• Ability to achieve organizational goals and objectives
• Filling specialized positions
When asked what organizations would like to be able to do, if they had the
adequate resources/expertise, to prepare for the aging workforce:
Succession Planning
Skills Gap Analysis
Performance measurement, better ability to track important
indicators
Knowledge Transfer

48. 7%
12%
22%
23%
25%
26%
26%
31%
43%
57%
Monitoring turnover
Tracking actual retirements
Projecting talent gaps by function
Tracking hiring trends
Projecting talent gaps by type
Nothing at this time
Monitoring customer service
Monitoring service levels
Tracking tax base/revenue streams
Other
What is your organization doing to assess
the potential impact of the Aging Workforce?
N=271

49. 4%
8%
15%
18%
18%
24%
24%
28%
32%
37%
45%
45%
51%
60%
Recruitment
Training / Employee Dev
Benefits
Workforce Planning
Retirement Plan Management
Compensation Administration
Orientation
Job Candidate Testing
Payroll
HR IT
Union Contract Negotiation
Workers Comp Admin
Time and Labor Mgmt
Other
HR Areas Best Prepared to Deal with Impact of the Aging Workforce
N=262

50. 9%
10%
15%
22%
23%
23%
25%
26%
32%
34%
36%
38%
46%
75%
Training & Employee Dev
Identification of new leaders
Changes in Compensation
Establishing Competencies
Retention Efforts
Job Shadowing/Mentoring
Diversity
Performance Measures
Improved internal forecasting
Skill Gap Analysis
Changes in Benefits
Improved employee tracking
Redeployment of resources
Other
Key Components of Succession/Retention Plans
N=220

51. Knowledge Management
For the purpose of the survey, Knowledge Management was defined as efforts
related to the capture and maintenance of institutional knowledge.
Respondents were asked to rank their organization’s overall knowledge
management on a 1-5 scale, with 1 being low/no capacity and 5 being
high/complete capacity.
Average Response Rank: 2.8
Only 10% of responding organizations have a Knowledge Management plan in
place.
For those organizations with a Knowledge Management plan, key components
include:
Documentation of Policies and Procedures
Cross-Training
Maintained Archives or central repository of records
Job Shadowing/Mentoring
Organizations without a formal Knowledge Management plan indicate similar
efforts.

52. Risk of Knowledge Loss
When asked if the organization was at
risk of potential knowledge loss caused
by retiring or exiting employees:
65% of respondents said YES.
22% said NO and 13% said Don’t Know.

53. 10%
46%
48%
52%
63%
75%
Loss in efficiency
Loss in time
Goals not reached
Strategic Goals/Program
Setbacks
Projects placed on hold
Other
Impact of Knowledge Loss on Organization Mission
N=71

54. Conclusions
Public HR professionals face a daunting task in managing its’
people with limited funds, limited influence on important
decisions such as IT & limited support from management.
Cost is an important issue in transformation and HR
professionals face the challenge of working towards
improvements and advances while cutting costs.
Improvements & upgrades in IT are critical to he success
The importance of workforce/succession planning is recognized,
but assistance is needed.
Many HR departments are struggling to be viewed as a strategic
asset.

55. Conclusions
Outsourcing and shared services are not the norm
within public sector.
Satisfaction is high for those using these tools.
The aging workforce may present a problem for
public sector organizations.
Succession planning & the identification of new
leadership remains a weakness.
Knowledge management remains a critical challenge.
Organizations need to improve efforts around
identifying knowledge that is important to the
organization.

56. Questions/Comments
For additional information, please
contact Neil Reichenberg,
nreichenberg@ipma-hr.org
Thank you!