“Shared Services:” Streamlining Massachusetts Government Human Resources

[tab name=”MEDIA COVERAGE”]Coming Soon[/tab]

[tab name=”VIDEO”]Coming Soon[/tab]

[tab name=”IMPACT”]Coming Soon[/tab]

[end_tabset]

Massachusetts Human Resources Division

Problem Statement

In 2003, the Commonwealth was experiencing one of its worst fiscal crises, and cutbacks were made throughout state government. The state Human Resources Division (HRD) had to absorb severe reductions, with budget cuts of over 45 percent and personnel cuts of 50 percent. In response, HRD, which provides personnel services to state agencies and 44,000 executive branch employees, had to find new ways to perform its functions more efficiently. Ruth Bramson joined state government from the private sector as the state’s first chief human resource officer to address this crisis. The governor directed Bramson not only to “do more with less” but also to establish state-of-the-art HR practices to reduce the cost of managing the executive branch workforce, streamline processes, “professionalize” the workforce, and provide incentives to engage, motivate, and reward the best performers in civil service.

The Solution: Reinventing the Human Resources Division

Bramson implemented a new strategic vision to improve HR service delivery through a “shared services model,” which won unanimous approval from the governor and all cabinet secretaries. This radical redesign included a new dual reporting relationship for each secretariat’s most senior HR professionals, who now report both to their cabinet secretary and to the state’s chief human resources officer. With every single department and agency under scrutiny to deliver best value services to their clients and demonstrate cost-conscious performance, this model proved to be the right solution.

Defining Shared Services. Shared services are those services that a single group provides to other business units from centers of expertise while pushing the operational practices out to the units themselves. By centralizing core services, each agency is able to focus on their particular functional and operational objectives and leave the large policy and program design to the centralized unit. These experts in turn become a single source of information, sharing best practices and thereby improving the quality and consistency of HR services throughout the state.

Components of Shared Services. The shared services delivery model captures the best of two worlds, eliminating the unnecessary, costly, and time-consuming bureaucratic controls of centralized models while avoiding expensive redundancies and substandard service delivery often found in decentralized service models. HRD captures the best HRD’s charge: Reduce the cost of managing the executive branch workforce, streamline processes, and provide incentives to engage, motivate, and reward the best performers in civil service ideas and insures buy-in for all new policies and programs by utilizing joint HRD and agency taskforces and forming the Secretariat HR Advisory Council, comprised of the most senior HR professionals in the state.

Under the shared services model, HRD is the driver and facilitator of a collaborative customer-focused HR policy. Programs are evaluated against public and private sector best practice models utilizing performance metrics and return on investment analysis. The Advisory Council acts as the fulcrum around which all strategic and programmatic activity revolves. When an issue is identified that requires in-depth study and policy or legislative changes, a taskforce is formed. By sharing talent from all the agencies and selecting employees interested in a particular issue to be studied, the taskforce engages the minds and passion of these individuals around a critical issue. To date, HRD has studied and implemented major reforms in performance management, pay-for-performance, and orientation, and is currently addressing workforce planning. These groups work intensely for defined time periods on these tasks, producing deliverables that become the basis for change.

Measuring Success. The success of the shared services model has exceeded expectations. HRD has successfully streamlined many processes, allowing agencies to reduce staffing and saving the Commonwealth millions of dollars. In HRD alone, the division is now working with 50 percent less staff while handling more complex responsibilities and programs. It is leveraging technology to get work done and making it easier for HRD customers to get their work done. The division has seen tremendous improvement in time to hire employees, reductions in turnover among

Achievements. Some highlights of this year’s achievements through the shared services model include the following:

  • Agencies identified shared recruitment needs and worked together to create a new process which reduced the time to fill a position from an average of four months to as little as five weeks. Forms are online and accessible; signoff has been pushed to the agency level for many positions to save time and duplicative staff involvement.
  • By identifying duplication and waste and reorganizing how HR services are delivered across the entire executive branch of state government, HRD has reduced HR staffing, saving millions in payroll while improving service
  • By sharing training resources and creating a faculty of trainers across the state in addition to providing e-learning, 3,000 managers are now proficient in performance management using a new state-of-the-art employee evaluation system. Evaluations are being done on time with better manager/employee communication and alignment with agency goals. 
  • With the centralization of training resources and more qualified trainers in each agency, HRD now delivers training to its customers where they are, rather than bringing everyone to Boston. The division has developed a complete curriculum and online registration system which centralizes the courses and prevents duplication of design and delivery of the same courses, particularly mandatory courses such as preventing sexual harassment, workplace violence awareness, and diversity training.
  • HRD implemented the Commonwealth’s web-based employee evaluation and professional development planning system, called the Achievement and Competency Enhancement System (ACES), for all executive branch managers. Through a pilot program undertaken by five agencies sharing financial and human resources, HRD worked with a vendor to conduct a successful pilot that laid the groundwork for implementation of the statewide ACES program.
  • With a taskforce that conducted salary surveys and identified practices being used by the federal government and other states, HRD designed and implemented the first merit pay program for 3,000 state managers, recognizing and rewarding the highest performing managers more generously than those who are just meeting job requirements—while staying within a 3 percent merit pool. This represented true reform to a change-averse culture.
  • An HR customer satisfaction survey established baseline performance data to evaluate future improvements in service delivery. With this data and selected metrics, HRD is moving to a culture of continuous improvement, always challenging itself to do better. HRD’s 2004 annual report was published as a summary document for its customers to help them understand the division’s work and value its accomplishments.

Case Stude: Workers’ Compensation

HRD’s Workers’ Compensation Unit is the insurer as well as utilization review agent for state employees who have suffered industrial accidents. Although the unit has a $50 million annual budget, it had a severe backlog of 22,000 medical bills and was providing poor service to agencies and employees. It had an adjuster caseload of 220 per adjuster (nearly 100 above industry standards) and a pervasive adversarial culture throughout the organization.

HRD reorganized the unit, terminated employees whose performance was not satisfactory, installed a new management team, created a new e-services claims management website, and improved case management. These reforms have reduced employee return-to-work times, enhanced accessibility of information to the unit and providers of services, and improved speed in claims adjusting for employees and providers alike. Administrative costs will be reduced by $300,000 in fiscal year 2006, the first reduction in over a decade.

Specific improvements include the following:

  • The medical backlog has been eliminated and controls put in place to prevent such a backlog from recurring. Bills are now paid within three days of receipt. 
  • Additional full-time claims adjusters have been hired leading to a 46 percent reduction in cases per adjuster from 220 to 120. This has resulted in:
      • increased efficiencies and proactive case management
      • on-site claim reviews with the user agencies
      • the use of customized risk management reports for user agencies.
  • The establishment of a customer-friendly approach is fostering a collaborative working relationship with the user agencies. This has resulted in improved risk management and employees returning to work more quickly. 
  • An interactive website has been developed for user agencies, allowing 24/7 access to information such as:
      • all relevant claim, finance, and utilization review information
      • investigation reports
      • risk management reports
      • medical and indemnity cost reports (available to agency CFOs)
      • comprehensive cost monitoring (resulting in improved cost control).

Next Steps

HRD has only just begun to shake up the state workforce through its shared services model. The division plans to leverage this year’s successes to aggressively push the shared services agenda during 2005-06 by:

  • auditing the progress of shared services to ensure uniformity of practice and policy while identifying areas needing improvement 
  • aligning the service delivery model to drive strategic objectives of the administration (for example, by providing less costly recruitment services to agencies, HRD has been able to improve turnaround time and fill open positions more quickly, reducing headcount and supporting the statewide strategy to eliminate duplication of job effort) 
  • continuing to expand the shared services model in HR to reduce staffing, add more technology, and better engage managers in working with their employees 
  • identifying areas for expansion of shared services into other areas of state government, such as procurement, financial, legal, and IT 
  • expanding accountability by creating meaningful standards, measures, and checks and balances 
  • mandating regular data collection that will allow us to measure the success of the shared services model at delivering quality services and reducing costs against baseline performance 
  • institutionalizing change as a constant factor in process improvement 
  • expanding the merit pay programs and improving shared performance goals as part of an ongoing effort to change the culture from one of entitlement to one that rewards success 
  • developing a workforce planning methodology to assess what skills will be needed in the next five years and begin to train and develop employees to fill those needs.

Leveraging technology to both reduce costs and increase effectiveness will be a major area of focus for HRD. Currently the division is working to implement:

  • employee self-service for payroll, benefits and HR services 
  • e-learning accessible to all agencies of the Commonwealth 
  • enhanced web-enabled access to information and services 
  • online application and screening programs for civil service 
  • online workers’ compensation information and claims data 
  • enhanced management reports to better measure performance metrics
  •  completion of the state’s first comprehensive workforce analysis.

Conclusion

The implementation of the shared services model across executive branch HR organizations has resulted in both major service/process improvements and significant savings to the Commonwealth. The shared services model has allowed HRD to break through the traditional barriers associated with both centralized and decentralized service delivery models, allowing the state to reap the benefits of each while avoiding the costly pitfalls. Massachusetts is in the forefront of the shared services movement, leading other states and many private corporations in applying this model to human resource management.

As the pressure on government to perform better, and as costs continue to be scrutinized, the shared services model allows the state workforce to perform with agility and flexibility. Managers and employees are taking greater ownership of people issues and have better access to policies, processes, and consultative advice. Knowledge is being shared as fiefdoms are broken down and decisions are being made faster and better. While cost reduction is clearly an important motivator for this model, far more compelling is the value-added efficiency in managing the statewide workforce. The availability of the right people and appropriate technologies, combined with a business-focused approach to government, is providing a rare opportunity to fundamentally improve efficiency and effectiveness in the state workforce. This is particularly critical in HR, where state workforce management resides and where the environment for the people who work for the citizens of the Commonwealth is shaped.

About the Human Resources Division

HRD provides human resource leadership, guidance, and customer-focused HR solutions for state agencies and 44,000 executive branch employees. Its services include employee relations, performance evaluation, training and professional development, classification, and salary and benefits administration; collective bargaining; civil service; workers’ compensation, diversity, and equal opportunity programs; and workforce planning, recruitment and hiring. In addition, HRD administers the Commonwealth’s policies in the area of Civil Rights and the Code of Fair Employment Practices.

Ruth Bramson was named the Commonwealth’s first Chief Human Resources Officer in 2003, bringing 25 years of human resource (HR) experience to the public sector from the private sector. She was recently awarded the International Quality and Productivity Center Shared Services Network’s most prestigious award as Shared Services Leader of the Year.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.