In this era of constrained resources and thirst for efficiency – both for public and private organizations – HR departments are seeking better ways to adapt their workforce to be even leaner than they are already, but also more productive, across both sectors.

Given the long-term need for public agencies to operate effectively, a new Government Accountability Office report suggests public HR departments may need to tweak their traditional management and operation techniques. While some in the consultancy field would say these tactics emulate private sector styles, the core goal is still to carry out their business responsibilities by serving the taxpaying public.  

According to the Office of Personnel Management, the recruitment and talent management arm of the federal government, a three-year salary freeze, reductions from sequestration due to federal budget problems and furloughs for thousands of employees, may have added some kerosene to this talent challenge. In the 2013 Federal Employee Viewpoint Survey – an OPM study of more than 376,000 employees – job satisfaction, pay satisfaction and organizational satisfaction all experienced downward slides due to the ongoing problem of constrained resources.

Also See: UW-Madison overhauls recruitment and staff management systems

“Reduced investments in the workforce can really undermine the ability of agencies to carry out their missions,” says Rob Goldenkoff, director of GAO’s strategic issues. “You saw this happen in the 1990s where there was a lot of downsizing going on. Goldenkoff says he understands the strains put on public resources, but says public employer benefits needs still have to be addressed. “You know we’re not questioning the downsizing or the cost capture – we’re just saying that it needs to be done intelligently,” he adds.

Going about it the smart way can be a difficult task, however. In its investigation, the independent agency found that organizations need to utilize nontraditional human capital strategies to address the problem. Those can include strengthening coordination among agencies that have more than one person in charge of a particular task; using technology and strategic workforce planning to bolster government-wide collaboration; and creating a more “agile” workforce by having the right management schemes in place.

Goldenkoff explains that a lot of the issues with public management stem from the culture surrounding organizational boundaries.

“Many of the challenges that were identified were cross-cutting in nature, but agencies tend to solve them individually or independently and that’s inefficient,” Goldenkoff tells EBN. “Now, in these more austere times, it really has created an impetus for agencies to collaborate more and look for more creative solution.”

But according to Kevin Carrington, the federal practice leader at The Segal Company, collaboration among decision makers is not just a public problem.

“Some of the strategies we are seeing out there [focus on] centralization among agencies and organizations in private sector companies,” Carrington explains. “How do we reduce the duplication [and] centralize functional delivery of things that are used across the organization?”

Meanwhile, Carrington advises that HR and benefits management leaders need to better communicate what he calls “the employment value proposition.”

“It’s really looking at how we align that with the outcomes and goals,” he explains. “In the case of the private sector, how do we use that value proposition to increase engagement and drive revenues and profits? And in the public sector, how do we increase engagement and drive the ability to more effectively provide our mission?”

The value for employees can be easily translated when looking at the overall benefits picture. In 2011, the Alameda County Employees’ Retirement Association, an Oakland, Calif. public pension fund that has more than 20,000 current and former county employees, agreed to tack on a key private business management tactic – the private health exchange – to help it drive its mission. Large employers such as AT&T, Time Warner and IBM have all agreed to move their retirees to private exchanges. The costs involved are substantial for workers: One Fidelity Investments estimate highlights that a couple retiring will pay around $220,000 just for health care.

Also See: Employers mull answers to retiree health care cost puzzle

“We’re a public plan and not a lot of public plans offer retiree health care, and if they do, it’s usually through the county versus the retiree system,” says Kathy Foster, assistant chief executive officer and certified employee benefits specialist at the Alameda fund. “Part of my job is to manage a fund that we have [just] for health care benefits for the retirees, and I’m always looking at ways to keep those costs down.” 

She notes that the association’s group plan option, a standard fixture among public plans, was becoming very expensive. In 2008, the organization was paying out more to benefits than it was taking in through investment income. By offering Towers Watson’s private Medicare exchange to its Medicare-eligible population, she says the retirement plan was able to cut its costs in half –  $2.5 million in 2013 for its more than 1,200 enrollees. Alameda’s venture into the private sector strategies is not stopping with just its 65-and-older population.

Foster says the retirement fund will take a look at its members’ experience with the exchange before they cast any judgment on it being the perfect retiree platform. “It’s a little bit more difficult to estimate any projections because they are so many different rates, but it’s something that we are working on for possibly for 2016 coverage.”

Bryce Williams, managing director of Towers Watson’s exchange solutions business segment, says that many HR and benefits personnel are continuing to adopt its private sector strategy.

“This is not like buying pencils or staples for less, these are really big dollars that are being overspent,” he says, referencing health care and other benefit costs. “But in a very low-risk way, states [and other government jurisdictions] now can adopt what has been proven to be a much more efficient model by the private sector.”

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