Things may be booming on Wall Street, but state governments' HR departments are still reeling from the Great Recession. They're facing personnel cuts, pay freezes and disappearing budgets—just as baby boomers begin to retire.
The challenges are ongoing as state leaders continue to cut HR budgets across the board. And as agencies race to fill vacant or soon-to-be-vacant positions, training programs often get slashed first, says Richard Greene, a principal with Barrett and Greene Inc., a New York-based research firm that studies state and local policy and management.
Why training programs? Greene, who has interviewed dozens of state HR leaders over the past several years, says internal cuts are the least likely to upset taxpayers.
"There's this whole debate over what makes the government work better versus how we can provide direct services to voters," he explains. "If we stop giving you the service we always have, people notice. If you want to cut back on mental health dollars, there's an affected constituency. But if you cut training, your constituency is just internal government workers."
A Lack of Demonstrated Impact
In addition to a lack of public exposure, training programs are vulnerable because they don't often yield measurable results. HR departments can't easily demonstrate the long-term value of investing in training.
"It would be ideal to show your state legislature that with more training, you'd need to hire fewer people, or productivity goes up 15 percent, or if we cut training we'll lose this much money," says Greene. "But they can't put it in concrete terms."
Imagine government HR leaders' frustration: According to our 2015 Human Capital Management Report(HCMG), leadership development is a crucial part of agencies' talent management strategies—with 63 percent of survey respondents marking it as a current concern, and 29 percent noting it as their top priority for ongoing staff development.
At the same time, a mere 2 percent of the HCMG survey respondents ranked their succession planning efforts as very successful (a 50 percent decrease from 4 percent in 2013), highlighting the wide gap between "strategy" and reality in leadership development for employees.
The Need for Shifted Priorities
Greene is quick to note that the ongoing cuts to government HR departments aren't a "nefarious plot" to keep HR managers at arm’s length from the real decision-makers. Instead, governments simply don't grasp the value or long-term return of investing in HR.
To more effectively communicate the value of training programs, HR departments should look closely at how they measure employee performance and tie in the impact of training, says Greene.
Of course, not every state leader takes his or her HR department for granted. Greene points to North Carolina Governor Pat McCrory as a state leader who values the importance of HR.
McCrory, who worked in the HR department at Duke Energy, told Greene that he chose his former boss, Neal Alexander, as the state's HR director because Alexander sought to elevate the department from an administrative function to one that had more say in strategic, statewide decisions.
McCrory says that Alexander's managerial experience as Vice President for Human Resources at Duke Energy, the country's largest electric power holding company, helps him understand "the importance of having HR at the table to understand the business issues that were being addressed in cabinet meetings and other secretary meetings throughout the organization."
With a talent crisis looming, other politicians would do well to follow McCrory's lead. Without understanding the true value of HR and investing resources in talent management, government leaders are putting the future of their agencies—and consequently, their workforces—at risk.
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