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Human capital managers at government agencies face many challenges thanks to strict budgets, set compliance policies and an organizational hesitancy to change the status quo. These challenges often prevent them from being able to offer innovative projects to younger employees, use compensation as a performance motivator or tout growth opportunities, which are frequently defined by tenure rather than performance. As a result, 71 percent of local and state government workers are not engaged in their jobs, according to a Gallup poll.

In light of this culture, HCM leaders must seek out innovative tools and leverage creative strategies such as incorporating job rotations, flexible work arrangements or mentorship programs to increase engagement and provide continuous training and development. But it's no easy task—The State of Human Capital Management in Government report highlights the five key obstacles that HCM leaders grapple with at government agencies, and how to overcome them.

1) Skills Gap and Private Sector Competition

Recruiting people with the right skills for the job is one of the top three talent management priorities for 53 percent of leaders, according to the Human Capital Management Group (HCMG) study. An aging workforce, combined with an observed skills gap in the incoming workforce, means that HCM leaders must find ways to empower and excite employees in order to attract talent with adequate skills, boost retention rates and remain competitive with the private sector.

“Engagement equals increased morale, and increased morale equals engagement," says Camille M. Hoover, executive officer for the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK). “Leaders need to be thinking on a daily basis how they can create and sustain a culture where employees can flourish, where they can have the tools and resources they need, and innovation and creativity are rewarded."

Creating a formal mentorship program, putting shadowing opportunities in place and allowing employees to explore different functional areas are ways to attract talent and build needed skills on the job. To sustain an empowering culture, Hoover suggests leading administrative workshops on how to problem solve, create positive change and implement core values in daily work.

2) Succession Planning

Succession planning is essential to building a well-trained workforce—36 percent of leaders report that improving succession planning is their greatest staff development need, and 70 percent say they are currently investing in leadership development.

But in order to build a bench of future leaders, agencies must pay more strategic attention to succession planning. “It's paramount to create a culture that integrates training, learning and developmental opportunities for all the staff," says Hoover.

By finding ways to develop internal employees for advancement, HCM leaders can build much-needed skill sets, and create a work environment that people want to stay at long term. Incorporating annual employee performance reviews, prioritizing professional development and having clearly-defined competencies can help encourage learning across the workforce and inspire future leaders.

3) Limited Budgets

HCM leaders focus much of their time, energy and resources on employee engagement. And rightly so—when employees feel undervalued or that there isn't room for growth, they will either leave or disengage, resulting in low productivity and morale. For HCM leaders in government, however, engagement efforts are complicated by the fact that they are often working with a small budget.

Despite this limitation, agencies are getting creative in their approach to engagement: 81 percent are implementing employee recognition programs and 71 percent are implementing flexible work from home options.

Listening to employees and implementing flexible solutions that align with their needs helps drive commitment and loyalty. “Identify individual needs of learners to deliver engagement in the best way possible," advises Aaron Lee, director of leadership and professional development for the Veterans Benefits Administration.

At NIDDK, Hoover encourages employees to participate in town hall meetings, roundtables, focus groups and employee surveys. Based on feedback from these activities, the agency creates targeted, focused, strategic initiatives around engagement.

4) Change Management

Other than budget, change management is the most cited barrier preventing agencies from reaching their talent management goals. To successfully roll out new initiatives, HCM leaders must first receive buy-in from organizational leaders.

“The number one way I've seen so many initiatives, ideas and concepts fail, is that they have not received the sponsorship they need," says Lee. Senior leaders need to buy in and see the benefit, he says. “That way, when [the initiative] gets into the organization and spreads, people will be more apt to use it and it will become a part of the culture."

Once they have approval, HCM leaders should approach change management one step at a time. Discuss the goals, benefits and rollout plan for the new initiative using a variety of communication methods in different venues, give early adopters the tools they need to get the word out and be transparent and clear in messaging.

5) Data-Based Decision Making

Today, HCM leaders can rely on data for real-time information on employee skill level, engagement and development so that they can make better decisions for their workforce. But despite its far-reaching capabilities, data in underutilized from an HCM perspective at government agencies.

“Better analytics and talent management allows organizations to have a deeper data-supported view of the entire spectrum of the employee lifecycle," explains James Egbert, human capital strategist for the Department of Health and Human Services.

Currently, data is mostly being used to streamline onboarding, pre-onboarding and assessment processes. However, that is just the tip of the iceberg—data can also be applied to succession planning, recruiting and talent retention efforts by using employee surveys to gain feedback, or people management software to identify and close skill gaps, or uncover themes and trends to boost satisfaction.

“Providing human capital leaders with timely, meaningful and accurate datasets allows for better recruiting, staffing, engagement, development, performance management and transition of workforce elements as dictated by mission requirements," Egbert says. By incorporating data and analytics as part of their talent management strategy, HCM leaders can make more informed decisions about where improvements are needed, leading to a better use of resources and increased employee satisfaction.

Despite the many challenges that government agencies come across, HCM leaders can build a loyal employee base and nurture future generation of leaders by finding creative ways to boost employee engagement, providing the learning and career development opportunities workers want and utilizing data to generate insights and make decisions.

To learn more about the future of talent management in the government, check out these key learnings gathered from Cornerstone's partnership with HCMG.

Photo: Twenty20