Approval of April 15, 2015 minutes (5 minutes)
Shared Services – Ellen Herbst, et.al. [90 minutes]
CALL IN NUMBER 866-453-8771 PASS CODE 2785164
May 20, 2015
1:00 p.m. – 3:00 p.m.
1401 Constitution Avenue NW, Room 6029, Washington, DC 20230
Meeting called by: Labor-Management Forum
Program Manager: Mr. Frank Milman
Attendees: See sign-in sheet for participants around the room
Documents: Minutes from the April meeting of the Forum, Partnership for Public Service’s “Building a Shared Service Marketplace, Recommendations for a Government-Wide Approach,” Partnership for Public Service’s “Building a Shared Service Marketplace, Recommendations from the Shared Services Roundtable, U.S. Department of Commerce’s “America Is Open For Business Strategic Plan: Fiscal Years 2014-20,” Department of Commerce Shared Services Initiative Project Overview – May 2015.
Type of meeting: Special Meeting on Shared Services
Note Taker: Ms. Mary O’Connor
Agenda Item: Introductions/Approval of April Minutes
Presenter: Ms. Ellen Herbst
Introductions were done around the room and on the phone. A motion was made to adopt minutes taken on April 15, 2015, and minutes were approved without any amendments.
Agenda item: Shared Services Presentation
Presenter: Ms. Ellen Herbst
A member expressed the following inquiry: what happens to the employees (including vacancies) in the current organization that will be incorporated into a “shared service?”
In the member’s remarks, he made the following observations:
- There is a desire to review the case studies already reviewed by management in order to understand the nature of the FTEs affected, including attrition and vacancies eliminated over time for:
- NIST (Finance)
- DOJ (IT)
- TSA (acquisitions)
- Forest Service.
- In future LMF sessions, the labor member will share surveys of national labor organizations to seek examples of such shared services experiences, including the Department of Labor and the US Treasury.
- DOC is such a diverse agency, in any comparison, particular note will be made of the difficulty in applying comparisons with agencies that have a more unified mission compared to the diverse missions and bureaus comprising DOC.
- The member believes that management should solicit and distribute a general ruling from OHRM and the DOC Office of General Counsel regarding the laws that might apply to shared services.
- It is the desire of this member that an LMF Working Group on Shared Services will be established immediately that will provide useful work products at least at every quarterly LMF, if not more often. Examples of such inputs would be practical examples of multi-year experiences at other Federal agencies or other parties who have already adopted such shared services organizations.
The member requested for the second Action item - “Decide how much Forum wants to be involved” by All. Deadline TBD
Appreciation was also expressed by the Management Co-chair as it served as a platform into the discussion on the initiative, stating that this might be something to involve PDI.
The Management Co-chair stated that the initiative will be renamed moving forward, but emphasized its goal of improving the quality and consistency of service around certain functions with transparency and accountability. A goal of the new strategic plan was to determine that which is unique at the Department and that which can be shared. In a budget-constrained environment, non-mission positions are not getting priority; and therefore mission support positons are being overlooked. The new strategic plan captures this support through the “operational excellence” component.
In July 2014, leadership met to discuss what’s working and what challenges are currently being faced. One of the biggest challenges was that organizations could not hire people quickly enough or buy things quickly enough, both of which are crucial to meeting mission priorities. Additional areas that need improvement are the 20 year old financial system, and greater IT infrastructure. Hence, the 4 focal points of the initiative to improve quality and consistency with greater transparency and accountability are: HR, acquisitions, financial management, and IT.
The initiative team began by reading case studies, looking at both private sector and government examples, but focused on what other governments (state/local/etc…) are doing. The Secretary issued memo to direct the Deputy Secretary and the Department Management Council (DMC) (consisting of Deputy Secretaries, CIO, CFO, and OGC) to assign them to start studying best practices and come up with recommendations. The reason for this approach is because the Deputy Secretary level is where mission and mission support come together. The Department has had projects in the past that were called “shared services” but were actually centralization projects. Because of this, there is an importance for the providers and receivers of service to “own this.” Last summer, a small contract was issued to Deloitte and a project team was formed to explore where shared services could help, where they wouldn’t be helpful, and to improve quality and consistency while increasing transparency and accountability. The first step in this project was to determine the current state. The Management Co-chair emphasized that she banned the term “cost-cutting” in this project since the goal is to produce greater quality and consistency.
Executive sponsors are assigned to each project area (page 4 of the presentation) to assure deliverables. Each work group is co-chaired by functional providers. The teams put forth ideas about what they do today if they did it in more of a shared service fashion in the future. The first phase of this project utilized past projects to create better practices. A focus was placed on how to increase customer service while delivering greater technical service; with that, the need to have an independent emphasis on shared services was established. Additionally, an importance on smarter business practices was expressed, such as streamlining contracts for similar functions. The project approach for the first phase was centered on defining in-scope services, collecting data, and developing findings (page 7). From this data, the team identified ratios within the Department such as the number of HR specialists to staff. Through these efforts, the team worked with 3,721 employees and discussed experiences such as onboarding with new employees, the hiring process with managers, and receiving travel reimbursements.
The Management Co-chair then discussed the findings on pages 9-12, including explanations, and what should be done differently to address the findings. One issue that was explored was the lack of transparency in the acquisition process. It was found that there are unclear expectations and challenges with understanding the required documents involved. Much of what is purchased are considered common good, such as office supplies, and it was determined there needs to be a more efficient way of purchasing common procurement items. The outdated financial management system was discussed, and areas like travel, relocations, and accounts payable were identified as areas that could benefit from the improvement of quality of service and the customer experience if there was a more current system. The Management Co-chair noted that the voice of the customer was most impactful in regards to HR. The HR team absorbed negative feedback and turned into points to address in their findings. They found that the maturity of HR services is generally at “basic” or “developing” level. HR is currently understaffed, and spending a majority of time on inquiry resolution rather than workforce analysis, and other mission supporting activities. Mr. Mahoney noted that HR professionals spend 36% of time answering questions. The Management Co-chair pointed out that many questions to not require a human being to answer and used the Employee Personnel Page as an example of how we can apply greater technology to provide greater transparency. Mr. Mahoney brought up OPM benchmarking, where they ask for 1 HR professional to 65 employees, the Department has a 1 to 80-120 ratio. While there are big correlations between service and staff, causes and effects have not been determined. Ms. Herbst reinforced that with less questions, HR professionals are more available to do better work. Mr. Mahoney stated that there is a pent up demand for more technology. The Management Co-chair used the examples of constantly approving documents through the routing of paper folders, rather than electronically. Additionally, she noted that five service providers are processing standard forms (ex: SF-50s), and emphasized that because of lack of better technology, it is hard to have the transparency that is needed. The IT team found that with 11 CIOs, the IT world is very fragmented. The IT community needs to define what is/isn’t common.
Over the next six to eight months, the project will begin detailed implantation planning work. With an enormous amount of work ahead, a need for a Federal team has been established. The project needs one year details from GS-15’s and SES level employees to serve as a change management communications person, a full time project manager, a full time business/budget analyst, and a lead for the entire project. Although the planning should take six to eight months, one year details are requested in order to have those participating in the planning process to be involved in the implementation process. A member asked where labor would come into this next phase, and the Management Co-chair turned the question back to the Forum, asking what role it wants to play.
It was noted that a member was concerned about things happening in bureaus in anticipation of shared services, when asked, the member stated that there as an assumption of contracting out services and having fewer employees. The Management Co-chair reinforced that as of right now there is no plan to impact the workforce, and that these discussions may be premature. It was suggested to have the initiative as a standing agenda items with updates, or potentially more frequent updates or input gathering sessions. It was also suggested to have something concrete presented at each quarterly meeting, and to draw upon examples from other agencies. While it took NASA seven years to implement their shared services initiative, a new physical location was being built (and disrupted by Hurricane Katrina) during this time. A member asked how much involvement labor played in NASA’s initiative, and Mr. Mahoney stated he would find out.
When asked about the leadership of initiative at the Department, the Management Co-chair stated that she is the Executive Sponsor, but there will be an office with an Executive Director of Shared Services who will be responsible for the implementation plan, for service level agreements, MOUs, and to capture the voice of the customer.
It was noted that the current Federal hiring strategy is to “steal” from other agencies, and that pool of people in HR and acquisitions is getting smaller. Additionally, should there be a retirement wave, there will be a large skills gap. NOAA was used as an example of how there was no inflation coverage over the last 10 years funding. Since NOAA is considered to still be meeting their mission, it is unlikely there will be a change in funding. Further discussion about cost cutting and losing jobs occurred; however, it was emphasized that this is not the concern of the initiative and it is too soon to be discussing this. Further, there is a body of work that exists, and how it’s done and who it is done by will be different. Management is concerned about what happens in the future, but until there is a better understanding of what the future is, there isn’t a need to comment on this just yet.
The Management Co-chair reminded the Forum that there will be more specificity in the future and that the Forum must determine how involved it would like to be. A member inquired about a “current state” with FTE’s and vacancies and the desire to know what the future would look like, but the Management Co-chair stated that the future is unknown, and that’s what the next several months will determine. A request to know the number of FTEs/vacancies, term, and contract employees was made by the Forum. As a start for involvement, the Forum wants to be updated regularly; understand the FTEs/vacancies, term, and contract employees; and proceed from there with potentially having a person or two involved in the planning stage. One member brought up the point that as the Department moves towards shared services and global functions, the dynamic of who labor negotiates with may change with bureau service changes. Management noted that there have been many conversations on ER/LR to ensure against jeopardizing employees who have issues, grievances, and negotiations to be addressed. It was noted that this type of example is why it is important to know what goals the Forum would like to achieve. A member suggested that it would be beneficial to have someone working on this in order to be integrated in be beginning so that these types of questions to come up at the end of the initiative.
A member asked why HR was so understaffed, and management stated that it is an area that becomes specialized in Government due to regulations, and it doesn’t automatically translate in/out of Government. Understaffing is not unique to the Department; HR is short all across Government. It was also noted that within the next 5 years, millennials will be a majority of the workforce, and the current tools needed are not available, thus there will need to be an increase in technology while there is a change in the workforce.
|Action items||Person responsible||Deadline|
|Determine Labor Involvement in NASA’s experience||Kevin Mahoney||ASAP|
|Decide how much Forum wants to be involved||All||TBD|
|Determine the number of FTEs/vacancies, term, and contract employees||Danny Sorrells||TBD|