The movement to shared services should continue to be a priority for the new leaders of our government. Shared services bring operational effectiveness, cost efficiencies, and increased customer service. The transition to shared services is a significant transformation for any leader and organization. It is also significant for the people working within that organization. As with any transformation, the human capital element should be top of mind. As leaders engage in the planning for and transition to a shared services operating model, they must consider the size and composition of the workforce. Their shared services workforce is a blended one: it consists of the staff that will operate the shared service center. It also includes the functions and services that do not transition, traditionally referred to as the retained organization.
As part of the ongoing series on human capital risk management, the National Academy of Public Administration (the Academy), in partnership with Ernst & Young LLP (EY), hosted a panel on October 6, 2016 to raise awareness and share insights on human capital risk in a shared services transition. The panel focused specifically on the risks associated with the retained organization. Featured panelists included: Beth Angerman, Executive Director, Unified Shared Services Management, U.S. General Services Administration; Anita Blair, Academy Fellow; Ellen Herbst, Chief Financial Officer and Assistant Secretary for Administration, U.S. Department of Commerce; and, Mark Rose, Director of Financial Operations/Comptroller, U.S. Coast Guard. Karen Shrum, Senior Manager in the Government & Public Sector Practice of EY, moderated the panel. The panel shared their perspectives on the retained organization. Their insights, presented below, are valuable for new federal leaders.
While shared services is not a new topic in the Federal landscape, the conversation traditionally covers the benefits of automation and increased efficiencies. We must also extend this conversation to the retained organization and how this entity affects the success of the organization. The retained organization is the hub of the function to be migrated. While often blamed for inefficiency and reduced levels of service, it does house employees who have years of organizational and functional experience. It is thus a critical organizational consideration for any leader. Leaders must be focused on the "new" work of the retained organization and the capability and capacity of the staff to execute that work. Strategies for the retained organization include attrition, re-purposing and re-training. There are inherent risks in these strategies. Risks include:
Mitigating risks and overcoming challenges requires detailed planning and creative solutions. Practical strategies for federal leaders include:
Shared services, because of the efficiencies it brings to the organization, will continue to be a focus of the new Administration. For new leaders, the retained organization cannot be an afterthought - its seamless integration with the shared service function is key to organizational success. Within the retained workforce lies a wealth of organizational knowledge that can be shared to aid service continuity, new employee onboarding and overall knowledge retention. Determining how to tap into the experience of the retained organization, and focusing on creating opportunities for employees within the organization, is key to successful transition and mission execution.
Karen Shrum is a Senior Manager in the Government & Public Sector Practice of EY where she leads the federal human capital risk management service area. She has over 19 years of federal and private sector experience leading and supporting government organizations through organizational change. Karen holds a Masters in Business Administration from the George Washington University.
Liz Burokas is a performance improvement consultant in the Government & Public Sector Practice of EY where she focuses on workforce analysis and transformation management. Prior to EY, Liz performed data analysis, project management and training development for the non-profit sector. Liz holds a BA from Georgetown University and a Masters in Business Administration from the University of Maryland.
Katie Hilferty is a consultant in in the Government & Public Sector Practice of EY where she focuses on human capital, change management, and shared services. Prior to joining EY, Katie provided Executive level Human Capital support to a fortune 500 defense contractor. She holds a BA in International Affairs from George Mason University in Fairfax, Virginia
Jonathan Wigginton is a consultant in in the Government & Public Sector Practice of EY where he focuses on human capital support for federal agencies. Prior to joining EY, Jonathan worked at a leading non-profit organization focusing on organizational assessments. Jonathan holds a BA in History from the University of Mary Washington in Fredericksburg, Virginia.