by Harry Feinberg

Welcome to the birthing of civil-service HRO, an era that’s not going away anytime soon—in fact, it’s already a reality.

It starts at the recently announced $280 million transaction in which the State of Florida outsourced its human resources, recruiting, training, benefits, and payroll-administration services for 189,000 employees to Convergys Corporation, a leading provider of employee-care services. This contract is the largest HRO project to date. According to Florida's Department of Management Services, the project will save the state up to $173 million over the seven-year life of the contract.

Now hear this: All states should take notice. This is the trail-blazing deal that will be a model for other government bodies to follow. After all, cities, municipalities, and even states have for generations outsourced everything from facilities management to the management of their jails. The fact that Governor Jeb Bush has embarked on some of the most hardline outsourcing initiatives in the nation is a credit to his business acumen, and will long be hailed as one of the most innovative moves ever made to better the workplace for vast numbers of Florida's civil servants. It is for this reason-the State of Florida's Service First initiative-that Governor Bush was selected as one ofHRO Today's 100 HRO Superstars.

In the near future, you'll see more and more states taking the lead from Florida's program. In fact, our sources tell us that there are many states currently in discussion with providers of HR Outsourcing.

Federal Level

Now let's "kick it up a notch" and bring this to the Federal domain. Perhaps, dear reader, brothers George and Jeb are talking to each other about the outsourcing movement. After all, brother George is the first Harvard MBA president. And the first thing they teach you at Harvard is how to learn from case studies. Jeb's case study of governmental outsourcing success is now mostly written. Brother George is simply building on his little brothers success. This past mid-November, President Bush did the federal government workers' largest union a huge favor. He spawned a new revelation for governmental HRO by facilitating the American Federation of Government Employees to get out of that age-old story of evil management vs. good labor. He forced them to waive obsolete "union worker rights" a step necessary in molding 22 different agencies into the new Department of Homeland Security. As such, the Bush administration has identified 850,000 federal jobs that will be outsourced to the private sector.

Government understands outsourcing. They've been doing it for years. They just called it "contracting." President Bush's plan to "privatize"-I call it "outsourcing"-is good for labor unions and, unbeknownst to most unions, they have the ability enter the modern age: the age of HR Outsourcing.

Labor Unions & HRO

Why is it good for a labor union to understand that it's best for it to be an outsourcing provider? Four main reasons: 1) the unions are already outsourcing wealth and health-among other things-for its members; 2) the unions can add new profit centers to their current revenue model (dues) through fee-for-service proceeds (which government should be willing to pay)-i.e. unions can be the payroll and benefits department or the training department, and for the first time, therefore, unions can aid their members' career development; 3) the unions are now in a position to rework that stale culture of us vs. them, and redefine the purpose of making better workplaces (a core competency of a labor union), thus opening the door for a more positive approach; 4) as outsourcers, unions afford the government cost savings, improved quality, and the ability to provide their customers (members) work/life quality improvements while giving our government the foresight to focus on its core competency: running our country and protecting Americans.

Today we are at the dawn of a new age in the HR Outsourcing world and HRO Today's cover story is only the beginning of the HR civil-service outsourcing story.

So...stay tuned.