Extracting the emotions from the decision-making process will be a wise move for governments and taxpayers alike.
Regular readers of this column are probably aware of my disdain for how government is run. Usually, I base my opinion on the inexplicably inefficient way in which local governments operate in my home state of New Jersey. Perhaps due to emissions from all the refineries in the Garden State, we have lost access to neurons capable of comprehending the economies-of-scale concept.
Nevertheless, I’m a holdout. I still believe that outsourcing can play an important part in lowering costs while improving services throughout government. I have seen this first-hand. When administration of our automated, regional toll system, E-ZPass, was outsourced to a well-known provider, it completely transformed customer service. In the old days, handling an error in your account was the administrative equivalent of legally changing your last name. Phone calls, letters, and prayers were often necessary. Recently, when I experienced a problem, it took one phone call to resolve the issue. Outsourcing really was that potent.
Why am I hopeful that HRO will have its day in the public-sector sun? In this issue, contributing writer Russ Banham examines the state of public sector HRO (see Slow Going with Uncle Sam, p. 10), and while adoption has been slow in the federal government, signs of a broader embrace are emerging. The Transportation Security Administration (TSA) was one of the pioneers in the federal government, as were the states of Florida and Texas on the state level.
Although few have followed in their footsteps since, a considerable number of government bodies are selectively outsourcing HR services with much success.
Take, for instance, the subject of this issue’s cover story: the Office of the Comptroller of the Currency (see Cash Flow, p. 42), which has moved most of its relocation services to an external provider. HR managers there speak glowingly about cost savings and service upgrades as a result of embracing a comprehensive mobility outsourcing contract. What’s really impressive about their engagement is that it came about after the bureau undertook a lean Six Sigma review of operations and decided outsourcing was the answer. In other words, the decision to outsource was based on a disciplined, fact-finding effort and not on indefensible suspicions.
This is the key to greater public-sector outsourcing—taking the emotional aspect out of the decision-making process. If more government bodies would undergo these fact-based self-examinations, taxpayers would get a better return on their dollars. I’m not sure cost savings are always the most compelling reason to outsource—just ask some commercial-side buyers—but producing a better customer experience is, and that’s value to taxpayers. In the case of the OCC, which competes with private-sector employers for talent, ensuring that workers are well supported during their relocation helps to reinforce a positive impression of the organization among assignees, which in turn boosts retention. And who can really argue against better service?
All taxpayers—myself included—have a negative impression of how efficiently government bodies operate. That’s because with few exceptions, stakeholders involved in the public sector mostly fail to govern with innovation. While some of this shortsightedness is attributable to the government structure and regulations on discretionary spending, a lot of it is due to an entrenched culture. But as public-sector HR leaders witness more success stories—whether it’s the OCC or California’s Orange County, which outsourced benefits administration—they may indeed take a second look at outsourcing.
And for those of us with all neurons firing, that can only be good news.