HR Directors Get a Personnel Downgrade
Even though states spend more on payroll than anything else, many governors no longer look to human resources for advice on their workforce.
It’s always been tough to run a state’s department of human resources. And since the beginning of the Great Recession, it’s gotten even more difficult as pay freezes, reductions in workforce size, and increasing co-pays for health and pensions have demoralized workers.
With workforces under great stress, you might think that governors and other high-level state officials would be listening ever more carefully to the reports of their HR leaders.
You would be wrong. Based on dozens of interviews with human resources directors over the last couple of years, the opposite is often the case. HR directors report that their departments aren’t seen as the place to go to create a more effective workforce; they’re the place to go to balance budgets.
Even if they aren’t in extremis, HR directors are hesitant -- for obvious reasons, such as loyalty to their governors -- to speak publicly about the change in their situation. But off the record, we got quite an earful. “With the diminished position of human resources, I don’t get a sense of what our true role is,” one told us. Said another, “Our function has been ignored.” A third said that they “are structured within a department of administrative services. It would be best for HR to be positioned differently.”
In a recent edition of IPMA-HR News, a magazine for public-sector HR officials, consultant Howard Risher took note of the new direction for governments vis a vis their employees. “Employees need to be managed as assets, not as a cost,” he wrote. “The common strategy in leading knowledge companies is creating a work environment where employees collaborate to tackle problems as they arise.” He then noted that government “has been going in a very different direction.”
There have always been a number of states in which the HR function has moved from a separate agency to a division in a larger one. That’s been the case in at least four states in recent years: Georgia, Nevada, Oklahoma and Washington. Among states that have formal cabinets, fewer than half include their HR directors at that table.
Of course, the positioning of the personnel function in the state’s hierarchy isn’t directly correlated to its power; nor is the decision to realign agencies tied to any nefarious plot to keep it in a subordinate position. For example, Nevada, a state hit hard by the recession, decided to merge all internal service agencies under one roof, a move that saw HR placed within the department of administration. “They were,” says Lee-Ann Easton, the state’s HR director, “trying to avoid duplication.”
That’s fair enough, and some HR directors have easy access to the governor’s ear, regardless of where the lines are drawn on an org chart.
At the same time, it seems to us that there’s a distinct possibility that when an office is placed between the HR director and the governor, that move could be seen as symbolic. There are those who believe that the further an agency or a department gets from a direct report to the governor’s office, the less sway it will have on policy.
Sally Selden, a professor and associate dean at Lynchburg College in Virginia, and a nationally recognized expert in state human resources, sees these trends as particularly troublesome. “Many of the states have gone three steps backward,” she says, adding that “there’s great importance in guiding strategic decisions with the help of those who have a clear idea of how to get people to work together toward a mission. It’s more important today than it’s ever been.”
As Selden and others point out, even from a strictly budgetary point of view, the significance of the workforce in a state government can hardly be overstated. Payroll is the single largest use of revenues in the states. Almost everything a state does is labor intensive. Yet a number of states are paying too little attention to the consultative capacity of HR offices in decision-making.
Beyond that, many HR departments are being squeezed for sufficient capital to keep their technology up to date -- beyond simple payroll systems -- and their training in place. In order to provide the next generation of leaders, training continues to be one of the easiest cuts to make. It’s a vulnerable spot for shrinkage, after all. When was the last time you saw anybody putting together a petition for more training for state employees?
As the late Eva Santos, the highly regarded director of the Washington state Department of Personnel, told us a few years back, “Preparing future leaders is a great concern to me. Agencies which are squeezed by massive budget cuts themselves have been less likely to send employees for training.” That continues to be the case.
This negative phenomenon may be common, but of course it’s not universal. In North Carolina, the role of HR is held in high regard by Gov. Pat McCrory. That shouldn’t be much of a surprise as the governor’s background included several years in the HR department of Duke Energy, working for his current HR director, Neal Alexander.
When McCrory asked Alexander to be part of his transition team, Alexander made the point that HR was down in the organization as more of an administrative function. He wanted to elevate it, recognizing, he noted, “the importance of having HR at the table to understand the business issues that were being addressed in cabinet meetings and other secretary meetings throughout the organization.”