Many countries are experiencing a crisis in public-sector human resource management stemming from mounting pressures on a number of fronts. Budgets are tight for numerous governments around the world, and human capital costs represent a major—if not the major—cost center. Employee compensation accounts for about 25% of government budgets on average (they are even higher, at about 30%, in Africa, the Middle East, and Central Asia). In addition, demands on government staff are increasing because of a growing need for services in some countries and rising expectations of government performance among citizens in general. At the same time, a looming retirement wave in many countries is creating a potentially problematic loss of institutional expertise. And all this is playing out at a time when governments must upgrade their talent base. This includes recruiting people with the skills to help them deploy new digital technologies, an area where talent is in limited supply and for which there is tremendous competition.
The bottom line: governments must dramatically improve how they recruit, train, and manage talent. And they must make HR into a strategic partner for public-sector leaders, one that plays a key role in helping to improve overall government performance. Governments that rise to this challenge will emerge with an organization that is more effective and efficient—and a workforce that is able to fully harness the potential of new technology.
Based on extensive experience working with public-sector organizations, BCG has identified ten steps that governments can take to ensure that their transformed HR organization is efficient and well-connected to internal stakeholders, that it takes a strategic approach to helping the overall organization, and that it has a full toolbox of the necessary skills and capabilities.