Government HR leaders know only too well the pressures weighing on their organizations. First, there are the big constraints on public budgets, which frequently lead to large-scale reorganizations or severe staff cuts—or both. In the US, for example, the Department of Defense recently announced a sharp 8% cut in Army staff and a 17,000-person reduction in the civilian workforce. In France, Ministry of Defense staff was slashed from 330,000 in 2006 to 270,000 today. And in the UK, the government has reduced the number of civil servants by almost a fifth since 2010.
In addition, demands on government are only increasing. For example, in the wake of the global financial crisis, governments in many countries continue to play a large role in areas such as assistance for the long-term unemployed. And providing these services often requires increased staffing and enhanced training and skills.
At the same time, citizens have increasingly high expectations when it comes to the quality and efficiency of public services, in part because more information is available about the performance of governments around the world. From the OECD’s PISA rankings of student performance to the World Bank’s Doing Business rankings to BCG’s own Sustainable Economic Development Assessment, there is greater visibility into how governments are performing relative to peers.
Governments also need to upgrade their skills in many areas. Whether because increased outsourcing requires new contract management skills or because the latest digital tools demand high levels of technical expertise, governments need to bring critical skills onboard.
Compounding these challenges is the fact that many governments are facing an exodus from the workforce over the next decade. In OECD member countries, for example, one-third of employees are older than 50. As a result, a significant amount of hiring and training will be needed, as well as an overall rethinking of roles.
Transforming HR will require major initiatives… Taken together, the forces weighing on governments will trigger significant shifts. These will include changes in the scope and mission of some roles, improved processes in many areas of government, and mergers, reorganizations, and delayering programs. HR will play a central role in such initiatives, and government leaders must ensure that their organizations are up to the task. HR leaders certainly recognize the need for change.
In BCG’s 2014 Creating People Advantage survey of more than 400 government HR leaders (conducted in partnership with the World Federation of People Management Associations), public-sector HR managers reported significant challenges, including the need to develop advanced analytic capabilities. (See “The Current State of Public-Sector HR.”)