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Shift to HR shared services could save Connecticut millions

By consolidating 17 separate HR operations into one shared service, Connecticut expects to save significantly on costs, most of it in personnel reductions through retirements.

The state of Connecticut is consolidating 17 human resources departments into one HR shared service. It expects to reduce overall HR costs by 20%, or approximately $10 million, much of it through staff reduction.

The state's executive branch HR departments were operating independently, with different forms and processes and inconsistent ways of interacting with state employees, said state officials at a briefing Tuesday, providing an update on the shift to HR shared services that began in 2019.

The independent HR departments were "interpreting rules and contracts slightly differently and trying to figure things out in their own silos, as opposed to working together as one team to solve similar problems," said Josh Geballe, commissioner of Conn.'s Department of Administrative Services.

HR departments were interpreting rules and contracts slightly differently and trying to figure things out in their own silos.
Josh GeballeCommissioner, Connecticut Department of Administrative Services

The state has 350 HR employees working in the 17 agencies; approximately 140 of those workers are expected to retire, thanks to a retirement surge. According to an analysis completed last year, the state expects about 27% of its workforce to retire by July 2022.

With the consolidation, the state's HR shared services will eventually operate with 280 people, including about 70 new hires.

The shift also meant getting rid of paper-based processes. The state hired Scan-Optics, a firm in Manchester, Conn., to digitize some 1 million pages of files, and UKG Service Delivery, formerly PeopleDoc by Ultimate Software, to develop a case management system.

The system upgrade enables employees to access HR documents from a centralized location.

HR document sharing is 'cool'

"It's cool to know that my colleagues and I could be looking at the same document online at the same time and be on opposite sides of the state," said Tiffany Tran, an HR leadership associate in the administrative services department, who also spoke at the briefing.

The state believes HR shared services will make it more competitive with the private sector in recruiting HR professionals.

When new college graduates and HR professionals working in private-sector HR see what the state is doing to modernize, "they will see that their skills are transferable here to the state," said Nick Hermes, the state's chief human resources officer.

Eser Rizaoglu, an analyst at Gartner, agreed with Hermes' outlook on hiring. HR departments loaded with transactional work are "going to be a less attractive job," he said.

HR shared service operations create good, strategic jobs and new careers for people in shared services, Rizaoglu said.

The leading drivers for HR shared services are cost savings, enabling efficiency, and standardizing and automating most transactional and routine tasks. Improving customer services and service quality also ranks high, according to Rizaoglu's research.

"A lot of shared services leaders and HR leaders are looking at improving customer experience and the quality-of-service offerings," Rizaoglu said.

"By saving costs and driving efficiency and standardizing, you're creating greater capacity for the rest of your HR staff to focus on higher-value work -- and that's what they are doing in Connecticut," he added.

Connecticut's transition to HR shared services comes with a technology cost, but "it will pay itself off over the longer term," Rizaoglu said.

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