How civil service transformation benefits public employees

Organizations can seek to revamp their entire infrastructure or take a more piecemeal approach focusing on one department at a time. Ernst & Young LLP is currently working with a state government as it transforms its entire civil service organization after a severe financial crisis. While the government has taken steps toward achieving a sounder financial footing, it quickly realized it needed to fully engage employees, many of whom went without pay increases for years and faced the uncertainty of an unfunded pension, among other trials. They realized that just getting back on their feet financially would not be enough if they wanted to truly rebound from the crisis.

Engaged in summer 2021, EY teams recently completed two pilots for selected key financial agencies and are now working with the state government to scale the project and begin rolling out the reform to more than 60 government agencies and a workforce of more than 20,000 employees in January 2023.

The pilots focused on four strategic components: organizational design, compensation, recruitment, and evaluation and development of employees as they seek to transform human capital capabilities and resources. With much of the design work finished, an EY team now stands ready to help them deploy the transformation along five workstreams: organization design, compensation, employee evaluation, recruitment, and change management.

1. Organizational design

As a first step, the team sought to understand and redesign the organizational structure for each agency to make sure employees with the right skills and competencies were assigned to the right area and job. A skills and competency survey found, for example, that administrative tasks consumed 40% of the overall workload, which meant that employees were not focusing on value-added areas. To address this, the EY team and the government consolidated many of those tasks into a centralized shared services team. This resulted in pilot employees being able to focus on more strategic tasks that advanced the agency’s priorities, eliminating their backlogs because they could focus on critical activities.

2. Compensation

The team also conducted an extensive review of the salary scales against market rates in an effort to align and adjust compensation so employees would be paid competitively. This was a significant undertaking and the initial study indicated that the two departments were significantly below scale: in one agency, 73% of the employees were paid below market rates, while the other revealed that 80% were below. Addressing this discrepancy became one of the main tasks for the oversight board and now no employee in either agency is working below market rates. A survey conducted after the salary adjustment showed that this has significantly improved employee satisfaction and engagement.

3. Recruitment

After identifying a number of skills gaps in the organizational design phase, the team realized that in addition to upskilling employees they would need to address these gaps by seeking external talent who could support the government’s digitization efforts and further drive operational efficiency. Recruitment had been a point of contention in the past, so the team designed a digitized, optimized and candidate-focused recruitment process that utilized a single digital platform, with built-in safeguards for transparency in the recruitment process. As they assessed both agencies, they identified the need for more than 100 positions in the areas of accounting, data science, project management and technology to bring into the state’s government.

4. Employee evaluation (performance management)

The final strategic component of the transformation effort was to develop an employee evaluation system that measured proficiency and key skills and competencies that would set the stage for fair, impartial evaluations. As part of the assessment, the team realized that both agencies had created a complex job classification system, which they sought to simplify by trimming 176 job classifications down into 2. This allowed leaders and employees to clearly understand their classification, providing a clearer pathway for promotions and advancement. Overall, the team reduced 24,000 job classifications to 1,500.

5. Change management

Given that they were working with two agencies, with two separate leadership teams, the EY People Advisory Services team needed to develop a strategic change management approach that would serve to effectively engage with the various stakeholders, gain employee buy-in for the transformation efforts, and manage impacts on roles and operations. Rather than follow the traditional approach of relying on a top-down communication program marked by frequent communications from leadership, the team created a change network of key influencers within each agency. This approach helped to deliver key information to the right people, from people they were more likely to know personally or professionally.

With the successful completion of the pilots, EY professionals and the government are now determining the additional priority agencies to turn their focus as they move to deploy the project through the full civil service organization of more than 20,000 employees, starting in January. The transformation effort has the potential continue for several years, but it is certainly off to a strong start and serves as a beacon for other organizations considering similar transformations.

Summary 

The path to civil service transformation is never an easy one, but it will pay dividends not only to the organization’s people, but ultimately to the constituents they serve. Organizations that define their future ambition and embark on transformation to build a prepared and resilient workforce will establish themselves as a civilian employer of choice, build a reputation of excellence with the public, and create greater workforce predictability in the face of tomorrow’s challenges.