state of oregon

SecretaryofStateDennisRichardsonAuditsDivision,DirectorKipMemmott

Report2017–21

StateofOregon

DepartmentofAdministrativeServicesShouldEnhanceSuccessionPlanningtoAddressWorkforceRisksandChallengesSeptember2017

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SecretaryofStateAuditHighlightsSeptember2017

Department of Administrative Services Should Enhance Succession Planning to Address Workforce Risks and Challenges

Purpose

The purpose of the audit was to determine if and how the State of Oregon could better plan for future key workforce needs, including preparing state employees to fill key roles.

SecretaryofState,DennisRichardsonOregonAuditsDivision,KipMemmott,Director

Key Findings

Within the context that effective succession planning is difficult, complex and is frequently not a priority within the public sector, we found:

1. DAS has not developed or implemented a state‐level succession planning framework, despite recognizing the importance of succession planning.

2. The lack of a succession planning framework increases workforce risks, such as not developing or retaining knowledgeable and skilled employees to perform critical functions.

3. These risks are exacerbated by demographic and economic trends, including increasing retirement rates, and a lack of formal succession planning processes within state agencies.

4. State agencies also report challenges, including inaccessible workforce information, that may hinder strategic human capital management practices and should be addressed at a state level.

To reach our findings we conducted interviews, reviewed documents and reported practices, researched leading practices and analyzed workforce data.

Recommendations

Drawing from national leading practices and benchmarking with other states, the report includes eight recommendations to the Department of Administrative Services focused on implementing a succession planning framework in the Oregon executive branch. Recommendations include providing guidance to agencies, monitoring workforce risks, and working with agencies to identify and address barriers at a state level.

The Department of Administrative Services agreed with our findings and recommendations. The agency’s response can be found at the end of the report.

Background

This audit reviewed succession planning within the Oregon executive branch. Succession planning is an ongoing management process used to ensure workforce continuity and effectiveness, particularly in key leadership and technical functions.

Report Highlights

The Secretary of State’s Audits Division found that the Department of Administrative Services (DAS) should play a stronger leadership role in addressing key workforce risks and challenges within the state executive branch, through enhanced workforce succession planning.

About the Secretary of State Audits Division

The Oregon Constitution provides that the Secretary of State shall be, by virtue of his office, Auditor of Public Accounts. The Audits Division performs this duty. The division reports to the elected Secretary of State and is independent of other agencies within the Executive, Legislative, and Judicial branches of Oregon government. The division has constitutional authority to audit all state officers, agencies, boards, and commissions and oversees audits and financial reporting for local governments.

Audit Team Will Garber, CGFM, MPA, Deputy Director

Andrew Love, Audit Manager

Caroline Zavitkovski, MPA, Principal Auditor

Rod Campbell, MA, MS, Staff Auditor

This report is intended to promote the best possible management of public resources. Copies may be obtained from:

website: sos.oregon.gov/audits

phone: 503‐986‐2255

mail: Oregon Audits Division 255 Capitol Street NE, Suite 500 Salem, Oregon 97310

We sincerely appreciate the courtesies and cooperation extended by officials and employees of the Oregon Department of Administrative Services and state agencies during the course of this audit.

Report Number 2017‐21 September 2017 Succession Planning Page 1

Secretary of State Audit Report

Department of Administrative Services Should Enhance Succession Planning to Address Workforce Risks and Challenges

Introduction

Successionplanninghasmanydefinitions.Forthepurposeofthisaudit,wedefinesuccessionplanningasanongoingmanagementprocessusedtoensureworkforcecontinuityandeffectivenessinkeyleadershipandtechnicalfunctions.Whilethereisalackofconsensusonwhatexactlysuccessionplanningentails,literaturesuggeststhatitismorethanjustplanningforreplacingtopleaders.Successionplanningshouldincludedevelopinga“talentpipeline”throughoutalllevelsofanorganization.Itcanalsoincludeplanningforseniortechnicalroles,suchasheadengineer,inadditiontoleadershiproles.However,thelackofagreeduponterminologyandunderstanding,canmakeexecutingsuccessionplanningmorechallenging.1

Successionplanningisanongoingsystematicprocess.Itinvolvesassessingtheskillsandcompetenciesneededformeetingorganizationalobjectives,implementingworkforcestrategies,andcontinuallyevaluatingandenhancingthesestrategies.Strategiescanincludepreparingemployeesforfuturerolesthroughleadershipdevelopment,careerdevelopment2andknowledgetransfer;targetedrecruitmentandretentionstrategies;anddesigningandcommunicatingcareerpathways.Successionplanningisacomponentofstrategichumancapitalmanagement.3

Effectivesuccessionplanningmitigatesworkforcerisks.Ithelpsorganizationsretainknowledgebyidentifyingneedsandputtingstrategiesintoplacetotransferknowledgeandretainknowledgeableemployees.Italsohelpsorganizationsidentifyandexecutestrategiestoclosegapsintechnicalandmanagerialcompetencies.Additionally,successionplanning

1Successionplanningisalsocalledsuccessionplanningandmanagement,andsuccessionmanagement,withsomevariationinmeaning.2Developmentreferstolearningexperiencesforlong‐termcareergrowthandfuturepositions,asopposedtotraining,whichistypicallyfocusedonacquiringskillsneededtoeffectivelyperformone’scurrentposition3Strategichumancapitalmanagementrepresentstheentirerangeofpracticesandprocessesformanagingpeopleinanorganization.

Succession planning is an ongoing process used to ensure workforce continuity and effectiveness


candemonstrateformalandintentionalinvestmentsincareerdevelopmentandcareerpathstocurrentandpotentialemployees.Providingafairandclearprocessforsuccessionintofuturerolescanimproverecruitment,retentionandemployeeengagement.

Finally,asuccessionplanningframework,tailoredtoanorganization’sneeds,canguidesuccessionplanningefforts.Frameworkscanincludeobjectivesandvision,guidelinesandpoliciesthatsetoperationalparameters,definitionsofkeyconcepts,formalizedprocesses,clearlydefinedrolesandresponsibilities,andtoolsortemplates.Theycanalsoincludesystems,informationandtrainingtosupportprocesses.

Thestrategicimportanceofsuccessionplanninghasbecomemorepressingowingtochangingworkforcedemographics,includingahigherproportionofworkersover60andincreasingworkforcediversity.Moreworkersatornearretirementagepresentsadditionalrisksofknowledgeloss.Anincreasinglydiverseworkforcepresentsincreasedcomplexityandanopportunitytocapitalizeonbroadbackgroundsandperspectives,aswellastodiversifymanagementandleadershippositions.

Oregonhasahigherproportionofworkersover60thaninthepast.About15%oftheworkforceis60orolder.4AsshowninFigure1,thispercentagehasalmostdoubledsince2006.

Figure 1: Distribution of Executive Branch Employees in Age Categories, in 2006 and 2016

Source: Oregon Audits Division, using Department of Administrative Services (DAS) personnel data, obtained from Position and Personnel Database (PPDB).

Additionally,thestateworkforcehasbecomemoregenerationallydiverseasbabyboomersareleavingandbeingreplacedbygenxersand

4Thisauditfocusedonpermanentemployeesintheexecutivebranchandexcludedthejudicialandlegislativebranches,semi‐independentagencies,andtemporary/seasonalworkers.Futurereferencesinthereportto“workforce”refertothisnarrowerdefinition,unlessotherwisespecified.

7%

21%

30%34%

8%8%

23%

28% 28%

15%

Under 30 30s 40s 50s 60 and Over

2006 2016

Changing state employee demographics increase the need for effective succession planning


millennials.Figure2illustratesthisdemographicshift.Generationaldifferencescanaddcomplexity,butalsodifferentperspectivesandopportunitiestotheworkforce.

Figure 2: Distribution of 2006 and 2016 Workforce in Generation Categories5

Source: Oregon Audits Division, using DAS personnel data, obtained from PPDB.

Theworkforceisalsobecomingmoreraciallyandethnicallydiverse,particularlyamongyoungerworkers.Figure3showsincreasingdiversityacrossallagegroups,butparticularlyamongworkersunder30.ThismaypresentanopportunitytobuildatalentpipelinethatismorereflectiveofthepeopleofOregon,withastrongerdiversityofperspectives.

Figure 3: Workforce Representation of People of Color6 (as Percentage of Workforce) within Age Categories, in 2006 and 2016

Source: Oregon Audits Division, using DAS personnel data, obtained from PPDB.

5GenerationdefinitionsarebasedonPewResearch’sdefinitions–MillennialGeneration:born1981‐97,GenerationX:born1965‐80,BabyBoomGeneration:born1946‐64,andSilentGeneration:born1928‐45.6EmployeesidentifiedasAfricanAmerican,AsianAmerican,Hispanic,NativeAmerican,PacificIslander,ormulti‐ethnicinthestate’spersonneldatasystem.

2%

31%

61%

6%

20%

43%36%

1%

Millennials Gen Xers Baby Boomers Silents

2006 2016

Under 30, 18%

28%

30s, 17%

21%

40s, 14%

18%

50s, 10%

15%

60 and Over, 8%

12%

2006 2016


Thestate’sworkforceperformsjobsthatdirectlyaffectthelivesofOregonians;itisthestate’smostimportantstrategicresource.Fundingthisresource,throughsalariesandbenefits,iscostly.

Intheexecutivebranch,Oregonemployedover35,000permanentemployeesin2016.7Theseemployeesperformawidevarietyofjobstoensurethehealth,safety,andeducationofOregonians;protecttheenvironment;andboosttheOregoneconomy.Forinstance,statepoliceofficerspromotehighwaysafety,environmentalregulatorssafeguardcleanairandwater,andemploymentspecialistshelpunemployedOregoniansgetbacktowork.Thosearejustafewexamplesfromover500positionclassifications.Manyjobsrequiretechnicalskillsoradvancedtrainingandoftendrawonyearsofaccumulatedknowledge.

Thestateexpendssignificantresourcesonitsworkforce.Thestatebudgetedroughly$7billionforoverallstateemployeecompensationinthe2015‐17biennium.8Thisrepresents10%oftheoverallstatebudget.StateGeneralFundmoniesaccountedfornearlyhalfofthatamount.

StatelawgivestheOregonDepartmentofAdministrativeServices(DAS)responsibilityforthestate’spersonnelsystem.9DAShastheauthoritytodelegatehumanresource(HR)managementand,infact,manystateagenciesmaintaintheirownHRfunctions.

TheChiefHumanResourcesOffice(CHRO),withinDAS,isresponsibleformanagingstatepersonnelprocesses,includingmaintainingtheclassificationandcompensationsystems,facilitatingcollectivebargainingnegotiations,administeringemployeetraining,providingHRservices,andestablishingstatewideHRpolicy.CHROprovidestrainingrelevanttosuccessionplanning.Forexample,itprovidescentralizedleadershipdevelopmenttrainingtoaround30participantsayearfrommultiplestateagencies,throughaprogramcalledLeadershipOregon.Italsooffersmanagementtrainingforcurrentandprospectivemanagers.

CHROalsooverseesstateagencyHRfunctions.Manystateagencies,particularlylargeragencies,havetheirownHRfunctions.AgencyHR

7AccordingtotheLegislativeFiscalOffice,therewereover40,000budgetedpositions(slotsforworkers)throughoutallthreebranchesofstategovernmentin2015‐17.However,10–15%ofpositionsarevacantatanytime.8Thisincludessalaries,benefitsandotherpayrollexpensesforallthreebranchesofstategovernment.9OregonRevisedStatute240

The workforce is among the state’s most important and costly resources

The Department of Administrative Services has responsibility for the personnel system and policy

The Oregon executive branch employs over 35,000 people.


departmentsareresponsibleforstrategichumancapitalmanagement,suchassuccessionplanning,fortheiragencies.Incontrast,atleast20stateagencies,boards,andcommissionspayassessmentfeesforCHROtoprovideHRsupportservices.CHROoffersadditionalfee‐basedHRconsultingservicestoagencies,whichcouldincludesuccessionplanning.

Forthe2017‐19biennium,CHRO’sbudgetisroughly$34millionwith76positions.TheLegislatureincreasedCHRO’sbudgetsubstantiallybyadding$20millioninfundingforanewhumanresourceinformationsystem,whichincludes30newlimiteddurationpositionsandthreenewpermanentpositions.TheLegislaturealsoeliminatedthreepermanentCHROpositions‐anexecutiverecruiter,atrainingdevelopmentspecialist,andanadministrativespecialist.CHRO’sprincipalrevenuesourceisfromassessmentofstateagencies.

Objective

OurauditobjectivewastodetermineifandhowtheStateofOregoncouldbetterplanforfuturekeyworkforceneeds,includingpreparingstateemployeestofillkeyroles.

Scope

TheauditfocusedonsuccessionplanningandmanagementwithintheexecutivebranchincludingassessingtheresponsibilitiesandactivitiesofDASandselectedstateagencies.

Methodology

Toaddressourobjective,weexecutedamulti‐facetedmethodologythatincluded,butwasnotlimitedto:conductinginterviews,administeringaquestionnaire,reviewingdocumentation,andanalyzingworkforcedata.

Weconductedinterviewswithapproximately50stateagencyleaders,employees,andstakeholders,includingdirectorsanddeputydirectors,HRdirectorsandanalysts,policyanalysts,economists,internalauditors,projectstaff,andotherrepresentativesfromorganizationsincluding:

OregonDepartmentofAdministrativeServices; EightlargeOregonstateagencieswith250ormoreemployees‐the

OregonDepartmentsofEducation,HumanServices,Corrections,Employment,FishandWildlife,Transportation,ConsumerandBusinessServices,andRevenue;

Fivesmall/mediumstateagencies,boards,andcommissionswithlessthan250employees‐OregonPublicUtilityCommission,DepartmentofVeterans’Affairs,DepartmentofLandConservationandDevelopment,DepartmentofGeologyandMineralIndustries,andBoardofDentistry;

OregonGovernor’sOffice;

Objective, Scope and Methodology


Laborgroups‐ServiceEmployeesInternationalUnion(SEIU)andAmericanFederationofState,CountyandMunicipalEmployees(AFSCME);and

HRofficesinsevenotherstates‐Washington,California,Texas,Ohio,Tennessee,Delaware,Pennsylvania.

Inadditiontointerviews,wefurtherreviewedpracticesattheeightlargeOregonstateagencies,throughadetailedquestionnaire.WeaskedHRdirectorstocoordinatewrittenresponsestodetailedquestions,includingprovidingsupportingdocumentation.Theseagenciescollectivelyemployoverhalfofexecutivebranchemployeesandprovideservicesineightdifferentprogramareas,asdefinedinthestatebudget.

WeanalyzedDASworkforcedataforpermanentemployeesintheexecutivebranch,coveringtheperiod2006–2016.Weassessedthedataforreliabilityandconcludeditwassufficientlyreliableforourauditpurposes.

WereviewedreportsanddocumentationpertainingtosuccessionplanningandrelatedpracticesandprojectsintheOregonexecutivebranch.Wealsoreviewedpersonnelpolicies,laws,andleadingnationalpractices.10

Duetothebreadthoftheauditandnatureofthetopic,wereliedontestimonialevidence,suchasinterviews,butobtainedsupportingdocumentationorindependentverificationwhenpossible.Wealsofocusedoncentraloffices,anddidnotconductinterviewsinfieldoffices.

Weconductedthisperformanceauditinaccordancewithgenerallyacceptedgovernmentauditingstandards.Thosestandardsrequirethatweplanandperformtheaudittoobtainsufficient,appropriateevidencetoprovideareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedandreportedprovidesareasonablebasistoachieveourauditobjective.

10SourcesforleadingpracticesincludeUSOfficeofPersonnelManagement,NationalAssociationofStatePersonnelExecutives,SocietyforHumanResourceManagement,GovernmentFinanceOfficersAssociation,“EffectiveSuccessionPlanning,”byWilliamJ.Rothwell,andreportsandwebsitesfromotherstates.


Audit Results: The Department of Administrative Services Should Enhance Succession Planning to Address Workforce Risks and Challenges

AskilledstategovernmentworkforceisessentialfordeliveringhighqualityservicestoOregonians.TheDepartmentofAdministrativeServices(DAS)shouldplayastrongerroleinensuringcontinuityofaqualityworkforcethroughenhancedsuccessionplanning.

Currently,theOregonexecutivebranchlacksarobustworkforcesuccessionplanningframework.Withinthecontextthateffectivesuccessionplanningisdifficult,complexandisfrequentlynotaprioritywithinthepublicsector,DAShasnotprioritizeddevelopingandadministeringasuccessionplanningframeworkwithinthestateexecutivebranch.Mostofthestateagencieswereviewedalsohavenotprioritizedformalizingsuccessionplanningprocesses.Asaresult,thestatefacessignificantworkforcerisks,especiallyowingtoshiftingdemographicsandincreasingretirementsandturnover.LeadingpracticeliteratureandsuccessionplanningpracticesimplementedbyotherstatescanbeinstructivetoDASasitmovesforwardonthisstrategichumancapitalmanagementobjective.Weofferseveralrecommendationsinthisregardforenhancingstateworkforcesuccessionplanningefforts.

TheOregonexecutivebranchlacksarobuststatewideworkforcesuccessionplanningframework.DASutilizesadecentralizedapproachtostrategichumancapitalmanagement,withdecision‐makingoftendelegatedtostateagencies.Withinthismodel,DASdoesnotprovideformaloversightandhasnotdevelopedorprovidedsuccessionplanningguidancetostateagencies.Additionally,whilethestateagencieswereviewedaremanagingtheirworkforce,mosthavenotcreatedorfullyimplementedtheirownsuccessionplanningprocesses.Furthermore,bothDASandstateagencieslackefficientaccesstodataandthoroughinformationaboutworkforceriskstoguidetheiractionsanddecisions.

DAS does not provide formal workforce succession planning oversight or direction to state agencies

DAShasnotdevelopedorcommunicatedformalpolicyandguidancetofacilitatesuccessionplanningforstateagencies.Currently,stateagencieslackaccesstostatewideobjectivesorvision;writtentoolkits,templatesorprocesstools;anddefinitionsofkeyconcepts,suchasdifferentiatingworkforceandsuccessionplanning.Furthermore,DAShasnotprovidedguidanceonthestate’srecommendedapproachesforincorporatingpublicsectorprinciplesandvaluesoffairnessandequity.WhilesomestateagencyHRdirectorsexpressedconcernthatifDAStookamoredirectiverole,itcouldrestricttheirabilitytoinnovateandmeettheirspecificneeds,

Oregon lacks a robust statewide workforce succession planning framework


otheragencyHRdirectorsandexecutivestoldusthathavingacentralframeworkandvisioncouldmakesuccessionplanningeasier.

Inadditiontothelackofdirection,thereisalsominimaloversightfromDAS.DAShasdelegatedsuccessionplanning,atleastimplicitly,tostateagencies,butdoesnotsystematicallychecktoensuresufficientactionsandeffortsareoccurring.However,thechiefhumanresourcesofficerdoesmeetregularlywithstateagencyHRdirectors,wheretheydiscusstopicsrelatedtostrategichumancapitalmanagementissues.

State agencies lack systematic succession planning processes

Risksresultingfromthelackofastatewidesuccessionplanningframeworkareexacerbatedbecauseindividualagencieslackformalandtransparentsuccessionplanningprocesses.Specifically,whilemanyareproactivelyworkingonworkforcedevelopmentactivities,thestateagencieswereviewedgenerallylacksystematicsuccessionplanningprocessesthatcouldtarget,improve,andinformthoseactions.

Alltheagencieswereviewedtakesteps,formallyandinformally,topreparetheirworkforceforfuturepositionsthroughcareerdevelopment.Thesestepsincludeleadershipdevelopmentprograms,DAS’semergingmanagertraining,jobrotations,mentoring,andcoaching.Forinstance,nearlyallreviewedagencieseitherhaveformalleadershipdevelopmentprogramswithintheiragenciesorsendemployeestoleadershiptrainingoutsidetheiragencies,suchasDAS’LeadershipOregon,orboth.Allofthemalsoreportedofferinginformalcareerdevelopmentopportunities.Theseactivitiesprovideagoodplatformonwhichtoimplementmoreformalsuccessionplanningactivities.

However,mostoftheseagencieslackformalprocessestoassessworkforceneeds,andmonitorandevaluateworkforceoutcomes.Forinstance,mostagenciesdonothaveprocessesinplacetoassessfutureworkforcecompetencyandskillrequirements,inordertoinformworkforcestrategies.Additionally,agenciesdonotclearlythreadtheirworkforcedevelopmentactionstotheiragency’sstrategicplansandgoals.

Whileagenciestakeactionstodevelopemployees,thereareadditionalrisksstemmingfrominformalworkforcedevelopmentactivities.Forexample,someagencieshavedelegatedthemajorityofsuccessionplanningdecisionstomanagers,withoutstrongcontrolsinplacetoensuretheeffectiveandtransparentimplementationandmanagementoftheseactivities.Forinstance,agenciesgenerallylackprocessesfortrackingemployeedevelopmentactivities,outsideofthoseregisteredthroughthestate’sonlinetrainingportal.

DAS and agencies also lack strategic personnel management information to support succession planning

Limitsondataaccessibilityandavailabilityinhibittheusageofstrategicpersonnelmanagementinformation,criticalforinformingagencystrategy


andpersonnelmanagementdecisions.Theaccessibilityandavailabilityofworkforcedataislimitedintwoways.First,thecurrentstatepersonneldatasystemisover20yearsold.Itlacksfunctionalityforuserstoproducecustomreportseasilyandthesystemdoesnothavebuilt‐incareerplanningtools.Somedataelements,suchasemployeeskillsandcompetencies,arealsonotcollected.Second,informationonretirementeligibilityislimited.DASdoesnothaveaccesstodatafromthepensionsystem,soretirementeligibilityreportsareestimated,ratherthanactual.

Somerecentenhancementsmayimproveworkforcedataaccessibility.Forexample,DASmadesystemchangestoprovideforeasieronlineaccesstoestimatedretirementeligibilityreportsforstateHRpersonnel.TheLegislaturealsoapprovedfundingforanewhumanresourceinformationsysteminJuneof2017.DASestimatesthenewsystemwillbefullyimplementedbythesummerof2018.Thenewsystemshouldallowgreateraccessibilitytoworkforcedataformoreusers.

Inadditiontochallengeswiththedatasystem,DASisalsonotregularlymonitoring,assessing,ordisseminatinginformationaboutworkforcerisks.DASdoesnotregularlyassessstate‐levelworkforcerisks,suchasrisksofknowledgelossfromretirements,throughdataanalysisorbysystematicallycollectinginformationfromstateagenciesaboutrisksoractivities.Inparticular,DAShasanopportunitytoassessrisksforpositionsthatarecommonthroughoutstategovernment,suchasinformationsystemsspecialistsorHRanalysts.However,DASdoesgathersomeworkforceinformationonarequestedorevent‐drivenbasis,forexampletopresenttotheLegislatureorfulfilladatarequest.

DAShasnotprioritizeddevelopingandimplementingarobustsuccessionplanningframeworkdespiterecognizingtheimportanceofsuccessionplanning.DAShasstartedworkonastate‐levelproject,butuptothispoint,otherbusinessneedsandstrategicinitiativeshavetakenprecedence.AgencyHRdirectorsandexecutivesalsoreportedcompetingprioritiesandstate‐levelbarriersaschallengestosuccessionplanning,whichlessenincentivestoprioritizethiswork.Thisisnotanuncommonsituationwithinthepublicsector.

Despite recognized importance, implementing a framework has not taken priority over competing initiatives

ThechiefhumanresourcesofficerandagencyHRdirectorsandexecutivesconsidersuccessionplanning,careerdevelopmentandfillingkeypositionsasimportant.However,otherinitiativeshavetakenpriorityoverdevelopingandimplementingarobustsuccessionplanningframeworkintheOregonexecutivebranch.

Implementing a succession planning framework has not been a state priority


DAShasworkedoninitiatingastate‐levelprojectfocusedonsuccessionplanningforseveralyears.In2014,DASstaffconductedaliteraturereviewofbestpractices,compiledworkforcedata,anddraftedawhitepaper.In2016,aninternatDASinterviewedstateagenciesandrepresentativesfromotherstates.Atthattime,DASstaffreportedplanningtodraftaprojectproposal.However,akeyemployeelefttheagencyandDASdidnotmakeadditionalprogress.DASstaffattributedthelackofprogresstothebusylegislativesession.

Whiletherehavenotbeenanyformalstatewidesuccessionplanninginitiatives,DAShasworkedonotherstrategicstatewideprojectsthatcouldsupportsuccessionplanninginthefuture.Forinstance,aspartoftheOregonManagementProject,11DASstaffandagencyrepresentativescreatedalistofstatewidecompetenciesformanagers.SomeagencyHRdirectorsreportedplanstoincorporatethesecompetenciesinagencysuccessionplanningandmanagertraining,toensuretheirworkalignswiththeoverallstatestrategy.

State agencies report competing priorities and state‐level barriers

StateagencyHRdirectorscitedlimitedresourcesandcompetingprioritiesassignificantbarriersaffectingsuccessionplanningactivities.Operatinginanenvironmentwithoutastate‐levelsuccessionplanningframework,realandperceivedbarriersadddisincentivesforpursuingformalsuccessionplanningactivities.Themesaboutstate‐levelbarriersandchallengesincludethelackofaccessibledata,restrictivepersonnelrulesandstructures,publicsectorprinciples,andthelackofastate‐levelframeworkandstrategyforinformationsharingandcollaboration.

Asnoted,Oregon’sdatasystemisover20yearsoldandlacksfunctionality.HRdirectorsandagencyexecutivesreportedthatthecurrentworkforcedatasystemmakeselementsofsuccessionplanningmorechallenging.HRdirectorsanticipatethatanewhumanresourceinformationsystemwillimproveandstreamlinestrategichumancapitalmanagement,includingsuccessionplanning.Thenewinformationsystemisalsoexpectedtohavebuilt‐insuccessionplanningtools,suchastoolstoidentifytalentpoolsandmonitorsuccessorreadiness.However,thetoolsavailableinanewsystemwillonlybeusefulifemployeesactivelyusethemanddataisaccurateandcomplete.

Additionally,publicsectorpersonnelrulesandstructures,suchastheclassificationandcompensationsystem,arecomplexandareperceivedasrigid.Thesecontrolsareinplaceforimportantreasons,includingensuring

11TheOregonManagementProjectisanEnterpriseLeadershipTeamprojectco‐sponsoredbythechiefoperatingofficerandthechiefhumanresourcesofficer.TheEnterpriseLeadershipTeam,comprisedofstateagencyleaders,advisesthegovernoronmattersrelatingtothestateenterprise.Theprojectaimstoaddressclassificationandcompensation;overallphilosophy;andtraining,recruitmentandretentionofseniorleadershipprofessionals.Theclassificationandcompensationelementoftheprojectisonhold,whiletheyworkontheotherelements.


consistentandequitablecompensationpractices.However,executivesandHRprofessionalsviewsomeofthesecontrolsasburdensomewhenitcomestostrategichumancapitalmanagement.Forinstance,someagencyHRdirectorsandexecutivesreportedthatredesigningpositionstocreateclearercareerpathsorreassigningemployeesfordevelopmentpurposeswaschallengingandtimeconsuming.OneHRdirectorreportedthatlimitsincompensationflexibility,suchasnotbeingabletoofferageographicpaydifferentialincompetitiveurbanareas,affectedtheagency’sabilitytotargetrecruitmentandretentionstrategies.Smalleragenciesreportedhavinglessflexibilitytoleaveapositionvacantorshiftemployeesaround.

Furthermore,alackofclarityandconcernsaboutthebestapproachtomeetpublicsectoremploymentprinciplesandvalueshasledtosomereluctancetotakeactionamongmanagersorHRprofessionals.Publicsectorpersonnellawsandrulesarebasedonmeritsystemprinciples,intendedtoensurethathiringandadvancementisbasedonacandidate’sability,throughafairandopencompetitiveprocess.Additionally,thevastmajorityofstateemployeesarerepresentedbylabororganizations.

Giventheseprinciplesandvalues,someHRdirectorsreportedreluctanceintheiragencytotakingactionsthattheywereconcernedwouldappearasunfair,inappropriateordiscriminatory.Forinstance,someHRdirectorsreportedconcernsaboutidentifyingspecificindividualsashavingpotentialforadvancement,fearingitcouldappearunfairorimplythatanemployeewasguaranteedaposition.SomeHRdirectorsexpressedperceptionsthatsuccessionplanningismorecomplicatedforcollectivelybargainedemployees.

Finally,somestateagencyexecutivesandHRdirectorsreportedbeingisolatedfromotheragenciesandDAS,unawareofwhatotheragenciesweredoingwithstrategichumancapitalmanagement.ThechiefhumanresourcesofficerhasinitiatedregularmeetingswithstateagencyHRdirectorstoimprovecommunicationsandcollaboration.However,giventhelargenumberofstateagencies,thecurrentapproachmaynotbesufficienttoaddressallconcerns.

Thelackofaformalstatewidesuccessionplanningframeworkhasseveralnegativeimpacts.Theseincludeanincreasedriskofinstitutionalknowledgeloss,alackofrequiredskillsetsandcompetencieswithintheworkforce,andmissedopportunitiesforimprovedemployeerecruiting,retention,moraleandengagement.Theserisksarefurtherexacerbatedbycurrentworkforcetrends.

The lack of a succession planning framework increases key workforce risks


State government faces risk of knowledge loss, exacerbated by turnover risks

Ifknowledgeisnotdocumentedandtransferredwhenemployeesleaveanorganization,itwillbelost.Withoutplanningandimplementingstrategies,institutionalknowledgelosscanresultinreducedefficienciesorqualityofservice.Increasingretirementandotherturnoverrisksfurtherexacerbaterisksofknowledgeloss.Somespecializedpositionsalsohavehigherretirementrisks.Knowledgeincludesanunderstandingofwhathasworkedornotworkedinthepast,specializedknowledgeaboutanorganizationorindustry,andevenprofessionalrelationships.

Retirementsandotherturnoverrisksareincreasinginthestate,leadingtogreaterriskofknowledgeloss.AsshowninFigure4,theannualnumberofretirementshasincreasedoverthelastdecade.Additionally,voluntary,non‐retirementresignationshaveincreasedoverthelasteightyears,afteradecreaseduringtherecession.Demographicandeconomictrends,suchasworkforceagingtrendsandlowunemploymentrates,suggestincreasesinretirementsandresignationscouldcontinue.Additionally,constrainedbudgetscouldresultinlayoffs,dismissals,ordelayedhiring,addingtopotentialloss.

Figure 4: Annual Numbers of Resignations and Retirements12

Source: Oregon Audits Division, using DAS personnel data.

12Thetotalnumberofstateemployeesalsoincreasedoverthisperiod.Asaresult,theproportionofemployeesretiringincreasedonlyslightlyfromaround2%to3%oftheworkforce,between2006and2016.Thecombinedturnoverratefromresignationsandretirementsin2016wasroughlyequalto2006ataround8.5%,buthigherthanduringtherecessionat6.5%in2010.

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Retirements Resignations

One HR analyst told us that when people retire, her agency seems caught by surprise, even after receiving advanced notice.

They have hired back retirees on a temporary basis, because no one else knew how to do the job.


Whileresignationsaremorenumerousthanretirements,retirementsareparticularlyconcerningwhenitcomestoknowledgeloss.Mostretireesleavewithsignificantexperience.Oftheroughly1,000permanentstateexecutivebranchemployeeswhoretiredin2016,90%had10ormoreyearsofstateexperience.Forcomparison,nearly2,000employeesvoluntarilyresignedin2016,butoverhalfhadworkedatthestateforlessthanfiveyears.

Additionally,somespecializedpositionshavehigherretirementrisksthanothers.Forexample,nearlyallofthestate’sdentalinspectors,whoinvestigatecomplaintsofillegalandunprofessionalconductbyOregonlicenseddentists,arecurrentlyeligibletoretire.Inanotherexample,about30%ofinformationsystemspecialistswillbeeligibleforfullretirementwithinfiveyears.

State government faces risk of inadequate workforce skills and competencies, especially in competitive positions

Thelackofasuccessionplanningframework,increasestheriskofashortageofemployeeswithkeycompetenciesinthetalentpipeline.Risksarehigherforspecializedandcompetitivepositionsthatmaydrawfewerexternalcandidates.Inadequateworkforceskillsandcompetenciescanaffectservicequality,increasethetimeapositionisvacant,orincreasetrainingcosts.

Nationalresearchhasfoundorganizationsfacerecruitingchallenges,forjobswithstrategicimportanceandinpositionsrequiringscience,technology,engineeringandmathskills.HRleadersinstateagenciesreportedconcernswithhavingadequatelypreparedmanagersandleaders,aswellasadequateskilledtalentforspecializedandcompetitivepositions,suchasnursesorITprofessionals.Theyalsoreportedconcernswithrecruitingincertainareasofthestate,suchasdrawingcandidatestoruralareasorcompetingwithhigherpayingcompetitorsinthePortlandmetroarea.

State risks missing opportunities to improve recruitment, retention, diversity and enhanced employee engagement

Withoutgreaterinvestmentincareerdevelopmentandpathsthroughsuccessionplanning,thestaterisksmissingopportunitiestoimproverecruitment,retentionandemployeeengagement.Clearandfairprocessesandpathwaysforadvancementmaybeparticularlyimportantforfemaleemployeesandemployeesofcolor,currentlyunderrepresentedinmanagementpositions.

Aspartofsuccessionplanning,articulatinginvestmentsincareerdevelopmentandcareerpathscanbeusedasarecruitingtoolortoimproveretention,moraleandengagement.Improvedmoraleandengagementcanaffectthequalityofservicedelivery.Asoneagencydirectortoldus,investinginemployeedevelopmentincreasesproductivityandemployees’“day‐to‐day,wanttocometoworkquotient.”


Fairnessalsoimprovesemployeecommitment.Promotingtransparentprocesses,throughformalsuccessionplanninganddecisionscanalleviateconcernsaboutfairnessinadvancement.Thismaybeparticularlyimportantforretentionandengagementofemployeesofcolorandfemaleemployees.Conversely,leavingdecisionsinformal,couldriskperpetuatingbiases.

Womenandpeopleofcolorarecurrentlyunderrepresentedinmanagementandsupervisorypositions,comparedwiththeirrepresentationintheoverallworkforce.Whileoverhalfofthestateworkforceiswomen,lessthanhalfofmanagersandsupervisors13arewomen.Inaddition,only12%ofmanagersandsupervisorsarepeopleofcolor,notmuchchangedfrom10%tenyearsago,andbelowrepresentationintheoverallstateworkforce(18%).

DAScandrawonpromisingpracticestoinformsuccessionplanningintheOregonexecutivebranch.Bestpracticeliteratureforpublicsectorsuccessionplanningsuggeststhatitshouldbeanongoing,systematic,strategicandtransparentprocess.CentralHRdepartmentsinotherstates,comparabletoCHROinOregon,haveimplementedstrategiesthatcouldbemodelsforDAS.Finally,somestateagenciesinOregonaretakinginnovativestepstointentionallydevelopemployeesthatareworthyofattention.

Succession planning should be an ongoing systematic and strategic process

Accordingtobestpracticeliterature,workforcesuccessionplanninginthepublicsectorshouldbeanongoingsystematicprocesstiedtooverallagencystrategy.Itshouldalsoaccountforpublicsectorprinciplesandbefairandequitable.Onestrategytopromotefairnessistocommunicatetransparentlywithemployeesaboutsuccessionplanning.

Manysources,includingtheUSGovernmentAccountabilityOffice(GAO),USOfficeofPersonnelManagementandtheSocietyforHumanResourceManagement,recommendasystematicprocess,clearlylinkedtoanorganization’sstrategicgoalsandbusinessneeds.

TheOfficeofPersonnelManagement,whichhasresponsibilitiesforfederalpersonnel,hasoutlinedasuccessionplanningprocesswithsixsteps:

1. Linkstrategicandworkforceplanningdecisions.2. Analyzegapsbetweencurrentstateandprojectedfutureneeds.3. Identifytalentwithintheorganization.4. Developsuccessionstrategies.

13Managersandsupervisorsaredefinedasemployeesinmanagement‐serviceorexecutive‐servicewithsupervisoryresponsibility.Non‐supervisorymanagementserviceisnotincluded.

Promising succession planning practices provide insights for addressing workforce risks


5. Implementsuccessionstrategies.6. Monitorandevaluateefforts.

Othersources,suchastheNationalAssociationofStatePersonnelExecutives,recommendtransparencyinsuccessionplanning,particularlyasastrategytoaddresspublicsectorconcernsaboutfairnesswithinthemerit‐basedsystem.Transparencyincludesopenlycommunicatingaboutdevelopmentopportunitiesandthedecisionmakingprocess.Tohelpguideprioritizationefforts,workforcerisksshouldbeidentifiedandassessed.

DAS can leverage succession planning approaches implemented by other states

Oregoncanreviewandadoptsuccessionplanningpracticesusedbysomeotherstatesthathavetakenpromisingsteps.Forexample,somestatespublishanddisseminatetoolkits,monitorstate‐levelrisks,andreadilyprovidedataandguidancetodepartments.Additionally,somestatesfocusonexpandingcentralizedleadershipdevelopmenttraining.Last,somestatesprovideguidanceonapproachestomeetpublicsectorprinciples.

HRofficesinCaliforniaandOhiohavepublishedanddisseminatedtoolkitstoguideagencyworkforceandsuccessionplanning,andprovidedtraininginsuccessionplanning.Californiahostsforumsandalistservonworkforceandsuccessionplanningtopromotesharingandcollaboration.In2016,theCaliforniaDepartmentofHumanResourcespublishedareportonCaliforniastateagencies’barrierstoworkforceandsuccessionplanning,aswellasopportunitiestoimproveHRservicetostateagencies.Thedepartmentinterviewednearly100stateexecutivesforthereport.

Additionally,somestatescollectreportsandinformationfromagencies,whichcouldbeusedtomonitorsuccessionplanningactionsandstatewideworkforcerisks.HRofficesinPennsylvania,Ohio,andCaliforniarequestthatagenciessubmitsuccessionplansorinformationabouttheirstrategiesandworkforceriskstothecentraloffice.Pennsylvaniarollsuptheinformationintoonestate‐levelreport.GeorgiaandTexasmandateinstatutethatagenciesproduceandsubmitworkforceplans.However,mostofthestateswecontacteddidnotrequireplansbylaw.

Furthermore,otherstatesmakeworkforcedemographicdatamoreavailabletoagenciesandthepublicthanOregondoes.Pennsylvania’sHRdepartmenthascreatedaretirementprojectiontoolforagencies.Delawareusesdatafromthepensionsystemtoprovideaccurateinformationonretirementeligibilitytoagencies.Atleasteightstatespublishsomelevelofworkforcedemographicdatapublicallyontheirwebsites.

Somestatesarealsofocusingonexpandingcentralizedleadershipdevelopmentprograms.Tennesseeinparticularhasworkedonimprovingandexpandingleadershipdevelopment,includingcreatingachieflearningofficerposition.Tennesseecentrallytrains250–300employeesayearinleadership,inadditiontoagency‐basedtraining.Washingtonisalsofocusingonbuildingleadershipcapacitycentrally.


Finally,somecentralHRofficeshavealsosentclearmessagesaboutwhatapproachestheyconsiderappropriateforsuccessionplanninginthepublicsector.Forinstance,bothCaliforniaandOhio’sHRofficesrecommendatransparentprocess.California’steamstatesthatallemployeesshouldhavetheopportunitytoexpresstheirinterestinparticipatinginsuccessionplanningactivities.Conversely,Ohiofocusesitsformalsuccessionplanningononlyexempt,non‐unionizedemployees,toavoidconcernsaboutfairness.ArepresentativefromWashingtonreportedthattoaddressconcernsaboutfairness,theyareconsideringcommunicatingtransparentlyabouttheirprocessforidentifyinghighperformingemployeesforleadershipsuccessionplanning.

In Oregon, some agencies are taking innovative approaches to prepare employees for potential future roles

Somestateagenciesareimplementinginnovatestrategiestoprepareemployeesforsuccessionintopotentialfutureroles.Theseincludeagenciesofvaryingsizesandfromdifferentprogramareas.Manyoftheagencieswespokewithprovideformalleadershipdevelopmenttrainingorofferjobrotationsforexperientiallearning,anoften‐citedbestpracticeinemployeedevelopment.Belowaretwoexamplesofdepartmentinnovativesuccessionplanningstrategies.

TheDepartmentofGeologyandMineralIndustrieshasimplementedajobrotationprogramdesignedtogivetechnicalemployeesexperienceinmanagementandleadershippositions.Positionsarefilledonatemporarybasis(onetotwoyears),throughanopencompetitiveselectionprocess.Theprogrambeginswithfillingoneseniorlevelmanagementpositionthroughajobrotation,whichthencreatesacascadingsetofvacancies,inturnfilledthroughmorejobrotations.Thisgivesmultipleemployeesdevelopmentopportunities.ThedepartmentdirectorhadpreviouslyimplementedthismodelattheStateofWashingtonDepartmentofAgriculture,whereitaccomplisheditsgoalsandexceededmanagementandstaffexpectations.

TheDepartmentofConsumerandBusinessServiceshasdesignedaformalsuccessionplanningprogramthatseekstoalignemployeedevelopmentwiththeagency’skeycompetencyneeds.Staffapplytotheprogramandareacceptedonacompetitivebasis,throughcommitteeselection.Eachparticipantselectsanaspirationaltargetposition,fromalistofidentifiedcriticalpositionsintheagency.Participantsthencreateindividualdevelopmentplans,andreceivetargeteddevelopmentopportunities,specificallydesignedtoincreasetheirreadinessforthatposition.

DASandstateagenciescandrawontheabovepracticeswhendesigningandimplementingsuccessionplanningframeworksandprocesses.


Recommendations: DAS Should Enhance Workforce Succession Planning Governance by Implementing a Strategic Framework and Addressing Challenges

WeofferthefollowingrecommendationstoassistDASwitheffortstoestablishandmaintainarobustsuccessionplanningframework.WerecommendthatCHRO:

1. Developastatewideworkforcesuccessionplanningstrategyandframework,inconsultationwithstateagenciesandstakeholders,thatprovidesconsistentguidanceanddirection,butalsoallowsagenciesflexibilitytomanagewithintheiruniquesituations.

2. Providespecificguidancetostateagenciesonsuccessionplanning,similartothetoolkitsprovidedbyotherstates,includingbutnotlimitedto:

a) definitionsofconceptsforstatewideuse,suchasdefiningworkforceplanning,successionplanningandretirementeligibility;

b) explanationofthekeysuccessionplanningprocessesthatshouldbeused;

c) toolsandtemplatestoinformsuccessionplanningsuchastoolstoidentifyandanalyzeskillsgapsoridentifytalentpools;

d) recommendedmetricstomeasureperformance;ande) recommendedapproachestomeetpublicsectorprinciplessuch

asguidanceondevelopingacommunicationplanforimprovedtransparency.

3. Developandimplementprocessestomonitor,assessandaddressstateagencyeffortsandstateworkforceriskstoensurecriticalpositonsarefilledwithqualifiedstaff.Thisshouldinclude:

a) regularlycollectinginformationfromstateagenciesabouttheiractionsandrisks;

b) assessingworkforcerisks,suchasretirementeligibility,fromastate‐levelperspective;and

c) regularlycommunicating(e.g.,bypublishingonline)workforceinformationtostateagenciesandstakeholders,suchastheLegislature,publicandlabororganizations.

4. Workwithagenciestodefineessentialdataneedsrelatedtosuccessionplanningandensureneedsaremet,includingworkforcedemographicsandretirementeligibilitydata.

5. WorkwithPERStoobtainretirementeligibilitydatainordertoimprovetheaccuracyofworkforceinformationusedforbroadsuccessionplanningstrategies.Addressanyconcernsaboutindividualprivacyandguardagainstanypotentialforagediscrimination.


6. ProvideguidanceandtraininginthenewhumanresourceinformationsystemtostateHRemployeestoensureappropriatebusinessprocesschangesaremadetosupportandcapitalizeonthenewsystem,andtoensuredataintegrity.

7. ExpandoncurrentopportunitiesforstateagenciestosharepracticesandcoordinatewitheachotherandDAS.ThisshouldincludeincreasingoutreachtoagenciesnotrepresentedattheHRadvisorsmeeting,expandingopportunitiesattheHRdirectorsmeetingforagencycollaborationandsharing,andreachingouttoHRdirectorswhodonotregularlyattendtheHRdirectorsmeeting.

8. WorkwithstateagencyexecutivesandHRpersonneltoaddressbarriersinsuccessionplanningrelatedtostateHRpolicy,rules,orprocesses,bymakingadjustmentswhenappropriateandprovidingguidancetoagenciesonhowtoachieveobjectiveswithinexistingstatestructures.

Department of Administrative Services

Office of the Chief Operating Officer 155 Cottage Street NE

Salem, OR 97301 PHONE: 503-378-3104

FAX: 503-373-7643

Kate Brown, Governor August31,2017KipMemmott,DirectorSecretaryofState,AuditsDivision255CapitolSt.NE,Suite500Salem,OR97310DearMr.Memmott:ThisletterprovidesawrittenresponsetotheAuditsDivision’sfinaldraftauditreporttitledDepartmentofAdministrativeServices(DAS)ShouldEnhanceSuccessionPlanningtoAddressWorkforceRisksandChallenges.ThankyouforprovidingtheDASwiththeauditreportregardingsuccessionplanning.WeappreciatetheworkoftheAuditsDivisionstaffandarepleasedtohavetherecommendationsinthereport.Thisauditcomesduringatimeoftransformationalchangewithinhumanresourcesintheexecutivebranch.Asreferencedintheaudit,thecurrenthumanresourcesinformationsystemisover20yearsold,anddoesnotprovideuswithdatatoconductworkforceplanningactivities.In2014,abusinesscasewasdevelopedcollaborativelywithagenciestoprocureanewinformationsystemforworkforcemanagement.Afterseveralyearsofplanningandprocurementactivities,theOregonLegislaturefundedtherequestforahumanresourcesinformationsysteminJune,2017.TheStateofOregonselectedWorkdayasthenewhumanresourcesinformationsystem.ItisscheduledforfullimplementationinJuneof2018.Workdaywilleliminatemanual,paperdrivenprocesses,andprovidecapabilitytomanagetalentandsuccessionmanagementplansstatewide.EmployeedatashouldbeavailableforanalysisbySeptemberof2018.TheWorkdayapplicationissoftwareasaservice,andprovidesopportunitytoincorporatebestpracticesinworkforcedevelopmentfromboththeprivateandpublicsectors.TheimplementationofWorkdayiscriticaltoaddressingtherecommendationsinthisaudit.

Kip Memmott August 31, 2017 Page 2 of 7

Page 2 of 7

Oursuccessionplanningstrategyistargetedatidentifyingpotentialfutureleadersusingdevelopmentaltools,preparingourfutureworkforce,andestablishingandsupportingworkingenvironmentsthatfosterdiversityandinclusion.Overthepastthreeyears,wehaveenhancedworkforceplanningbyincorporatingnewapproachesandencouragingtheuseofcurrentactivitiessuchasjobrotationsforcareerdevelopment.Theseactivitiesareongoing,andprovidetheframeworkforasuccessionplanningstrategythatincludes:

• ContinuingtoenhanceandsupporttheLeadershipOregondevelopmentprogram.Theprogramhasbeendeliveredforover27yearswithover700attendees.LeadershipOregonhasbeenverysuccessfulindevelopingleaderswithinstategovernment.Manyofthegraduateshavefilledagencydirectorandotherkeyleadershiproles.

• DesigninganddeliveringtheManagementEducationSeriestoenhancethe

skillsofmanagerswithinstategovernment.Additionalcourseworkforthisseriesisinprogress.Over500managershavecompletedthetraining.

• Deliveryofanemergingmanagertrainingprogramforemployeesthatmay

beinterestedinmovingintomanagerialcareerpaths.

• Thedevelopmentofamentoringtoolkitforemergingmanagersandselectedmentors/mentees.ThenewWorkdaysystemincludesfunctionalityformakingtheconnectionbetweenmentorsandmentees.

• Theadoptionofcollaborativeenterprise-widevaluesandmanagerialcompetenciesthatwillbemappedtotheWorkdaysystemforemployeedevelopmentandperformancemanagement.

• Launchingofapilotinternshipprogramthispastsummerthatincluded60

internsfromcollegesanduniversities.Thefeedbackwasuniversallypositive,andprovidedanopportunitytoconnectwithapotentialnewworkforce.

• Finalizingandpilotingcurriculumforanexecutiveonboardingprogram.A

teamofseniorandnewagencyleaderswillcompletethisprojectinOctoberofthisyear.


Page 3 of 7

BelowyouwillfindDAS’responsetothespecificauditrecommendations.RECOMMENDATION1

Developastatewideworkforcesuccessionplanningstrategyandframework,inconsultationwithstateagenciesandstakeholders,thatprovidesconsistentguidanceanddirection,butalsoallowsagenciesflexibilitytomanagewithintheiruniquesituations.

AgreeorDisagreewithRecommendation

Targetdatetocompleteimplementation

activities(Generallyexpectedwithin6months)

Nameandphonenumberofspecificpointofcontactforimplementation

Agree

February2018

MadilynZike503-378-3020

NarrativeforRecommendation1Successionplanningcontinuestobeatopicduringbiweeklyhumanresource(HR)advisorsmeetingswithagencies.TheChiefHumanResourceOffice(CHRO)isreviewingthedocumentationsubmittedwiththeauditfindingstoincorporatepracticesasappropriate.RECOMMENDATION2

Providespecificguidancetostateagenciesonsuccessionplanning,similartothetoolkitsprovidedbyotherstates,includingbutnotlimitedto:a) definitionsofconceptsforstatewideuse,suchasdefiningworkforceplanning,

successionplanningandretirementeligibility;b) explanationofthekeysuccessionplanningprocessesthatshouldbeused;c) toolsandtemplatestoinformsuccessionplanningsuchastoolstoidentifyand

analyzeskillsgapsoridentifytalentpools;d) recommendedmetricstomeasureperformance;ande) recommendedapproachestomeetpublicsectorprinciplessuchasguidanceon

developingacommunicationplanforimprovedtransparency.

AgreeorDisagreewith

Recommendation

Targetdatetocompleteimplementationactivities(Generallyexpectedwithin6months)


Agree Itemsa,andewillbecompletedbyFebruary1,2018.Itemsb,c,anddwillbeimplementedwith

WorkdayinSeptemberof2018.



Page 4 of 7

NarrativeforRecommendation2Duetotheauditfindingsregardingreadinessrelatedtodefinitionsandcommunicationplans,wewillrevisitandprioritizeourworkinthoseareas.TrainingwillbeprovidedintheuseofWorkdaytomanagetalentandcompleteworkforceandsuccessionplanningtoolsandactivities.Workdayhasbuilt-intoolsthatallowthestatetoanalyzeskillsgaps,andcreatetalentpools.Thetalentpoolscanthenbeattachedtospecificpositionsforuseinsuccessionplanning.RECOMMENDATION3

Developandimplementprocessestomonitor,assessandaddressstateagencyeffortsandstateworkforceriskstoensurecriticalpositonsarefilledwithqualifiedstaff.Thisshouldinclude:

a) regularlycollectinginformationfromstateagenciesabouttheiractionsandrisks;

b) assessingworkforcerisks,suchasretirementeligibility,fromastate-levelperspective;and

c) regularlycommunicating(e.g.,bypublishingonline)workforceinformationtostateagenciesandstakeholders,suchasthelegislature,publicandlabororganizations.





Agree TobecompletedduringtheWorkday

implementation.September2018.


NarrativeforRecommendation3AccesstothePERSsystemdatathroughtheWorkdayapplicationwillprovidedashboardsformanagementandexecutivestaffregardingactionsandrisks.ThelegislativeandjudicialbranchesareparticipatingintheWorkdayapplicationusingWorkday’sreportingcapabilitiesandthisinformationwillbereadilyavailablethroughtheapplication.Unlikeinthepast,accesstothisinformationwillnotrequirecustomreportsorrequeststoDASfortheinformation.


Page 5 of 7

RECOMMENDATION4

Workwithagenciestodefineessentialdataneedsrelatedtosuccessionplanningandensureneedsaremet,includingworkforcedemographicsandretirementeligibilitydata.

Agree

ThisinformationwasincorporatedintothebusinessrequirementsforWorkdayandis

includedintheWorkdaysystem.


NarrativeforRecommendation4AnintegrationtotheOregonPERSsystemisincludedintheWorkdayimplementation.Dataneeds,includingdemographicdatarequirements,werecollectedincollaborationwithstateagenciesduringthebusinesscasedevelopmentandwillbedeliveredintheWorkdaysystem.RECOMMENDATION5

WorkwithPERStoobtainretirementeligibilitydatainordertoimprovetheaccuracyofworkforceinformationusedforbroadsuccessionplanningstrategies.Addressanyconcernsaboutindividualprivacyandguardagainstanypotentialforagediscrimination.





Agree

February2018.PERSdata-September

2018.


NarrativeforRecommendation5AnintegrationtotheOregonPERSsystemisincludedintheWorkdayimplementation.Dataneeds,includingdemographicdatarequirements,werecollectedduringthebusinesscasedevelopment.PoliciesandpracticeguidelineswillbedevelopedtominimizeriskinpreparationforWorkdayimplementation.


Page 6 of 7

RECOMMENDATION6

Provide guidance and training in the newhuman resource information system tostateHR employees to ensure appropriate business process changes aremade tosupportandcapitalizeonthenewsystem,andtoensuredataintegrity.





Agree

May2018.


NarrativeforRecommendation6Communication,training,andorganizationalchangemanagementactivitiesareincludedandfundedintheWorkdayimplementationplan.TheWorkdayprojectteamhastrainersandchangemanagersdedicatedtotheprojecttoensureemployeesareproperlypreparedtomodifybusinessprocessesanduseWorkdaytoitsfullpotential.RECOMMENDATION7

ExpandoncurrentopportunitiesforstateagenciestosharepracticesandcoordinatewitheachotherandDAS.ThisshouldincludeincreasingoutreachtoagenciesnotrepresentedattheHRadvisorsmeeting,expandingopportunitiesattheHRdirectorsmeetingforagencycollaborationandsharing,andreachingouttoHRdirectorswhodonotregularlyattendtheHRdirectorsmeeting.





Agree

Ongoing


NarrativeforRecommendation7DASwillcontinuetomeetbiweeklywithHRadvisorsandbimonthlywithallHRmanagerswithastandingagendatopictodiscussbestpractices.Whileitisnotpossibletocontacteachagencythatdoesnotattendthescheduledmeetingindividually,DASwillincorporateasynopsisintheHRnewsletterasanothermethodofcommunicatingwithstaff.ApositionwithintheCHROtochampionsuccessionmanagementandfacilitatetheuseofbestpracticesisunder


Page 7 of 7

developmentwithatargetofhavingthepositionfilledbyJanuary2018.TheCHROalsoattendsallEnterpriseLeadershipTeammeetingsandallAgencyDirectorsmeetingstoshareinformationandpractices.RECOMMENDATION8

Work with state agency executives and HR personnel to address barriers insuccession planning related to state HR policy, rules, or processes, by makingadjustmentswhenappropriateandprovidingguidancetoagenciesonhowtoachieveobjectiveswithinexistingstatestructures.





Agree

Ongoing


NarrativeforRecommendation8TheactivitiesintheseareaswillcontinueasacorefunctionofworkforceplanningwithintheCHRO.Overthelastfewmonths,practiceshavebeenmodifiedsothatCHROpoliciesarereviewedbytheEnterpriseLeadershipTeamandallagencydirectorsforfeedback.Theyarealsocirculatedtoallhumanresourcesmanagersstatewideforcommentpriortofinalization.PleasecontactMadilynZikeat503-378-3020withanyquestions.

Sincerely,

KatyCobaChiefOperatingOfficerDASDirector

cc:

state of oregon

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