Human Resources Administrative Review Conceptual Recommendations University of Maine System May 2013 Meeting the Human Resource Needs of UMS Now and in the Future Three members of the Review Team are here today to add campus perspective” Judy Ryan, Associate VP for HR at UM Sheri Stevens, Executive Director of Administrative Services, UMA Jennie Savage, HR Manager, UMPI Edit for names for appropriate group In order to focus on our recommendations, I’ll go very quickly through the first ten slides. They are there for your background information.

Review Team Sheri Stevens, UMA Judy Ryan, UM Martha Freeman, USM Jennie Savage, UMPI Tracy Bigney, UMS Cindy Huggins and Becky Wyke, Sponsor Tamara Mitchell, OE Partner Laurie Gardner, UMF (joined team for report writing)

Status & Timeline Conceptual plan under review by Steering Committee, Presidents, Shared Services Advisory Council, Chief Academic Officers, Board of Trustees, Campuses – May & June Team completing financial analysis Plan posted on Mission Excellence Website and Feedback Survey open: May 24 - June 28 Scheduled for BOT action July 15

Scope of HR Review Human Resources Equity and Diversity Talent Management (hiring, managing, developing) Total Rewards (compensation and benefits) HR Information and Reporting Institutional Leadership and Planning Equity and Diversity Labor and Employee Relations Organizational Development Payroll Talk about what it is not – student employment, student AA/EO/Title IX.. Payroll includes student employees, but not student employment

HR Services Human Resources work can be seen in these categories: Transactional –repeated, standardized Tactical/customer service –high touch Strategic Almost all current HR/EO services are mission critical or legally mandated Many “should do” HR services are performed only to a limited extent Transactional –standardized and repeatable, e.g. benefits administration and payroll Tactical/customer service = working with employee or manager Strategic –aligning workforce with strategic plan of institution; e.g. Bend the Trend Categorized each function as mission critical/mandatory; should do; would be nice Almost all we do now is mission critical; the “should do” is only done to a limited extent

Criteria for success Interoperable- having “depth” not “redundancy” Competent-quality customer service, high level of professionalism Consistent, timely and clear - in data, decision making and policies. Savings and/or efficiencies Depth = bench strength; not so dependent on single employee always afraid, “what if something happens to _____?”

Input into analysis phase Discussions with all campus and system office leadership teams Discussions with HR/EO staff at each campus and system office Consultant workshops

Common Themes of Input Strong support for the role of local HR on all campuses and system office Need for local knowledge Strong recognition that strategic human resource management is important but is currently a gap in HR service Generally broad support for improving data management/technological solutions Strategic human resource management – aligning employees with institutional strategic plan through practices such as training, development, planning, succession management

Leadership Input Nearly all current HR services are essential services Universally recognized issues with decision making process (lack of clarity or accountability) across the organization Currently recognized gaps are in employee development and training and lack of formal inclusion of campus leadership in labor relations strategy and communications Scalability is important – differences may be due to campus size or rural vs. more urban settings   Scalability –also different missions; one size does not fit all

HR/EO staff input Need an intentional communication plan and shared expectations (clarity) between system office and campuses More HRIS authority should be decentralized Need better reporting, integration of databases Would like to see improved training for HR staff Intentional communication plan –currently staff feel frustration that we are not all pulling in the same direction HRIS authority –more autonomy in use of MaineStreet

Sibson Consulting Assistance “Over the shoulder” assistance to review Team’s work Identify best practices and benchmarks Led workshops to explore organizational designs for HR About 20 employees from HR/EO, IT, Finance from across the System participated in three workshops The RT had already completed a lot of work when Sibson joined us in January

Impact of Human Resources HR function About 83 FTE employees in HR/EO departments Total cost $7 million UMS Human Resources 5,700 faculty and staff (human resources) Total cost about $350 million (compensation and benefits); 73% of E and G budget

UMS Human Resources and HR Function HR has the ability to impact the effectiveness of all human resources; the HR function is only a small piece of this. It would be short sighted to only look at savings within the HR function. This led us to expand the scope of the review. This is not unlike Procurement looking both at the administrative costs and the impact they can have on total spend for goods and services. $430 Million is cost of human resources in total budget, not just E and G.

Expanded Scope of Review Make the HR function more efficient while investing in strategic HR management to affect the overall effectiveness and productivity of UMS human resources This realization led us to expand the scope of our review

Overarching Recommendation A New Paradigm Strategic Human Resource Management (SHR) to leverage the total human resource asset. Strategic Human Resource management is recognizing an organization’s human capital as being the principal source of the organization’s innovation and competitive advantage. In doing so, the focus shifts from: How do we get our employees to do a particular function or task? To How do we best engage and inspire our workforce for our mutual benefit? There are three parts of the new paradigm: Strategic HR, employee engagement and optimal service delivery Strategic human resource management = aligning human resources (people) with the institution’s strategic goals and operating in a highly efficient, effective manner. Most of what HR does now is mandatory or mission critical due to policy, contract and law. There are other aspects of HR that “should be” done, and we currently fulfill these roles in a fledgling way. We need to put more emphasis on the strategic aspects of HR.

New Paradigm SHR Key practices: institutional planning, talent management (finding, attracting, nurturing and developing employee talent, proper positioning of individuals within the organization, and off-boarding), alignment (aligning individual, group and organizational goals), culture/work environment management (encouraging employee engagement and decision-making, morale, retention), and organizational development (structures, human capacity planning, efficiency and effectiveness)

New Paradigm Employee engagement Optimal service delivery UMS success depends on faculty and staff engaged in doing our best work to fulfill the universities’ missions Drive decisions to the lowest appropriate level Employee development to provide skills and abilities Increase authority and accountability of employees and managers Optimal service delivery Different HR services require different delivery mechanisms Customer/Client Focused Employee development gives employees the skills and abilities to make the decisions and perform at a higher level with less oversight More on service delivery modalities later

What does the new paradigm require? Long-term culture change Engagement means leaders delegate more decisions and manage through employee accountability and audit mechanisms Service orientation Up front investment in staff and technology Education of HR staff and administrative leadership Those reviewing and approving this report need to be aware of these aspects of the paradigm. This is what UMS is committing to.

The Plan to achieve this 1. Leadership team representing all universities and the system office Team of four System Chief HR Officer “Super 6” HR leader for UMA, UMF, UMFK,UMM, UMPI and SWS UM Associate VP for HR USM Chief HR Officer Our specific recommendations constitute a plan to achieve the new paradigm. There are three major pieces of the plan: Leadership team HR Transitions Optimal service delivery Leadership Team Super 6 provides the executive HR leadership for the 6 entities This will improve decision making in HR

HR Leadership Team Clear authority for UMS HR policy, program, practices and budget Improve decision making and consistency Venue to discuss and balance tension between campus perspective and “system-ness” Better define areas of responsibility, accountability for system office, campuses, shared services Multi-Campus Position Strong equal voice for smaller/mid-sized institutions Strategic HR leadership and expertise to supplement and support campus HR resources

HR Leadership Team Team!!

Staffing based on competencies Competencies will be defined for all positions “Knowledge, skills, abilities, self-image, traits, mindsets, feeling, and ways of thinking” (Society for HR Management) Starting with the Leadership Team the selection process will ensure that employees have the competencies for the positions Commitment to: competency based staffing, providing opportunities for current employees, employee development, and limiting workforce disruption

The Plan 2. Transition the HR function A. HR leaders are business partners with chancellor and presidents B. Educate HR staff, administration and leadership about strategic HR and service orientation This slide is just a few words, but a big, important effort. We recommend that the HR leader on each campus report to the president/chancellor. Education about strategic HR will prepare HR to provide the services and will prepare leadership to expect and demand them.

The Plan 3. Optimal service delivery –differentiated and client focused A. Critical role of HR at each campus High touch, requires local knowledge Advising on personnel policies and labor relations Assisting with innovation and group process Designing, training and auditing performance management Supporting employees Employee, manager, leadership and organization development Three service modalities to match the types of work we do: Local HR, shared expertise and shared services Don’t read roles

The Plan 3. Optimal service delivery – differentiated and client focused B. Share Expertise Not every campus can or needs to have high level expertise in every area of HR Staff at larger campuses and system office with specialized knowledge share with smaller campuses Pilot a Shared Expertise Team and if successful, expand to other areas Areas to be considered: Benefits and Wellness; Organization Development/Communication; Labor Relations; Equal Opportunity/Diversity; Compensation Share expertise to get away from “haves and have nots” Shared Expertise Team = SET Don’t read text

The Plan 3. Optimal service delivery - differentiated and client focused C. Shared services for transactional work Repeated, standardized work Build on Employee Benefits Center (EBC) After EBC is transitioned and enhanced, add payroll, aspects of recruiting, and data entry Centralized management; co-located

The Plan 3. Optimal Service Delivery - differentiated and client focused D. Process Improvement Employ Lean process improvement to HR Eliminate unneeded steps and rework; decision making to lowest level of appropriate authority HR processes affect all departments; savings are not just in HR Estimate savings of 10 – 16% Expand to all other areas after HR In addition to the three service delivery modalities there are three aspects of how we perform work to be client focused: process improvement, technology and 360 feedback

The Plan Optimal Service Delivery - differentiated and client focused E. Invest in technology and IT support Increased IT support and increased capacity within HR to manage technology –ultimately 2 positions in HR (replacement headcount, not new) and 1 in IT Technology needs will be assessed using the standard business case model and phased in as projects are approved and pilot projects demonstrate success Case management Applicant tracking, e-recruitment Imaging/Document Management Workflow Expanded employee and manager self service Expanding use of technology will help us to be more efficient. HR was the first area to implement PeopleSoft 10 years ago. We now need to catch up in adding other technologies to out work. Don’ t read text Imaging –electronic personnel files Case management –shared services center Knowledge center –allow employees to get info specific to their situation when they need it Date warehouse –important for reporting and institutional information on which to base decisions

The Plan Optimal Service Delivery – differentiated and client focused E. Invest in technology and IT support Medium and longer term considerations may include Learning Management System Performance management Portal with knowledge center Data warehouse F. Use 360 feedback For work groups and individual leaders Formulate action plans to address areas of improvement

The Plan 4. Staged investment and implementation to demonstrate success of the new paradigm Form & develop Management Team Develop full implementation plan for approval Lead and assess pilots Pilot Lean-HE process improvement in benefits and recruitment Pilot shared service center: transition and enhance Employee Benefits Center (with technology investment) Begin education and transition to strategic HR Future phases subject to approval of implementation plan and business case review for additional technology investments Staged implementation gives us the opportunity to demonstrate the success of these broad changes. We will submit the full implementation plan and experience of the pilots to the Board for approval to go ahead with the rest of the work. Technology investments will be subject to the normal SSAC business case approval process.

Financial Impact Investment in specialized staff and technology Pilot projects will be initiated to demonstrate the value of the new paradigm and service delivery models Full implementation plan to be approved by Board of Trustees Future investments subject to management approval Savings in FTE as technology and business process redesign are fully deployed FTE in HR/EO function reduces from 83 to 74 (subject to appropriate investments) Savings make it possible to invest in SHR at relatively little added cost over time UP front investment in Super 6 and technology for pilots. FTE reductions can’t occur until technology is in place, so there is a lag between the investment in technology and the savings in FTE.

Invest in Strategic HR to Gain Longer Term Savings Expand Lean process outside HR to create savings in all administrative areas Improved management by Leadership Team Consistency Controlling costs – administrative, benefits Improved Engagement and Decision-Making Improved dialog with bargaining agents Improved communication with employees Improved service to students and the State of Maine Investment is required to create longer term savings for strategic, core mission priorities

Assessment Metrics and assessment to be spelled out in Implementation Plan 360 feedback HR workgroups Leadership Team Individual leaders FTE reduction in HR Documentation of Lean process results Annual assessment by Presidents Council and SSAC Ask Team Members to add their campus perspective or other thoughts.

Implementation Preliminary Implementation Define and fill the Leadership Team positions Initiate pilot projects Assess pilots Full implementation plan subject to approval by Board of Trustees Future investments and projects subject to management approval

Feedback Reminder Report and survey are available on the Mission Excellence website: https://mycampus.maine.edu/group/mycampus/think-mission-excellence Survey Period: May 24 – June 28

Timeline Reminder Vetting process by Steering Committee, Presidents, Shared Services Advisory Council, Board Finance and Facilities Committee –May 1 – May 16 Roll out to HR/EO staff after May 8 Board of Trustees SHR discussion - May 20 Seek feedback from University community –May 22 – June 28 Board of Trustees action – July 15

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