A confluence of events-increasing use of competitive sourcing, pressure to improve workforce planning and management, and the rising profile of HR within organizations-provides a ripe opportunity for HR executives positioned to seize it. While deliberation and speculation have surrounded competitive sourcing since the A-76 circular was first released in 1966, inclusion of competitive sourcing in President Bush's management agenda is ensuring the steady pace of competition. The federal government anticipates competing nearly 30% more positions in 2004 than it did in 2003, and 18% more agencies plan to undergo a competitive sourcing activity in 2004 than did in 2003. At the same time, changes in federal employee demographics are driving an increased focus on effective human capital management in government, and recognition of the value of human capital officers in driving improved human resource management is bringing HR departments into the spotlight. These changes make A-76 competitions the opportunity HR leaders can use to generate change and have real and lasting impact on their organizations.

Ample guidance exists on the effective management of A-76 competitions. What is not readily available is experience-based, detailed advice for HR leaders on how HR can effectively involve itself at a strategic level. Pivotal Insight’s recent study, Taking the Wheel: How HR Can Drive Success in Competitive Sourcing, seeks to identify, outline, and explain the steps HR can take to involve itself at a strategic level, thereby improving the A-76 process specifically and the operations of the agency as a whole.

Recent changes in the perception of HR in both the public and private sectors support the contention that HR has an opportunity to transform its role and function. Increasingly, organizational leaders are recognizing that HR has an essential role to play in the effective strategic management of the organization. They are, in effect, offering HR leaders a seat at the corporate strategic table. There are two key elements to HR being able to take that seat: HR must (1) generate the change itself; and, (2) demonstrate its value to the organization, clearly and on an ongoing basis.

Competitive sourcing, because of its high profile and its reliance on effective human capital management, provides the perfect opportunity for HR to generate change from within and demonstrate its value to the organization at a strategic level. Seizing this opportunity will require HR leaders to take a strategic stance. Pivotal Insight has identified seven key findings from its research that constitute “taking a strategic stance.”

1. Embrace the opportunity
   
   Because there is so much negativity swirling around competition, HR tends to shy away from involvement. However, by viewing A-76 activities as opportunities, HR raises its profile in the agency and improve agency operations at the same time. Our research identified several best practices that embody "embracing the opportunity," including starting early, being proactive, market HR's unique capabilities, and establishing and managing expectations.
2. Change opinions
   
   While we found numerous examples of forward-thinking, proactive, ambitious HR leaders, the general consensus-inside and outside of HR-is that HR is reactive. A full 90% of interviewees noted that HR is not involved at a strategic level as early as they should be in the process. In order to seize the opportunity that competition presents, HR will need to generate change itself, through owning that change and identifying and developing strong relationships with stakeholders.
3. Use facts as tools
   
   Because job security is among the most important reasons for federal employees to stay with the government, any threat to that security triggers fear. The facts demonstrate, however, that involuntary separation as a result of competition is limited. A recently released study demonstrates that only 5% of regular employees were involuntarily separated as a result of competitions. HR leaders can help to alleviate some of the fear that accompanies competition by knowing, and using, the available facts.
4. Build a team and develop constituents
   
   A good HR team and well-developed constituencies are essential to effective A-76 strategic management. A strong team begins with a prepared leader, who develops understanding of the A-76 process, knows the "business" of the agency, and brings the "people" focus to the process. Building the team, and putting players in the right places, whether organizing them by activity or business unit, can empower them to support the competition effort. Finally, building and leveraging constituents-inside and outside the agency-provides the support structure necessary for success.
5. Communicate, communicate, and communicate some more
   
   Effective communications, in the form of a well-conceived plan, is essential to smooth A-76 transitions. Because consistency is key to success, HR should oversee the development and deployment of communications plan. However, because employees tend to have greater contact with, and trust in, their direct line managers, communications should come from that source rather than HR.
6. Upgrade and update skills
   
   Right or wrong, there is a notable dichotomy between how well HR believes it understands "the basics"-e.g. benefits, RIF procedures and regulations, severance issues, etc.-and how others view that understanding. HR leaders need to ensure their staff both knows these topics and demonstrates an ability to use that knowledge in practice.
   
   At the same time, there are new (or largely new) skills and knowledge HR needs to develop: A-76 competition process, workforce planning, market analysis, organizational design, agency "business," performance management economics, and cost analysis.
7. Think outside the box
   
   Becoming a truly strategic player requires innovative thinking about all aspects of the job. One strong example that some HR leaders are employing to circumvent the competition process entirely is workforce planning. While workforce planning may not be a viable option for all agencies at this point-it requires an agency to have an established process-it presents food for thought for HR leaders involved in longer term planning. Identifying positions that will be needed in the future, mapping them against current positions, and identifying gaps presents an opportunity to make changes over the long term, rather than making wholesale changes immediately that require competition.

Both competitive sourcing and HR in government are dynamic; some would say volatile, issues. Our research gives us confidence that the changes surrounding these topics provide a real opportunity for HR executives and their staff to have meaningful positive influence in their agencies.

For detailed analysis of the best practices presented in this article, see Pivotal Insight’s full report, Taking the Wheel: How HR Can Drive Success in Competitive Sourcing.

Visit us at www.pivotal-insight.com or call us at 703-914-2760 for information on how to order the report, as well as to learn more about our research and consulting services.