Federal HR Modernization Lags Despite Costly Inefficiencies
A new report from Workday, Inc. (NASDAQ: WDAY), the AI platform for managing people, money, and agents, reveals that outdated federal human resources systems are costing taxpayers nearly $1 billion in lost productivity every year. According to the report, 89% of federal HR leaders believe these outdated systems are significantly hindering agency performance and mission delivery.
The High Cost of Outdated Systems
The report, Future-Ready Feds: Modernizing Human Capital Management to Empower Government Service, highlights a critical inefficiency: Federal HR leaders dedicate almost half their time (48%) to system workarounds, error correction, data reconciliation, and manual tasks. Key challenges include security risks, limited analytics, and data sharing issues. Surprisingly, despite these clear problems, only 48% of leaders consider HR modernization a high priority, and 83% report lacking a modernization roadmap.
The consequences are real: During a typical week, 47% of federal HR leaders face data update delays due to manual processes, and more than one in four (28%) encounter system downtime or technical failures.
“The federal government is at a crossroads,” said Lynn Martin, Chief Growth Officer Government, Workday. “Legacy systems are wasting valuable employee time and taxpayer dollars. Federal HR systems must embrace modernization to drive efficiency and enable data-driven decisions that enhance service delivery, customer satisfaction, and mission success.”
The HR Transformation Imperative
Automation and shared services emerged as critical areas for transformation. Federal HR leaders believe 61% of processes could be at least partially automated, and an overwhelming 98% support shared service models with proper implementation. Key opportunities include AI-driven skills matching, centralized recruiting, and standardized personnel systems.
The report comes at a time where the federal sector is facing unprecedented change, highlighting the urgent need for HR modernization to support the federal workforce and meet mission demands. To accelerate this transformation, the report recommends federal agencies:
- Make HR modernization a mission-critical IT priority
- Digitize and automate manual HR workflows to boost efficiency
- Invest in workforce analytics to improve hiring and reskilling decisions
- Prioritize security and compliance in HR technology
Forward-Looking Statements
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