Convergys’ Ground-breaking Government Pact A Progress Report

Florida’s contract to outsource HR services for more than 200,000 state employees was the first of its kind for a government agency and one of the largest HR outsourcing deals ever. In 2002, the state’s Department of Management Services tapped Convergys, a Cincinnati-based customer care, billing and HR outsourcing company, for the nine-year, $350 million contract. As with other pioneering HR outsourcing pacts, this one started out rocky and got worse before it got better, according to state and company officials and industry analysts. Three years into their collaboration, though, the partners profess to be happy with the results to date. A Management Services Department spokesman says the deal allowed the state to avoid $80 million in technology upgrades and should result in additional cost savings, though he wouldn’t specify how much. Chris Emerick is operations vice president for Convergys’ Employee Care division, which runs the Florida contract and the company’s other HR outsourcing deals. Here’s what he has to say about that deal and outsourcing in the public sector:

    Workforce Management: What was Florida’s HR service like before?

    Chris Emerick: They were limping along on a 25-year-old platform. There were no Web-based tools for employees or managers. Thirty-three agencies were doing work their own way. They asked us to deploy state-of-the-art technology, streamline HR processes, create consistency and ensure compliance with all federal and state regulations.

    WM: A lot’s been written about problems and delays you encountered. What happened?

    Emerick: Each agency had its own processes. You can’t just go in and say, “This is how we’re going to do performance management and here’s what we’ll offer for professional development.” You have to go through a process with those stakeholders to reach agreement. They hadn’t done that at all. When you’re operating on a tight time frame and need to build new technology and have to go through identifying best practices, that’s a very labor-intensive activity. Also, there was quite a bit of turnover at the agency we contracted with. In three years we’ve had three different department secretaries and two interim secretaries. That’s five leaders with five teams. Each comes in and likes to revisit decisions and look for opportunities to do things a little differently or improve on them.

    WM: What’s the status of the work today?

    Emerick: Core functions have been up and running for at least a year, and staffing and recruiting have been up for more than two years. There are some small pieces the state has opted to defer.

    WM: Can you give some examples of how have services improved?

    Emerick: With paper résumés, it would take 100 days to fill a vacant position. With automated technology, we can provide a hiring manager with a qualified candidate pool within three days of a job posting. Our cycle time is now 45 to 50 days. In August we hired 1,200 state employees, our largest month to date. In the employee benefits application, employees and retirees can model benefits options for themselves and their families at home online. Instead of rendering time sheets manually, they can do it online, on paper or call our service center. We track why employees contact us to get to the root causes so we can make continuous improvements. In other self-service features, managers can track attrition rates and which agencies are having problems. We can identify attributes we used for hiring that are and aren’t working, and which employees are having challenges and change their training accordingly.

    WM: What happened to state workers displaced by the outsourcing deal?

    Emerick: Upwards of 800 jobs were going to be lost. The state did an outstanding job of preparing those impacted workers. We held a series of job fairs. We hired some. State agencies worked closely with each other to support employees moving (to other agencies). They took care of almost 100 percent of their people. Only a handful lost their jobs.

    WM: Are you doing any of the work offshore?

    Emerick: No. That was one of the contract requirements. We committed to doing the work in the state of Florida, out of our office in Jacksonville and a facility in Tallahassee.

    WM: After Florida, Convergys won an HR outsourcing contract for the state of Texas’ Health and Human Services Commission. How do the deals compare?

    Emerick: It was a night-and-day situation. Texas had completed its transformation and reached an agreement on consistent processes across all those domains. We came in and built out the technology platform.

    WM: What have you learned from public-sector deals that you’ve applied to bids for other government or corporate jobs?

    Emerick: PeopleFirst was one of Gov. Jeb Bush’s key initiatives, but just because it was didn’t mean it was endorsed by all other elected officials. It took a lot of heavy lifting to convince folks there was a benefit to state employees and taxpayers, that this would ultimately be better for them. We did a lot more customization than the state set out to do, but it was necessary to get the system up and running. Also, Florida has a broad public records law. You’re doing everything out in the sunshine. You have to be cognizant of that.

    WM: Are you bidding on other government contracts?

    Emerick: We’re in various stages with some other pursuits. Things did slow down a bit around election time last year–some states put the brakes on. You need a sponsor high up in state government for these (initiatives) to be successful, typically in the governor’s office. Sometimes when there’s turnover these initiatives get stalled. We’re starting to see activity crank up again. I’d expect in 2006 we’d see two or three states go out with RFPs for initiatives similar to what Florida and Texas have done.