State effort to combine HR offices flounders
Additional costs expected as move falls six months behind; employees claim switch has led to confusion
Nearing the end of her second and final term in office, New Mexico Gov. Susana Martinez issued a directive in late February that called on the state to consolidate human resources offices spread across multiple government agencies.
On paper, the plan to centralize and streamline human resources functions under one roof at the State Personnel Office made sense — especially amid a budget crisis that renewed interest among lawmakers to shrink government and cut costs.
The move to consolidate also would allow Martinez, a Republican whose popularity has waned in recent years, to deliver on a campaign promise to trim government bureaucracy and save taxpayers money.
But the highly touted effort is now six months behind schedule, additional costs loom in the future and state
employees claim the move has led to confusion within a government that provides human resources services for some 18,000 workers.
“It’s created a mess in every agency,” said Miles Conway, a spokesman for the American Federation of State, County and Municipal Employees. “Employees don’t know where to go for assistance, and the department has no answers for them. It’s not a cost savings.”
When Martinez issued her directive, she didn’t say how much money the state would save. And now that the effort has floundered, officials also aren’t saying how much more money it could cost.
State Sen. John Arthur Smith, D-Deming, vice chairman of the Legislative Finance Committee, said the consolidation is taking longer than Martinez probably anticipated.
“My attitude is that as slow as it’s moving, it’s not moving very well,” Smith said in a recent interview. “Obviously, they’ve run into some obstacles. I’m not certain it’s the governor’s fault, but it’s certainly her staff ’s fault for leading her down that road.”
About 27 state agencies, each with their own human resources functions, are poised to be consolidated.
State Personnel Office Director Justin Najaka said the consolidation is “moving along well” despite missing what he called “projected target dates” to meet certain milestones.
“It’s just a huge endeavor, and there’s so many little parts and moving pieces and different components that we have to balance out and work through,” he said Thursday in a brief interview at the state Capitol.
“This is an initiative that we’re working on, and we believe it’s going to be the best thing for taxpayers and citizens. We’re behind those initial target dates, but the work is still being done,” he said.
When asked why the project was running behind schedule, Najaka said the state has “a limited number of HR staff who are trying to do their day jobs as well as design this system.”
“This is one of the largest reorganizations that has ever happened in state government,” he said. “We knew this was huge. … We knew we were in for the long haul.”
The Governor’s Office did not respond to repeated requests for comment.
In her directive, Martinez did not set a deadline for completion but ordered that “all agreements and transfers contemplated herein shall be completed as soon as practicable.”
While the governor’s directive didn’t specify a timeline, a follow-up strategic implementation plan for the so-called Service Driven Centers of Excellence set several target dates, including July 2017 as the month to “deploy new services to state agencies, state employees, and other constituents.”
The State Personnel Office — commonly known as SPO in state government parlance — missed the deadline.
“This date has been revised to ensure that non-general funding sources are not negatively impacted, all functional areas will be addressed and all affected employees are trained prior to implementation,” Moses Winston, general counsel and legislative coordinator for the State Personnel Office, wrote in an email.
Winston said agencies under the purview of the state’s general fund, such as the corrections and tax and revenue departments, will be integrated into the consolidated model first.
“SPO is committed to a phased implementation to reduce the chance of disruption,” he said.
Najaka said his office wants to make sure “we have everything covered before we bring on the first group of agencies.”
“We would rather do it right than rush it,” he said.
Smith, who also serves as chairman of the Senate Finance Committee, said the consolidation could face budgetary obstacles as lawmakers move funds from individual agencies to the personnel office to handle its human resources operations.
“When it comes to transferring the dollars, if it’s not in the budget, they won’t be able to do that, so there’s going to have to be legislative action, and that’s probably going to slow it down,” he said. “If you’re going to consolidate into Santa Fe under SPO, if the dollars were with some agency, you can’t just transfer those dollars to another agency without legislative approval.”
No policies or procedures
Winston said the State Personnel Office, the Department of Finance and Administration, and the Legislative Finance Committee have discussed including budget adjustment request language in the General Appropriations Act — authorizing agencies to transfer operating funds to the personnel office to effectuate the consolidation.
“This act by these agencies may also inform and determine the timeline moving forward,” he wrote.
The 40-page strategic implementation plan listed July 2017 as the proposed date to adopt new policies and procedures, but a state government employee who has worked on the consolidation and asked not to be identified for fear of retaliation said “not one policy has been approved” so far.
“The writing and rewriting of these policies required a team of around 20 people and countless hours to complete,” the employee said.
Winston said writing new policies and procedures is an ongoing project.
“SPO continues to work with its partner agencies to finalize a consistent set of core human resource policies to ensure that they meet the unique needs of each executive agency while providing consistent expectations and guidance across state government,” he wrote, adding that about six policies are scheduled to be sent to agencies for review and approval in the next couple of weeks.
Waiting on a call center
The strategic implementation plan identifies a new human resources call center as a “key component” to the consolidation. But the call center, which will serve as the first point of contact for human resources services, still isn’t up and running.
“Once HR staff are trained on consolidated business processes and agency staff are trained on how to access services, the first group of agencies will be merged into the consolidated model,” Winston wrote. “Current and newly hired agency HR professionals filling existing agency HR vacant positions will be staffing the call center; however, these employees must continue their current work at each agency until the consolidation is implemented.”
Winston said the call center is “physically ready” and that staff will be trained after the tracking software is finalized.
The employee who spoke on the condition of anonymity said it’s clear the state started the consolidation “without a thorough understanding of all the details and issues” that would need to be addressed to successfully implement the plan.
“Clearly, they did no research into each agency’s HR bureau and what it does for each agency,” the employee said. “All in all, it’s a colossal disaster that’s a waste of taxpayers’ money.”
Exactly how much more money state government will have to spend on the consolidation is unclear.
Some of the future costs include renovating buildings to house employees. The state also has hired an architectural firm to develop a consolidated master plan.
In addition, Winston said “there will be a number of items that will need to be purchased or developed that do not exist today,” including a single case management tracking system to automatically track employee grievances, union complaints and other legal issues.
“We are still determining which products to use,” he wrote. “However, this is expected to be a very minimal expense.”
The digitization of personnel files, a project that is mutually exclusive but works hand in hand with the consolidation, has also been slow-moving — and will require the state to spend more money.
The digitization is linked to a $1.2 million software program the state purchased to help manage human resources for all its employees. Part of the software’s ability and purpose is to scan all personnel files into one database and link the database to the state’s financial management program.
But so far, only 91 licenses for the program have been purchased — and an additional 700 licenses for the digitization software are needed. Winston said the State Personnel Office has requested funding for the additional 700 licenses in fiscal year 2019, but he did not provide the amount of the request.
A source said each license costs about $350, which would bring the cost of 700 licenses to about $245,000.
With thousands of employees, the digitization of personnel files is arduous work that could take years to complete.
“The performance goal is to have 347 active personnel files scanned into a digital format by the end of FY18 and 1,000 scanned in by the end of FY19,” Winston wrote.
“It takes approximately 90 minutes to prepare, scan [and] move portions of each scanned document into the proper ‘drawer’ in each employee’s electronic file,” he added. “The time to digitize a complete file will notably decrease as staff become more familiar with the scanning process.”
If the digitization is done completely in-house, all personnel files should be scanned by fiscal year 2020, Winston wrote.
“SPO has requested an appropriation to engage a third party to scan the documents,” he wrote.
Looking to the future
Currently, the state has only two records clerks scanning documents, in addition to performing their daily job functions. But Winston said the team will consist of one records manager and seven records clerks “when fully consolidated.”
Smith, the senator from Deming, said some human resources employees have opted not to work at the State Personnel Office.
“Some of those people they wanted to move in have refused to move to Santa Fe,” he said. “They’ll just have jobs in other areas, so I suspect right off the bat they’re going to run into a shortage of people, and if they can’t move some of the money and if they can’t be paid from another agency on a temporary basis, then that’s going to have to come out of state personnel’s budget and that was not appropriated during this fiscal year that we’re in right now.
“I suspect state personnel, from a budget standpoint, could be sucking air.”
Smith said another unknown is what the next governor will do.
“In the six months that the new governor is on board under this budget cycle that we’ll be approving in January and February, the new governor could reverse what’s going on there or could ask for a supplemental appropriation in January a year from now,” he said. “The next governor will be responsible for instituting half of it or he or she can undo it.”
Contact Daniel J. Chacón at 505-986-3089 or dchacon@ sfnewmexican.com. Follow him on Twitter @danieljchacon.