Future-ReadyFeds: Modernizing Human CapitalManagement to EmpowerGovernment Service April 2025 INTRODUCTION The Federal workforce is at an inflection point. The January 20, 2025, Executive Order,Reforming the Federal Hiring Process and Restoring Merit to Government Service,calls formodernizing human capital management(HCM) through technology, dataanalytics, and digital platforms. Meanwhile, broader efficiency initiatives – such as theDepartment of Government Efficiency’s (DOGE) push for streamlined operationsand ongoing discussions around Federal workforce reductions – are reshapingagency priorities. How can Federal human resources (HR) leadersidentify and address urgentworkforce needswhile relying on outdated legacy systems that limit visibility andreinforce data silos? What inefficiencies stand in the way of workforce optimization,draining valuable time and resources? How can modern, cloud-based technologieshelp agencies build a more agile, effective workforce? MeriTalk, in partnership with Workday, surveyed100 senior HR decision-makersacross Federal civilian agencies and the Department of Defense (DoD) to assessthe state of Federal HR solutions. This report explores key challenges, opportunitiesfor change, and how modernization can drive better workforce outcomes whileadvancing the administration’s goal of maximizing government efficiencyand productivity. “HR management systems”refer to all software solutions, IT systems, or datamanagement processes an agency uses to manage its workforce needs. Thisincludes HCM systems, human resource management systems (HRMS), talent andperformance management systems, custom or proprietary solutions, and manualprocesses – such as those managed in Microsoft Excel or Access. EXECUTIVESUMMARY FEDERAL HR IS STUCK IN THE PAST –LIMITING MISSION SUCCESS: of Federal HR leaders say outdated HR management systems hinder mission success Agencies spendnearly half of their time (48%)working around HR system limitations –correcting errors, reconciling data, and handling repetitive manual processes Topfrustrations:security and compliance risks, limited workforce analytics, and the inabilityto effectively share data DESPITE CLEAR NEEDS, HR MODERNIZATIONLACKS URGENCY: 96%believe effective public service starts with modern workforce managementYet only48%say HR modernization is a high priority at their agency83%report that their agency lacks a clear roadmap for modernization HR LEADERS AGREE: MODERNIZATION ISESSENTIAL TO AN EFFICIENT, AGILE WORKFORCE: 61%of HR processes could be at least partially automated 37%say Federal HR operations are a good fit for shared services, and another61%wouldsupport a well-planned implementation Topopportunitiesto improve efficiency: recruiting and hiring, HR analytics and reporting,and workforce planning and performance tracking FUTURE-READY FEDS: MODERNIZING HUMAN CAPITAL MANAGEMENT TO EMPOWER GOVERNMENT SERVICE|3FUTURE-READY FEDS: MODERNIZING HUMAN CAPITAL MANAGEMENT TO EMPOWER GOVERNMENT SERVICE|3 HR SYSTEMS& THE COST OFTHE STATUS QUO Outdated HR systems are failing Federal agencies – forcing HR leaders to work aroundsystem limitations rather than advancing workforce strategy. From security risks tofragmented data, legacy systems are stalling progress when government needs to bemore agile than ever. of Federal HR leaders say outdatedHR management systemshindermission success Top frustrations: In the past week: 47%experienced delays in dataupdates due to manual processesor a lack of automation Security and compliance risks Limited workforce analytics 42%encountered delayed,inaccurate, or incompleteworkforce reports Inability to effectively share data Lack of integration and interoperabilitybetween systemstied withoutdated,slow, or manual processes 28%faced system downtimeor technical failures ACCESSIBILITY& WORKFORCEVISIBILITY Workforce data is the foundation of strategic HR planning, yet many agencies aremaking critical hiring, reskilling, and management decisions in the dark. Less thanhalf of HR leaders can easily access basic personnel data – let alone the insightsneeded for long-term workforce strategy. Less than half say it’s “very easy” to accesskey workforce data, including: say they lack clearvisibilityinto contractorroles and redundancies If you could easily access one type of workforce data that you currentlystruggle to get, what would it be? A real-time skills matrix with projectexperience and training completions”“ Detailed employee engagement readings”“ Remote vs. in-office productivity”“ Forecast data to understandemployees’ career paths”“ Hiring velocity data ... and reasons for any delays”“ THE EFFICIENCYOPPORTUNITY Federal HR leaders spendnearly halftheir time navigating system inefficiencies– manually entering data, fixing errors, and waiting on outdated processes.Modernization could reclaim millions of hours and drive significant cost savings. Federal HR leaders estimate spending nearly half