General Government Oversight Committee State Human Resources Update. Neal Alexander, Director North Carolina Office of State Human Resources

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1 General Government Oversight Committee State Human Resources Update Neal Alexander, Director North Carolina Office of State Human Resources 1

2 Agenda Temporary Solutions Reorganization Through Reductions (RTR) Salary Adjustment Fund Performance Management & Learning Management 2

3 3 Temporary Solutions

4 Temporary Solutions Background Established: 1986 Provides temporary staffing services to state government in an efficient and cost effective manner, enabling significant savings to the State. 4

5 Temporary Solutions Background (cont.) Administration fee of $2/hour provides: Recruitment/Selection Classification/Compensation HR Policy Compliance Employment Data/Payroll Processing Accounts Receivable/Invoicing Affordable Healthcare Act Enrollment Salary and Benefits for 12.5 FTE Temporary Solutions Staff Members Operating Expenses Facility Lease Data Management System Unemployment Benefits (December 2015 payment: $605,212) $1 Monthly Fee for NCIDs Assigned to Temporary Employees 5

6 Temporary Solutions Reason for Expansion Section 26.2(e) of House Bill 97, Session Law added to Chapter 126 and requires Temporary Employment needs of the state to be met through the Temporary Solutions Program Temporary Solutions Program will be expanded by: 1. Transferring temporary employees at Council of State agencies to Temporary Solutions Approximately 1,033 active positions 2. Converting Personal Service Contracts (PSC) to Temporary Solutions positions Per a Program Evaluation Division report, approximately 32% of the 462 PSCs reported to OSBM in FY should have been temporary positions This figure does not include PSCs under $25K that were not required to be reported to OSBM 6

7 Temporary Solutions Implementation process Phase I Meetings with HR Directors October 2015 thru January 2016 (Completed) Phase II System Changes Began in December 2015 (Ongoing) Phase III Collect Employment Paperwork Began in December 2015 as DPS started transitioning some of their personal service contracts (On-going) Phase IV Communication with Active Employees Began in December 2015 (On-going) Phase V Complete the Transfer Initial deadline: June 30, 2016; however, based on current progress, we anticipate completion by April 2016 (On-going) 7

8 Temporary Solutions Usage stats - before and after expansion Prior to EO4 FY 12/13 After EO4 FY 13/14 FY 14/15 Projected ,269 3,362 3,700 % increase FY 12/13 - FY 13/14 82% % increase FY 13/14 - FY 14/15 2% Projected % increase FY 14/15 - FY 15/16 10% Does not include potential increase due to PSCs that may be transferred to temporary positions 8

9 Temporary Solutions Savings/Cost Avoidance Jul -Sep Oct - Dec Jan - Mar Apr - Jun YTD Total Applications Placements Hours Worked 769, , , , ,400, Receipts $1,539,256 $1,202,424 $1,093,188 $965,603 $4,800,470 Payroll $13,902,038 $11,271,177 $17,243,521 $9,117,088 $51,533,824 Average Pay Rate/Hr $18 $19 $32 $19 $ 21 Mark-up@25% $4.52 $4.69 $7.89 $4.72 $5.37 Savings/ Cost Avoidance $2,705, $2,216, $3,764, $1,796, $10,483,

10 Temporary Solutions Exceptions House Bill 97, Session Law , Section 26.2.(e) - allows State agencies to request an exception to the requirement to utilize the Temporary Solutions Program Exceptions were also authorized as of part of the Governor s Executive Order 4 which required all Cabinet agencies to utilize the Temporary Solutions Program Exception requests must be submitted in writing to the State Human Resources Director for review and approval Exceptions are reviewed on annual basis and agencies are required to provide data for any temporary employees whose employment data is not maintained within BEACON 10

11 Temporary Solutions Examples of exceptions given To date 12 exceptions have been granted to 9 agencies Examples: DOA, Commission of Indian Affairs Federal funds used for participants in a Vocational Rehabilitation Program; participants are hired for 6 months and paid minimum wage DPS - Federal grants fund temporary employees for Tar Heel Challenge National Guard School, Prison Industries Enhancement Program, truck drivers that must meet federal transportation regulations DNCR - Temporary employees, paid with grants/private funds, hired at regional museums, zoos, parks, and aquariums Revenue - Seasonal temporary employees working within the tax return area State Treasurer Approval granted to use external staffing agencies for temporary employees with distinctive expertise and/or skills set in legal, finance/accounting, investments, HIPPA certification, and non-it project management 11

12 Temporary Solutions Total budget and fund balance fund balances uses Total Budget $65,757,525 96% of this budget is allocated for temporary employees Remaining 4% goes to wages and benefits paid to 12.5 FTEs staff members for Temporary Solutions and operation expenses Fund Balance (as of January 19, 2016): $885,040 Fluctuates with bi-weekly payrolls for Temporary Solutions Average bi-weekly payroll is $2M; however, it could be as much as $6M when including payroll for DPI virtual school teachers 12

13 Temporary Solutions Issues with agency payment or compliance Percentage of accounts receivable exceeding 30 days past due has improved Business process improvement in the areas of job placement orders, invoicing and time entry has improved the accuracy of invoices which has allowed more timely payments Dedicated staff allocated to focus specifically on ensuring timely payments Invoices to agencies are due upon receipt Goal: No accounts should exceed more than 30 days past due Based upon the fund balances for the months from July through October 2015, the timeliness of invoices did have an adverse impact. 13

14 Temporary Solutions Fund balance for FY 15/16 Month/2015 Fund Balance July ($1,497,536.09) August ($2,990,010.26) September ($677,664.33) October ($5,872,629.80) November $818, December $885, A fund balance is needed to ensure there are sufficient funds to cover monthly payroll. 14

15 Reduction Through Reorganization (RTR) 15

16 Reorganization Through Reduction Purpose RTR is a voluntary employee separation program created by the General Assembly in 2013 and established under the direction of the Office of State Human Resources (OSHR) to enable an agency to: Restructure Reorganize Gain financial and skill-set efficiencies in order to increase agency effectiveness and achieve agency business needs, objectives and goals without loss of position or funding for the position RTR program may be utilized within the Cabinet and Council of State agencies 16

17 RTR Process Reorganization Through Reduction 1. Evaluate and determine agency need for reorganization or skill-set changes 2. Define volunteer eligibility requirements by identifying caps and exclusions 3. Draft agency-specific RTR plan for submission to OSHR for approval and then to OSBM 4. Provide details on program design and eligibility requirements to agency employees 5. Schedule and open 21 day window for employees to request RTR Participating employees return their Volunteer Separation Request Form to the RTR Control Center (OSHR) by the deadline 6. Review requests and work with management team to Approve/Deny 7. Communicate decisions to employees requesting RTR and schedule separation dates as appropriate 8. Separate employees that are approved for RTR and provide them with a Settlement Agreement/Waiver of Claims 9. Return signed agreement to OSHR and process separation payment through BEACON. 17

18 Reorganization Through Reduction (RTR) Funding for Payouts Appropriated Severance funds Agency supported Receipts Supported funds Federal funding 18

19 Reorganization Through Reduction (RTR) Participating Agencies Administration Cultural Resources Health & Human Services Information Technology State Auditor State Budget & Management State Human Resources 19

20 Reorganization Through Reduction (RTR) Number of Employees by Agency Who Chose RTR Agency Division(s) RTR Volunteers Approved for RTR Selected for RTR-RIF Employees Separated Total Expenditures Administration Cultural Resources Purchasing & Contract, Fiscal Management, Advocacy Section Human Resources, Information Technology, State Library, Museum of Art, Historic Sites, Transportation Museum, State Library $978, $485, Information Technology Administrative Support Group, IT Strategic Sourcing, Data Center Operations / Consumer Platform-Desktop Services $363, State Human Resources Agency-wide $1,017, Health & Human Services Office of the Controller, Medical Assistance ,289, State Budget Management Agency-wide $524, State Auditor Agency-wide $672, TOTALS: $5,331,

21 Reorganization Through Reduction (RTR) Average payout Average RTR Expenditure - $40, Average RTR-RIF Expenditure - $21, Average Total Expenditure - $38, Possible changes to positions after RTR Reallocation to a different job classification Same classification with different duties Same classification reorganized into different work unit 21

22 Salary Adjustment Fund 22

23 Salary Adjustment Fund Salary Adjustment Fund Authorization (FY $12.5M recurring funds, FY $25M recurring funds) Must be used to fund agency requests for: Salary range revisions Special minimum rates Grade to band transfers Geographic site differential adjustments to provide competitive salary rates for affected job classifications or groups in response to changes in labor market rates as documented through data collection and analysis according to accepted human resource professional practices and standards (House Bill 97, Session Law , Section 30.12A.(a) 23

24 Salary Adjustment Fund Criteria for Fund Allocation Determine market relativity for each job within an agency Compa-Ratio of 0.85 or less 1.00 is considered at market Positions with average turnover of 10% or more Agency Distributions Agencies receive 5% of the average salary for each qualifying job Agencies can allocate 2 7% per employee 24

25 Agency FY Total w/benefits FY Total w/o Benefits* Salary Adjustment Fund Administration $100,879 $124,993 Administrative Hearings $22,030 $14,468 Administrative Office of the Courts $93,817 $1,050,000 Agriculture $133,876 $297,183 Commerce $22,174 $158,369 Community Colleges $222,778 $177,858 Controller - $39,362 Cultural Resources $160,695 $220,476 DENR/DEQ $4,853 $390,948 Health and Human Services $2,994,956 $2,853,507 Information Technology $12,059 TBD Insurance $99,797 $211,192 Justice $468,511 $356,379 Labor $275,169 $185,728 Military Affairs - $62,451 Public Instruction $47,909 $214,707 Public Safety Emergency Management $1,588,748 - $8,009,536 $525,105 Revenue $691,010 $424,342 Secretary of State $17,041 $76,869 State Auditor's Office $592,286 $511,018 State Budget Office $15,756 - State Controller $196,256 - State Human Resources $7,540 TBD State Treasurer $95,506 $23,970 Wildlife Resources Commission $59,571 $225,869 Other Individuals (2) Identified in Budget $40, Grand Total $7,923,217 $16,194,330 * FY 2015/2016 data is as of January 22, $8 million of the $25 million is held in reserve to cover the cost of benefits. Salary Adjustment Fund

26 Salary Adjustment Fund Status/Plans for 2016 $25 million (annualized) effective January 1, 2016 Initial allocation - $17 million (30% needed for benefits) $1.5 million is planned for Judicial Branch 2 nd allocation Remaining balance will be paid out T I M E L I N E January 11 Review plan with OSBM January 13 Provide initial information to agencies January 22 Preliminary information due to OSHR from agencies January 29 Agencies provide salary increase information to OSHR February 1-5 Review with OSBM and the Governor s Office Next paycheck after Gov Ops consult February Submit recommendation to Gov Ops per budget consult requirement Salary increases included in employees paychecks 26

27 Performance Management & Learning Management Expansion Funding 27

28 Performance Management & Learning Management Performance Management & Learning Management System Funding Authorization (FY $270,000 recurring funds, FY $270,000 recurring funds) Provides funding to implement the Performance Management and Learning Management Systems, which track and report performance evaluations of state personnel. Funding for these programs in FY is $936,465. (Committee Report for House Bill 97, Session Law ) 28

29 Performance Management & Learning Management Budget $936,465 is needed annually to pay the subscription fees for our Performance Management and Learning Management Systems Before expansion fund, OSHR had $666,465 in the budget for these systems PM annual subscription fee: $300,000 - paid July, 2015 LMS (recurring): $636,000 - paid November,

30 Performance Management & Learning Management Expansion Funding: $270,000 (needed annually) With this expansion funding, we fund: 1. State-wide Learning Management System (LMS) Implemented June 1, 2013 Delivers, Tracks and reports state employee training 4,491,605 Learning Objects completed since Go-Live (6/1/2013 to 9/30/2015) Event catalog contains 2,771 unique training titles 1,022 online courses published by state agencies Additional 4,375 Skillsoft online courses available 940 classroom sessions currently available for registration 30

31 Performance Management & Learning Management Expansion Funding: $270,000 (needed annually) Continued: 2. Performance Management (PM) System - NCVIP Tracks and report performance evaluations of state employees 28 agencies and Boards/Commissions have implemented NCVIP, as of 12/31/ % of the state s full-time employees have Performance Plans in place 31

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