13 HR Customer and Strategic Services

National Institutes of Health

National Institutes of Health (NIH) comprises institutes and centers (ICs) that focus on a variety of medical research agendas in support of the overall mission “to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce the burdens of illness and disability.” NIH is the largest source of medical research funding in the world, with scientists doing research for NIH at universities, medical schools, and other institutions throughout the world.

NIH headquarters, in Bethesda, Maryland, houses researchers, the NIH clinical center, and the Office of the Director. Although the ICs operate fairly independently, the Office of the Director is responsible for NIH-wide policy and processes, strategic planning for the agency as a whole, and coordination of research activities across all ICs. The Office of Human Resources (OHR) falls under the Office of the Director, functioning as a centralized unit that provides client services, workforce-relations support, and strategic human capital programs to NIH headquarters and all ICs.

With a unique and specialized mission and workforce within the federal government, NIH faces distinct human capital challenges in recruiting and developing employees. One pervasive challenge across federal HR organizations is balancing quick, responsive operational HR service delivery with proactive strategic human capital advisory services. NIH has successfully built and maintains an organization that achieves excellent operational outcomes, provides valuable strategic analysis and guidance, and upholds a culture of customer service that fully supports the mission of NIH headquarters and the ICs.

The Evolution of HR at NIH

Over the past 10 years, NIH has undergone various cycles of decentralization and centralization of HR operations. In 2003, the Department of Health and Human Services (HHS) implemented an initiative to consolidate all HR operations at the HHS level. This initiative sought to standardize, centralize, and improve HR business processes throughout the department by establishing five HR shared-service centers (SSCs) in Atlanta, Baltimore, Rockville, NIH, and the Indian Health Service (IHS). The department required significant staff reductions in the HR SSCs, which were to be offset by the development and deployment of new automated systems.

Prior to the consolidation initiative, NIH had 25 HR offices—nearly one for each IC. Ultimately, NIH and IHS were exempted from consolidating their HR operations under the HHS SSC. However, NIH was required to centralize its HR operations in its Office of Human Resources. As part of this transition, NIH was required to reduce its HR staff from about 450 FTEs (full-time equivalents) to a maximum of 256 FTEs within two years. This initial consolidation left NIH with an inadequate level of HR support.

A transition committee comprising OHR and IC representatives was formed under OHR’s leadership to design and implement the transition within the footprint required by HHS. Recognizing the need for more information regarding customer expectations and needs, as well as best practices, NIH leadership contracted with the National Academy for Public Administration (NAPA) to hold internal focus groups and perform benchmarking.

NIH and OHR adopted an organizational design aimed at balancing the need to consolidate HR operations with the need to foster effective client relationships. The new centralized structure combined administrative support centers (to handle functions in which efficiency and process are critical), centers of expertise (where specialized knowledge serves the whole community in developing policies, resources, and best practices), and business partnerships (consultative services to address any unique needs of individual ICs). OHR now comprises five divisions and two additional organizations under associate directors:

• Client Services Division

• Compensation and Senior/Scientific Employment Division

• HR Systems, Analytics and Information Division

• Workforce Relations Division

• Workforce Support and Development Division

• Associate Director for Administrative Management

• Personnel Policy and Accountability Group.

When the reorganization went into effect, the ICs felt the impact of the foundational and resource shifts almost immediately. The new model better supported NIH as a corporate entity; for example, eventually this model allowed strategic recruiting for NIH rather than just individual ICs. It also created a broader knowledge base within HR and enhanced consistency in policies and processes. However, it meant that the individual ICs no longer had HR employees as direct reports. Many of the former HR staff had been moved from their physical locations in the ICs to HR hubs, some off campus. Moreover, veteran HR staff, whose institutional knowledge and experience were invaluable, were lost in the mandated staff reductions. Some workers retired earlier than planned; others accepted new jobs outside the HR field. Consequently, NIH experienced a significant decrease in the quality of HR services, especially those provided directly to clients. Initially, complaints were high and morale was low.

The results of the NAPA study and follow-on efforts by OHR gave NIH senior leadership support to justify 60+ additional FTEs in 2005 and 22 additional FTEs in 2006. By 2006, substantial progress had been made in the restaffing effort. However, gaps in service delivery still needed to be addressed on a larger scale. First, OHR needed to be able to provide a consistent high level of operational and strategic customer service to the ICs, including hiring, classification, employee relations, and day-today operations. As a next step, OHR wanted to function as a strategic entity to provide human capital planning, analysis, and advisory services to NIH leadership and across the organization.

Many HR offices across the federal government face similar challenges and have similar goals. They strive to provide excellent operational services and function as a strategic advisory resource with leadership and organizationwide. How is it possible to do both effectively when an HR office faces so many demands on its time and resources? Where does the HR office start, and how does it maintain a high level of service going forward? It is not easy to play both roles successfully, but NIH has been able to do so. This transformation did not happen overnight; it took a consistent, focused effort that was supported by leadership and bolstered by contributions from employees at multiple levels throughout the organization.

Customer-Focused Strategic and Operational Support

In 2012, Phil Lenowitz, Deputy Director of Human Resources, described the strategies that he and Chris Major, Director of Human Resources, used to achieve NIH’s successful transformation of the strategic and operational HR organization. After 60+ new staff were hired in a three-month period, Phil and Chris focused on the ICs’ immediate functional needs: “hiring, classification, recruitment, pay setting, all the day to day operations, employee relations … we built that up first because that’s where the clamoring was.” This initial push toward building a solid foundation for effective operational services was called the Austin project (drawing inspiration from Steve Austin, the main character of the 1970s television show The Six Million Dollar Man). As Phil explained, we wanted to build a “better, stronger, faster” model for HR service delivery.

HR leaders gathered feedback from colleagues across NIH—executives, senior IC leaders, scientists and researchers, and administrative staff. Through this extensive outreach effort, HR identified three main steps that could be taken to address some of the common themes expressed by its customers:

• Colocation. The most salient change in the shift from independent HR offices to a consolidated HR organization was the loss of “face time” between HR specialists and institute staff. HR leaders recognized the importance of striking a balance between complete consolidation and complete IC independence. Some ICs expressed more of a need for on-site HR staff. HR agreed that if the ICs requested colocation and were willing to provide the space, HR would provide the people. ICs had the flexibility to request colocated staff full-time or on a rotational basis. This blended approach took the unique needs of each customer organization into account rather than trying to apply a one-size-fits-all solution.
  
  Phil explains that “anybody [in HR] who deals with the institutes and centers is supposed to spend at least one day per quarter with their customers … go into a lab and spend the day with a lab chief, or sit in on a scientific meeting to see what kinds of things they’re dealing with. Our staff is more in touch with the mission, and the managers recognize the people. It’s about the relationship. If you have good relationships with the people you service, you’re going to do better at your job and they’re going to be happier.”

• Organization. With the ICs’ participation, HR leaders came up with a modified structure for the Client Services Division (CSD). The new structure added two deputy directors and an associate director under the CSD director. The deputy directors split supervisory duties for the ten branches that provided HR services to the ICs; IC representatives had input into the selection of the deputy directors as well as leaders in the CSD branches. The associate director supervised areas such as the delegated examining unit, the classification unit, internal operations, and the commissioned corps. The additional level of supervision freed up more time for individual branch chiefs to spend with the ICs, increasing coordination, consistency, and consultation across branches. According to Chris Major, director of OHR, this structure worked quite well: “The new CSD organization more efficiently allocated the senior level resources. This allowed the CSD leadership to think strategically by spreading operational decisions among seasoned leaders. It enabled CSD to drive accountability and customer service to the next level. And importantly, it provided the impetus for staff to look at the metrics that measured their work, a motivating factor resulting in greater productivity.”

• Accountability. Findings from the Austin project suggested a need for increased accountability for customer service. CSD began focusing on concrete ways to build a customer service culture. One example was revision of the performance elements in CSD performance plans. Branch chiefs and HR specialists each have a performance element that measures customer service. However, instead of being rated by their immediate supervisors within CSD, the institute staff members who the branch chiefs or specialists serve are responsible for rating customer service. This gives ICs direct input into performance appraisal and ensures that CSD staff are directly accountable to their customers in a meaningful way. It also builds mutual accountability by putting the onus on ICs to raise any concerns about customer service.

Multiple factors contributed to the success of the Austin project, which was a large-scale undertaking that resulted in substantial improvements to service delivery. It may seem obvious that the first step toward improving customer service is to ask your customers what they need; however, when the customers are distributed across 27 ICs and cover a broad range of functions, this is quite a task. Where feedback on customer needs differed, OHR tailored its response and subsequent actions.

The reorganization went beyond moving employees and resources around. Building in accountability was an important factor, but the HR leaders also made a point of ensuring that employees were grounded in essential HR competencies through training and development. Instilling a customer service culture was important, but employees also needed to have the knowledge and expertise to know how to serve their customers most effectively. For example, if an HR specialist had to deny a manager’s hiring request because of regulatory constraints, it was important that the specialist be able to offer alternatives to reach a solution that worked for everyone.

The key to the success of the renewed OHR was the development of a strong leadership team. Each division director and associate director became not only the leader of his or her organization, but also a steward of OHR. The ability of the members of this team to recognize the needs of the entire organization—and to be global in their thinking—was vital to building a great organization. Also key to building capacity in OHR were implementing new ideas, taking carefully considered risks, and engaging in robust debate that not only allowed, but demanded, that all views on a subject be discussed and subject to critical analysis and scrutiny. Innovation was possible only because of the characteristics of this team. Chris notes that “putting the right people on the bus was foremost as we built our team. We knew that with the right people, we would be able to become more than a service provider. OHR would be become integral to the NIH mission.”

The initial success of the Austin project gave OHR the momentum to continue pushing toward further improvement. To bolster and expand the customer service culture it had been building, OHR brought in a new leader for the Client Services Division, Valerie Gill. Valerie’s vision for CSD aligned with this new direction. Three phrases guided her approach to HR service delivery: “Engage the team. Improve the process. Thrill the customer.” Valerie introduced numerous initiatives that demonstrated her commitment to putting these phrases into practice.

Valerie recognized the need for creativity in her organization and the importance of providing ongoing support for her employees’ successful ideas. One of the branch chiefs came up with the idea of holding a strategic recruitment meeting (SRM) for the ICs she serviced; the positive results led to NIH-wide implementation of the meetings. Before the SRMs became part of the CSD process, a manager would request a hire and the HR specialist would create and post a job announcement based on the information the manager included in the request. The strategic recruitment meetings involve an investment of time up front to identify the key characteristics of the specific hiring needs. When an IC requests a hire, the HR specialist meets with the selecting official, the administrative officer from the IC, and any other relevant stakeholders. As Phil explains, “They talk about the process that will follow, what we’ll need the manager and the administrative officer to do, what HR will do, and what the time frame is. That’s helpful. But the important part is that we go to the manager and we say, ‘What is it you’re looking for? Tell us what the ideal candidate looks like.’”

The HR specialist asks a series of targeted questions to elicit as much information as possible about the customer’s needs for a candidate. For example:

• Are you looking for a particular specialty within this scientific area (e.g., a general chemist vs. a chemist with a specialized focus or research background)?

• Where might we be able to find people with this skill set?

• What organizations might be good to recruit from, keeping in mind the overarching NIH goal of achieving diversity in our workforce?

• What types of recruitment benefits would help you appeal to this type of candidate (e.g., recruitment bonus, student loan repayment)?

The manager gains a realistic overview of the time frame and his or her role in the process, while the HR specialist gains detailed information about the customer’s needs. The SRM process has numerous benefits. First, the time invested up front saves substantial time later in the process. The meeting educates the customer on his/her responsibilities so that time frames do not slip because the customer is unsure what to do. It also provides a level of accountability for the HR specialist. The specialist tells the customer exactly what to expect, and then the specialist is responsible for delivering on those expectations. The meeting also reinforces the relationship between the customer and the HR team. Both sides come to the table to lay out the plan, and potential obstacles to the recruitment process are addressed up front. The SRM worked so well for NIH OHR that the CSD branch chief who envisioned the idea traveled to conferences and other agencies to speak about its benefits and share lessons learned from its implementation at NIH.

Valerie also led CSD staff through a pilot of an HR clinic program—another idea from a branch chief who planned it for a small group of ICs. Valerie explains that “the clinic was another way for us to provide value to our customers; educate them on the OHR services available to them; help them understand their role in ensuring the success of the recruitment and other OHR process; address any questions or suggestions they may have to enhance the OHR program and strengthen our relationship with them.” The idea was so well-received that the clinic was opened to all of NIH.

The first HR clinic was an all-day event at a conference center where participants could choose from 20 sessions on 13 HR topics, including benefits, retirement planning, classification, hiring authority requirements and flexibilities, and administrative matters. HR staff worked collaboratively with their customers while planning the event by collecting survey feedback on topics of interest. On the day of the event, HR staff members were available between sessions at tables representing various branches and initiatives to talk one-on-one with IC attendees. The clinic provided the opportunity for HR staff to engage with their customers in person and for administrative professionals from different ICs to network with one another. Plans for the next NIH-wide HR clinic are now underway.

As IC needs change—whether driven by research priorities, resources, leadership change, or other factors—HR must adapt to continue effectively meeting needs. CSD’s strong customer service culture enables HR to identify opportunities for improvement before potential issues escalate. For example, when a need for closer working relationships between CSD and the NIH clinical center emerged, CSD held facilitated meetings with the center’s senior leadership and the CSD leader to clarify roles, responsibilities, and expectations. As Phil notes: “They got to work together face to face and got to know each other. We’ve done the same thing with the National Cancer Institute and the National Eye Institute. Each one is a little different because it caters to the needs of that particular institute. They’ve developed a variety of tools that, while they were developed with one institute, they can use it elsewhere as these partnerships grow.”

Balancing NIH’s overarching strategic direction with the diverse needs of individual ICs is no easy task; conflicts and challenges are bound to arise. One of the ongoing general challenges that HR leaders face is being available to lead successful operational HR and weigh in on escalated HR cases while still finding the time to lead the proactive efforts in strategic planning. With the foundation of customer-focused HR service delivery in place, it was important to NIH’s human capital leaders not to lose focus on opportunities for further improvement.

Strategic Human Capital Planning, Analysis, and Advisory Services

Although the initial focus of the HR transformation was to address NIH’s immediate operational needs, it was important to HR leaders to move toward a more strategic model where they were also able to provide valuable analysis and advisory services. The director and deputy director started by taking opportunities to provide strategic advice and guidance as they arose, demonstrating the added value they could bring to the organization beyond day-to-day HR services. For example, the HR team led a study of compensation for scientific and medical staff that was critical in enabling NIH to recruit top talent. When NIH was facing the possibility of a furlough, HR took the lead in analyzing the estimated impact, identifying essential personnel, and laying out a plan to deal with the situation.

The director of NIH started calling on Chris, Phil, and their staff for strategic advice and service more frequently. “As we were able to deliver the day-to-day services to the ICs, senior leaders gained confidence in our ability to expand our portfolio,” says Chris. “As difficult tasks came into NIH, OHR was called upon to deliver. This caused us to look at our business in a different way and to alter our thinking. We began anticipating what our senior leaders needed and were delivering more than we promised instead of promising more than we could deliver. We were no longer only an operations organization. We were being integrated into the senior leadership of NIH. And resources needed to be allocated appropriately to meet those requirements.”

Chris and Phil knew that with the complexity of the organization and the variety of NIH stakeholders, they could always expect something to be coming down the pipeline that would have an impact on human capital, whether it be a new mandate from HHS, an executive order, or an internal shift in priorities. Phil explains that they “needed a way to respond to this; not necessarily the experts, but the people who can figure out what we need to do, get to the experts, and coordinate these projects.” They created a strategic initiatives group (SIG) to help HR move from an ad hoc, reactive strategic advisory model to a model that was more organized, yet agile enough to adapt to different priorities as they emerged. Creation of the SIG demonstrates a continuation of Chris and Phil’s deliberate effort to maximize the value of HR’s resources and services.

The SIG is currently made up of a small group of management analysts. Chris and Phil manage the group, but it generally functions as a self-directed work team. The group’s projects vary in topic, scope, and urgency. The SIG can be called upon to spring into action when a quick-turnaround request comes down from the director’s office, or it can be asked to propose a strategic solution to an ongoing challenge internally where members are able to devote more time and resources to planning and piloting the program. Along with having direct access to the HR director and deputy director, this group is empowered to work directly with the appropriate high-level contacts on any given project or initiative. This enables the SIG to function independently and to gather the information it needs to move quickly and efficiently.

One example of a large-scale SIG initiative is the five-star executive recruitment program. A SIG member (who was a presidential management fellow) saw an opportunity to improve the executive recruitment process by more fully integrating HR coordination with the Office of the Director. Originally, staff from that office would coordinate visits for interviewing executives, with HR involved at various points in the process. This employee proposed that HR take ownership of the entire process to make it a smoother operation from beginning to end. Since HR staff were already involved in posting the announcements and facilitating the selection of candidates to interview, it made sense for them to remain a consistent point of contact all the way through to the employee’s onboarding.

The executive recruitment program has proven beneficial to the director, the selecting organizations, and the candidates. OHR’s coordination of the process end-to-end builds a relationship with new executives from the beginning, demonstrating that HR is an organization that is attuned to its customers and ready to go the extra mile to support them.

The SIG has been extremely valuable in responding to HR issues, but its members are hardly the only employees who contribute to strategic human capital planning and analysis at NIH. OHR has access to a wealth of HR data through the workflow information tracking system (WITS). The system’s original purpose was to track hiring actions to figure out where they are in the process and how long it takes to complete each step. Since the system was built, its usage has expanded both within and outside OHR. The HR Systems, Analytics, and Information Division (HR SAID) uses the information from this system to support a data-driven approach to both the operational and strategic functions.

For example, an IC decided not to allocate any of its annual budget to giving performance awards one year. HR SAID was able to analyze the turnover rates in this IC and determine that they were not significantly different from turnover rates in other ICs. Attrition data and projections within ICs and in positions across ICs also inform the strategic recruitment strategy. High attrition in a position where the qualifications are common across multiple ICs can be mitigated by issuing global announcements instead of announcements for specific ICs. That way, the time and resources invested in seeking out candidates for the position can potentially benefit several ICs.

Just as the CSD’s improvements in operational HR support were made with consistent effort through multiple phases, the reputation of the HR team as a strategic advisor and partner developed over time. OHR has kept its focus on continual improvement, which has been essential in maintaining a high level of service in a constantly evolving environment. Although a variety of factors contributed to the results of this ongoing effort, Phil notes that if he had to identify a single thing that made all of it possible, it would be support and resources from the top. Chris and Phil had the trust of the NIH leadership, who were confident in allocating the appropriate resources for the transformation to be successful. NIH leaders had confidence in the return that OHR would deliver in terms of improved services for the investment of resources.

Results

Since the NIH human capital transformation was a steady, gradual effort, the results of these initiatives emerged overtime. Results clearly show that the continued effort and investment have paid off for NIH.

Improved Customer Service

During the Austin project, customers and stakeholders from the ICs gave OHR a wealth of information on what they needed from CSD, and OHR followed through on meeting those needs. For example, when it became clear that many ICs wanted their on-site HR specialists back, OHR worked with the ICs to make this happen in a way that satisfied both individual IC needs and higher level HR priorities. This effort represented a basic foundational level of providing tailored customer service: The customers made a request, and OHR did its best to accommodate them.

At a more strategic level, HR leadership used the high-level feedback gathered through the Austin project to propose and implement specific initiatives to address gaps in customer satisfaction. When the ICs asked for better accountability, OHR built accountability mechanisms in throughout the organization structure and the performance management program.

Phil and Chris had often been approached by IC executive officers with complaints about the lack of HR services to meet their needs. As a result of these projects, Chris describes a clear change in customer perceptions of HR: “After these projects and the emphasis on strategic leadership in OHR, the complaints died down and we would get compliments on the work the OHR staff did—quicker hiring, better candidates, faster service, creative ideas, more responsive staff.”

Improved Operational Outcomes

Between 2009 and 2012, NIH reduced its time to hire from 106 to 62 days—a 40 percent decrease. The average time to issue a certificate of eligible candidates to managers after an announcement closed decreased from 21 days in 2008 to 8 days in 2012—more than a 60 percent decrease. In addition, the average time to make a job offer to the manager’s selected candidate decreased from 3 days in 2008 to the same day in 2012. The strategic recruitment meetings, CSD organization, and overall focus on customer service have clearly played a role in this operational outcome.

Other creative initiatives have contributed to the HR department’s success in improving outcomes as well. For example, HR implemented global recruiting and shared certificates for common positions. These programs streamlined the hiring process by filling common vacancies across NIH using one announcement and by allowing hiring managers to share applicants with other hiring managers who needed to fill a similar position. The number of hires through global recruitment increased from 164 in 2010 to 470 in 2012.

Successful Functioning as Strategic Partners

OHR has successfully established a strategic partnership with NIH leadership to provide analytic and advisory services for NIH’s human capital programs and processes. As HR demonstrated its value on more and more projects and initiatives, the NIH director and executive team began to seek out its services more frequently and to rely more heavily on OHR guidance and support. OHR is also a driver of strategic direction. Its proactive consultation, combined with the agile responsiveness of the SIG, provides comprehensive coverage of NIH’s human capital needs.