Why the U.S. Government needs to modernize workforce management systems

Federal agencies are under mounting pressure to modernize their aging human resources and workforce management systems. According to the U.S. Office of Personnel Management (OPM), approximately 75% of civilian federal agencies still rely on legacy HR platforms. These outdated systems, often customized and fragmented, struggle to support modern workforce needs, such as data-driven recruitment, skills-based hiring and cross-agency mobility.

In a new podcast, Steve Krauss, Director of OPM’s HR Quality Services Management Office, emphasized the widespread challenges agencies face. “Workforce planning, recruiting, onboarding, training — all of these critical functions are hindered by systems that don’t integrate or communicate effectively,” he says.

To address these challenges, OPM has introduced a set of human capital management standards designed to guide agencies through modernization efforts. “These standards help agencies align their processes and systems with industry best practices,” says Krauss, adding that coordination between agencies is essential to avoid redundant investments and leverage shared solutions.

Matthew Cornelius, managing director for federal industry at Workday, highlighted another pervasive issue: reliance on spreadsheets and makeshift databases. “In many cases, agencies’ HR management systems include countless Excel sheets, which create significant data silos,” says Cornelius. “Without unified, real-time data, agencies cannot make informed strategic workforce decisions.”

Cornelius also stressed the importance of modern, cloud-based platforms that offer real-time data and insights. “Agencies need enterprise-level visibility to optimize workforce planning, performance management and resource allocation,” he says.

Krauss underscored the financial stakes involved as well. “The federal government spends over $2 billion annually maintaining outdated HR and payroll systems,” he says. “By adopting integrated, cloud-based solutions, agencies can reduce costs and improve services.”

Both experts agreed that leadership commitment and cross-agency collaboration are crucial for success. “Modernizing HR systems is not just about technology; it’s about empowering agencies to fulfill their missions with the right people in the right roles,” says Krauss.

As federal agencies look to the future, implementing cloud-native HR solutions and adhering to unified data standards will be key to building a resilient and agile government workforce.

Listen to the full podcast conversation here. And learn how Workday supports OPM’s “Workforce of the Future” strategy.