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In 2023 alone, there were several proposed tweaks to the federal pay system. If finalized, one would let agencies offer a 50% bonus over two years for certain positions. Another change last year added four locality pay areas.

These are just two examples of what feels like constant change to the federal pay and human resources systems that serve almost 3 million federal employees.

For most of the last 20 plus years, federal agencies have been trying to modernize federal payroll and HR systems to make addressing these changes easier and faster.

Starting back in 2002 with the payroll consolidation efforts and going through recent OPM initiatives to develop data standards and a HR marketplace, there are many who believe the perfect storm of desire, technology and need are coming together.

Cathy Van Hoesen, the director of finance standards and customer services for the Defense Finance and Accounting Service (DFAS), said her Defense Department customers can do so much more at the application level than ever before. Changes to the technology and business processes over the last few years have led to a better customer experience today and even more advancements in the near future in DFAS’s myPay system.

“They can get their leave and earning statements there. They can make changes to their tax information there. They can change their address. For example, there’s a lot of self-service capability through that tool, and we continue to find ways to modernize that,” Van Hoesen said during the discussion Revolutionizing HR and payroll: Strategies for a modern workforce. “Two of the things that we’re looking at right now are we’re working on adding a capability to do some document upload there that will really specifically help our retired and annuitant pay community. We not only service civilians and military members, but we also service the retired and annuitant community from the military, and so this will give them a way to interact with us and send documents to us in a secure online manner. We’re also starting at looking at developing an app for your phone, for myPay.”

More, better data needed

DFAS expects to have the mobile app ready in late 2025 or early 2026.

Another recent tool lets agencies or third party customers access their payment information. Van Hoesen said these customers can go into self-service and pull reports for their agency.

“They could pull that data into a tool that they could then create a dashboard from things like that gives them information about the individuals pay. It gives them information some basic human resources information as well as we’re working on adding leave to that,” she said. “Self-service has been a huge step forward from a from a data availability perspective, if you will, for our customers.”

Van Hoesen added when DFAS asked its customer what they need from the service provider, more and better data consistently is the number one thing.

Making data easier to access for customers is a key piece of the Interior Business Center’s current and future technology modernization strategy.

Julie Bednar, the associate director of the Interior Business Center’s Human Resources Directorate, said the ability to be agile and ensure they can integrate data are key features within their full hire-to-retire suite of services.

“We deploy various forms of agile development and data integration, application programming interfaces (APIs), full integration and low code, no code and other automation solutions that take data from the very beginning of a person’s entry on duty all the way through their full life cycle,” Bednar said. “We have data that will go in one time for their entry on duty be utilized across time and attendance, performance management, employee development, HR and through that full data integration. We also have a full amount of data visibility that is available to our clients to use from a self-help perspective. So through all of the things, our customers have the opportunity to use any part of that hire-to-retire suite to get the full efficiencies of the experience without the need for duplicative investment from an IT standpoint.”

IBC’s piloting AI tool

The improved management of data is leading IBC to take advantage of new capabilities like robotics process automation (RPA) and artificial intelligence.

Bednar said IBC is piloting an AI tool for internal use to help the customer support folks.

“We’ve leveraged some low code solutions to automate some previously manual processes, and through some very simple low code solutions, we’ve saved hundreds of man hours of time in making some of those internal processes more efficient,” she said. “Similar for RPA, we’ve deployed several across the Interior Business Center and with our customer agencies.”

As a customer agency, the Federal Aviation Administration is looking to more easily access and integrate the data across several disparate systems to help drive decision making.

Bisa Cunningham, the deputy assistant administrator for human resources management at the FAA, said the future end state would be a one-stop shop for HR data.

“We’ve got basically six different systems that don’t talk to one another. We’re doing a return on investment and business justification case right now to be able to figure out what are the savings and how do we pull those systems together to talk to one another,” Cunningham said. “We’re entering in one system for payroll, for benefits, for awards, etc. We wanted to be able to talk to our learning management system because we want to be able to customize career learning development for targeted groups, as one example. Our time keeping system is customized to a certain extent because we’ve got to be able to address not only different pay systems, but different shift work, and so we want to be able to have that seamless connectivity between those systems.”

FAA is more complex than many agencies or private sector organizations with a mountain of personnel flexibilities that revolve around everything from compensation to deductions to distinct rules and regulations around all facets of pay and benefits.

Automation can help manage payroll data

“Over the past year, our HR department has stood up our human resources, information system group filled with data analytic, data visualization people and so part of future state we would also like to get we’d like to see our payroll provider provide us more of the raw payroll data so we can do analytics on everything from turnover rates, things like retire supporting, retirement forecasting and workforce planning, succession planning and attendance,” Cunningham said. “Our future state for the department is to adopt a human resources information system that will integrate to our payroll system.”

Cristina Goldt, the general manager of workforce and payroll products in the Office of the CHRO at Workday, said the only way for agencies and private sector organizations to handle the volume and velocity of data coming in to them is through automation and AI tools.

She said the underlying payroll and HR system technology is more agile today than ever before to more easily implement these new tools.

“When you think about the payroll function today, it is often viewed as sort of a back end transactional solution, where really payroll has the ability to really be more strategic and help the organization’s strategic priorities,” Goldt said. “You can then understand if you have the right people in the right place because you are actually looking at all the data. It is bringing that data together, and then what happens is efficiency in that they’re actually able to get that information much more quickly so then they’re able to do things like help model pay, do things that help support their workforce, but then help support their business more strategically too.”