The Office of Personnel Management (OPM) is launching an HR Shared Service Center for federal agencies to streamline their human resources (HR) functions, the latest step in the Trump administration’s Federal HR 2.0 initiative.
Agencies that choose to join the center will partner with OPM, which will handle the “full spectrum” of their HR tasks – including benefits, staffing, and performance management –while agency leaders are expected to focus on mission priorities.
Administration officials say the partnerships will simplify HR processes, reduce administrative burdens, and improve operational efficiency. Eight federal entities are working with OPM to transition to the shared services model starting in fiscal year 2027, including the Department of Housing and Urban Development, the Consumer Financial Protection Bureau, and the Office of Government Ethics.
“For decades, a decentralized approach to HR service delivery in the Federal government has led to suboptimal service, costly and duplicative systems, and inconsistent application of policies,” OPM Director Scott Kupor said in a March 17 memo to agency heads. “At the beginning of the Trump Administration, there were nearly 42,000 HR employees government-wide, often performing duplicative and overlapping functions, at an overall cost of $5.4 billion …The Federal government can – and should – do better.”
“By leveraging shared services, agencies can reduce fragmentation, enhance compliance, and shift administrative workload away from program staff – allowing greater focus on mission execution,” he added.
The first Trump administration, in its 2017 cybersecurity executive order, also encouraged agencies to share platforms for common operations like human resources and finances.
The new shared service center will “complement” the transition to a single, government-wide HR system, the memo said. OPM announced in October that it planned to launch a new, government-wide human capital management (HCM) system that would ultimately result in a single platform to house information across agencies on job titles, salaries, benefits, and employment histories.
A request for proposals posted to SAM.gov in October said OPM is looking for a secure, cloud-based HCM platform that can support the entire government. The contractor must deliver a Federal Risk and Authorization Management Program (FedRAMP) Moderate or higher certified “Core HCM” platform.
The Core HCM system will be the system of record for about 2 million federal civilian employees, with the goal of government-wide adoption by fiscal year 2028. The system will not initially include military personnel and intelligence community agencies.
Implementing the new system will serve as a cornerstone for the administration’s broader “Federal HR 2.0” initiative. Kupor described the initiative in his memo as an effort to improve HR services across the government by creating “efficiencies in Federal human capital management and facilitating more effective management of the Federal workforce as a unified entity.”
Outdated HR management systems hinder mission success, according to 89% of federal HR leaders, recent research from MeriTalk, in partnership with Workday, found.