Federal agencies are losing nearly $1 billion annually in productivity costs due to outdated human resources systems, according to a new report released Monday by Workday.
The study found that 89% of federal HR leaders believe these legacy systems significantly hinder agency performance and mission delivery, with employees spending almost half their work time on system workarounds and manual tasks.
“The federal government is at a crossroads,” said Lynn Martin, chief growth officer government at Workday. “Legacy systems are wasting valuable employee time and taxpayer dollars.”
Despite these challenges, only 48% of federal HR leaders consider modernization a high priority, and 83% report lacking a roadmap for updating their systems, the report revealed.
The consequences appear widespread across agencies. During a typical week, 47% of federal HR leaders face data update delays due to manual processes, while more than one in four encounter system downtime or technical failures.
The report, titled “Future-Ready Feds: Modernizing Human Capital Management to Empower Government Service,” identified significant opportunities for improvement through technology.
Federal HR leaders believe 61% of their processes could be at least partially automated, and 98% support shared service models with proper implementation.
The research was conducted by Meritalk and surveyed 100 federal HR decision-makers across civilian agencies and the Department of Defense during February and March 2025, with a margin of error of ±9.78 percent.
To address these challenges, the report recommends making HR modernization a mission-critical IT priority, digitizing manual workflows, investing in workforce analytics, and prioritizing security in HR technology implementations.
Workday’s government cloud platform currently serves several federal customers, including the Department of Energy.
