Talent has emerged as a critical strategic resource for tax authorities seeking to enhance operational efficiency, strengthen revenue collection, and deepen stakeholder collaboration. The Lesotho Revenue Authority (LRA) recognizes this imperative and is actively modernizing its human resource management systems. To support this initiative, the World Customs Organization (WCO), through its HRMC-WCO-UNCTAD Programme, recently conducted a five-day "Competency-Based HR Management" workshop—a core component of WCO's flagship Executive and Professional Competency-Based HRM Programme (EPCB-HRMP).
Held from April 4-8, 2022, the workshop featured instruction from a Liberian human resources management specialist, fostering South-South cooperation. The training aimed to further enhance the skills of LRA's modernization task force members, who had previously received online capacity-building support in 2020. The program focused on equipping 34 participants from LRA's Human Capital Management (HCM) department and task force with competencies to serve as strategic partners and change agents within the organization, while developing and implementing competency-based HR tools.
HR Management Challenges for Tax Authorities in Digital Transformation
As digital transformation sweeps across global economies, tax authorities face unprecedented challenges and opportunities. While technological advancements offer potential efficiency gains—such as using big data analytics to identify tax risks or artificial intelligence to optimize taxpayer services—they simultaneously demand more sophisticated human resource management approaches. Traditional position-centric HR models struggle to adapt to rapidly evolving operational requirements, necessitating more flexible, efficient, and human-centered systems to attract, develop, and retain high-caliber professionals.
Key HR challenges in this context include:
- Talent shortages: Increasingly complex tax administration requires professionals with interdisciplinary expertise in data analysis, information technology, and legal frameworks. However, tax authorities often face intense competition for such talent due to compensation limitations and constrained career progression opportunities.
- Skills mismatch: Traditional tax professionals frequently lack essential digital competencies, including data analytics, programming, and project management capabilities. Significant training investments become necessary to bridge these skill gaps.
- Organizational culture transformation: Digital transformation extends beyond technological upgrades, requiring fundamental shifts from bureaucratic traditions toward more open, collaborative, and innovative workplace cultures.
- Employee engagement: Digital transitions can generate workforce anxiety and job insecurity, potentially undermining staff morale. Proactive mental health support and change management become crucial for maintaining engagement.
Competency-Based HRM: A Strategic Response
Competency-based human resource management represents an approach grounded in employees' knowledge, skills, abilities, and behavioral characteristics. It emphasizes identifying job-specific competencies aligned with organizational strategy, then cultivating these attributes through targeted recruitment, training, and performance management initiatives.
Compared to traditional position-focused models, competency-based HRM offers distinct advantages:
- Enhanced strategic alignment: Tightly integrates HR practices with organizational objectives
- Greater precision: Enables more accurate identification of employee development needs
- Improved objectivity: Facilitates fairer performance evaluations for compensation and promotion decisions
- Increased adaptability: Allows continuous competency model updates to address emerging challenges
LRA's HCM Capacity Building Initiative
The WCO workshop addressed several critical themes: HR's role in customs performance, strategic HRM principles, human resource development functions, competency-based HRM methodologies, HR project management, and HR leadership. Participants gained comprehensive understanding of both theoretical foundations and practical applications.
Under the leadership of HCM Director Khopotso Liphoto, participants demonstrated strong commitment to developing and implementing competency-based tools, formulating a detailed action plan encompassing:
- Competency modeling: Defining key competencies for LRA positions to guide all HR functions
- Recruitment and selection: Implementing competency-based hiring through behavioral interviews and situational assessments
- Training and development: Creating personalized programs addressing competency gaps
- Performance management: Establishing competency-based evaluation systems
- Talent development: Building career pathways to motivate continuous professional growth
Institutional Commitment and International Support
LRA's executive management and HCM leadership have pledged to provide necessary resources for successful implementation. The WCO has committed to ongoing capacity development assistance, helping LRA establish transparent, competency-based HR systems to achieve modernization objectives. This international partnership ensures access to specialized expertise and technical guidance throughout the transformation process.
Future Directions for Tax Administration HRM
Looking ahead, several trends will shape HR management in tax authorities:
- AI integration: Applying artificial intelligence across recruitment, training, and performance management processes
- Data-driven decision making: Leveraging HR analytics to optimize workforce strategies
- Flexible work arrangements: Adopting remote and hybrid models to attract and retain talent
- Lifelong learning systems: Establishing continuous education frameworks for rapid skill adaptation
LRA's competency-based HRM initiative offers valuable insights for developing country tax administrations navigating digital transformation. By cultivating highly skilled, professional workforces through strategic human capital development, revenue authorities can better serve national economic objectives while adapting to evolving technological landscapes.