The European Union defines public administration reform as one of three pillars of enlargement for the countries of the Western Balkans, together with the rule of law and economic governance, and therefore, for several years now, public administration is the fundamental reform area in our country. The Council of Europe and the European Union recognized the challenges that local governments in the Republic of Serbia face in their development and supported the Ministry of State Administration and Local Self-Government in initiating and implementing the project “Human Resource Management in Local Self-Government”. The overall objective of the project is to improve the efficiency and administrative capacities of local self-government units through the establishment of a professional training system and the improvement of the human resources management in order to reach a greater degree of efficiency and citizen satisfaction with the work of local self-governments. The project was launched in early 2016 and it would be fully implemented by the end of 2017 in partnership with the Ministry of State Administration and Local Self-Government and the Standing Conference of Towns and Municipalities. The total budget of this project is 2 million Euros and it is funded by the European Union and the Council of Europe. The Council of Europe launched a public call for city and municipality administrations and 20 pilot municipalities have been chosen (Bač, Belgrade, Bujanovac, Čačak, Kragujevac, Kraljevo, Loznica, Medveđa, Niš, Novi Sad, Pančevo, Raska, Savski venac, Smederevo, Stari grad, Svrljig, Trstenik, Valjevo, Zrenjanin) to participate in the project related to the improvement of the human resources management. So far the chosen cities and municipalities have adopted human resources management policies; a set of training for employees in the field of human resources management was held; the rules on internal organization and job classification and other relevant documents have been improved; municipalities and cities for the first time started the process of analyzing the needs for professional development and planning of employee capacity development.