Birmingham City Council, one of the biggest public sector organisations in Europe, has taken its HR function through a major transformation – including significant job cuts. Andy Albon, the council’s director for equalities and HR, tells Tara Craig what it took, why it was necessary, and how his team responded to the changes.
Four years ago, after two decades of Labour rule, the Conservative and Liberal Democrats took control of Birmingham City Council, forming a progressive political partnership and ushering in what Andy Albon calls “startling energy”. With the new administration came the realisation that the council and its workings needed to change – as did the 400-strong HR department.
HR at the council has traditionally been based around individual departments. Albon says it lacked proper strategic leadership and political management. It also suffered from a low level of qualifications and expertise, with the team relying on outmoded systems and technology.
“It was a question of asking what an organisation that is undergoing change while seeking service improvements requires,” he says. “The answer was HR staff who are professional and agile, able to respond to changing business needs, and support managers who themselves are under considerable pressure to improve.”
Albon acknowledges that news of the proposed transformation was greeted with concern by his staff – HR professionals being no more keen on dramatic change than anyone else. Pitching the plans to his team, he argued that, in common with HR departments in other sectors, they needed to be “ahead of the curve” – that to have a business role, HR needed to demonstrate its contribution.
The most obvious aspect of this transformation has been the reduction in staff numbers. This is ongoing, and Albon expects to have lost 80 of his people by the end of the process. But he denies that job cuts within the HR team were prompted by the need to save money. He will not even acknowledge that the lost positions were in fact job cuts, arguing instead that the redesign of the function necessitated a reduction in numbers. Nor will he admit that the department had previously been overstaffed, or give a figure for the number of jobs lost across the council as a whole.
Rather he insists that the job cuts have been achieved largely through natural wastage, and that a great deal of care has been taken to move people to alternative positions within the council. “We took an inordinate amount of time meeting staff,” says Albon. “We didn’t shy away from giving them the bad news, but we also put in place processes to help them consider their positions and what they wanted to achieve from their jobs; whether they wanted to stay with us or move to other parts of the council, or indeed seek work outside it.” Counselling was provided for those affected.
Job losses aside, the most potentially divisive issue has been pay. A new structure was implemented last year, and Albon threw out more than 35 separate pay grades, replacing them with seven broader grades. This prompted considerable trade union opposition, with Steve Foster, chairman of the joint trade union committee dealing with the issue, telling the Birmingham Post: “The council is looking to impose this rather than seeking agreement, and the unions will respond in an appropriate fashion. When the letters detailing the new grades hit the mats, we will be looking for industrial action.”
Strike action followed, but Albon was adamant that without a basic pay structure, the team would not be able to meet the rest of its objectives around developing a performance culture. He notes that the council has reduced salary gender gaps, with the biggest gap currently at 2.7%.
The next stage was to look at how best to use the new grades to reward competency and behaviour. The council has a very clear image – captioned ‘The Birmingham Way’ – of how its people should interact with customers and each other. The behaviours involved are based on the organisation’s core values – belief, excellence, success and trust – which have in turn informed its ‘BEST’ engagement strategy. These behaviours are the metrics against which staff competency is measured, and a new appraisal process, based on a new SAP computer-based system, has provided a means of measuring them.
A corporate moderation process ensures that, as far as possible, one manager’s appraisal is based on the same standards as the next manager’s. The council runs a grandparenting system, whereby each appraisal is signed off by the appraiser’s manager. Albon is confident that appraisals are scored as fairly and consistently as possible, which is crucial, given that they now dictate salary.
Introducing a new pay structure wasn’t an easy ride, Albon admits, given that 14% of council staff – some 4,500 people – saw a drop in income as a result. But he remains convinced that the simplification of the pay structure and the implementation of performance-related pay was essential to creating a behaviour-driven culture, providing flexibility of deployment and of skill-sharing. Less contentious has been the improvement in training on offer to the HR staff.
The council has invested close to £2m in looking at training needs, putting in place a programme of short courses and helping employees gain professional qualifications, working with the Chartered Institute of Personnel and Development (CIPD) to have them credit previous experience. Albon says the key to the transformation of his HR team was to make it more professional, and to move it from transactional to strategic.
Some types of organisations lend themselves better to cultural change than others. In the case of Birmingham County Council, the main barrier was also one of the organisation’s strengths – the number, and variety, of its employees. With 60,000 staff (including around 40,000 full time employees), the council sees itself as a conglomerate. “We employ architects and planners, civil engineers and social workers, data managers and street sweepers.”
Albon speaks frankly about the difficulties this poses when it comes to cultural change – operational problems in particular. The sheer number of roles involved caused “very interesting discussions” when it came to equal pay legislation.
Asked whether he would have done anything differently, Albon pauses for some time. “You know, I don’t think I would,” he replies. “We’ve achieved an awful lot, and the mechanisms in place do seem to be working. The one thing you can’t do too much of is communicate, but there are practical boundaries to that.”
As for unexpected results of the transformation, he believes it has inspired a greater ability to innovate. So much so, he says, that it has become a case of having to make sure that the HR team isn’t moving faster than the organisation it supports.
His advice for anyone planning a similar transformation is above all to make sure your leadership is committed to the changes. Second, have a good project manager – in Birmingham’s case, Bill Fletcher, one of Albon’s assistant HR directors. And third, focus on transparency and engagement.
Listen to Andy Albon’s HR transformation tips in greater detail:
Despite the job losses, Albon is continuing to recruit. He has opted for an HR leadership team based on the business partner model. Among the business partners, who are all either service- or specialist-based, are a number of external recruits, but only one of these, in an interim position, has come from the private sector. “This is a politically managed organisation, and I need within HR people with political nous who know their way round political issues and the way political organisations work,” he says.
Indeed, unlike the average organisation, this one has to contend with the reality that its leaders, having been elected, might disappear with the next election. Is this behind Albon’s sense of urgency? His Cabinet member and champion at the top is Conservative councillor Alan Rudge, who actively promotes the council’s work in putting people management skills into practice. Albon admits that without Rudge’s backing, his HR transformation would not have taken place at such a furious rate.
With the process nearing completion, Albon says his enthusiasm for the role of HR is as keen as ever. “HR is a wonderful profession. It gives you this brilliant helicopter view of what the organisation does, especially in the public services, where we do things through people, for people.”