Public sector employers reduce services to meet wage cuts

One-fifth of public sector employers that made cuts to their wage bills in 2010 had to stop providing one or more services to do so.

This is according to an XpertHR survey on public sector cuts during 2010, which also found that three public services in 10 introduced or expanded shared services in the last year to save money.

Where redundancies were made to meet payroll cuts, voluntary redundancies outweighed compulsory redundancies by a ratio of eight to one.

However, the outlook for 2011 is bleaker, with two in three of the 92 public sector respondents expecting to cut services and many anticipating a higher proportion of compulsory redundancies.

Respondents predict, on average, that they will have to cut 21 jobs through voluntary redundancy programmes and a further 20 through compulsory redundandancies in 2011.

Of those who offered a voluntary redundancy programe, two-thirds offered enhanced terms to employees who took it. The report explains that many employers adopted this approach in order to make the offer as attractive as possible to staff.

Noelle Murphy, XpertHR editor and author of the report, comments: “The public sector is facing huge cuts and HR is growing increasingly concerned at how these cuts are going to affect employees, not only in terms of those leaving the organisation through redundancy programmes, but also those who remain.

“Morale, engagement and, ultimately, productivity are going to take a big hit, our respondents told us. There are also real concerns about how organisations can deliver cost-cutting programmes while delivering their programme of services.”

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