Shared services at HM Prison Service: how has HR coped with the change so far?

The business

HM Prison Service employs 48,000 officers and other staff, with the larger prisons employing as many as 600 officers and smaller ones as few as 50.

These staff have traditionally been serviced by a network of 130 personnel ‘outstations’ and a central HR department.

The challenge

The UK’s full-to-bursting prison population hit 80,000 in October 2006, leading to calls for the re-introduction of prison ships and warnings that young offenders institutions were in meltdown.

The cost of HR had been three times higher than it should be – £1,000 per head compared with £330 against benchmarked organisations – with 85% of this relating to repetitive, transactional tasks.

“It has been a very process-driven organisation, with lots of people filling in forms,” explains Cathy James, a former governor at Liverpool Prison and now business change manager.

The solution

Two years ago, the service began an HR change project that, it hopes, will save £30m a year. The three-pronged project is focused on the development of a transactional shared service centre, based in Newport, Wales, supported by area-based teams of HR professionals, who will liaise with governors on case management issues and, finally, the recruitment of HR business partners in each prison.

The process has involved bringing in IT partner EDS, and recruiting former Royal Mail transformation director Steve Hodgson as head of shared services at the Newport centre. It has meant close consultation with unions and prison governors. Roll-out began last September and is due to be completed in mid-2008.

“What we have done is to remove the transactional work to the shared service centre, so managers can e-mail or phone if they need to. This means we can effectively close down the outstations, but it has been a massive task,” explains James.

There will be no compulsory redundancies of HR and personnel officers, but staff will have the option of leaving the business, moving to the shared service centre, becoming part of the field business units or, for the more strategically minded, becoming HR business partners.

“Where once there might have been around eight people within a personnel unit there will now just be the one business partner, so all those other people will have gone,” says James.

The business partner split will be about 70% from existing personnel officers and 30% new recruits, she believes.

The result will be one of the largest groups of HR business partners ever recruited in the public sector.

“We are going to have far better quality people management rather than process management. At the moment, we police processes, but under this new system we will be able to liberate ourselves to manage people,” she explains.

The outcome

The project is still at a very early stage, but one of the early ‘wins’ has been overcoming scepticism about the move to shared services.

“People have been very anxious about what it means for them. Some have been sceptical that it will work properly and identify risks,” says James.

“But even the most resistant and negative people have recognised that things need to change and have done their best to facilitate that, which is very exciting,” she concludes.

If I could do it again…

“I would probably try to simplify the way we have gone about it,” admits Cathy James, business change manager at HM Prisons. “We have had lots of layers of governance and consultation, but there is probably a simpler way to do it. It has become very complex, but when we started on this journey, we really felt we needed a belt-and-braces approach.”

As in any transformation process, you have to ensure you don’t take your eye off the day-to-day or remove elements too quickly, she advises.

“There is no point in buying something off the shelf. People have to understand the nature of the business and its culture inside out,” James explains.

Employee perspective

Julie Farnworth has been in HR within the Prison Service for 19 years, working her way up from a support grade position to become a senior manager and head of performance management at Preston Prison.

She now works on the change programme and will eventually return to Preston as its HR business partner.

“Initially, there was the fear factor,” Farnworth says. “Many heads of personnel did not know how they were going to be affected, so there was a period when quite a few people felt vulnerable.

“But now most have decided what route they are going down – whether they are going to go to the shared service centre, be a business partner or develop local people plans. Now that most people have made their decision, they are looking at it as a real opportunity, especially the business partners,” she adds.

It has been important to get the message across that the change is an opportunity, not a threat, Farnworth says.

“They will have the opportunity to do a lot of the work they wanted to do in the past as heads of personnel but never had the time because they have been so wrapped up in personnel transactional work,” she adds.

Guide to an HR shared service in 10 steps

1 Determine a clear case for creating the service – how will it add value?

2 Review and redevelop your HR processes – simply creating a centralhub is unlikely to deliver a more customer-driven service, so you may need to overhaul processes.

3 Explore different options – should you have centres based around business groups or regions?

4 Clarify the role, responsibilities and accountabilities of the shared service centre.

5 Clarify and communicate the role and responsibilities of its customers, including line managers.

6 Agree performance indicators and a performance management framework to measure effectiveness.

7 Specify the scale of capital and the nature of the resources required to get the technology and infrastructure in place.

8 Set up project teams of key stakeholders and appoint senior champions to sell the change to the business, using a wide range  of communication tools.

9 Pilot and then phase the transfer of activities to minimise disruption.

10 Ensure staff have the appropriate knowledge, information and skills to effect a smooth transition.

Source: Chartered Institute of Personnel and Development

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