The way local government manages its services continues to be challenged by austerity, but public-sector HR professionals are perfectly placed to drive that change. Martin Couzins returns from the Public Sector People Managers’ Association’s 2013 conference in Bristol with some useful insights.
Public-sector HR teams are uniquely placed to influence future workforce strategy. This was the message from PricewaterhouseCoopers’ Juliet Stuttard, who told the the PPMA annual conference in Bristol that the rapidly changing make-up of public-sector organisations will require HR teams to use an evidence-based approach to workforce strategy.
Stuttard outlined the macro-workforce challenges that she thinks will increasingly affect local government as a result of the projected 900,000 jobs due to be cut by the end of 2017. These include: the ageing workforce; different attitudes towards work from the younger generation; decreasing mobility as families are more reluctant to move for work; engaging the workforce in new ways of working; and the physical and cultural challenges of working across sectors.
Local government now has to do more with less, she said. This change is resulting in emerging models for how local government will deliver its services, whether they are bought in from external providers, shared services or in-house services that are owned by the authority.
Each model will require a different approach to workforce management. For example, those working for an external provider could be working to different organisational aims to those who are working for an in-house team.
Whatever model is required, however, Stuttard said all future workforce strategies will have to focus on five main strands: efficiency, collaboration, productivity, flexibility and agility.
Hackney Council’s engagement secrets
Evidence and analytics
According to Ian Tomlinson-Roe, head of HR consulting services to the public sector at PricewaterhouseCooopers, HR teams will have to design workforce solutions to meet the aims of organisations. He urged delegates to “grasp the evidence” and use analytics to help shape the business.
“Is it not time to start thinking about our workforce in the way we think about our customers?” he asked. “What would a marketing report of your workforce tell you?”
Tomlinson-Roe outlined what he thinks the required skills of the future are. According to him, these include:
- demonstrating evidence for, and understanding of, financial costs and productivity measures and linking them to workforce measures;
- the return of high-level organisational design skills, such as organisational architects;
- skills to manage resources through the organisation, ie workforce planning and scenario planning;
- understanding what workforce enablers look like – for example, reward, learning and development, and talent management.
Reward was a strong theme for Daniel Hibbert, principal at HR consultancy Mercer. He talked about what is and what is not working in local government and highlighted reward as an issue.
According to Hibbert, public-sector employers really need to develop new reward models in line with the changing nature of how business is done, but most are failing to do so. Reward is often relegated to the bottom of the HR to-do list, he said.
“Reward falls in to the ‘too-difficult’ box,” he said. “There are other things that are easier to do.”
A one-size-fits-all reward strategy is no longer viable due to the wide variety of jobs, the range of service delivery models, differing employee aspirations and fluctuating employment markets.
As a result, new reward models will be needed and these will need to change according to different local authorities and segments of the workforce within those authorities. Hibbert said the public sector needs to do better at linking pay to performance, and while the sector is very strong on equal pay, governance and transparency, it needs to reduce the number of job titles and grades, and communicate reward strategies more effectively.
Hibbert has been carrying out research into reward at two local authorities, Hertfordshire and Wigan. Based on that research, he has developed four different reward models that the authorities are considering:
- Loyalty model – works well for developing people and as a basis for incremental pay points. Works well for teachers, but not right for most jobs in local government.
- Market model – single rate for the job. Less likely there will be a long-term job on offer.
- Career model – for developing careers, for example social workers and planners.
- Dynamic model – jobs where individual capability matters for the job; particularly important for senior jobs.
It is important to design the right reward strategy, demonstrate its impact on the employment value proposition and communicate that effectively, said Hibbert: “Good communication is important – you might want to spend more on communication than the reward itself.”
Although local authorities cannot compete with the private sector on profit sharing and incentives, they are still very strong on aspects such as pensions and wellbeing policies, and should take advantage of that and broadcast it to their staff.
Hibbert offered four steps to better reward systems:
- Put pay zones in and identify job families in order to reduce job types.
- Ensure you have performance management systems and processes in place to make this happen.
- Align pay with career development.
- Act on senior management pay. In the past, senior manager jobs have been simple and straightforward. But local government is moving away from this and these jobs are becoming more complex and flexible. Reward will be based on the competence and value of the person based on capability.
Communication and leadership crucial for Hackney council
Some local governments are doing better than others on reward and communicating with employees about their reward offerings. One such organisation is the London Borough of Hackney.
It scored record staff engagement levels recently – more than 20% above public-sector averages. And this is despite £48 million in budget reductions, the third highest loss of central government funding in the country, 340 redundancies, the London Olympics and the riots of 2011.
Caroline Anderson, assistant director of HR and operational development at Hackney council, said that the culture of a council plays a big part in determining how employees feel about their workplace, particularly during challenging times. She said the resilience of staff and their commitment to each other have made a big difference.
Communication and leadership have also been critical. For example, chief executive Tim Shields aims to see all staff throughout the year and goes on around 40 roadshows each year to meet workers. The council’s staff surveys show employees like the fact there is a clear vision and visible leadership, and there is flexible working and good personal and career development.
The cuts have taken their toll however, with staff not liking the wider drive for efficiencies or seeing colleagues leave.
One recent success story the borough is very proud of is the relocation of many of its customer-facing services into new purpose-built offices. The project involved designing and building a new home for 1,600 staff. In addition to services being co-located, the move was a catalyst for new ways of working, including hot desking and home working. It also involved the implementation of a new council-wide document management system and customer relationship management system.
The open-plan office and atrium means Hackney workers see the residents, which Anderson said helps them connect with the council and its purpose.
Echoing Tomlinson-Roe’s point about strong organisational design principals, Anderson told delegates that building an OD structure enabled better communication through the change project.
Communication is always key. For Hackney, it was also critical that the elected mayor of Hackney took ownership of the project. From his leadership came devolved responsibility throughout the council for delivering the new building and new ways of working