Confidential - do not distribute© 2008 PPMA
The Squeeze On Spending – Public Sector HR Response
1st November 2012 – ECC Conference
PPMA President - 2012/13Martin Rayson
Confidential - do not distribute© 2008 PPMA
Political & Economic Context
• Budget reductions, past present and future
• Growing demand• Managing uncertainties• Changes in
responsibility
Confidential - do not distribute© 2008 PPMA
LB Barking & Dagenham Case Study
• Budget spend = £270m (excluding benefits)
• % reductions = 30%• Still £6m to find for
14/15, despite doing the radical things
• One of the lowest household incomes in London making it difficult to sustain town centre growth
• The percentage of residents with no qualifications (23.2%) is almost twice the London (12%) and national (12.4%) rates.
• The percentage of Borough residents with degree level qualifications or equivalent (22.37%) is the lowest in London and almost half the rate for the capital as a whole (39.7%)
• Public sectors cuts and benefits changes further reducing incomes and weakening the local economy
• 37.9% of the private sector housing stock (owner occupied and rented) in the borough is non decent
• Urgent need for additional school places with rising birth rate
Confidential - do not distribute© 2008 PPMA
Changes in the Shape of the Public Sector
• “Public services” rather than “public sector”
• Councils are becoming more diverse – range of different approaches and operating models
• Working with others to meet local needs and build the conditions for economic growth
• Leadership role – magnanimous letting go
Confidential - do not distribute© 2008 PPMA
Implications for LB Barking & Dagenham
Confidential - do not distribute© 2008 PPMA
Implications For HR
Citius, Altius, Fortius
Swifter, Higher, Stronger
Confidential - do not distribute© 2008 PPMA
Engagement Challenge
• “Engaging for Success”
• Key determinants of engagement:
Create a strategic vision
Engage your managers Give employees a voice Organisational integrity
CIPD Employee Outlook Survey 2012:
Levels of Engagement:
Views of “Senior Managers”:
Private Sector Public Sector
Engaged 39% 35%
Neutral 58% 62%
Disengaged 7% 3%
Private Sector Public Sector
I trust them +9 -28
I have confidence in them
+12 -25
They have a clear vision
+30 +1
Confidential - do not distribute© 2008 PPMA
Leadership Challenge
• Commercial skills – greater understanding of cost, not budget
• Managers as collaborators, negotiators and coalition-builders – not traditional managers
• Flexibility
• Managing change and uncertainty
• Better communications and involvement
Confidential - do not distribute© 2008 PPMA
Talent Challenge
• Media attention on the sector
• Senior salaries
• Lack of investment
• Career paths
Confidential - do not distribute© 2008 PPMA
Reward Challenge (with acknowledgement to Mercer)
Current structures
Pay systems administered through complex and inflexible processes
Talent management separated from reward and dealt with in unconnected groups
Emphasis on equal pay compliance
Fixed costs, including incremental costs that have no connection with performance
Reward for tenure
Each term and condition of employment managed separately
Reward dealt with in isolation as a specialist technical area
Current structures
Pay systems actively managed to respond to the needs of the business
Reward aligned with an integrated approach to talent management
Emphasis on flexibility whilst maintaining equal pay compliance
Flexible reward models which are tied in more closely with performance
Reward for contribution and performance
An integrated “Total Reward” approach
Reward integrated with EVP and other HR strategies
Confidential - do not distribute© 2008 PPMA
Employee Value Proposition or “Deal” (with acknowledgement to Edinburgh Napier University)
Confidential - do not distribute© 2008 PPMA
The State of the “Deal” at LB Barking & Dagenham
ContributionsInducements
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LB Barking & Dagenham - Biggest “Tensions”
1). We are expecting people to do “more with less”
- “Lack of capacity in the team to deliver”- “Competing for precious time to deliver services”
2). Lack of support from the “organisation”
- “No real understanding from higher management of what individuals and teams actually do and what their resource needs are”
3). The suppression of negative issues
- “At team meetings, issues are discussed, although I feel due to pressure from management not to be negative, these issues are never passed on”
Confidential - do not distribute© 2008 PPMA
LB Barking & Dagenham Response
• Defining and communicating the strategic narrative
• Leadership and management development programme
- Constructive/courageous conversations training
- Managing pressure and creating productive workplaces
- Retaining and recruiting talent
- Future managers programme
• Engaging staff around a “Staff Charter”