The future of public sector HR

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Although the public sector has weathered the storm of austerity measures, it's not out of the woods yet. We explore where next for public sector HR

“The role and shape of the state will have changed beyond all recognition”. So warned The Institute for Fiscal Studies back in January. It was referring to the effect of further public sector austerity measures planned for the next five years.

The more concrete verdict from the new government contained in the July budget was slightly different than expected, with spending still set to fall from 2015 to 2016 up to 2018 and 2019, but an extra £28 billion allocated for 2020. These cuts represent a period of public sector reform that, in the words of Deloitte’s head of public sector Mike Turley, quoted in the Guardian, “will be more concentrated than anticipated, but no less profound.” And this on top of those £35 million-worth of cuts already experienced over the last five years.

Particularly in light of those cuts already made, it might be expected that public sector bodies across the nation – especially in non ring-fenced areas such as local government – would be sad, hollowed out, and demoralised places to be. And certainly there have been plenty of headlines regarding closed libraries and leisure centre facility disrepair to fuel this impression.

Yet what is broadly emerging is a public sector, and public sector HR, landscape of huge resilience and creativity, says president of the Public Service People Managers’ Association (PPMA) and director of people and business services at Wiltshire Council Barry Pirie. And this is a creativity and energy Pirie is confident will continue come what may over the next five years.

He is in no way naïve or glib about the scale of the challenge though. “In essence many of our services will have to reshape, and the majority of savings will be delivered by either stopping the service or making significant redundancies,” Pirie says.

But he adds that “to a certain extent austerity has been a good thing”, explaining that “certainly for those of us in local government, it’s forced us to deliver things we traditionally talked about but didn’t necessarily want to deliver because they were quite challenging.”

Mark Turner, managing partner at executive search firm Gatenby Sanderson, confirms this has left the sector, and particularly its HR functions, in a strong position going forwards. “I think everyone thought in 2010: ‘seismic cuts, how on earth are we going to deliver those?’ But actually the nearer we’ve got to this year, the more organisations have been in no doubt they’ll have to dig deeper and be more creative.”

The business need

Dilys Wynn, director of people services at Gloucestershire County Council, explains that public sector organisations have already proved their ability to drive efficiencies while maintaining services. They’ve managed to do this, she explains, through really getting to grips with the exact needs of their local communities. “We [at Gloucestershire County Council] have completely redesigned the organisation to become a commissioning model, so our emphasis is on the community’s needs,” she says. “We’ve looked at commissioning against need rather than commissioning things we’ve always done, because they may not meet need interestingly enough.”

Of the imperative to positively rise to every austerity challenge, she adds; “You can look at this in two ways. You can say ‘these are the cuts we need to make’. Or you can say ‘this is what we have left to spend, how do we use this in the best possible way?’”

If the last five years have been a time of innovation and positivity for many public sector bodies overall, this has particularly been the case within HR teams says Gillian Quinton, managing director (business enterprise and shared services) at Buckinghamshire County Council.

“Tough times are some of the best for HR because they enable the function to prove it can really add value,” she says. “I think there’s been a shift over the last couple of years. If you look at the trajectory HR’s definitely on an upward path now.”

It will be critical over the coming years to continue to complement a demand-driven ethos within public sector service provision with a strategic, customer-focused HR approach, says strategic director of organisational transformation at Nottingham City Council, Angela Probert.

“The last few years have forced us to be really customer-focused rather than focusing purely on process,” she says. “It’s the business partnering approach. Everyone in the HR team here spends at least two days a year on the frontline, so we’re not driven by what we think should happen but what’s best for the business.”

Crucial to this is HR taking on a more proactive, less obstructive role, according to Pirie. “HR’s role is to improve our business outcomes and not be seen as a barrier,” he says, explaining that a policy approach that factors in the myriad services any public sector organisation is likely to oversee is crucial: “In an organisation like mine we deliver more than 300 services across a lot of different levels of professionalism. So to have one policy would be mad; we need to be flexible.”

Joined-up thinking

A key element of public sector organisational redesign that HR must continue to support is a more joined-up approach. Pirie points out that this often leads to strategies such as combining back office functions with other local authorities and between local councils and local health services for example. But it also involves just generally more sharing of expertise and collaboration to provide a streamlined and effective end-to-end service for communities. “We’re working with local hospitals for example, looking at process improvement, collaboration, how we can actually make the customer journey more seamless, because we help the same customers,” says Pirie.

He cites the example of Wiltshire Council sharing assets with its police force so that service delivery reception desks are colocated with the police’s. “That means customers can have one visit to one building and have several transactions in a face-to-face environment,” he says. Facilitating such a joined-up approach between organisations that have historically been fairly bureaucratic and siloed is no mean feat. Harmonising different cultures is key.

“That’s an important area for HR to support because the barriers aren’t physical – they’re not processes and systems – they’re cultural,” says Pirie. “What we’re trying to do is help everyone understand the various cultures and give managers the tools to help facilitate conversations between different organisations.”

As Pirie highlights, a big part of enabling this shift is providing the right training. “It’s about making people understand that they themselves will not be doing it all anymore; others might take on a significant part of what they started,” says Gloucestershire County Council’s Wynn.

She adds: “You’re now looking at a different sort of leadership. The primary skillset for leaders is less about management of their own groups of staff through traditional hierarchies, and more about being able to influence situations and work with people to share ideas and outcomes.

”Buckinghamshire County Council’s Quinton says that sustained focus on leadership training will be vital to future success. “It’s all about building better leaders because the leadership really sets the direction of travel and gives clarity,” she says. “I think it’s about investing more in people against this backdrop of massive cuts. We’ve really got to find those resources to help people build resilience, to help them develop positively.”

She adds: “I think cultural engagement is massive. For me it’s about middle managers. Quite often there’s a disconnect between senior managers and the frontline and there’s this tundra of managers who are promoted because they’re specialists, but they forget they have a massive impact on culture and engagement.”

Cutting back creatively

Of course redesigning public sector organisations and encouraging more sharing of resource and expertise will only go so far in matching the scale of the austerity challenge – past, present and future. Cutbacks are inevitable.

HR can play a key role in the creative use of technology – community- and employee-facing – to maintain service provision, says Wynn.

“There’s the element of how we’re using technology in the community, to help people stay in their homes for example. That’s a training issue,” she says, explaining that again this should, if done well, go hand-in-hand with an improved service. “People expect to use their smartphones to take a library book out for example. It’s about removing the grunt work but also offering a better service.”

In terms of digitising HR processes, Pirie says it’s important to train the organisation to self-serve: “We’ve got a homepage with lots of policy information, video help guides, the usual stuff. For our managers that’s the first port of call. Last resort is face-to-face.

“The first step there is to be clear about what HR’s role is. I think the business has been confused about that. I think that issue has been particularly pronounced in the public sector.”

Similarly there’s a big piece for HR around helping employees manage service users’ expectations, says Quinton: “We’ve noticed a shift in terms of people’s expectations regarding public services. There’s now almost a dependency. We’ve got to try and shift that slightly so people are prepared to self help and look after each other.”

Getting staff out volunteering in the local community is a great way of promoting this mindset, and encouraging others to plug service gaps through volunteering, she adds. “People forget that when you work in the public sector the majority of your employees are local residents too and we forget they can be agents for good in their communities.

“For example, when I worked for the London Borough of Hackney we had a huge problem with schools failing and reading ages dropping. So we gave our employees time off to go into schools and read with pupils. Most people volunteered and within six months the average reading age had gone up.”

Pirie agrees that HR needs to be proactive in helping to, at least partially, resurrect the ‘Big Society’. “A big area we’ve focused on over the last two years is increasing the number of volunteers we work with,” he reports, adding: “Areas such as libraries are quite traditional for people to volunteer in. Now we need to think of other roles. So CCTV – people could come in and monitor that.”

Of getting volunteering right from an operational HR perspective, he adds: “We have to be very clear. If we have terms and conditions for employees we need similar policies, procedures and conditions for volunteers, because they need to be clear what they’re volunteering to do, and we as managers need to understand how we should manage them.”

The talent drain dilemma

Of course not only are redundancies, and plugging the gaps they leave, pressing issues for public sector HR currently. So too is how those remaining staff are rewarded. This has become a particularly headline grabbing issue of late, with the July budget setting out a public sector four-year pay freeze. Some people are concerned that this will result in talent seepage to the now much more buoyant private sector.

But again, the public sector has risen to the challenge with skill and ingenuity reckons Pirie. He reports that small perks such as discount offers and monthly staff awards have gone a long way.

Nottingham City Council’s HR Excellence Award-winning reward and benefits strategy is a particularly creative example, with many of the benefits offered (such as purchase of annual leave and other salary sacrifice schemes) also helping to reduce the council’s budget shortfall.

The real key to its success has been the broad range of perks – from public transport discounts to childcare vouchers – on offer, meaning there’s something for everyone, says Probert.

The most critical factor in retaining talent is really recognising the reasons most want to work for the public sector. “When money is king that doesn’t always turn people on,” says Pirie. “Our vision is very embedded in terms of the impact on communities. That’s a key motivator for many of our staff, and it’s how we attract and retain them.”

in fact the scale of the challenge faced is seen by many as a positive rather than a negative, says Gatenby Sanderson’s Turner, who reports this is certainly his experience in public sector HR professional recruitment. “‘Are the jobs doable?’ is something we’re often asked. But in fact people are seeing the opportunity to enhance their careers and CVs,” he says. “So it’s about positioning the scale of the change, the chance to make a lasting difference.”

“People at relatively junior levels of the organisation can see those opportunities. They view that as a very stimulating environment,” agrees Wynn. Regarding the renewed impetus on innovation that’s been generated through cost-driven scrutiny, she adds: “If you’re saying we’re going to meet demand but we might not do it in the same way, you are actively encouraging people to come forwards with suggestions and ideas.”

The new HR professional

Of course such radically different ways of doing things will perhaps require a different public sector HR professional skill set. Turner reports that more commercially-minded HRDs are now in high demand. “Some of my public sector clients have identified a skills gap in HR folk who can deliver transformational change with a commercial leaning to it,” he says.

Probert highlights that sourcing HR professionals from other areas of the organisation can help ensure a demand-driven approach. “Fifteen per cent of the HR transformation team don’t have a purist HR background. They’ve come from frontline services or project management-type roles so they’ve got that customer focus,” she says.

One slight worry for local government specifically, however, is top HR talent migrating across to ring-fenced areas such as the NHS. Pirie confirms we’ll see more of this over the coming years, but points out the aforementioned draw of working in a challenging and so reputation-enhancing environment. He adds that, due to the rising prevalence of a joined-up approach, HR roles will increasingly straddle various local public sector bodies anyway.

The next five years are set, then, to hold yet more large-scale changes that will go right to the very heart of how HR operates. There’s no doubt that further reducing public sector spending won’t be easy. And many in the profession will be girding their loins for some incredibly difficult decisions.

For the public sector to emerge in 2020 once again triumphant in its innovative retention of services, its HR teams need to dig ever deeper into their creativity reserves. They must, says Probert, be proactive in tackling whatever comes their way.

“It is not going to be easy going forwards,” she says. “But you have to be confident managing those changes. That’s the strength of HR; it has to give ?the organisation confidence in making difficult decisions.

“You need not to be in a crisis situation, we need to show this is the norm going forwards. HR needs to give confidence – whatever happens.”

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