confidential - do not distribute© 2008 ppma the squeeze on spending – public sector hr response...

Confidential - do not distribute© 2008 PPMA

The Squeeze On Spending – Public Sector HR Response

1st November 2012 – ECC Conference

PPMA President - 2012/13Martin Rayson


Political & Economic Context

• Budget reductions, past present and future

• Growing demand• Managing uncertainties• Changes in

responsibility


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


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


Implications for LB Barking & Dagenham


Implications For HR

Citius, Altius, Fortius

Swifter, Higher, Stronger


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


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


Talent Challenge

• Media attention on the sector

• Senior salaries

• Lack of investment

• Career paths


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


Employee Value Proposition or “Deal” (with acknowledgement to Edinburgh Napier University)


The State of the “Deal” at LB Barking & Dagenham

ContributionsInducements


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”


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”

confidential - do not distribute© 2008 ppma the squeeze on spending – public sector hr response...

Documents

public sectorpublic

barking dagenhamimplications

public sectorcouncils

private sectorpublic

public sectors cuts

local needs

integrated approach

total reward approachreward