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Embracing cost-cutting and collaboration

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Fundamental change programmes require innovative practices within limited budgets. Caroline Nugent, director of HR and occupational development at oneSource – a shared service for the London Boroughs of Havering and Newham, employing 8,500 staff across both councils – explains why it’s a great time to work in the public sector, despite the challenges.

What are the biggest challenges currently facing you as an organisation, and how are you planning to meet these from an HR/recruitment perspective?

It’s a cliché, but the challenge is recruiting the right people, at the right time with the right skills, behaviours and productivity. Working in the public sector is a challenge but it’s full of opportunities.

With significant funding cuts, we are not talking new challenges but fundamental change programmes. We have more than 40% of budget being cut from local authorities and we  had been carrying out change for six years when the cuts started with a vengeance. The significant change does bring opportunities, though; for example, we are able to generate income, which is something councils have had limited ability to do, historically, due to restrictive laws.  

We still face a talent drain – retaining people who can earn more in the private sector – but it gives us the opportunity to train interns and apprentices who often stay in the public sector.  Social worker recruitment is a big challenge for all councils but, by working collaboratively – even though we are searching the same markets – we have overcome the challenge. There are perceptions that the public sector is not as 'sexy' or rewarding as the private sector. You couldn't be more wrong.

Tell us about any recent change initiatives that have affected the organisation, how you overcame challenges and the business results achieved

Our cuts of more than £200m have had the greatest effect. For both councils, this has made our change programme imperative. We need to develop a cheaper business model, while still producing results. Our work must be relevant.  

We are undertaking terms and conditions reviews in both councils to reduce the bottom line and a full job evaluation exercise for 5,000 staff members, including those working in our schools. Private companies are now facing equal pay claims, which we have managed for years. We are also looking at spans and layers, learning and development and talent programmes – all under the banner of ‘2020’.  

Another challenge is encouraging managers to use HR self-service. Having 45 HR staff (including myself and a deputy) to manage 8,000 employees is, in itself, a major challenge, and I cut my HR budget by another 20% this year, making our income-generation opportunities imperative, alongside getting managers to do more HR tasks themselves. 

We have seen managers rise to the challenge, but some have needed more support than others. Our HR transformation review has also led to new opportunities for HR staff to develop generic skills. They often carry out work at a much higher level than that of colleagues they speak to in the private sector. They have to be able to do anything on any day!

Some argue that public sector HR is less progressive and innovative than HR in the private sector, do you agree?

We have had to come up with innovative practices with very limited budgets! We cannot buy new things on the market so have had to design them ourselves, for example, to reduce reliance on the HR service. I have been part of the award-winning Chartered Institute of Personnel and Development (CIPD) VineHR, which is a group HR leaders working collaboratively to get results. 

People in the public sector network and shares what we have achieved. It feels good when you can genuinely share good practices with others and can call on people to support you in critical times. I am part of another group of heads of HR whose work around recruiting social workers has allowed us to take back control of a market in which individuals were able to charge us what they wanted. We can negotiate on costs and get things for free which the private sector would find harder to achieve.

 

What are your expectations for the future of the public sector?

We are facing increased legislation, which puts us in a more challenging position than our private sector colleagues. This year, for example, we have issues around IR35 tax rules for self-employment, which will not impact the private sector. We have an exit cap which, due to our pension regulations, impacts on people who have long service but earn less than £40,000. It’s hardly hitting the big players, but it’s having a significant impact on our redundancy programmes. We are likely to have many more compulsory redundancies as a consequence. 

We also have the government’s equal pay audits, as well as gender reporting – and then there’s Brexit. Who knows how that will impact on us, but we have an obligation to maintain a harmonious country. 

We need staff to think in more commercial ways, and even though we will have far fewer members of staff, we still have many opportunities. For example, my interns have won full-time jobs by demonstrating the right behaviours and wanting to learn. There will always be a public sector, but the next few years will be a real challenge.

How can HR professionals develop the skills to succeed in the public sector at a time when there may be no budget for professional development opportunities?

It’s a great time to work in the public sector. We need commercial skills, negotiation skills and political skills. I recently spoke to a senior HR business partner from the private sector who had never worked with trade unions. Staff at all levels in councils work with the trade unions and, learning what to say, and how to look for the win/win situations.  

We still have industrial relations and strikes which many in the private sector have not had to deal with. You need tenacity and pragmatism to succeed and self-learning and self-awareness are key; you need to be comfortable with ambiguity and balance risks and business delivery. I am probably less risk averse than some colleagues, but it all has to be weighed up to get the right results. Many skills are learned on the job as you get thrown in at the deep end.

We do have less money for training, but by shadowing and exposing people to challenging situations, they learn quickly. I have a skilled team working with me who will take opportunities given to them. I never said that anything was “not in my job description” when I was learning over the years and that's how my team gets exposure to new things. 

Our networks of the Public Services People Managers’ Association PPMA and the CIPD enable great learning and sharing. Our annual PPMA conference is a great opportunity to learn.  My recent ‘speed-dating’ event with staff from the health authorities, sharing our knowledge and experience, is an excellent example. All in all, the public sector has many opportunities for learning.

 

Mary Appleton

By Mary Appleton

Changeboard

Mary is Changeboard's editor in chief.

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