Collaborative working arrangements with other public bodies are high on the agenda and, alongside this, is the consideration of HR shared services and outsourcing. Key issues include moving to a unitary environment and the introduction of self service and ERP environments. These are significant business matters, high on the HR agenda and result in considerable pressure on HR as a support service with regard to identifying the best way to support front line delivery.
The HR function has, without doubt, been elevated in importance across the business over the last five years with many authorities already progressing with HR transformation. Yet the factors above have led to a number of additional Challenges.
Headcount freezes and outsourcing
From a recent survey that we conducted across the senior management teams of local authorities nationally, we see that all authorities are expecting headcount freezes through the coming year with the majority also expecting there to be remuneration reductions and pay freezes.
Interestingly, the majority of authorities we spoke with are considering, or already planning, outsourcing non core activities. In particular, many are deliberating on the best ways to manage the HR shared services functions: either in-house or via external partnership arrangements.
From a hiring perspective, authorities feel that there will not be an increase in contract staff or the use of management consulting services but rather an increase in the in-house, up-skilled talent required to drive such projects forward. As these outsourcing arrangements increase, there is the need for different talent to be hired particularly individuals who are able to manage the commercial realities of partnership arrangements, get the most out of SLAs and are able to liaise effectively between the shared service centre and the business to get the best out of delivery.
Recruiting from the private sector
As youd expect, for authorities that have been recruiting HR professionals, there has been a significant increase in access to individuals from the private sector. In such cases, we have increasingly been required by our clients to work very closely with candidates to really understand their motivations and desires in such a move.
Of huge importance here has been Digby Morgans experience and ability to accurately ascertain a candidates capacity to actually make that move to the public sector. A combination of the passion and desire to make a difference to the local community or other cause is frequently as important as the skills to manage what is often a challenging stakeholder group and effect change in hugely complex environments.
All the authorities we spoke to expressed the fact that they have used interim management from the private sector to facilitate successful change programmes: for instance, bringing in-depth experience to bear in driving organisational cost reduction programmes. Success has sometimes simply depended on an individuals adaptability, flexibility and, crucially, ability to recognise the similarities and respect the differences between the public and private sector environments.
However, in tandem with the anticipated upswing in economic confidence, many authorities felt that, unfortunately, their ability to continue to hire from the commercial sector will be hampered. Theres also an expectation that the increased Challenges as a result of the inevitable efficiency drives will lead to problems with talent retention.
Approximately 75% of the authorities questioned have already embarked on an Ulrich style HR transformation programme. More often than not, this has led to significant though not insurmountable - issues as a result of the massive change programmes required and the need to up-skill and re-focus talent across the organisation to best enable commercial success.
Nevertheless, all of the authorities that have embarked on such change agree that it is proving a successful process: and one that offers HR a genuine opportunity to assist business leaders through crucial organisational transformation.