The HR Role in Public Sector Reform

January 19 2011 - Successive Governments have seen public sector HR as either a cost to be managed or a means of dealing with redundancies, but not as a crucial strategic function, according to a recent CIPD report.

The report, Boosting HR performance in the public sector, prepared jointly with the the Public Sector People Managers’ Association (PPMA), points to the risk of failure for the Government's public service reform plans to deliver lasting improvements because they under-emphasise people and HR management issues. According to Stephanie Bird, CIPD Director of HR Capability:

"Public service transformation is critically dependent on developing new skills, changing engrained behaviours and managing the uncertainty and conflict that can arise as a result. Unless HR is involved at the heart of this process to ensure the key people management issues are addressed, public service reform plans will remain frustrated.

"Unfortunately, HR in the public sector has been seen by successive governments as a cost to be managed, or a way of making redundancies. It is no coincidence that attempts by previous administrations to create a step-change in the quality of public service delivery have failed. This government cannot afford to make the same mistakes.”

Widespread reporting of cuts in public sector staff, including government departments and local authorities, have led to fears of job losses among the people who are crucial to delivering reforms. John Philpott, the CIPD's Chief Economist has estimated that the scale of the cuts introduced by the UK's Conservative/Liberal democrat coalition, totalling £81 billion over the next four years, will mean that public sector job losses will reach 725,000 by 2015-16. The report argues that effective leadership and people management, careful change management and organizational development are crucial to maintaining employee morale and engagement and encouraging staff to accept new ways of working. Managers need the ability to manage across organizational boundaries if radical plans to improve co-ordination and collaboration between different public services and deliver more cost-effective services are to succeed. According to the report, public sector organizations will need:

• more effective collaboration, with each other and with the voluntary and private sectors, to prevent overlapping and duplicated services and to be more cost-effective
• to identify more efficient ways of working and foster innovation
• to identify potential costs savings by means of greater use of shared services and outsourcing
• a more effective focus on meeting the changing needs of the public through enhanced front-line autonomy
• to negotiate new/local terms and conditions of employment
• to manage and communicate change effectively, involving employees through effective consultation to ensure employee/union buy-in

Prime Minister David Cameron emphasized the need to change the nature of public services:

"We know instinctively that the state is often too inhuman, monolithic and clumsy to tackle our deepest social problems. We know that the best ideas come from the ground up, not the top down. We know that when you give people and communities more power over their lives, more power to come together and work together to make life better - great things happen."

The Government plans to do this by supporting mutuals, co-operatives, charities and social enterprises and giving them greater involvement in running public services.

The report discusses the fundamental importance of the way changes are managed, the extent to which employees feel they are consulted and have a voice and their acceptance and 'buy in' to new ways of working. The critical people management issues underpinning major change programmes highlight HR's role. The Human Resource function should provide the organizational development strategies supporting the business needs of transforming public services. If HR is not accepted as a transactional function by policy-makers and HR specialists are not allowed a significant role in engaging with or influencing the Government’s reform agenda, the process of transforming public services will fail.

Dean Shoesmith, PPMA President, argues that HR is at a crossroads:

"The public service reform agenda provides both an opportunity and a challenge. HR can build and establish its reputation as a key strategic function if it is at the heart of managing change, helping to facilitate service delivery redesign and building the necessary leadership and management skills for sustained public service transformation. However, if HR is preoccupied by its traditional activities, such as hand-holding line managers, then it will be left behind and its reputation as a transactional function will be reinforced. The case studies profiled in our collaboration with the CIPD show how HR is already underpinning successful public sector transformation – we hope this report provides useful guidance to support the adoption of best practice across the sector.”

According to the report, the entire public sector is facing renewed pressure to use shared services or outsourcing for more cost-effective HR services delivery. This results in an additional emphasis on a need for public service front-line managers to become better people managers because the HR function will no longer have the same resources to hand-hold managers on issues such as managing conflict, stress and absence, and wider aspects of performance management. There will be a need for major parts of the public sector to renegotiate (at a national or local level) revised terms and conditions of employment to improve efficiency and offer a more locally appropriate range of services. The change agenda will have to be communicated clearly and positively, with effective internal communication channels providing a clear narrative as to why change is needed and also offering opportunities for meaningful consultation.

The scale of the proposed changes may appear daunting but they play to the strengths of HR specialists if they choose to use them. Without HR being at the heart of the change initiatives, there is a risk of piecemeal efforts that miss key components of people management that are crucial to employee engagement and bringing strategies, visions and values to life at the front line.

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