As part of the build up to November’s HR in the Public Sector Forum, Les Venus, Chief Executive of Threshold Initiative offers his response to the Comprehensive Spending Review and how it will affect the Public Sector and HR professionals in general.
The much trailed and leaked Comprehensive Spending Review was properly unveiled on Wednesday. Was it as bad as you thought…or worse? While public spending is being trimmed by an average of 25% what it will probably mean in human terms is cost reduction through redundancy.
These redundancies will not be made overnight, but staggered through until 2014. But the published figures are that nearly 500,000 public sector workers will be looking for new jobs in the private or third sectors. This means managing a significant redundancy programme in the public sector while businesses rise to the challenge to create new jobs. “Challenge” is used by so many commentators. It implies that the situation will be difficult without some herculean effort on the part of the private sector. But the private sector has always responded to the market, and the current climate is no different. Some will see this as a business opportunity while others will seek to defend the status quo…
Whilst we should not seek to minimise the impact of the cuts both in personal terms and in the “challenge” of getting the process right, these changes offer significant opportunities for private and third sector businesses.
Yes, the cuts will have an impact on the private sector as well and, no doubt, there will be job losses there too. But a recent survey of the top 150 public sector employers published by the law firm Eversheds found that:
- 56% were currently operating a recruitment freeze
- 45% proposed to operate a recruitment freeze
- 43% envisage some form of partnership arrangements
- 21% anticipate a rise in outsourcing
This survey provides a useful insight into how at least one element of the public sector views the future, and suggests opportunities for the private and third sectors.
It means a wider choice of experienced workers becoming available to the private and third sectors, not overnight, but perhaps over the next 2-3 years. It gives businesses the chance to balance their workforce and build the skills necessary to take advantage of the potential new public sector business opportunities and build on existing strengths in the private sector. A good example of this perhaps is outsourcing services back to the public sector.
Public Sector Equality Duties which broadly require that the public bodies reflect the diversity of the UK population in their workforces means that the work pool will be diverse in terms of all the protected characteristics. As the redundancy programme rolls forward you should be ready to tap into this newly available pool of talent. To take full advantage of this you will need to be sure that your recruitment process is non-discriminatory, that you cast your net widely and that you communicate effectively to all parts of the community.
It means more business opportunities as the public sector explore new ways of working through partnerships or outsourcing. But you will need to operate in an inclusive manner. Again, Public Sector Equality Duties require the promotion of equality and delivery of services in a non-discriminatory manner. You will therefore need to be able to prove that you can do the same on the public body’s behalf, to meet their Equality Duties.
Although these opportunities exist, there may be pitfalls for HR professionals in ensuring that redundancy exercises or contractual changes are handled appropriately. There already exists a burgeoning number of tribunal complaints as shown in the recent Employment Tribunal statistics and these are probably set to rise further as redundancy programmes are rolled forward. Any programme needs to be free from discrimination and the criteria used for selection must be both transparent and open.
So what are the top tips when you are thinking about making employees redundant?
Always consider if there is an alternative. New research from Pricewaterhouse Coopers has suggested that the cost of replacing a competent member of staff equates to approximately a year of that person’s salary, reflecting all costs associated with lost skills and productivity, cost of replacement and training of new recruits. So remember to consider natural wastage, retraining and redeployment or just changing working patterns as a way of avoiding those costs
Have you followed the ACAS redundancy procedure? Redundancy programmes are stressful for the employees involved and for those that have to carry the redundancy programme forward. As this is a procedure many HR professionals will not be overly familiar with, research good practice and the legal requirements before you start
Remember to inform you employees at as an early stage as possible about the possibilities for redundancies and consult them, their trade union or employee representatives about the process you intend to use, including ways of avoiding or reducing the number of redundancies and how the consequences could be mitigated
Agree objective selection criteria that are non-discriminatory, clearly defined and capable of being applied in a fair and transparent manner. You should also establish a clear appeals process that is capable of being applied in an independent way.
Be clear about what support you will offer in helping employees find other work, such as allowing time off work and what redundancy pay they will receive. It is good practice to offer some form of counselling service to help employees cope with the financial and emotional impact of redundancy
The recent EHRC triennial review found evidence to suggest that the workplace remains a stressful and difficult place for some groups of people. In the current climate of cost-reduction we must all guard against discrimination both as individuals and in the processes we operate.
Changing personal attitudes can take time, but making organisational systems non-discriminatory does not. As employers we need to ensure that the redundancy or recruitment procedures we follow are fair and free from discrimination. But non-discrimination also pays dividends in maximising your business opportunities, particularly in relation to the public sector. So make sure that your business understands what can cause discrimination and how everyone has a role in helping to stop such behaviour.
So what can business actually do?
Tracking policy to vision is vital. Vision for the ‘new organisation’ needs to be unambiguous and communicated but what constitutes success must also be clearly defined and progress towards it measured and adjusted. Certainly cut costs and particularly waste, but remember whatever you do that the policy or action has to add value. It shouldn’t be based on a policy or action that delivers less for less but one that delivers more for less or even the same?
This is the time to get it right. We all have a part to play and that’s the biggest opportunity of all