Healing the Wounds | How can the public sector recover from the pain of austerity?

How can the public sector recover from the pain of austerity?

Prime Minister Boris Johnson may have pledged a cash injection for some public services – a reputed £1.8bn for NHS hospitals and a further 20,000 bobbies on the beat – but the wounds of deep austerity cuts will take many years to heal.

Whatever your political persuasion, whatever the rights and wrongs, the 2010 austerity programme embarked upon in response to the 2008 financial crisis by the coalition government, gathered momentum and led to unparalleled change within public services.

The infamous note left by the outgoing Chief Secretary to the Treasury, Liam Byrne, for the new incumbents which read: “I'm afraid there is no money” was a postscript to a situation which prompted central and local government to find ever-more inventive ways of saving cash.

With human resources being a significant overhead, it is perhaps not surprising that the axe was the first to fall there. But at what cost? Local authorities have been pushed into becoming the facilitators of services rather than the delivery.

With the loss of experienced employees, skills and local knowledge ebbs away, along with the quality of service, squeezed by demands for lower costs, often questionable employment practices (poor wages/conditions, zero hours contracts etc.) and contrary to the philosophy of those contracting out the services.

Those put forward the argument for outsourced services believe that they open up competition and that the private sector is more likely to achieve efficiency improvements, is more innovative, less hierarchical and more focussed, leading to improved value for money.

In doing so, the core workforce is reduced to a lower level which is initially viewed as win-win, less cost and guaranteed assured service levels but it all too often lead to a lack of engagement in the workforce with poor motivation and a “them and us” culture. Failures have been seen over the past few years in G4S and Serco to name just two.

As the public sector begins to claw its way up from the austerity precipice, it may wish to consider an alternative solution that enables it to do more with its core workforce by managing it in a demand-responsive way.

Underinvesting in the workforce, can result in an organisation becoming more expensive not less so. It is by no means easy but by following these steps can cut costs while maintaining services.

Plan work patterns using as much information as is available

  • Work with employees, representatives and unions to engage the correct number of people in any shift pattern taking account of absence sickness and holidays. Analysis may even show, irrespective of other benefits of reducing excessive working hours, that this may even be a cheaper option especially where higher overtime rates are prevalent or external support is costly.

  • Understand any reasons for absence and whether you are able to actually address them not just fill them. When do they occur, who is absent, what issues are caused by the absence e.g. could multiskilling prevent additional hours requirement. Is absence repeated by specific individuals, for what reasons – they may or may not be genuine? Does it occur at specific times such as around time planned off?

  • Ensure that holiday time is taken in to account, if holiday is taken evenly then with average holiday entitlements an additional person is required for approximately every nine employees. However, holiday is not normally taken evenly! Is there anything that can be done to ensure that this is planned to fit not only with workforce requirements in mind but also those of the business e.g. a blanket rule of a number of people allowed off may not be suitable if there is a period of slack – encouraging employees to take time off when the business doesn’t need them or service level is lower may at times help both parties.

Matching short term peaks and troughs through better shift planning

  • Analyse requirements to see if there are different needs for people to be at work at different times then try and plan for them. A simple example may be where you currently have five, eight-hour shifts, Monday to Friday. However, Monday, for this example, was generally the busiest day of the week, often required extended working through overtime, with a lighter requirement the rest of the week. The response should be to build a shift pattern with a 10-hour Monday reciprocally seven-and-a-hour shifts the rest of the week. It may be that it is possible to increase the hourly rate slightly to offset any employee losses from this overtime reduction – in reality all then become winners as the employee is at work fewer hours and the business may well maintain a better productivity level, although this wage increase may be only aspirational. This type of system is frequently seen in accounting where month-end weeks have longer shifts than other weeks.

Matching longer term peaks and troughs using banked hours schemes

  • There are a multitude of working arrangements that range from flexitime to annualised hours that rely on banks of hours to allow different shift lengths to be worked in different periods of the year, month or day. Flexitime is generally seen as a form of working aimed more towards helping employee flexibility but with care schemes can be designed to work with matching business demands as well. The best schemes will help both. An Annualised hours scheme is in essence a banked hours scheme based on a year. They often go slightly further than simple banked hours as other entities such as holidays and pay are also based on a year so all can be aligned.

Managing banks and/or overtime levels ensuring evenness

  • Whichever form of flexibility is chosen or even if you stay with overtime then the problems can be reduced through maintaining a good record of hours worked by each individual. This would include monitoring all types of hours, normal hours and overtime/banks and ensuring that there is a good balance of hours – ideally across all relevant employees. Workforce Management Systems, such as that provided by Crown Workforce Management, ensures that planners are able to look at attendance demand and can rank employees based on a variety of criteria, such as cost (labour grade), attendance information, bank levels or overtime usage to ensure fairness whilst making sure that people are in the right place at the right time.

Whatever the future holds in store, one thing is certain: ours is a changed landscape. It is only by thoroughly understanding our organisations and the demands placed upon them can we affect change to similarly respond to those needs and deliver better service.

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