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According to research from Knox D’Arcy, public sector organisations are falling behind the private sector because of less effective management. The research suggests local authorities are around 27% less effective in their staff utilisation than the average private sector business.

With these findings published, there has been predictable reaction from many quarters – with the some unsurprising “public sector bashing”… simply making people work more effectively will solve the financial crisis facing public services … though some voices offier stout defence of public sector institutions against private sector bias.

This has been balanced out by a range of “messenger shooting” incidents. Public sector union UNISON has said the study is “misleading, unrepresentative and unhelpful”.

While it’s difficult to come to certain conclusions from what has been published, the findings are certainly worth some exploration.

Knox D’Arcy undertook a survey of 1,855 managers and supervisors (173 from local government) supported by 376 day-long observations, (36 were from local government), the latter of which involved detailed shadowing and minute-by-minute recording of the managers’ activity in private and local government sectors.

These research activities found local government managers were slightly less proactive than private sector managers in the way they managed and supervised staff. In local government, managers were spending an average of less than 15 minutes each day (3% of their time) engaged in ‘active’ management. Private sector managers spent around 25 minutes each day (5% of their time).

Knox D’Arcy reported further that staff utilisation rates in the private sector reached 44% compared to 32% in local government. It is difficult to review these figures effectively as the methodology for measuring workforce productivity has not been disclosed.

Knox D’Arcy postulate the difference in utilisation is related primarily to more robust systems and greater personal accountability for performance in private sector organisations. With such a modest difference in managers’ behaviour, this seems unlikely to account for all the difference.

The staff utilisation figures seem, universally, very low, perhaps suggests the use of low-level task-based models. It is not clear whether work was similar between the organisations involved or how other factors might have impacted the measurements adopted. Research by the Office of National Statistic was attempting to measure the “ouputs” of public services and recognises the complexity of the task -

• Private sector business can capture most outputs in money terms while the public sector cannot,
• Productivity measures can ignore the differences in the application of labour and capital,
• Public sector labour use involves many complexities,
• Health and education outputs are quality adjusted but elsewhere outputs are assumed to rise in line with inputs,
• public sector resources can be are devoted to things unmeasured – including costly inspection and audit, a key target of the new government.

According to the ONS figures, public sector productivity fell after 1997 (falling most in 2002 and 2003) but began to improve in 2006 and 2007. The big spending increases took take time to “bed in” and produce results. How these lessons translate into the “utilisation” measures used in this research is a matter of speculation.

Whatever people make of the methodology and figures in the headlines, in the context that many organisations report concenrs over mangement capacity, comment by Paul Weekes, the report’s author and principal consultant at Knox D’Arcy is interesting and will certainly ring true for many organisations (public and private sector alike) -

” … most managers were found to be uncomfortable confronting the poor performance of staff or even establishing with staff what good performance meant. Many seemed more comfortable spending time doing hands-on work in the mistaken belief that they were ‘helping’, rather than managing people and performance levels.

Often they were observed busily carrying out administrative tasks, while outside their office their staff were clearly under-utilised; it is crazy to have well-paid managers spending so much time on administration or doing the work of their people when their greatest value would be to spend more time ensuring their staff’s performance is being optimised.”

Those conclusions are sound – helping managers to guide and support their teams’ performance is vital in public sector organisations (and private sector business too). Managing performance effectively requires substantial time and effort from managers and supervisors  and certainly more than the 3-5% of time suggested in the research.

Managers have to be encouraged and supported to spend more time on communicating effectively, engaging and motivating team members, planning and shaping peoples efforts and activities, recognising and rewarding good performance and, where necessary, having the difficult conversations needed when people are not doing what is expected of them. Skills training, coaching and other confidence building measures as well as robust policy and processes are all vital. None of this is rocket science ….. but neither is it easy.

Knox D’Arcy are right to highlight the need to change management culture where capacity in currently inadequate. It is also right to focus on staff utilisation as a key issue in the public sector. But it seems more of a stretch to accept the suggestion that, across the whole public sector, 68% of labour costs are just “wasted” and that working the system smarter and harder with better line management will solve all the problems.

How well do managers in your organisations perform?

How do you measure utilisation and productivity in your service?