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Outsourcing: Are HR and Payroll So Different?

July 12, 2010 in Corporate Services, Shared Services and Outsourcing

Image : Tychay, Flickr

Over the last decade, it’s become increasingly clear the transactional side of Human Resources and the Payroll service are two sides of the same coin.

The HR team helps managers source and deploy people into effective roles on the right employment terms. The Payroll team implement those terms accurately and in accordance with tax legislation.

Completing the cycle, the Payroll Team provide invaluable workforce and cost information which cab support strategy, planning and policy review.

Both teams help manage the workforce and support the reduction of associated risks while removing burdens from front line management, allowing them to focus on operations and team leadership.

In the article “The Other”, SystematicHR described the highly structured environment payroll inhabits and the contrast with the “flexibility” which managers and HR departments so highly value. Working with both teams regularly, Attractor recognises the description and accepts there are elements of truth in the common stereotypes.

There is something else which, until recently at least, distiguished the two departments.

In the UK, organisations have traditionally been happy to outsource payroll transactions to a commercial partner. They recognise the work needs technical skills but can be labour intensive. They consider it safer to pass risks to a specialist body who guarantees compliance and, hopefully, generates economies of scale.

Some perceive the reluctance of organisations to outsource HR as protectionism or empire-building by the management team. HR is often considered more central to business operations, making it less attractive to outsource. Fears often arise over “losing control” of key issues on staff appointments and difficult people management issues. With HR supporting action by senior and line managers, it isn’t possible to transfer “compliance risk” in the same way. Read the rest of this entry →

Tags: efficiency, HR, human resources, outsourcing, payroll, risks, shared service 2 Comments »

by Attractor

Where to Cut?

July 7, 2010 in Leading and Managing Results, Public Services

Under the last government, the public sector experienced more than a decade of top-down, target-driven, centralised change.

With massive investments in public services, strides were made on improving infrastructure and service levels in health and education.

But, with money and targets arriving thick and fast, the capacity for change was overwhelmed and efficiency declined.

It was easy to predict a search for productivity was coming – but the financial crisis turned this into a massive shock – the equivalent of putting your car into reverse direct from fourth gear.

In the middle of 2010, the anticipation of cuts in UK public services is creating at atmosphere where any public servant whose role might be considered “not vital” will be thinking about career options. With the economy at a very early stage of a slow recovery, prospects don’t look good.

But what is “vital”?

An opinion poll for the Local Government Association looked at where people thought spending should be cut and protected, showing where people preferred deicions to be made about spending in their local area -

62% wanted local councillors to decide,
18 % backed MPs
2% said officials in quangos

Respondents wanted NHS managers, quangos and overseas aid to be cut while doctors, nurses and other hospital staff, police, schools, fire services and care for the elderly by social services should be protected. Those sentiments are unsurprising and calling for reductions in the cost of administration, bureaucracy and management is all too easy.

In the coming months we will see suggestions that any reduction in the number of police officers, nurses, doctors etc would be a disaster. While nobody wants to see front-line services being reduced, in fact, taking a view about what is “vital” is less straightforward than most tabloid papers might suggest. Read the rest of this entry →

Tags: cuts, efficiency, efficiency and reform, OEP, public sector No Comments »

by Attractor

Will Total Place Help Solve “The Problem”?

July 5, 2010 in Leading and Managing Results, Public Services

Photo: Laffy4k, Flickr

Attractor was invited to join an HR Workforce Forum event at the start of July 2010, discussing the workforce and HR implications from the Total Place programme.

The forum event, hosted by Bevan Brittan, was attended by participants with in-depth experience of the Total Place programme and others working at the heart of public sector change management.

The forum heard details about the New Local Government Network (NLGN) Report “Greater than the sum of its parts”.

Lessons for HR and messages being given to government about “the storm” ahead, were examined.

“The problem” of course can be defined in many ways – waste, funding restrictions, failure to deliver benefits, inefficiency, unfairness, “postcode lottery” – and its unlikely any programme can address all of these together. It’s possible some of them are inextricably linked, the big, “fair” programme being wasteful and the small “efficient” project leading to uneven outcomes.

The Total Place pilot programme aimed to change public services so they improve the lives of local residents and deliver better value. It was hoped the pilots would deliver early savings to validate the work and develop learning about how more effective cross-agency working can function. The work involves three strands of activity -

‘counting’ – identifying how public money is spent to achieve objectives
‘culture’ - looking at how existing cultures and ways of working help or hinder the delivery of outcomes
‘customer needs’ – gaining practical insight into their needs, wants, expectations, behaviours and experiences

The challenge for HR functions in supporting service redesign, innovation and change management while also working to streamline and slim down their own functions was explored in some detail at the forum event.

Personnel Today have also published an article about Total Place and what it means for HR. In Stepping up to the mark, Roger Britton, at Worcester County Council talks about -

“the need to prepared to think in terms of a single public service workforce which is operating across organisations, the boundaries between which have become invisible.”

Tackling the “culture” within the existing empires poses a huge challenge which, if left unaddressed – allows silo mentalities to predominate and borders to remain defended. Mature and confident leadership, effective Organisation Development and Human Resources teams will be needed to drive these initiatives locally.

The Workforce Forum discussed the benefits and the legal and employment challenges of creating and staffing “New Economic Vehicles”, joint ventures and social enterprises which can remove barriers and allow partner organisations to focus efforts on delivering services and efficiencies together.

The NLGN report concludes billions of pounds could be saved by delivering joined-up service provision but warns that a lack of coherence and over-centralisation could derail the programme and prevent benefits being realised. Read the rest of this entry →

Tags: big society, cuts, efficiency, fairness, local government, nhs, OEP, postcode lottery, public sector, QIPP, total place No Comments »

by Attractor

Helping Managers Reduce Absence Costs

June 24, 2010 in Leading and Managing Results, Public Services

When public sector organisations are looking for ways to save costs, absence management is always part of the standard armoury.

The report “On the path to recovery”, published by CBI/Pfizer in June 2010, reviewed absence management and health issues in the workplace during 2009.

It is based on responses from 241 organisations employing 1.2 million employees.

Employees took on average 6.4 days off sick in the period, equivalent to 3.9% of working time – the lowest since the survey was started in 1987 and a small improvement on the 2007 figure of 6.7 days.

While independent commentators have suggested the recession has had an impact on employee behaviour during 2009, the report does not support this view, concluding instead, the improvement in absence rates is largely due to better absence management by all employers. Effective absence policies and well-being programmes seems to be having a positive impact. Read the rest of this entry →

Tags: absence, efficiency, public sector, QIPP, wellness No Comments »

by Attractor

NHS Targets £850m Savings in Management Costs

June 22, 2010 in Leading and Managing Results, Public Services

The revised NHS Operating Framework was published on 21st June 2010 and most comment is likely to focus on the removal or reduction in national performance targets.

Alongside these changes however, the updated framework targets significant reductions in management costs in coming years.

It seems Strategic Health Authorities (SHA) and Primary Care Trusts (PCT) will face the greatest initial focus, though local management teams will determine how this is delivered.

The government is seeking to reduce NHS management costs by a total of £850m by 2013, a saving of 46% overall – the first £222m being planned for the coming year.

Andrew Lansley, Health Secretary said -

“Management costs in Primary Care Trusts and Strategic Health Authorities have increased by over £1bn since 2002/03, with over £220m of the increase taking place during 2009/10. Costs now stand at £1.85bn and it’s our intention that during 2010/11 we will remove all the management costs that have been additionally incurred during 2009/10, to get back to the level of 2008/09. Then in subsequent years, we will go beyond that, with a further £350m reduction in 2011/12.”So that’s £222m in 2010-11, £350m more by 2011-12, with the remaining 278m being saved by 2013-14. In the revised operating framework, SHAs are being encouraged to go further, ensuring “all possible efficiencies are realised”.

While recognising the controls implemented by the Efficiency and Reform Group at the Cabinet Office do not formally apply, the revised framework tell NHS organisations they should demonstrate “similar discipline” in relation to spending on consultancy, marketing and ICT spend, recruitment procurement for goods and services as they “progress their quality and productivity plans”.

The Kings Fund has reacted by highlighting the need to continue invest in leaders who can engage frontline clinical staff in improving quality and efficiency, stating -

” … improving NHS efficiency will not come primarily from cutting the waste of managerial overheads. Given the NHS faces a shortfall of up to £21 billion a year, improving productivity at the frontline will have the most impact …”

How will your organisation respond to the challenge of reducing management costs?

Tags: back office, costs, efficiency, efficiency and reform, management, nhs, QIPP No Comments »

by Attractor

Efficiency and Reform in Government

June 21, 2010 in Corporate Services, Shared Services and Outsourcing

As a further sign pressure in the UK for the public sector to deliver savings is increasing, the Cabinet Office’s new Efficiency and Reform Group now has control of the the Office of Government Commerce (OGC) and Buying Solutions.

Including the authors of earlier efficiency reports – Sir Peter Gershon, and Dr Martin Read, the Group aims to deliver a significant programme of change.

Referring to the creation of the Efficiency and Reform Group, Francis Maude, Minister for the Cabinet Office was quoted as saying -

“We want a slim but strong centre that can drive down the cost of government, so protecting as best we can the crucial front line services on which our citizens depend”

The newly strengthened group will have the power to make sure departments work together to tackle waste in areas including ICT spend, procurement, advertising and marketing spend, and Civil Service expenses and recruitment.

There was speculation before the election that OGC would be brought closer into the government, in part to address criticisms that it lacked political clout. The move clearly reflects the points made at the Operational Efficiency Conference in November that it was far easier to address issues within the sphere of Whitehall departments than in the wider public sector.

The impact of the efficiency programme for local government and NHS organisations will probably take longer to materialise – and will probably reflect the “devolving” ambitions of the coalition government.

Attractor has already commented on the potential impact of a simplified approach to Civil Service terms and conditions and on the potential for outsourcing Whitehall’s back office functions and the calls to increase outsourcing and shared services. The actions of the Efficiency and Reform Group stretch to a far wider remit however. Read the rest of this entry →

Tags: back office, central government, consultancy, efficiency, efficiency and reform, procurement, public sector, shared services No Comments »

by Attractor

Offshoring the Back Office

June 17, 2010 in Corporate Services, Public Services, Shared Services and Outsourcing

The Management Consultancies Association wrote a pre-election report for all the political parties in April 2010. In “We Can Cut the Deficit”, they suggested ways to save £25 billion each year from public sector expenditure.

Some might think consider the report more a marketing document for consultancy businesses than a far-sighted analysis of strategic options.

If that, uncharitable, view was accurate, the new government’s “moratorium” on consultancy spending suggests it hasn’t paid off – yet.

The report urged politicians to move public service jobs to countries like India to reduce employment costs.

It would be unwise to deny there are potential gains to be made from offshoring public sector jobs. Such a move could form part of a grander strategy but needs some careful consideration. It would be unfortunate, however, if the strategy contributed to a worsening spiral of economic decline.

At one level, the advocates of offshoring sometimes appear to treat lightly the operational effort, time and cost required to deliver this in the real world seem rather lightly considered. It’s not clear that moving service offshore could contribute savings in the timescales needed for the public sector in 2010.

William Benn, Partner and Head of Public Sector at Alsbridge suggesting -

“the top five spending departments should be able to save around £10 million each per year – that translates to £0.25 bn over a five year term.”

The recommendations in a section called “Send it Offshore and Save” further stated -

“the concern about jobs going overseas has to be set against the conern foe eye-watering public sector costs, and the immediate need for savings to preserve frontline services.”

Furthermore, in the same report, other ways to save money were identified and Jane Ludlow of Atos Origin highlighted that change in front line services would dwarf efficiencies in back office functions.

There are other reasons why offshoring jobs might not be the most attractive path. Read the rest of this entry →

Tags: back office, data protection, efficiency, employment, offshoring, public sector, QIPP No Comments »

by Attractor

Supporting And Policing Expense Policy

June 10, 2010 in Pay and Reward, Workforce Management

With increasing transparency of expenditure across the UK public sector, we have seen more stories expressing “outrage” at levels of expenses claims.

The cost of expenses probably shouldn’t surprise anyone, though in more frugal times, the message of “restraint” needs to be heeded …. and not just by those with purchasing cards or in high-profile public sector roles.

Just because an expense claim is “within the rules” doesn’t mean it looks fair or reasonable to external review. The MPs expenses saga is a prime example of this and other examples are being widely quoted.

Nevertheless, your organisation’s expense rules should operate as an important guarantee of propriety in practice as well as supporting effective financial control.

Given it’s importance then, it must seem surprising, using data from GlobalExpense in their 2010 report that -

11% of all claims approved by managers are out-of-policy
one-fifth of hotel claims are out-of-policy out-of-policy
29% of entertainment and hospitality claims are out-of-policy
40% of mileage claims are submitted without VAT receipts – hindering VAT reclaiming

Contrary to some reports, however, just because a claim is “out-of-policy” does not mean it is “fiddled”. There are occassions when the standards and limits written into policy have become outdated or where the particular circumstances related to an expense item would justify the exception. Read the rest of this entry →

Tags: control, efficiency, expenses, policy, self service, transparency No Comments »

by Attractor

Maximising Value from HR

June 7, 2010 in Our Track Record

In the past, UK organisation were stereotyped by their slashing of training budgets when finances were tight – and then suffering the skills shortages which followed.

A new stereotype might be organisations looking to make efficiencies and reduce expenditure in their back-office functions so they can protect front line services.

Across the public sector, this “mantra” is being widely and loosely used without being explained in detail.

Real dangers exist where the implications of change are poorly thought through.

In richer times, it is easy to make the case for investment in services which support staff delivering effective front-line services. When times are hard, this is more difficult and its vital then, more than ever, to demonstrate how corporate teams impact on the business.

When organisations are looking to reduce expenditure, it is common to look for reductions in “overheads” – costs which can be reduced with little impact on front line services. Corporate back-office functions look “vulnerable” in this climate.

Organisations should always strive to ensure they are working in the most effective way – the optimum value between expenditure and achieving required outcomes. Back-office functions should be scrutinized as closely as other areas though it’s vital to keep a focus on what will maximise value rather than simply “reduce expenditure”. Read the rest of this entry →

Tags: absence, back office, benchmarking, efficiency, HR, human resources, productivity, QIPP, roster, workforce optimisation No Comments »

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You are browsing the archive for efficiency.

Outsourcing: Are HR and Payroll So Different?

Where to Cut?

Will Total Place Help Solve “The Problem”?

Helping Managers Reduce Absence Costs

NHS Targets £850m Savings in Management Costs

Efficiency and Reform in Government

Offshoring the Back Office

Supporting And Policing Expense Policy

Maximising Value from HR

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