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Had some really interesting discussions with senior HR practitioners this week – all touching on the shape, design and delivery of corporate services in the NHS.  Talking about the challenges facing NHS corporate functions, in particular we talked about HR Services and how senior teams should be considering areas for review and redesign using stronger evidence of efficiency and effectiveness.

We agreed NHS organisations needed help to understand their contribution, effectiveness, costs and efficiency. With better information available about those services, CEO’s could talk to their Directors about areas and ways to find better, more effective and affordable solutions to universal and ongoing organisational challenges.

Photo: kevindooley, Flickr

Over a period of years supporting public sector organisations’ support improvement action in corporate teams, especially with HR, Finance and Payroll, one of the most common topics of discussion with Directors and senior managers has been the proper place for payroll functions.

Some years ago, during a conversation with one (American) Chief Executive working in an NHS Trust that was experiencing problems with payroll services, this experienced leader expressed amazement that NHS organisations used outsourced payroll suppliers when ensuring staff were accurately and properly paid was “the most important responsibility of every employer.

Clearly he did not share the view of payroll as a low-value service, an assumption which might underpin the fact that, in UK public services, outsourcing payroll to a specialist provider is relatively commonplace.

Outsourced Solutions

Historically, payroll services have been the most likely corporate service for public bodies to buy-in from another organisation. Seen as non-core function, any in-house service would be viewed as wasting valuable time and money.

In the past, the challenge of legislative compliance combined with high volumes of relatively simple data driving most payroll processes (e.g. absence records, overtime worked, shift payments due) has made outsourcing the payroll function an attractive option.

This approach sees payroll as a”commoditized service” – a simple function which can and should be organised and delivered in the cheapest manner possible with the essential outcomes being payment accuracy and legal compliance.

During a time of austerity and cuts in public services, it seems more fashionable than ever before to outsource such services, having them delivered by a specialist payroll or multi-faceted corporate shared services provider. From 2007 onwards, public services have been seeking cost reductions in support functions by moving these services out to shared services organisations. The expectation for these projects is a combination of simplification, standardisation, automation and economies of scale will reduce costs while maintaining or improving standards. There should be no surprise there are both strong proponents and opponents of these projects, but everyone agrees delivering the benefits is pretty challenging.

For a shared services project to succeed in delivering savings while protecting quality, some fundamental changes are required, with significant review and redesign of functional roles and the business processes they are responsible for. With the trend for considering outsourcing a wider range of  administrative functions, the potential to buy in a combination of “HR and Payroll” or “Accounts and Payroll” is becoming increasingly common. In such cases the perspective of the client organisation about these support functions can be an important driver for the suitability of a particular solution. Read the rest of this entry →

Drawn into a conversation on LinkedIN last week about the “proper place” for the payroll team. Many people were sure that dealing with the pay, tax and accounting means there is no better place than in Finance – one even suggesting only Finance could be trusted to make accurate calculations.

Others were certain that the people-facing nature of payroll, the need for customer service plus the links to employment contracts pushed the function closer to Human Resources.

A few people identified the “HR input -Finance output” business that payroll delivered and talked about effective separation of duties to meet audit control requirements. This is definitely on the radar as a subject of a future article.

What do you think?

Working with public sector organisations, you will often hear (from corporate functions) that front-line managers cant operate self-sufficiently and need a lot of hands-on support from the corporate teams in finance, HR, procurement etc.

Does this reflect a clear and robust understanding of managers’ capacity and an organisational need for particular ways of working and higher levels of resource …. or simply excuses for maintaining out-moded models of operating?

Wouldn’t it be better for these teams to relinquish day-to-day control of the operational management of staffing an other issues, “letting go” while encouraging and supporting their managers to operate independently?

Public services may have a higher level of investment in professional education and training than private companies might expect and this might be a justification for higher resource levels in HR. Of course, many public services organisations have a high proportion of “professional practitioners”, creating a management layer naturally more interested in their professional responsibilities (i.e. patient care, social work, children’s education, catching criminals) than in managing staff and especially dealing with HR procedures.

It is that same professional context that can also create additional challenges when managing staffing problems that are more tricky to handle (see article Too Hard to Sack). In that context, we all recognise the temptation to procrastinate when there is something unpleasant to do and public sector managers can always justify focussing on public service outcomes first rather than having uncomfortable conversations. It’s possible this forms part of the context of a high-touch approach from HR teams.

Recently, we looked at the issue of HR ratios and explored whether it was possible to arrive at a magic “right number” using some kind of formula. Having decided this was almost certainly over-simplistic, we considered the kind of support and service models that HR might need to provide for managers. The Cranfield Study we referred to there showed organisational sector had a high correlation with the size of the HR function. Presumably this reflects the fact there will be many common features shared by organisations working in the same industry -

• similar workforce profiles with common working patterns etc.
• managers and staff with shared experiences and comparable skill sets,
• the same kinds of performance, conduct and other issues which require HR support.

It seems likely however these factors don’t reflect the whole picture. Read the rest of this entry →

If your CEO asks the question posed in the title, it probably isn’t acceptable to respond with the plain truth answer “It depends on how you want HR to contribute to the business!”

While this wouldn’t be an answer many would welcome, it is important to consider what role and purpose the HR department plays in your organisation – how it delivers value for the business. Form and size should follow function and purpose – do you need a large administrative function or a smaller team of highly skilled professionals?

If leaders want a “back to basics” personnel support function, the HR team might include a small number of “professional staff” with more administrative support people – helping managers to comply with the obligations of employment law and effective employment practice.

A more strategic perspective, incorporating organisation development and combined with a devolved approach to people management can see the HR function with slightly larger number of more specialist team-members – highly adapted to providing advise on complex issues while expecting managers to do more for themselves – offering less administrative support – particularly where it has deployed smart self-service solutions.

So what is the answer to the level of resources needed?

Read the rest of this entry →

While inheriting and accepting many features of the outgoing government’s strategy on productivity and efficiency, the Coalition Government has, at times, seemed less than enthusiastic about the delivery of corporate functions through shared service centres.

In the context of many reports of failing shared services projects in the public sector, it would have been astonishing if the government had not wanted to assure itself about these projects before setting out a strategy for the future.

In July 2011 the government published short paper setting out it’s views. Government Shared Services : A Strategic Vision summarises its findings and conclusions.

The government has set out an approach to consolidate back office “transactional services” in HR, Finance, Payroll and Procurement between and across Central Government organisations and Arms Length Bodies (ALBs).

It suggests the existing shared services operations, while not delivering optimum results, have already delivered savings (£13m per annum at the Home Office, £20m at Ministry of Justice and £35m per annum at Department for Work and Pensions) through moving back office transactions to shared service centres. It is relatively common for shared services projects to encounter difficulty in establishing a baseline position on service quality and costs and there are no details provided on how these figures have been derived.

The government’s new vision consists of -

• A Central Government oversight function to lead a new governance structure to accredit independent Shared Services Centres (ISSCs),
• A small equitable market (maybe 2 providers) of accredited ISSCs will be available for Government Departments and their ALBs to choose between,
• ISSCs will operate independently from customer organisations, delivering “outcome based services” using standardised simplified processes against established performance benchmarks.
• ISSCs can adopt different business models (i.e. public, mutual, private), leverage capability and financial investment needed to deliver services and can operate virtually or from integrated delivery centres.
• Departments can make a case to continue to use their own “standalone” corporate services if they can match ISSC performance using the agreed benchmarks.
• If a department can show better performance than ISSCs, they may be able to begin offering services to others but a Department may be compelled to become a customer of an ISSC, or at least meet the same standards, if they are falling shot of performance standards.

The Cabinet Office Efficiency and Reform Group Shared Services team will be working on a migration plan and a strategic outline business case for November 2011. Overall, the paper does seem to set out a pragmatic approach to the challenge, recognising that one-size might not fit all and providing some flexibility for the larger organisations to continue providing in-house services.

In relation to the shared services delivery model, the government has suggested it will learn five important lessons from the experience of early shared services adoption in government -

• Independence is important to incentivise a better quality of services at a lower cost.
• Delivery of shared services is not a core Government skill and bringing in operational and commercial expertise is vital to improving current capability.
• On-boarding to a bespoke service can be expensive and issues on charging between public organisations can act as a barrier, e.g. smaller organisations need an affordable solution.
• Shared Services comprises a range of key components that influence cost and require standardisation – infrastructure, IT platform, ERP solution, business change, business processes.
• Strong governance is essential and efficiency gains are proportional to the level of mandation in the use of shared services.

While these lessons look fine (if not very new), does this strategy make sense in its broader context?

Read the rest of this entry →

In the current climate, perhaps it is unsurprising NHS organisations are looking for clear financial justifications for making any investments in projects which will take some time to complete and deliver benefits. When resources are tight and a number of core corporate functions are being subject to scrutiny and pressure, people are not sure there is a financial justification for starting any new work.

Having had the Electronic Staff Record (ESR) in place since 2008 (at the latest), many NHS organisations have deployed self service tools in some shape though few appear to be making full use of all it’s key features.

Too many NHS Trusts have been “piloting” ESR Self Service for a long time, with only a small number of people across the organisation using some of the tools available. This pattern suggests NHS organisations have commenced deployment without a clear strategy or vision about how they want to change the way they work.

Like many large projects, it can be all too easy to fall into the trap of focusing on the technology rather than the desired business change.

Undoubtedly, self service tools face special barriers in a healthcare environment. Not everyone has routine access to a computer and the NHS workforce has been relatively late in adapting to new computing technologies generally. With effective planning however, these challenges can be appropriately addressed and overcome.

In part though, the lack of progress on ESR Self Service reflects an innately conservative approach of corporate teams to the introduction of new technology – possibly not an issue special to the NHS. To the extent that self service encourages devolution of control and decision-making away from corporate centres, it is quite natural for those teams to express concern about risks and potential loss of control.

The combination of hesitant corporate teams, competing priorities, financial pressures and institutional constraints has the potential to make many NHS organisations seem increasingly archaic to “modern” managers from forward-looking healthcare and private industry and a new generation of employees now joining clinical teams from universities – who are familiar with the features of modern self-service technologies including sites like Amazon, Lastminute.com, iTunes and Facebook.

Like many organisations then, the NHS has been relatively slow to implement self service tools in the workplace. It is all to common to hear the business benefits of ESR Self Service have yet to be fully understood or, more importantly, realised in practice. How can this be successfully approached? Read the rest of this entry →

Photo: srqpix, Flickr

The Coalition Government is apparently considering changes to employment law – pushing the qualification period for protection against unfair dismissal up from one year to two years. While this represents a reversal of employment law changes which took effect in 1999 – taking the UK back to the position before the last Labour government – they are also considering the introduction of a fee to discourage vexatious claims.

Business representatives, such as the British Chamber of Commerce, often suggest current arrangements are too one-sided – soft on employees – causing huge expense for employers in defending cases. Deregulation in this area will boost jobs, they say, though the TUC express the view that increasing burdens on dismissed employees would be objectionable – preventing people from bringing legitimate claims.

The TUC also reject the idea employment tribunal cases are running out of control, reporting a 14% rise in individual claims during 2009/10 – a figure which, in the context of the economic slowdown and resulting job losses doesn’t sound too alarming.

While the idea of making changes which are “pro-business” seems sensible, comments on Laurie Anstis’ Work/Life/Law blog suggest there are plenty of pragmatists out there who think the impact of such a change is likely to be marginal and many concerns it will simply encourage employers to act sloppily.

The BBC investigation last year provides interesting facts and some balanced perspectives – especially the points that employers need not deploy expensive legal representation to handle tribunals and that half of cases defended by employers in 2009 were won (though this seems like a case of a glass half full?).

So is a change in the law going to have an impact? Read the rest of this entry →

In a guest post on the HR Ringleader website, Felix Wetzel suggests the future is likely to see HR and Marketing moving ever closer until, sharing goals, with similar approaches and complementary skills and talents eventually, the functions merge.

Wetzel explains the need for HR and Marketing teams to work together to communicate and execute “the brand”. Much of the language he uses seems ill-judged in relation to a traditional HR audience. While “people = brand” makes a good start, moving on to “people = employees = customers = competitors = suppliers = citizens” might not help HR practitioners access his key ideas.

In fact the idea of linking brand with HR practive is not at all strange. The concept is supported by research and guidance on Employer Branding offered by the Chartered Institute of Personnel and Development (CIPD) which says -

“A strong employer brand should connect an organisation’s values, people strategy and HR policies and be intrinsically linked to a company brand.”

The CIPD’s research showed corporate branding was having a significant influence on recruitment campaigns, employee communication learning and development and leadership and management behaviours. HR practitioners perceived clear objetives for effective employer branding for alignment to vision and values, recruitment outcomes and both employee satisfaction and performance.

But are the two areas linked beyond the recruitment campaign? Read the rest of this entry →

The Sector Skills Council for UK Healthcare – Skills for Health has recently published the results of pilot work it was undertaking over a year with seven NHS Trusts on a ‘skills passport’.

The system, built by Skillsprofile based on work it has done withing other industries, allows workers to create an online record of their skills, qualifications and experience, verified by qualified line managers, enabling prospective or existing employers to save duplicating training where it is not needed – especially stautory mandatory training if staff move between employers.

Skills for Health endorsed the work delivered by the organisations, stressing the potential to reduce administrative costs associated with taking on new staff and a range of other benefits for employers and employees.

David Foster, Deputy Chief Nursing Officer for England has spoken favourably about the pilot, suggesting it had ” …confirmed the case for a skills passport, … also highlighted a range of potential additional benefits for employers, health workers throughout the UK, universities and, most importantly, those who use health services. But is this initiative too late? Read the rest of this entry →