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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 →

It is possible the UK is about to witness the decline and fall of the 20th Century’s monolithic, centralised state institutions. But trying to read the early actions of the coalition government is difficult and it’s too soon to tell how the new world of public service, created by the government’s actions, will look.

One might be forgiven for thinking a lack of vision is creating the uncertainty. In response, it might be argued the competing pressures and visions within the Labour party resulted in a lack of consistency in purpose and action (if not motivation).

It’s only fair to remember the coalition needs to craft solutions reflecting the new partnership …. a more formal process than takes place inside single party “broad church” governments.

So, as the coalition begins to shape things in their own image, what should we expect?

For the coalition parties, links between localism, pluralism and liberalism are deep and profound. Big, centralised government is broadly rejected. From the actions that have been taken by the new government, the coming changes may be more radical than anyone expects. Evidence of this can be seen in -

• the “Big Society” contrasted with Big Government with it’s echoes of “Total Politics“, coined by Greg Clark and James Mather and used by Ian Duncan Smith to attack the New Labour project,
• the abolition of Strategic Health Authorities and Primary Care Trusts and nascent plans to devolve spending to General Practitioners,
• the challenge of producing plans for 25% to 40% cuts in central government departments,
• the removal of regional planning controls,
• action to consolidate the number of arms length bodies,
• the moves to create elected police authorities.

So how will public services look in five years time? Read the rest of this entry →

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 →

The UK’s coalition government has made few changes to government departments – but the underlying “machinery of government” is under scrutiny.

According to reports in Personnel Today, the government is planning a cross-government HR framework – aiming to “eradicate duplication” and “simplify HR functions”.

The new Efficiency and Reform Group is looking at the creation of  “a single coherent HR policy” to be used by all Whitehall departments by March 2012. The Cabinet Office is considering a simpler approach to Civil Service pay, terms and conditions.

By focusing savings and streamlining efforts on back-office functions, the aim is to protect front-line services. Francis Maude is quoted saying - 

“Good government can cost less. It won’t do just to carry on as before. By joining forces and concentrating our efforts where the money actually gets spent, we can make sure the maximum amount gets taken out of government overheads, not front-line services.”

That sounds good though in reality the vast majority funds “actually gets spent”  delivering programmes and services rather than in the back office. There are potential savings to be made by the adoption of shared services and outsourcing for back-office solutions – though savings are by no means guaranteed. Even assuming savings are delivered, the financial benefit is likely to be small compared to the overall financial challenge facing the government. Read the rest of this entry →

The last government trailed the concept of outsourcing public sector back office functions to the private sector. The expectation is that this would raise money, reduce costs and contribute to defecit reduction. Do you think this is a good idea? Read the rest of this entry →

 The UK government seems certain that outsourcing back office functions would improve services as well as reduce costs. This view is supported by the major consultancy firms and the CBI. A programme of outsourcing seems likely.

What do you think?

Read the rest of this entry →

Public sector organisations are tasked with delivering significant savings through “efficiencies”.

A key strategy adopted by government is the adoption of shared services and outsourcing for back-office functions.

The strategy and its targets are based on conclusions derived from reported experience of both private and public sector organisations.

Yet, in his book “Systems Thinking in the Public Sector“, John Seddon concludes management fads, of which shared services are a good example, are rarely based on real evidence …. simply “plausible ideas”. Read the rest of this entry →

In 2009, the Chartered Institute of Personnel and Development (CIPD) reported 29% of organisations now outsourced HR services.

Just 7% however, reported outsourcing was an all-round success, with only 47% saying it had been a success in some areas.

Many outsourcing and shared adopters have a “bundled deal” with a assortment of services including HR, Finance, Estates and IT services from the same provider.

Maybe such solutions haven’t had sufficient capacity and competence built-in to deliver high quality HR services.

Service is likely to be perceived as poor unless client needs are well understood, service levels properly documented and supported by effective operational and technical solutions. Finally, services should be subject to the same detailed monitoring as the provider and client organisations are using for other functions. Read the rest of this entry →

Attractor can now offer a cost effective, independent, web-enabled, benchmarking service to NHS clients.

Using this new toolkit, and growing a dependable evidence-base, NHS Trusts can make robust decisions about the actions needed to improve service quality and value for money. Read the rest of this entry →