Innovative HR Innovative HR in the UK Civil Service Deborah Crewe, Modernising People Management

The context… HR is currently decentralized in departments, agencies and NDPBs The centre provides strategic direction and guidance, supports and challenges departments to improve, and delivers a small number of central services, focusing on Improving leadership capacity Upskilling the workforce Making the HR functions effective Aligning reward to performance Changing the shape of the workforce

The drivers for change… The delivery agenda: “We are proposing to put an entirely different dynamic in place to drive our public services: one where the service will be driven not by the managers but by the user – the patient, the parent, the pupil and the law abiding citizen” The Rt. Hon. Tony Blair, MP July 2004 Delivery ultimately depends on enabled, engaged and capable people Employment costs = 58% of expenditure Budget constraints lead to more emphasis on employee contribution to deliver

Studies show that effective HR is pivotal to business performance “It is the quality of an organisation’s people management that d etermines its real success or failure” (RBS) 1999 2000 2001 2002 2003 2004 Best 100 companies to work for FTSE all share index Comparison of shareholder value between the Sunday Times best companies to work for (2005) and the performance of the FTSE all share index 200 160 120 80 40 “There is overwhelming evidence of a direct link between the success of an organisation and the quality of its people management” Dave Ulrich

HR has to be good at five things to fully support the delivery agenda Measurement of Impact of HR on the Business HR Must: Execute strategy Manage change Maximise the contribution of employees Be low-cost and efficient in delivering transactional services Measure the impact of HR and people on the business performance HR Leadership & Policy Change Maximise Employee Contribution & Experience HR Administration

HR functions have made progress to meet this challenge in a number of areas Areas of progress A shared direction of travel All departments working on HR Transformation plans Progress with business partnering Building shared services Building capability Recruiting outsiders Development of insiders Setting PSG standards Energising the HR community Measuring HR and benchmarking Improving HR / staff ratios

Shared direction of travel: the Ulrich model Strategic partner Change agent Administrative expert Employee champion

But the HR function needs increased ambition for its contribution The current focus in HR is largely restricted to cost reduction. This is very necessary and makes HR more cost-efficient but does not, on its own, have significant impact on the achievement of delivery objectives. In addition to driving down the cost of HR, departments need to excel at improving the impact of people management on delivery objectives. This means: Focusing HR on those activities which add value and impact on the business Line and HR working together to execute strategy, maximise the employee contribution and manage change effectively Measuring for the impact of people on the achievement of delivery objectives The key focus of a HR function must be on improving the performance of the organisation.

HR Function Scorecard > People Management Scorecard To help meet this challenge, HR functions have to “mature” in four dimensions Operational Excellence and Service Quality Enabling Business Change Alignment with Strategy Execution Informing Strategy Choices HR defines and achieves excellence in operational efficiency and service quality HR refines its policies, services and skills for maximum effect on specific business outcomes People are recognised as drivers of the achievement of the key business-targets HR informs the organisation’s ambition and “customer”-facing strategy Excellent / consistent practice in all key HR processes and relationships with users Understands/practises how to use HR to influence business and operational outcomes Integrates People Plans into ‘business’ planning and budgeting processes Workforce effectiveness that gives sustained performance Cost per transaction Cost per employee Timeliness Accuracy Employee experience Headcount Management Attendance Management Skills gaps Leadership gaps Quality performance management Engagement Transfer of learning Human capital readiness Organisational capital readiness From two years From three years From five years Description HR focus Sample Metrics Current HR focus Indicative timescale HR Function Scorecard > People Management Scorecard

There is much for the HR functions to do Areas for future attention Sharing what an effective HR function is Creating intelligent customers Building people management outcomes into performance management Embedding professional standards Executing shared services and HR business partners Building line capability Improving readiness of workforce to deliver Measuring strategic outcomes Enhancing ability to manage change Refreshing HR function measurement

Professional Skills for Government : developing the skills and experience for 21st century services across all Civil Service.

HR professional standards Knowing the business – understanding the organisation and how HR can best contribute to its success Demonstrating HR expertise – understanding and delivering suitable HR practices for the organisation which lead to organisational success. Acting as a change agent – making organisational change happen Building personal credibility – personally demonstrates the organisation’s values, builds trust with partners in the organisation, and proactively contributes to organisational success.

The HR Transformation Directorate can accelerate progress HR Transformation Team offering To follow A viable contact strategy targeted on what gives greatest potential for value add in the most efficient way and sustaining a professional HR Community How to measure HR effectiveness How to build HR Professionalism Ensuring Value & Delivery led HR Transformation Signposting access to learning from others Toolkits How to unlock barriers to HR Transformation

Innovative HR Innovative HR in the Civil Service Deborah Crewe, Modernising People Management