Confidential - do not distribute© 2008 PPMA The Squeeze On Spending – Public Sector HR Response 1st November 2012 – ECC Conference PPMA President /13 Martin Rayson

Confidential - do not distribute© 2008 PPMA Political & Economic Context Budget reductions, past present and future Growing demand Managing uncertainties Changes in responsibility

Confidential - do not distribute© 2008 PPMA LB Barking & Dagenham Case Study Budget spend = £270m (excluding benefits) % reductions = 30% Still £6m to find for 14/15, despite doing the radical things One of the lowest household incomes in London making it difficult to sustain town centre growth The percentage of residents with no qualifications (23.2%) is almost twice the London (12%) and national (12.4%) rates. The percentage of Borough residents with degree level qualifications or equivalent (22.37%) is the lowest in London and almost half the rate for the capital as a whole (39.7%) Public sectors cuts and benefits changes further reducing incomes and weakening the local economy 37.9% of the private sector housing stock (owner occupied and rented) in the borough is non decent Urgent need for additional school places with rising birth rate

Confidential - do not distribute© 2008 PPMA Changes in the Shape of the Public Sector “Public services” rather than “public sector” Councils are becoming more diverse – range of different approaches and operating models Working with others to meet local needs and build the conditions for economic growth Leadership role – magnanimous letting go

Confidential - do not distribute© 2008 PPMA Implications for LB Barking & Dagenham

Confidential - do not distribute© 2008 PPMA Implications For HR Citius, Altius, Fortius Swifter, Higher, Stronger

Confidential - do not distribute© 2008 PPMA Engagement Challenge “Engaging for Success” Key determinants of engagement:  Create a strategic vision  Engage your managers  Give employees a voice  Organisational integrity CIPD Employee Outlook Survey 2012: Levels of Engagement: Views of “Senior Managers”: Private SectorPublic Sector Engaged39%35% Neutral58%62% Disengaged7%3% Private SectorPublic Sector I trust them+9-28 I have confidence in them They have a clear vision +30+1

Confidential - do not distribute© 2008 PPMA Leadership Challenge Commercial skills – greater understanding of cost, not budget Managers as collaborators, negotiators and coalition- builders – not traditional managers Flexibility Managing change and uncertainty Better communications and involvement

Confidential - do not distribute© 2008 PPMA Talent Challenge Media attention on the sector Senior salaries Lack of investment Career paths

Confidential - do not distribute© 2008 PPMA Reward Challenge (with acknowledgement to Mercer) Current structures Pay systems administered through complex and inflexible processes Talent management separated from reward and dealt with in unconnected groups Emphasis on equal pay compliance Fixed costs, including incremental costs that have no connection with performance Reward for tenure Each term and condition of employment managed separately Reward dealt with in isolation as a specialist technical area Current structures Pay systems actively managed to respond to the needs of the business Reward aligned with an integrated approach to talent management Emphasis on flexibility whilst maintaining equal pay compliance Flexible reward models which are tied in more closely with performance Reward for contribution and performance An integrated “Total Reward” approach Reward integrated with EVP and other HR strategies

Confidential - do not distribute© 2008 PPMA Employee Value Proposition or “Deal” (with acknowledgement to Edinburgh Napier University)

Confidential - do not distribute© 2008 PPMA The State of the “Deal” at LB Barking & Dagenham ContributionsInducements

Confidential - do not distribute© 2008 PPMA LB Barking & Dagenham - Biggest “Tensions” 1). We are expecting people to do “more with less” -“Lack of capacity in the team to deliver” -“Competing for precious time to deliver services” 2). Lack of support from the “organisation” - “No real understanding from higher management of what individuals and teams actually do and what their resource needs are” 3). The suppression of negative issues - “At team meetings, issues are discussed, although I feel due to pressure from management not to be negative, these issues are never passed on”

Confidential - do not distribute© 2008 PPMA LB Barking & Dagenham Response Defining and communicating the strategic narrative Leadership and management development programme -Constructive/courageous conversations training -Managing pressure and creating productive workplaces -Retaining and recruiting talent -Future managers programme Engaging staff around a “Staff Charter”