PPMA Joint Southern & South East Region and ...€¦ · Workforce overview Demand side issues...
Transcript of PPMA Joint Southern & South East Region and ...€¦ · Workforce overview Demand side issues...
PPMA Joint Southern & South East Region and London Region Meeting June 2013
www.pwc.co.uk
PwC
Introduction and overview
• PwC are working with the PPMA to develop thinking about the ‘future of the public sector workforce’
• The purpose of this work is to equip HR professional across the councils sector to facilitate the discussion with their leadership teams about the future size and shape of their own organisations – giving HR a ‘place at the table’
• This session will given an overview so far of our thinking both about the future of the workforce and the future of the HR function
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PwC
The future of the public sector workforce
Slide 3
PwC
Part 1. The future of the public sector workforce
Global context
Public Sector UK view
Workforce overview
Demand side issues
Supply side issues
The new world of public sector workforce
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PwC
Global outlook remains very mixed, with BRICs relatively strong but continuing storms in Europe
Source: PwC main scenario for 2012
Russia
Germany
UK
US
Brazil
India
Spain
Key
Canada
Mexico
South Africa
Australia
Japan
Italy
Greece
Ireland
France
2.1
2.3
3.6
2.3
-2.0
0.3
-0.6
0.0
0.4
-1.7
2.5
5.0
-6.9
3.1
8.0
2.2
3.9
x.x = GDP growth in 2012
China
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-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Apr May Jun Jul Aug Sep Oct Nov Dec January Feb March
The 2012 growth outlook for the Eurozone has deteriorated sharply since last summer
Consensus economic forecasts for Eurozone GDP growth in 2012
1999-2010 average Eurozone growth: 1.5%
Source: Consensus forecasts
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PwC
New strategic playground
for growth & development across sectors
EC IC
Organisation Territory
Internal
control
External
control
Arena for efficient
processes & effective services
Strategic
implementation
Public sector leaders need to balance their internal and external focus...
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...by creating the agile public body
A strategic leader, focused on and accountable for outcomes, not processes, and which sees collaboration, accessibility and transparency as core capabilities built through
...reducing the complexity of organisations
...enhancing customer intelligence
...developing new business models
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Where necessary, prepare to deal with failure where it becomes inevitable in a managed way
Strategic
Financial
Operational
Funding available to manage risk
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PwC
Public sector workforce statistics
• 5.7 million people work in the public sector across the UK
• In September 2012 around 19.4% of people in employment worked in the public sector: - 2.7 million central government - 2.6 million local government - 478,000 in public corporations.
• Top three industries in September 2012: - National Health Service –
employing 1.6 million people - Education – employing 1.5 million
people - Public Administration – employing
1.1 million people
(Office of National Statistics Part of Public Sector Employment, Regional
Analysis of Public Sector Employment, Released: 06 March 2013) 10
PwC
Cross service demand side issues
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Service demand and supply issues
• Political pressure to deliver better services ‘locally’ with local public resources
• Pressure to deliver ‘more for less’ ever decreasing funding and increasing efficiency target
• UK ‘protectionist’ attitude towards public services
• Increasing use of technology – 24/7 client access and support
• Aging population – pressure on adult health and social care
• Troubled families – income divide
• Intergenerational worklessness
• Migrant population – net migration figures
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PwC
Workforce challenges - macro • Aging workforce – segmentation?
• ‘Millennials’ – different attitudes
• Increasing cost of workforce
• Decreased ‘mobility’
• Engaging the workforce in the solution
• Physical and cultural barriers across public services (T&C’s culture)
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Specific workforce challenges
LG & Education Health
Central Gov ‘Blue light’
Significant reorganisation
Long lead time to
develop skills
Cost of workforce
Funding cuts affecting pay and promotions causing
increased resignations and making it harder to attract
candidates
Reduction in management
positions increasing spans of control to
reduce cost
Increase in partnerships
to save money
New operating models
Lack of transparency
between input and outcomes
Movement of services from
central to local delivery
Combining of back office functions to
save on cost – centralised HRSS
New structure – PCC replacing
police authorities
Amalgamating police fleets and centralising
contracts leading to larger areas covered and
more generalist roles
Modernisation – implementation of
new systems resulting in
changes to roles
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Integration of community
service delivery
PwC
Delivery models: the public-private continuum
Public sector control Hybrids Private sector control
Executive Agency
Trading Fund
NDPB
Public Corporation
Joint Venture
PPP
Privatisation
Mutual JV
BPO
GovCo
Permanently employed?
Outsourced?
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Cross service ‘supply’ side considerations
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Service delivery
Own
Buy Share
PwC
Own
• Retention of rare skills
• Workforce cost • Motivation and
engagement
Share
• Performance culture – shared goals
• Multidisciplinary teams – T&Cs
Buy
• Performance measurement
• Different organisations aims?
• Motivation of workforce
Cross service ‘supply’ side workforce considerations
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PwC
The future of the public service workforce
We need to work across existing and emerging boundaries creating evidence based strategy and prioritised workforce interventions focused around:
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Future Workforce
Strategy
Productivity
Flexibility
Agility Collaboration
Efficiency
PwC
The changing role of the HR function
Slide 19
PwC
Market trends - HR call to action
• HR functions have changed significantly over the past decade however there are still serious questions about HR’s ability to drive the change needed to deliver growth.
• To become a true strategic business partner, means understanding the company’s business, industry and strategy. HR needs to be actively involved in investment and business decisions and looking to financial measures to gauge results. A strategic HR function should act as a consultant to the company on all people issues, providing insights that can help business leaders make the rights decisions and helping to craft the right business strategy including those around new market entry.
• If HR is not focused on the strategic business issues that have a direct impact on overall value then their future may be bleak. With CFOs taking a much wider role around growth and business transformation, HR leaders need to become more strategic or face becoming purely functional
(Source: PwC 14th Annual Global CEO Survey ‘Growth re-imagined. The race for talent is back on)
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Market trends - HR call to action
“HR needs to be actively involved in investment and business decisions and looking to financial measures to gauge results. A strategic HR function should act as a consultant to the company on all people issues, providing insights that can help business leaders make the right decisions and helping to craft the right business strategy including those around new market entry.”
• What needs to be in place to enable this to happen?
• If these things are not in place, what can be done to counteract this?
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Market trends - CEO business and people challenges
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90% of CEOs
expect their key operations to grow in BRICs.
66% of CEOs
say that a lack of the right skills is their biggest talent challenge.
66% of CEOs
fear talent shortages will constrain their company’s growth.
83% of CEOs
intend to make “some” or a “major” change to their strategies for managing people.
(Source: PwC 14th Annual Global CEO Survey 2011 ‘Growth re-imagined. The race for talent is back on)
PwC
Business related pressures causing HR functions to transform
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From the CEO
• Focus on ‘core competencies’
• Companies retrench to focus on core activities
• Creates pressure on HR to ‘prove its worth’
From the CFO
• Pressure for cost reduction
• Benchmarking against sector high performers
• Requirement to demonstrate the ROI for HR activities’
From line manager
• Support for them to have the autonomy to manage their teams
• Tools to improve the performance of their teams
• Less labour intensive interaction with HR
From employees
• Improving service to employees
• Modern employees act as ‘volunteers’ and demand high standards of service from HR
• Employees have a new one-to-one relationship with companies
PwC
HR related pressures causing HR functions to transform
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From the HR Community
• Better, clearer, simpler governance
• Wanting better integration E2E – stop the silos
• Getting technology enablers to function in the right way
• Better recognition for the ‘stretch’
From the HR Market Place
• Focus on integrated transformation
• 2nd generation outsourcing & 3rd generation cloud based services
• Making multi-functional shared services work
• HR Software as a Service
From the HR Leadership
• Focus on aligning business objectives and HR priorities
• Delivering measurable HR Value
• Achieving greater influence at the top table
• Doing more with less – being leaner
From Internal HR
• Greater focus on benchmarking against the market and competitors
• How to work around current technology constraints without creating a culture of ‘patches’
• Ensuring effective governance and control of HR related work
• Building better capability to manage supplier relationships directly
PwC
The people challenges in transformational change
The present economic climate is demanding major workforce reform
• How do we define our people strategy?
• If we get it wrong, we will not be able to deliver our future business strategy
• How do we strategically plan our workforce requirements and deliver them?
• If we get it wrong, we could end up with the wrong workforce to deliver our strategy
• How do we reduce the cost of the workforce and improve flexibility and productivity?
• If we get it wrong, we could run out of money/not meet budget
• How do we identify the talent in the organisation and retain them?
• If we get it wrong, we could lose the talent to take our business forward
• How do we develop the right structure and roles to enable new cost effective operating models?
• If we get it wrong, we could end up with a model that fails to work in practice
• How do we have an HR function fit to drive workforce reform whilst reducing its cost?
• If we get it wrong, we may never deliver our financial and people requirements
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In summary, the case for stepping up the pace of HR change is increasing
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Common challenges potentially impacting how HR will be delivered in the future...
Cost reduction
Consolidation
Regulation & Risk
Globalisation
In addition, HR is facing ‘internal’ pressures...
HR
Cu
sto
me
rs
Global
Differentiated
Fragmented
HR
Ro
les
Strategic Focus (BPs)
Aligned to strategy (CoE)
Effective delivery (SSC, Local HR)
HR
En
ab
lers
Technology
Global Standards
Measured value
In addition, to the demands made by the business, there are strategic priorities for HR
Talent • New employee preferences &
requirements • Branding & sourcing of talent • Attraction & retention of global &
diverse talent
Culture • Increased need to manage risk and
embed ethics in corporate culture • Increased focus on organising and
incentivise around the customer • Cross cultural integration challenges
Change • Significant HR support to manage
organisational change • Increased complexity in business
processes and structures • Need to expand service delivery
models into new countries and segments
• The credit crunch has put cost reduction and efficiency at the top of senior executives agendas
• Increasing regulation in some sectors
•Significant increase in cross-border M&A
• The continuation of globalisation – for example, internationally mobile employee base and off-shoring
PwC
Evaluating our own drivers
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From the HR Community
• ’
From leadership
From the HR Leadership
From manager and employees
In two groups evaluate the key drivers in the public sector
PwC
HR Priorities - Business themes that trigger change in People and/or HR priorities
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Enables Shapes
Enables Shapes
Business Strategy defines the direction, positioning, scope, objectives and competitive differentiation
People Strategy defines the leadership, talent, culture and operating model requirements to align to the Business Strategy
HR Priorities articulates the strategic direction and imperatives of the HR organisation and builds out the capabilities required to align to the People Strategy
Critical workforce capabilities – viewing productivity
and skills development as an integral part of
transformation programs.
Managing change in turbulent times –guiding
organisations through change and transformation and
build organisational capability.
Talent management in the increasingly global
environment– establishing holistic, integrated,
technology-enabled, new talent supply chains.
Improving organisational effectiveness – striving for
high performance in operating models, culture,
leadership, adaptability and sustainability.
Learning and collaboration – considering social media
environments and new ways of working, blended
learning and learning as a business.
Measurement – focusing on data-driven, value
outcomes in building competencies, process
effectiveness, productivity and organisational
performance
Business Strategy
People Strategy
HR Priorities
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HR Priorities - Different business strategies will drive differing HR responses
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Alternative business strategy changes require an accompanying realignment of People strategy & HR priorities.
Survive Restructure & Refocus Expand
Focused primarily on short-term actions to manage costs, cash flow and
revenues to ensure survival.
Rationalise vendor contracts
Labour cost reduction
Consider lower cost labour locations
Operational efficiency improvements
Optimise processes and functions
Protect employer brand
Using rapidly changing environment as context to restructure - strengthen leadership and critical talent, review
operating model and culture to optimise agility and innovation
Rigorous workforce planning
Critical skills and role development
Talent retention
Engagement and alignment
Payroll and rewards optimisation
Performance management
Take advantage of market disruptions to acquire capabilities,
market share, and new talent
Leadership capability review and enhancement
Talent acquisition
Post merger activities
Workforce segmentation
Governance and organisation architectures
HR priority interventions
Business Strategy
PwC
These drivers are fundamentally changing the people operating model
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Lin
kin
g e
mp
loym
en
t bra
nd
with
ove
rall b
ran
d s
trate
gy
Business Strategy
People Management Strategy
Human Resource Strategy
Role of manager
Culture
(behaviour)
Retain
&
Engag
e
Build &
Grow
Talent
Perform
&
Reward
Attra
ct
Optimise (Incl. measurement and benchmarking)
“L
ine
of
sig
ht”
Lin
kin
g s
tra
teg
y to
activity
Change Levers HR
Structure & Capability
HR
Operating Model &
Technology Platform
Role of HR
In defining the People and HR
Strategies it is important to
recognise that they need to be
effectively aligned with the wider
business strategy.
It is also essential to understand the
importance of integrating other
component elements which make
up the broader system and which
underpins business change.
PwC
Managing
the HR
function
Aligning
people
to strategy
Managing
financial risks
Creating and
measuring
shareholder
value
• Payroll
management
• Benefits admin
Personnel
administration
• Job grading
• Salary admin
• Manpower
planning
• Compliance
(tax, labour
law, etc)
• International
assignments
• Pensions
HR management
• Personal
Performance
Management
• Training and
Development
• Reward
• HR Function
effectiveness
HR performance
• Governance
• Leadership
alignment
• Leadership
development
and talent
management
• New core
capabilities
• Employee
engagement
• Performance
management
Organisational
effectiveness
• Transformation
al change
• People
elements of
process or
systems
change
• M&A due
diligence &
integration
Managing change
• eHR
• Outsourcing
• HR Function
design
HR efficiency
Financial and accounting impact of people, people-related costs and HR interventions
Basic
Personnel
Services
Control and
Compliance
Specialised
Expertise
Strategic
Business
Partner
Change
Specialist
Administrator
Enforcer
Expert
Business Partner
Change Agent
Slide 31
And the type of HR function
PwC
There is no single generic solution
“There is no one single organisational solution for HR (…). Each organisation will need to find a way that best fits with its unique situation”
Transforming HR, Creating value through people – Reddington, Williamson, Withers
However…..
• Today's HR models all encompass four common elements, however the shape and focus of these vary from organisation to organisation
E-HR
Portal
Employee Self Services (ESS)
Manager Self Services (MSS)
Specialist HR
HR Leaders
i.e. Centres of Expertise
Business HR
i.e. HR Business Partners
Transactional HR
i.e. Shared Services /
Outsource
1 2
3 4
Admin Expert / Functional Expert
Change Agent/ Strategic Partner
Strategic Partner/ Leader
Employee Champion / Employee Advocate &
Human Capital Developer
Slide 32
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Function capability
Slide 33
PwC
People & Capability - HR needs to addresses capability and behaviour
HR has recognised that sustained functional performance requires an approach that addresses capability and behaviour. HR capability will focus on less traditional HR skills, such as:
• Trend spotter
• Talent assessor
• Business leader and consultant
• Strategy developer
Building business capability and support:
• Creating clear line manager accountability
• Providing the right tools, development and support
• Reinforcing the people management role
By focusing on capability HR can realise more value from historic investments in technology and process
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People & Capability – Building capability in the HR function
Personal Attributes
Required for excellent performance across all levels and functions
E.g. Results orientation, Commitment, Continuous Learning, Honest & Integrity
Leadership & Management Competencies
Success factors that differentiate performance across career levels and bands
E.g. Strategic thinking, Resource management, Networking, teamwork, Goal setting
HR Core Competencies
Success factors that are shared across all HR roles
E.g. Insights & Influence, Operational excellence, Stewardship
HR Role Specific Competencies
Success factors that distinguish sub-functional/role specific competencies
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• There are levels of competencies required to function within HR
• As organisations look to transform they also need to consider how key HR competencies need to adjust
• It should also be aligned to the attributes and the leadership competencies of the entire organisation
HR Business Partner
Centre of Expertise
HR Operations Local/ Generalist HR
Business Management
PwC
People & Capability – Building capability in the HR function
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Strategic Orientation
Functional Alignment
Leadership
Transactional
Business Partner
Centre of Expertise
Local/ Generalist HR
HR Operations
HR is recognising that sustained functional performance requires a different approach that fully addresses HR and business capability and behaviour. New roles in the HR function equally dictate new capability (skills, knowledge and experience) requirements. Some roles will focus on strategy alignment, others will focus on operational excellence.
Business Management
PwC
People & Capability – Building capability in the HR function
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HR Business Partner
• Aligned to business shape • Enhance business performance • Act as a change agent and strategic partner to the business
Centres of Expertise
HR Operations
Local HR/ Generalist
Business Management
Typical Role attributes Changes in capability required
• Provision of best-in-class strategy, policy and process •Lead specialist interventions & provide deep specialist advice to the HR community
• Delivers scaled operational services to the business and HR • Works with external vendors and supplier s • Quality and customer experience
• Provision of ‘near-to-customer’ tactical HR support, for example succession planning and performance management support
• Promotes a commercially-run and compliant function • Governance and reporting • Financial and strategic planning • Risk and compliance
• Increases in business acumen and strategic influence
• Increases in deep technical specialism and increased awareness of best in class approaches to their specialism • Strategy development, program design
• Increases in customer awareness and service management • Service & performance focus
• Org design, development & HR effectiveness • Relationship management • Project & Product management
• Sometimes an entirely new capability in HR • Increase focus on planning & performance
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Building our own ‘From ... To’ model
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Strategic input
Data interrogation
and utilisation
Impact
Managing
Planning
New mindset Barriers and solutions
PwC
Building our own ‘From ... To’ model – potential responses
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Strategic input
• Taking strategies, plans, solutions and helping to implement them effectively
Data interrogation
and utilisation
Impact
Managing
Planning
Current mindset New mindset
• Producing statistics and reports on time and accurately
• Credibility though meeting delivery expectations consistently
• Ensuring that individual, team and funtional objectives are delivered to required parameter
•Ensuring that planning is done effectively, in line with operational and business cycles
• Shaping solutions at inception to ensure they are more relevant, can be landed and are sustainable
•Analysing data to identify trends, issues and remedial solutions. •Identifying gaps in data captures and working with internal partners to fill gaps
•Building, developing and maintaining relationships through accessibility and demonstration of expertise on a day to day basis
• Continual review of how functional services are delivered with respect to meeting ongoing organisational requirements
• Identifying key emerging issues through organisational and environmental scanning and adapting planning to take account of these
PwC
Summary and close
Slide 40
PwC
Closing remarks
• Our external and internal factors are influencing the size, shape and composition of our workforce
• We need to change and adapt to meet these changes and deliver effective services of the future
• The HR function has a key role to play ..... but our ‘mindset’ need to change to give us a place at the table
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Thanks
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