The changing workforce deal

Newsletter articles

1 Jan 2012

HR Insight Issue 14

Peter Reilly, Director HR and Consultancy

Peter ReillyThe local government sector (and indeed much of the public sector) is going through substantial change at present and will be doing so for at least the next three years. This will involve a substantial reduction to employment numbers, though the precise size of the cut will vary between organisations. Much of this reduction will come via redundancy, some voluntary and some compulsory. There will also be traditional outsourcing or the creation of new bodies to undertake local services; in both cases staff transfers will occur. Moreover, there have been changes made to terms and conditions of employment, diminishing some of the benefits of local government employment, which may be of a temporary or permanent nature.

Against this background, there is an important question to ask about what the employment offer will look like in the sector in three years time. This question has to be answered once councils start recruiting again, but it is also relevant to the existing workforce. To a greater extent than in the past, council employees will have to deliver high productivity if the ‘more with less’ aspiration is to be delivered. The research is clear that employee productivity comes in part from their engagement with the organisation. How can organisations ensure that at the end of the cutting process they will have a motivated workforce?

One way that Councils might engender demotivation is through the way they manage change. Poor leadership, poor communication and poor line management will generate lack of engagement. How the change is managed (restructuring decisions, redundancy selection and appointment processes) is critical. Get this wrong and they will lose employees’ hearts and minds. Moreover, having the wrong people in the wrong jobs will, like disengagement, also damage productivity, especially where roles are ill defined or structures impede collaboration and good performance management.

There is a lot written on managing change processes well and one would hope (or exhort) councils to take note of this best practice. Perhaps, whilst they are making change happen, they may find it harder to focus on the future employment vision, especially how this is understood by the workforce. Yet most councils will still be employing the majority of the same people in three years as now. What do they have to offer them?

To explore the changing psychological contract and to try to build a new deal for the workforce, IES has received support from London Councils to conduct focus groups in Waltham Forest and Haringey and an employee survey in the latter. The aim has been to track employee perceptions of what they currently ‘get’ from their council and what they ‘give’ to their employers, against a background of significant change taking place. We hope this will inform future discussion on what the organisational offering to employees might look like in the future, building on earlier London Councils-sponsored research on total reward.