Ppma joint southern south east and london region meeting 280613 pw c prestn


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Joint PPMA regional event for London and Southern/South East regions - 28 June 2013

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Ppma joint southern south east and london region meeting 280613 pw c prestn

  1. 1. PPMA Joint Southern & South East Region and London Region Meeting June 2013 www.pwc.co.uk
  2. 2. 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 2
  3. 3. PwC The future of the public sector workforce Slide 3
  4. 4. 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 4
  5. 5. 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 Mexic o 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 5
  6. 6. PwC -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 6
  7. 7. PwC New strategic playground for growth & development across sectors ECIC 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... 7
  8. 8. PwC ...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 8
  9. 9. PwC Where necessary, prepare to deal with failure where it becomes inevitable in a managed way Strategic Financial Operational Funding available to manage risk 9
  10. 10. 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
  11. 11. PwC Cross service demand side issues 11
  12. 12. PwC 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 12
  13. 13. 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) 13
  14. 14. PwC Specific workforce challenges LG & EducationHealth 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 14 Integration of community service delivery
  15. 15. 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? 15
  16. 16. PwC Cross service ‘supply’ side considerations 16 Service delivery Own Buy Share
  17. 17. 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 17
  18. 18. 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: 18 Future Workforce Strategy Productivity Flexibility AgilityCollaboration Efficiency
  19. 19. PwC The changing role of the HR function Slide 19
  20. 20. 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) 20
  21. 21. PwC 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? 21
  22. 22. PwC Market trends - CEO business and people challenges 22 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)
  23. 23. PwC Business related pressures causing HR functions to transform 23 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
  24. 24. PwC HR related pressures causing HR functions to transform 24 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
  25. 25. 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 25
  26. 26. PwC In summary, the case for stepping up the pace of HR change is increasing 26 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... HRCustomers Global Differentiated Fragmented HRRoles Strategic Focus (BPs) Aligned to strategy (CoE) Effective delivery (SSC, Local HR) HREnablers 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
  27. 27. PwC Evaluating our own drivers 27 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
  28. 28. PwC HR Priorities - Business themes that trigger change in People and/or HR priorities 28 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
  29. 29. PwC HR Priorities - Different business strategies will drive differing HR responses 29 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
  30. 30. PwC These drivers are fundamentally changing the people operating model 30 Linkingemploymentbrandwithoverallbrandstrategy 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) “Lineofsight” Linkingstrategytoactivity 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.
  31. 31. 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
  32. 32. 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
  33. 33. PwC Function capability Slide 33
  34. 34. 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 34
  35. 35. PwC 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 35 • 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
  36. 36. PwC People & Capability – Building capability in the HR function 36 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
  37. 37. PwC People & Capability – Building capability in the HR function 37 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 37
  38. 38. PwC Building our own ‘From ... To’ model 38 Strategic input Data interrogation and utilisation Impact Managing Planning New mindset Barriers and solutions
  39. 39. PwC Building our own ‘From ... To’ model – potential responses 39 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
  40. 40. PwC Summary and close Slide 40
  41. 41. 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 41
  42. 42. Thanks This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. 130417-133751-NS-UK