NEED TO KNOW Management development
How to handle redundancies
Staff cuts are inevitable throughout the public sector. But research shows that the way redundancies are undertaken has a greater effect on employees than the job losses themselves. John Marsh explains how to prune sensitively
Be it central or local government, the health service or the police, we are entering uncharted terrain. The next year is not going to be easy and, for many, job losses are inevitable. So it will be more important than ever to ensure that redundancies are handled well and senior managers work together as much as possible. According to the Offi ce for Budget Responsibility, 600,000 jobs are to be lost from the public sector. The Chartered Institute of Personnel and Development forecasts 725,000. And there has certainly been a steady stream of job cut announcements since the 2010 spending settlement. These include around 1,000 posts going in Greater Manchester Police and in health trusts such as Pennine Acute Hospitals and St George’s Healthcare; 1,500 in Liverpool City Council and 11,000 in the armed forces.
One thing is sure – in light of the toughest spending package in a generation, it is incumbent on all those working in the public sector to strike a balance between living within squeezed budgets, protecting essential services, and managing job losses as smoothly as possible.
Redundancy programmes are a major change to any organisation. These management development pages have given useful guidance over previous months on leading in diffi cult times and motivating staff. But there are also some specifi c guidelines to follow to ensure that redundancies are handled successfully. The ten main ones are listed below.
1
GET A GRIP ON YOUR WORKFORCE DATA Crazy though it may seem, only a minority of organisations can truly claim to have a single version of the truth on numbers. Often, for example, the list of budgeted posts sits on fi nance systems while the details of actual staff in post sit on human resource department systems – and never the two do meet. Organisations need to translate reduced budgets into headcount numbers and understand the impact on various staff groups, as well as being on top of vacancy rates, attrition and skills mix. Getting a handle on data is the top priority.
42 PublicFinance APRIL 2011 2
ENSURE YOU HAVE GOOD PROJECT MANAGEMENT AND ACCOUNTABILITY Every redundancy programme needs good project management. One way is to set up a senior-level workforce governance board to oversee redundancies, vacancy management and restructuring. This typically consists of fi nance, human resources and operational leads. Project management is required as successful redundancy programmes have many interdependencies that need to be co-ordinated across a number of functions.
3
MAKE SURE PAYROLL AND PENSION DATA ARE UP TO DATE
A major part of any redundancy programme is having accurate and timely estimates of what departing staff will be paid and the effects on their pension. Most public sector organisations are considering voluntary severance programmes, which lead to many more enquiries from staff than the number eventually made redundant. Often, thousands of estimates are required. If handled badly this can cause reputation damage and upset to individuals. Are your
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