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Facing the fire: employment challenges in the public sector

From restructures to budgets, new government heads to rigid contracts, human resources leaders in local, state and federal agencies are facing a perfect storm of complexities to navigate.

Maddocks employment safety and people partner, Lindy Richardson, predicts things could get even more complex, as unions gain confidence, rates get capped, and services are increasingly shared among departments to shave costs.

“I advise government human resources personnel every day on their employment issues, so I understand the challenges they face; this can also extend to dealing with issues relating to contractors, volunteers, and services,” she says.

Over 15 years, Richardson has witnessed significant shifts in the matters faced by HR personnel. Here she explores some of the emerging challenges, and also offers advice on how HR leaders can navigate this road for everyone’s benefit.

Restructures

Amid constant changes of leadership, restructures are front-of-mind for many agencies. These can include redundancies, right-sizing, outsourcing and even insourcing of staff who were previously contractors, Richardson explains.

“The restructures tend to happen in the state government space around change of leadership,” she says.

“With the Andrews’ government recently getting power in Victoria, there was a whole lot of shake up. Departments changed lines. These MOG [machinery of government] changes don’t tend to lead to redundancies, rather people just moving around.”

Adding to the complexity of personnel moves is bargaining around enterprise agreements, which is increasing as unions become more confident and fight harder. The challenge for HR is managing the conflicting expectations from unions, governments, employees and external stakeholders.

“It can become quite protracted, and with the state government in particular there are a lot of hoops to jump through to ensure the government is doing the right thing,” Richardson explains.

“Industrial disputes are coming out of that space too … in areas of higher union activity.”

[pullquote] “Have a think about the culture you want to create — and how you can have your employment contracts and industrial policies support that culture.” [/pullquote]

Added to this environment are ever-decreasing budgets, with councils hit by tighter rate caps and scrutiny on efficiencies.

“If councils are restricted to rate rises, they have to manage their services and run their organisation with the money that is coming in.

“[They can’t say] ‘we want to increase our home and community care offering, therefore as part of setting our rates, we want to have a 1.5% uplift to help us grow’.”

Shared resources/services

As a result of the budgeting issues, Richardson says a growing trend is sharing of resources across departments or government entities (such as local councils). This is often to the benefit of staff, as they may remain more gainfully employed by being sent to areas where work is needed, however it can prove a challenge when it comes to contracts.

“A recent example of a shared service arrangement was in relation to secondment of staff among separate organisations to deal with availability of ebb and flows of requirements,” she says.

The two organisations were in childcare, in locations where the birth rate changes each year.

“So they banded together in a secondment arrangement, where they send people [nurses and childcare experts] to another area two days a week, with the idea that they may be needed back again the next year. I expect to see more arrangements like this.”

A similar scenario is arising with behind-the-scenes services, such as payroll, administration, IT and finances.

“Then you have sharing of staff to increase partnerships. It’s a variation of the model, so you have organisations with aligned interests that can see the benefit of one person or a group of people working across those organisations.”

This raises questions around who the core employer is, who is responsible for paying them, and who they report to.

“There are also the issues of how you are going to share the cost, and not pinching staff. That is something you normally think of in a commercial context … but for the public sector it is more that ‘we need that resource and we don’t want that resource leaving’.”

Shifts from private to public

With jobs-for-life rare, the movement of staff from the private to public sectors is increasing, presenting new challenges for HR leaders.

Richardson says this has many positives for government, such as bringing commercial minds into an agency, but it requires greater negotiation of contracts. People from the private sector may not realise government contracts can be subject to limitations (such as being for a maximum period of time), and dismissal procedures can be tougher than in the corporate sector.

“Then you have things like conflict of interest. You may have someone who goes from a property development firm into government, and they could have personal interests in a lot of things, shares, etc.

“To some extent the government entities have to catch up to some of those issues and be alive to them.”

While the corporate sector can more easily tailor employment contracts to individuals, the high regulation requirements in government can make this complex. New staff to the public sector could see this as a disadvantage.

[pullquote] “You can’t always plan ahead, as you can’t always foresee that someone is going to raise an almighty dispute over 2000 employees … in the next week.” [/pullquote]

“Organisations want to ensure that terms and conditions are fairly standard so that there is not seen to be someone who is favoured or going outside of it,” Richardson says.

To deal with this, Richardson says agencies should focus on building a great culture.

“Have a think about the culture you want to create — and how you can have your employment contracts and industrial policies support that culture, and ensure the contracts aren’t too vanilla”.

What can HR leaders do?

Despite the plethora of challenges, Richardson says they can be navigated successfully. A fundamental step is to intricately know processes to prevent compliance issues and litigation.

“Public sector employment is process driven. There are policies, processes and regulation that all sit on top of each other. As an organisation, if you have promised you will do something in a particular way, you have to do it that way.”

Richardson says there is nothing more vital than remembering that people are the essence of employment law, and this recognition should be the core of decision making.

“To a certain extent you can’t assume an outcome, as you have human beings coming from a whole lot of different backgrounds, and their decisions can be based from their heart, or their back pocket, or on all sorts of things.

“You can’t always plan ahead, as you can’t always foresee that someone is going to raise an almighty dispute over 2000 employees … in the next week.”

The key is fairness and speed of problem solving, she explains, along with a great deal of consultation.

“It is a requirement of every public sector arrangement that you need to advise your staff of what you are doing. Give them a genuine opportunity to provide you with feedback, consider that feedback, and then you can make a decision. That is an issue that is very much on the agenda of unions and also on the agenda of employees.

“If an employee doesn’t agree with a decision but thinks they have been treated fairly and reasonably, they are less likely to challenge it. Contrast that with someone who doesn’t agree with the decision and feels they have been mishandled and ignored; they are going to challenge that.

“Because it is about people, it needs to be managed quickly and managed well.”

Looking ahead in HR

Productivity pushes are likely to inform the 2015/16 financial year, expects Richardson, resulting in governments getting more commercially minded in their employment processes.

“Governments of all ilk need to be commercial and think about not wasting money or resources – for me it is most often seen in the bargaining space, but it is also about how can we do things better, where is the wastage? Commerciality and productivity will be ongoing themes for public sector employment.”

Written by: Melinda Oliver

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