Keeping staff positive in tough times

George Osborne’s June budget will have a sizeable impact on the public sector. Up to 120,000 public sector jobs will have to be lost and a two year public sector pay freeze on staff earning more than £21,000 will take place.  Public sector pensions will also be affected as the government tries to cap the £770bn bill for unfunded public sector pensions.

As part of the budget the government announced changes to the way public sector pension rises are calculated by shifting indexes from CPI – (Consumer Prices Index) – to RPI (Retail Prices Index). This could cut public sector pensions by up to £1000 a year. Lord Hutton will also make recommendations on public sector pensions in September which are likely to result in changes to how much people pay in and when they can draw their pensions.

There will also be a consultation on scrapping the default retirement age, meaning that people may have to work longer before being able to draw on their pension.

Staying positive
Amid great changes to their personal financial circumstances, public sector employees will be expected to deliver services to higher standards, with continued pressure for better co-ordination and improved outcomes.  But how will these changes affect them and those specifically working in procurement - how can they remain engaged and motivated when there appears to be so little to feel positive about? What should managers in the public sector be doing to ensure staff continue to deliver while remaining engaged in this tough climate?

Ed Fothergill, managing consultant at Xancam, a  business psychology consultancy which works with a variety of public sector organisations, believes that there are some positive things to come out of the changes. He comments: “While many employees rightfully are fearful about what the changes to the public sector will mean for them there are many things they can do to potentially change the outcome of their organisation or their position within it.

“Instead of viewing everything as a cost cutting exercise try to see this as a chance in a lifetime opportunity to identify ways to do things differently. Employees have a chance to find creative and innovative ways to deliver the same output in more cost effective ways – which could ultimately result in less headcount costs. Secondly, if employees are being asked to take on responsibilities which don’t necessarily fit within their area of expertise they might do well to view this as an exercise in stretching themselves – a one time chance to learn skills in an area they never would have considered prior to the recession.”

Doing more for less
It is clear that changes to the public sector will result in employees doing more for less. But in difficult economic times when organisations are undergoing significant change many high performing individuals will be tempted to move elsewhere. The challenge for organisations is in retaining their talent when the typical types of rewards have been frozen.

Ed Fothergill believes that the best way to retain talent is for managers to have open conversations with their people to find out what interests and motivates them. Finding out what makes them tick even in difficult times will enable managers to identify possible opportunities to stretch and develop people and so keep them engaged with the organisation.

David Noble, CEO of the Chartered Institute of Purchasing and Supply, the largest professional purchasing institute in the world comments: “These are certainly difficult times in the public sector, but procurement professionals have a real opportunity to make use of their skills and expertise and make a difference to the deficit. Using smart procurement techniques and strategic supply chain practices, rolled out across all government departments, purchasers can demonstrate their true value to employers while continuing to reduce costs. This makes them a real asset to any organisation.”

Keeping staff engaged
Ed Fothergill believes there are a number of things public sector employers can do to keep staff engaged during these difficult times:

• have a plan for communicating news to people, with clear timelines,  and tell people what they can expect to hear from you and when

• keep the lines of communication open and keep staff informed, even if there’s no news to tell

• be prepared to deliver bad news as soon as you can – people may not like the news but they will respect you for being upfront

• be as open and honest as is possible – if you fail to be honest you may lose the trust of your people

• encourage staff to provide creative ideas about how the organisation could save money – it may not only prevent some headcount cuts but will also engage people in the process and make them feel involved

• publicly recognise and reward good performance – even if it’s just a thank you

• look for non-financial incentives to motivate staff