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Case Study - Surrey County Council

Submitted by admin on 18 February, 2010 - 13:05

In the public sector, an article in Personnel Today (12 September, 2006) reported that Surrey County Council had saved more than £9m in the past four years by dramatically slashing the number of jobs in its HR department from 400 to just 40. This involved a major organisational restructure, where HR administration was transferred to an internal shared-services centre, and most of the HR support service for education was outsourced. Graham White, the HR Director at that time reported that: "Through effective use of TUPE, internal relocation and natural turnover, a very large part of the process was completed with little to no disruption."

The ratio of HR people to employees dropped from 1:80 to 1:600 and HR function completely changed its profile within the council. Graham White was very clear about the reasons: "We wanted to raise the game of HR, to move beyond being a large bureaucracy into a dynamic, strategic player in the organisation."

Although in the case of Surrey County Council it was believed that the reductions in HR staff and the associated cost savings did not impact HR service quality, the temptation to promote the cost-saving aspects of e-HR, however, may disguise a plethora of tensions concerning the wider organisational and relational impacts. Reddington et al (2005) draw attention to the need to manage the inherent tensions between cost savings and human interaction.

“The potential danger of over-stretching on the cost-saving aspects, to the detriment of the ‘human side’ of HR must be borne in mind. Customer intimacy, a key driver of the perception of service quality, can be compromised if a transactional mentality, driven by cost reduction targets, dominates the service delivery philosophy.” (Reddington et al 2005, p 68)

The conundrum for HR therefore seems to be how to deliver high quality administration services while also making a successful transition to higher value-add services. The point is also raised with some frequency that attention must be given to the aspects surrounding transformation of human capability and that inherent dangers lie in simply viewing e-HR as a technical solution.

As John Meelow, an HR practitioner at BP observed, when talking about a significant e-HR project:

“This has not been a challenge putting e-HR on the web, but more to do with getting people to use it. Our IT and HR departments led this project but we needed to start with the business wanting to do it in the first place! We forgot about the people and the processes and didn’t get buy-in from line managers.” (People Management, November 2002).

Given this situation, it I helpful to look at a range of outcomes that can result when e-HR is introduced – see Table 3.

Table 3 - Classifying e-HR Outcomes (Based on Reddington & Martin, 2006)

  Positive Negative
Intended

Transactional

  • Reduced costs of HR transactions and HR headcount reduction
  • Greater responsiveness to needs of managers and employees’ needs for (real-time) information and tailored HR solutions on demand
  • Increased self-efficacy among managers and employees

Transformational

  • Greater accountability of managers for people management
  • Increased acceptance of self-development by employees
  • Improved talent management through self-selection, self-assessment, performance management, etc
  • Greater sense of corporate identity through uniform HR portals
  • More time for HR to focus on expert/strategic issues
  • Greater ability to work flexibly from home, and other workplaces

Transactional

  • HR headcount reduction

Transformational

  • Lack of face-to-face contact and remoteness of HR staff from ‘clients’
  • Intellectual property and data ownership transferred to outsourcing partner
Unintended

Transactional

  • Spill over of information from HR into other areas of business

Transformational

  • Greater sense of organisational innovativeness/progress modelled through adoption of sophisticated e-HR

Transactional

  • Displacement of existing HR staff and loss of organisational knowledge
  • Lack of job satisfaction among HR staff working in shared service centres
  • Manager/employee frustration over ease of use and value of information
  • Resistance to new ways of working through ‘benign neglect’, opposition or mild forms of sabotage
  • Increased levels of cynicism with HR/organisational change programmes
  • Increased perception by managers of ‘doing HR’s job’ and work overload

 

It is clear that in order for the investments in e-HR to be effective, the key steps set out in the framework in this guide need to be managed professionally. Many issues derive from a failure to develop a detailed case which links business goals, strategic HR goals and e-HR architectures and which fails to take account of cultural considerations.

Only by taking the steps outlined in this guide in a professional way will the risks be minimised.