Source SeminarIntelligent Cost-CuttingFebruary 2009

Eilish Henry

PricewaterhouseCoopers LLP

Employee Engagement: the key to sustainable efficiency gains

Sharing the distilled learning, not just from what we did well, but also, and perhaps even more important, what we did badly –

including employee engagement!

February 2009Slide 2

PricewaterhouseCoopers LLPFebruary 2009

Slide 3

HMRC – some context

• HMRC – created in April 2005 - merger of IR and C&E

• 100k people in more than 800 sites with 200+ supporting IT systems

• Major public sector reviews (Gershon & Lyons)

• Gershon – find efficiency savings for HMRC of 12,500!

• Processing function (“back office” with 30,000 people - find savings of 8,500!)

• IT Programmes would not deliver within the timescale

and

• A Key Departmental Target – Deliver a better customer experience!

PricewaterhouseCoopers LLPFebruary 2009

Slide 4

The challenge – how to

do more work

to a higher standard

with fewer people?

PricewaterhouseCoopers LLPFebruary 2009

Slide 5

The Solution? - PaceSetter

• Lean – taking the non-value added work out of our processes

• Supported by Leadership and Operational Management interventions

• Benchmarking against other organisations and learning from them – “Go and See”

And then later…

• Re-configuring Processing using

• Migration of work and people

PricewaterhouseCoopers LLPFebruary 2009

Slide 6

This was not about “slash and burn”

The aim was not to simply cut a fixed % across the whole of the business but rather to carefully target the cuts at those areas that did not add value!

PricewaterhouseCoopers LLPFebruary 2009

Slide 7

The changes were both tangible and intangible

Tangible

Fewer staff

Fewer sites

Larger sites

New desk layout – team-working

Hot-desking

Visual Management

Daily performance conversations

Intangible

Increased confidence amongst team members - a “can-do” attitude

More ownership of problems and

Willingness to use their knowledge of the business processes and

To engage in problem-solving

More effective team working

Increased focus on the customer

Greater level of risk-taking

PricewaterhouseCoopers LLPFebruary 2009

Slide 8

Examples of tangible changes – Visual Management

Team Performance Board – Tracking only a handful of KPIs - the focus of the team’s daily performance conversation with their team leader. What went well and why? Learning from this? What didn’t go well and why? Learning from this?

Position for graphic or image

Communications Hub - key messages about performance and also wider organisational concerns. Shared learning. Feedback from customers.

PricewaterhouseCoopers LLPFebruary 2009

Slide 9

Where we did a bad job:

People felt de-motivated and insecure, unwilling to get behind the changes

People with options voted with their feet

We lost skilled, experienced and motivated staff and

Retained less experienced, less skilled and de-motivated staff (refer to results of staff surveys and also Radnor Report)

Where we did a good job:

People felt informed, energised and were willing to get involved with the changes and also to

Acquire new skills and enhance existing skills.

We retained more of our skilled, experienced and motivated staff and

Restructuring and re-organisation was achieved without adverse impact on the customer

“People learn what they want to learn”. Boyatzis

PricewaterhouseCoopers LLPFebruary 2009

Slide 10

Enhanced Employee Skills

•Effective team working

•Lean tools & techniques

•Problem Solving

•Challenging constructively

•Enhanced technical skills

•Customer Focus

All of column 1 +

•Coaching & Mentoring

•Visual Management

•Challenging appropriately:

non-attendance & under-performance

All of columns 1 & 2 +

•Detailed knowledge & application of lean tools

•Facilitation skills

Team members Team Leaders “Expert” support

PricewaterhouseCoopers LLPFebruary 2009

Slide 11

Effective Team Working

• Small teams & groups are natural forms of social organization

• Neural capability & evolutionary development of the brain equip humans to function in small groups

But

• Simply being in a team or small group does not necessarily produce an effective team

• People change through and with others

• Effective coaching and mentoring are essential ingredients for change

PricewaterhouseCoopers LLPFebruary 2009

Slide 12

Finally

• Never underestimate the capacity people have to resist change

• Especially true in public sector organisations

• Many people need compelling reasons to change – the “burning platform”

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.

© 2009 PricewaterhouseCoopers LLP. All rights reserved. 'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

A downturn can be viewed as an opportunity

- not to simply cut costs but

- to improve employee skills and

- the way you work

and

- deliver a better outcome for customers