It will take a while for the concept of realistic cost reduction to filter through in the public sector.

Some years ago I moved into public sector employment – since back again. Having come from a large blue-chip who had the corporate finger firmly on the pulse of conspicuous expenditure, I was at first reassured to hear the words: “We must be careful, this is public money we are spending.”

But it soon became clear this was a mantra trotted out with very little thought as to what it really meant.  For example, first class travel was still standard at some levels – even first class season tickets for those with regular London meetings.  The list of exceptions to the cost-cutting rule was seemingly endless.

I am sure – at least I hope I can be sure – such things do not still go on.  But, as Jaluch points out in Cutting Costs and Coffee, too many people in positions of responsibility are just way off the mark when it comes to cutting costs the right way. This shouldn’t be about plundering the public sector, but neither should it be about feckless soundbites.

As well as a much better appreciation of where to spend and where to economise, we need leaders able to create rapport, show genuine empathy, elicit ideas and demonstrate credible leadership to pull it off – without ripping the heart and soul out of the organisation in the process.

And public sector HR has a huge role to play in getting it right. As Courageous HR points out in its blog HR Business Partner – fact, fiction and the new role of HR, HR needs to focus on delivering the effectiveness mandate as well as purely efficiency. Cut costs and make change, of course, but don’t cut out or incapacitate critical life-giving organs in the process.

Cost cutting must not be a fashion statement. It must be for real and for the benefit of the whole organisation. Staff must understand the reasons for economies and must be committed to making a difference. Similarly, the spend it or lose it concept of the annual budget must be ended.

It will take time and a certain amount of education to change the habits of a lifetime for many.  But this is not all about public sector, bad; private sector, good. It is about learning from one another and taking the best and modifying it to suit the environment.

For ideas on cost cutting – without slashing the headcount – see our Alternatives to Redundancy Factsheet. For tips on inspiring staff to deliver in a downturn see our Motivating Staff Factsheet.

Tags: change management, HR management, Leadership effectiveness, Public Sector HR, redundancy training
Posted by Elspeth Watt
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