Trends in Strategic Workforce Management in OECD Countries

Zsuzsanna LontiPublic Governance and Territorial DevelopmentOECD

EUPANDublin

4-5 April 2013

2

The size of the public workforce has remained relatively stable…

Sources: International Labour Organization (ILO) LABORSTA Database and OECD Labour Force Statistics Database.

Employment in general government as % of labour forceN

orw

ayD

enm

ark

Swed

enFi

nlan

dFr

ance

Hun

gary

Esto

nia

Uni

ted

King

dom

Luxe

mbo

urg

Cana

daBe

lgiu

mIr

elan

dIs

rael

Slov

enia

Aust

ralia

OEC

DU

nite

d St

ates

Italy

Spai

nSl

ovak

Rep

ublic

Czec

h Re

publ

icN

ethe

rlan

dsPo

rtug

alTu

rkey

Aust

ria

Ger

man

ySw

itzer

land

New

Zea

land

Pola

ndCh

ileM

exic

oG

reec

eJa

pan

Russ

ian

Fede

ratio

nBr

azil

Sout

h Af

rica

Ukr

aine

0

5

10

15

20

25

30

35

2011 2001%

3

…While compensation has shown greater variation

Source: OECD National Accounts Statistics.

Compensation of general government employees as % of GDP

Denmark

Finland

Norway

Canada

BelgiumIre

landSp

ain

United Kingdom

OECDIta

ly

New Zealand

Poland

Mexic

o

Luxe

mbourg

Germany

Slova

k Republic

Japan

Russian Fe

deration

0

5

10

15

20

25

30

352011 2001%

4

Many OECD countries have an ageing public workforce

Source: 2010 Survey on Strategic HRM in Central/Federal Governments of OECD Countries

Italy

Sweden

Germany

Denmark

Greece

Norway

Finland

Canada

Ireland

Hungary

Switz

erland

New Zealand

Slove

nia

Mexic

oJapan

ChileRussi

a0%

10%

20%

30%

40%

50%

60%

2000 2009

Percent of central government employees aged 50 years or older

5

And most countries are restructuring the public sector

Source: OECD Fiscal Consolidation Survey 2012; and OECD (2011), “Restoring Public Finances: Fiscal Consolidation in OECD Countries”, Special issue of the OECD Journal on Budgeting, Volume 2011/2

Quantified expenditure reductions (2009-15)

IRL HUN

PRT GRC SVN ESP SVK NZL ISL ITA NLD AUT FRA POL CZE BEL DEU LUX GBR DNK CAN FIN SWE AUS CHE NOR

0

1

2

3

4

5

6

7

8Operational Programme Other% of GDP

6

Measures include cuts in workforce size and pay

• Cuts to operational expenditures affect public workforce numbers and remuneration.

Source: OECD Fiscal Consolidation Survey 2012.

Operational expenditure reduction measures

Operational expenditures

Wage cuts Staff reductions Other operational expenditures

0

10

20

30

40

50

60

70

80

90

100Plan 2012 Plan 2011

Perc

enat

ge o

f par

ticip

ating

cou

ntrie

s

Operational expenditure measures specified:

%

7

Workforce reductions include staff cuts and replacement rates

Country Measure Country Measure

Austria Replacing 50% of retiring staff Italy Replacing 20% of retiring staff

Czech Republic 10% reduction in staff in 2010 Netherlands Reduction of 120,000 to 150,000 jobs

Denmark Reduction of administrative staff Poland 10% reduction in staff

Estonia 15% decrease in personnel costs Portugal 1% reduction in staff per year, 2012 to 2014

France Replacing 50% of retiring staff Slovak Republic Hiring freeze

Greece Replacing 10% of retiring staff Spain Replacing 10% of retiring staff

Ireland 12% reduction in staff by 2010 United Kingdom Reduction of 490,000 jobs; hiring freeze

Anticipated changes in employment levels in more than 50% of agencies and ministries

Ukr

aineRu

ssia

n Fe

dera

tion

Unite

d St

ates

United Kin

gdom

Switzerla

nd

Sweden

SpainSlovenia

Slovak RepublicPortugalPoland

New Zealand

Netherlands

JapanItaly

IrelandIc

elan

dH

unga

ry

Gree

ce

Germ

any

France

FinlandEstoniaDenmarkCzech RepublicBelgium

Austria

Australia

Turkey

Norway

Korea

IsraelBrazil

Decrease ex-pected (28 countries)

No change ex-pected (5 countries)

Sources: 2010 Survey on Strategic HRM in Central/Federal Governments of OECD Countries; OECD (2011), Public Servants as Partners for Growth.

8

Effective management of cuts requires strategic HRM practices

Strategic HRM practices in central government (2010)

Source: 2010 OECD Survey on Strategic HRM in Central / Federal Governments

AUSTRALIA

CANADA

UNITED K

INGDOM

MEXIC

O

BELGIU

M

KOREA

PORTUGAL

ISRAEL

FRANCE

NETHERLANDS

UNITED S

TATES

AUSTRIA

ITALY

SWIT

ZERLAND

DENMARK

IRELA

ND

SWEDEN

TURKEY

ESTONIA

CHILE

GERMANY

FINLA

ND

SPAIN

ICELA

ND

NEW Z

EALAND

NORWAY

SLOVENIA

CZECH REPUBLI

C

POLAND

GREECE

SLOVAK R

EPUBLIC

UKRAINE

RUSSIAN F

EDERATION

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Composite Indicator OECD31 Average

The index is composed of the following variables: the existence of a general accountability framework; the existence of HRM targets built into performance assessments of top and middle managers; elements that top and middle management should take into account when planning and reporting within the general accountability framework; regular review and assessment of Ministries’/Departments’ HRM capacity; existence of forward planning to adjust for adequate workforces to deliver services; and elements considered in governments’ forward planning. The index ranges between 0 (low utilisation of strategic HRM practices) and 1 (high utilisation of strategic HRM practices).

And greater use of strategic workforce planning

What is Strategic Workforce Planning?

• A core HRM process shaped by organisational strategy.

• Helps identify, develop and sustain the necessary workforce skills while satisfying career and lifestyle goals of employees.

• Ensures the organisation has the right number of people, with the right skills in the right place at the right time.

• Requires high quality information and discussion, organisational strategies and efficiency concerns.

9

10

• Develop a strategic long-term vision through forward-looking management.

• Develop the capacity for strategic workforce planning.

• Take an integrated approach to HRM.• Enhance flexibility in HRM.• Balance cost, quality and investment in the

public workforce.• Manage competencies with a view to

performance.

OECD Conclusions on Strategic Workforce Planning (I)

11

• Foster diversity in the public service.• Ensure the prevalence of merit.• Strengthen performance management to

enhance accountability.• Ensure senior managers possess strategic

foresight and leadership.• Assess HR initiatives systematically.• Sustain reforms through quality strategy.

OECD Conclusions on Strategic Workforce Planning (II)