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Cost saving tops public sector agenda

Public sector workers will face increased pressure this year as cost cutting measures - pay reductions, redundancies and recruitment freezes - continue to bite, according to new research from global management consultancy Hay Group. As a result, senior leaders in the public sector express concern over the impact of cuts on workforce morale and engagement.

Key survey results

  • Almost two-thirds of leaders (62%) are seeking to reduce their pay bill this year.

  • As many as 62% are preparing to make redundancies.

  • Around two-fifths intend to implement a recruitment freeze (41%) and achieve savings through office and facilities closures (39%) over the next 12 months.

  • Almost three-quarters of senior managers (74%) believe their stretched workforces will suffer due to additional workload brought about by cuts.

  • Close to half of public sector leaders (46%) already identify a conflict between the needs of their organisation and the reality faced by their employees.

  • More than two-fifths (41%) believe that the amount of pressure on employees is already unsustainable. The same number report that employees are currently holding back discretionary effort and delivering only what is expected of them.

  • As a result, almost half of senior managers (48%) are reluctant to continue to ask more from their employees. Almost a third (31%) admit to feeling guilty doing so.

  • The majority (53%) are concerned that they may lose their best staff as a result of increased pressure.

A final word

“Public sector leaders are understandably concerned about asking more from workforces who have already felt the impact of cost-cutting measures, and rightly recognise the threat to employee engagement. Leaders must create a climate that will engage and motivate those around them, and ensure that their objectives are clearly communicated throughout the organisation.

“They must also realise the importance of middle managers as a crucial link between senior management and frontline workers. Middle leaders have a critical role to play in communicating priorities down and concerns up through the organisation, and in continuing to ensure the quality of service delivery.” - Peter Smith, a director at Hay Group.

Want to know more?

Title: Dealing with the Deficit, Hay Group.

Survey details: The report is based on research among 175 organisations across the public sector.

Availability: Contact Hay Group in London, tel: 020 7856 7000.

Hay Group is a “global consulting firm that works with leaders to turn strategies into reality”. With 85 offices in 49 countries, it works with over 7,000 clients across the world. For more information, visit: www.haygroup.com.

Date 09/03/2012

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