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Trends in Strategic Workforce Management in OECD Countries Zsuzsanna Lonti Public Governance and Territorial Development OECD EUPAN Dublin 4-5 April 2013 2011 Russian Federation Brazil South Africa Ukraine % 35 Norway Denmark Sweden Finland France Hungary Estonia United Kingdom Luxembourg Canada Belgium Ireland Israel Slovenia Australia OECD United States Italy Spain Slovak Republic Czech Republic Netherlands Portugal Turkey Austria Germany Switzerland New Zealand Poland Chile Mexico Greece Japan The size of the public workforce has remained relatively stable… Employment in general government as % of labour force 2001 30 25 20 15 10 5 0 Sources: International Labour Organization (ILO) LABORSTA Database and OECD Labour Force Statistics Database. 2 % 2011 Source: OECD National Accounts Statistics. Russian Federation Denmark Iceland Finland Sweden Norway France Canada Slovenia Belgium Greece Ireland Israel Spain Portugal United Kingdom Estonia OECD United States Italy Hungary New Zealand Netherlands Poland Austria Mexico Turkey Luxembourg Switzerland Germany Czech Republic Slovak Republic Korea Japan …While compensation has shown greater variation Compensation of general government employees as % of GDP 2001 35 30 25 20 15 10 5 0 3 2000 Source: 2010 Survey on Strategic HRM in Central/Federal Governments of OECD Countries Brazil Russia Ukraine Italy Iceland Sweden Belgium Germany United States Denmark Slovak Republic Greece Israel Norway Spain Finland Netherlands Canada OECD Ireland Austria Hungary Portugal Switzerland United Kingdom New Zealand France Slovenia Poland Mexico Australia Japan Estonia Chile Korea Many OECD countries have an ageing public workforce Percent of central government employees aged 50 years or older 2009 60% 50% 40% 30% 20% 10% 0% 4 And most countries are restructuring the public sector Quantified expenditure reductions (2009-15) % of GDP 8 Operational Programme Other 7 6 5 4 3 2 1 0 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 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 5 Measures include cuts in workforce size and pay Cuts to operational expenditures affect public workforce numbers and remuneration. Operational expenditure reduction measures Plan 2012 % 100 Plan 2011 90 Percenatge of participating countries • Operational expenditure measures specified: 80 70 60 50 40 30 20 10 0 Operational expenditures Source: OECD Fiscal Consolidation Survey 2012. Wage cuts Staff reductions Other operational expenditures 6 Workforce reductions include staff cuts and replacement rates Brazil No change expected (5 countries) Ukraine Anticipated changes in employment levels in more than 50% of agencies and ministries Decrease expected (28 countries) Slovenia Czech Republic 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 Sources: 2010 Survey on Strategic HRM in Central/Federal Governments of OECD Countries; OECD (2011), Public Servants as Partners for Growth. 7 Effective management of cuts requires strategic HRM practices Strategic HRM practices in central government (2010) Composite Indicator OECD31 Average 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 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). Source: 2010 OECD Survey on Strategic HRM in Central / Federal Governments 8 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 OECD Conclusions on Strategic Workforce Planning (I) • 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. 10 OECD Conclusions on Strategic Workforce Planning (II) • 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. 11