Trends in Strategic Workforce Management in OECD Countries Zsuzsanna Lonti Public Governance and Territorial Development OECD EUPAN Dublin 4-5 April 2013

The size of the public workforce has remained relatively stable… 2 Sources: International Labour Organization (ILO) LABORSTA Database and OECD Labour Force Statistics Database. Employment in general government as % of labour force

…While compensation has shown greater variation 3 Source: OECD National Accounts Statistics. Compensation of general government employees as % of GDP

4 Many OECD countries have an ageing public workforce Source: 2010 Survey on Strategic HRM in Central/Federal Governments of OECD Countries Percent of central government employees aged 50 years or older

And most countries are restructuring the public sector 5 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 ( )

Measures include cuts in workforce size and pay Cuts to operational expenditures affect public workforce numbers and remuneration. 6 Source: OECD Fiscal Consolidation Survey Operational expenditure reduction measures

Workforce reductions include staff cuts and replacement rates 7 CountryMeasureCountryMeasure AustriaReplacing 50% of retiring staffItalyReplacing 20% of retiring staff Czech Republic10% reduction in staff in 2010NetherlandsReduction of 120,000 to 150,000 jobs DenmarkReduction of administrative staffPoland10% reduction in staff Estonia15% decrease in personnel costsPortugal1% reduction in staff per year, 2012 to 2014 FranceReplacing 50% of retiring staffSlovak RepublicHiring freeze GreeceReplacing 10% of retiring staffSpainReplacing 10% of retiring staff Ireland12% reduction in staff by 2010United KingdomReduction of 490,000 jobs; hiring freeze Anticipated changes in employment levels in more than 50% of agencies and ministries 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 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)