Saving IT jobs in the face of spending cuts

Jobs are on the line in public sector IT departments as efficiency measures come into play. Yet while most IT managers have been forced to warn of job losses to come, it is far from clear what final team line-ups will look like. Creative solutions, including sharing staff with other authorities and even the private sector through shared services or secondment, are allowing some to hang on to their jobs while developing new skills. According to the Chartered Institute of Personnel and Development (CIPD), the average cost of making an employee redundant for the public sector, at £29,400 more than four times that of the private sector, means it can make hard financial sense to look for options other than redundancy. According to IT Trends, published by Socitm in January, IT staff cuts in the public sector in 2010-11 were much lower than expected. John Serle, editor of the report, still describes losses as "unprecedented", with about 4,000 jobs shed from the sector total of 30,000. But new ways of working appear to be more than compensating for this, and the survey reveals that joint working appears to be of growing interest. Some neighbouring local authorities are in discussions about sharing staff. Three London councils - Westminster, Kensington and Chelsea, and Hammersmith and Fulham - are discussing the move, removing 12 posts from about 180 across the three councils. David Wilde, chief information officer at the City of Westminster, has not yet finalised staffing arrangements. "We have very different structures in the three organisations so it is very early days to say whether we will merge teams or whether we will source in a different way," he says. Geographical information systems and business intelligence are areas that may be rationalised into one department, but that does not equal job losses for staff. "We rely quite heavily on contractors, so it is not as simple as saying 'We are going to rationalise, that equals posts lost', but we can rationalise to reduce our contractor costs." IT staff in the two other boroughs will be expected to follow Westminster's lead on converged networks. "That might mean quite dramatic changes in skillsets but that is the way the market is going anyway," Wilde says. Westminster and Hammersmith and Fulham are tied into contracts that limit their ability to take services from Kensington and Chelsea. "We are looking at a four to five year period on this because we are conscious of the complexities around current contract arrangements, but that isn't the reason why we shouldn't do it. Open dialogue "We are engaging with the staff. We have already set up the strategy board with respective financial directors and we are setting that scene. I have a very open dialogue with my staff and we are encouraging staff at a number of levels to engage. The more we can build these relationships the easier the transition will be," Wilde says. Many local authorities are facing a period of transition in which it may be unclear what skills they need to retain. Up to 30 local authorities are joining StaffShare, a social enterprise scheme, in a Local Government Employers pilot that will pay for membership for a 12 month period. StaffShare is an online secondment service for the public and private sectors, which connects employers to available secondment candidates and enables organisations to retain skills by seconding out employees when they do not have work for them. During the secondment, they remain in the employment of the original employer and their terms and condition of employment do not alter. "You can redeploy staff through Staffshare for anything up to 100% of their salary," says Phil Flaxton, a Staffshare founder. "If someone is on £40,000 per year you put them on Staffshare with information about what you are looking to recoup of their salary. Some organisations are happy to recoup 50%, others will say they want to recoup 100%." Councils that have signed up are in process of looking at staff who want to be redeployed. They could be facing redundancy. "Staffshare wasn't set up to do this but it can help a member of staff who is facing redundancy to prepare for a new career. As they are going out working for another organisation in the private sector or third sector, say for six months, that will help them prepare for life after the public sector," Flaxton says. He adds: "A number of people have been looking at Staffshare not only to second people out but to second people in, as they can't afford £800 a day for contractors. You could take an IT person from a bank who might be earning £50,000-£60,000 a year and they could be seconded for half their salary costs into local government." Geoff Connell, IT head at LBs Newham and Havering, has overseen the merger of support services for the two councils with the aim of cost savings and improved service quality. The merged function is now sharing services more widely, partly to avoid job losses. "Because we have more capacity than we need, where we have duplication of roles we are offering those services to other boroughs," he says. "We are providing information security resources to Lambeth and CRM to other boroughs like Waltham Forest, so with the economy of combining services, rather than shedding headcount through redundancies we are using it more widely. "I don't want to pay redundancy and also I don't want to be pushing people out of the organisation if I don't have to, so we have just gone along with natural attrition. The game plan is when people leave we don't replace them, we find a way to reshuffle and give other staff the opportunity to retrain." Different skillsets The councils were very different in term of skillsets, with Havering an Oracle DBA shop while Newham focused on Microsoft. "Where I have traditionally brought in resources at Newham to do my Oracle DBA work, we are working out how Havering can cover that for us and switching off that external spend," he says. "It has also given us the capacity to embrace new roles that we couldn't put a full time person in before, whereas now we can; for example, in testing release management." He describes the HR challenges of staff sharing as initially simple. "I am occupying a post in both organisations and Havering pays a fee for half of me and for enterprise architecture support. Then employees working for the other organisation cross charge to (each other's) account monthly. "The next stage is more complicated where we do a reorganisation and create a superstructure. That has been more challenging in terms of HR and legal advice because there are different terms and conditions." Issues include making sure people are not paid different salaries for doing the same jobs. He adds: " You learn a great deal when you do the job in another organisation, and that has been good for individuals' personal development, mine included." Outsourcing is another approach that may offer flexibility. Sefton Council has worked with outsourcing partner Arvato since 2008, when 130 staff were transferred across to the firm and multiple IT departments were centralised. The integration of previously disparate IT teams led to a reduction in posts. Dave Davies, head of IT for Sefton, says: "We are down to 117 now and that will be closer to 110 by the end of the year." He does not believe the public sector cuts will have a direct impact on IT department headcount. "The council is reducing services, not cutting them, for example cutting the opening hours," he says. "The infrastructure that is required to maintain that is still exactly the same." Jan Wemmel, ICT director for Arvato, says: "The ICT infrastructure was outdated and had higher staffing requirements than industry standard in the private sector. We had to integrate those teams. Previously they saw themselves in competition and now they had to work together." Staff were trained in support to cut support contract costs rather than posts: "We insourced quite a lot of services. That sounds ridiculous because we are outsourcers, but the council had a huge amount of support contracts that deskilled the workforce as they did not engage with that work any more. We had huge costs of support, so we have trimmed the external support back and reskilled the workforce. This saved some costs on the contractual side, which meant we did not have to cut the salary costs so much." Arvato has placed council IT staff in other organisations to address Sefton's staffing issues. "As a big international company we have the ability to win external business to allow people to stay in their jobs," Wemmel says. "We have a number of people who are working on external opportunities now that were previously employed by the council and decided to join Arvato." IT departments must strike the balance between making savings in staffing costs while retaining and developing fast changing skills. There remain skills shortages in IT: the CIPD Labour Market Outlook of winter 2010 found that 43% of employers in all sectors have vacancies that are hard to fill, with the greatest difficulty in engineering and IT roles. If the right balance is struck, however, a more efficiently staffed IT function will be the reward. This article is published by Guardian Professional. For updates on public sector IT, join the Government Computing Network here.