As all NHS organisations must now get more value for less money, efficient workforce strategies are essential, say Sue Morrison and Rachel Spink

It is a common misconception that the more resources you throw at something the more you get back. The proposition that you can get more out of less is a difficult concept for most people.

Finding solutions to drive down staffing costs is a constant challenge. Historically, redundancies have been the way forward, in conjunction with reduction in the use of agency staff and freezes on recruitment, and on the budgets for everything except mandatory training.

Shrinking the workforce like this is not seen to help improve (or even sustain) the quality of patient care. Whether you are in the public or private sector, quality of service is what differentiates your organisation from your competitors. This means the way forward cannot be to simply cut all costs. Any process has to be undertaken in conjunction with a drive to improve efficiencies.

All HR professionals understand the impact of organisational change on a workforce. People become stressed when confronted with change. They can become ill through stress; they may oppose proposed changes; they may leave. None of this assists the overall aim of achieving a more cost effective, efficient workforce, fit for purpose and delivering excellent patient care.

So what is the path to improving efficiencies within a healthcare organisation?

The case study shows how a foundation trust’s creative approach led to significant results (see box).

Apart from the obvious cost savings, the advantages of an approach like Blackpool’s are that employers can retain valuable qualified staff, minimise impact on service delivery, improve flexibility and avoid an adverse impact on morale. When the economic situation improves, employers will be in their best position to continue to provide quality services while avoiding the burden and expense of recruiting and training additional staff.

Sue Morrison is a partner and Rachel Spink a solicitor in the employment team at Hill Dickinson.

Case study

In 2009, Blackpool Fylde and Wyre Hospitals Foundation Trust faced a deficit of £24m and had to reduce this over 18 months. It needed to improve morale and create a productive workforce. It also wanted to avoid compulsory redundancies.

Consequently it set in train a process that resulted in financial and operational targets being achieved within the set timescale, improved service delivery, an 80 per cent reduction in MRSA rates, a significant reduction in sickness absenteeism, a more flexible workforce and an improved service to patients.

Strikingly, no compulsory redundancies were necessary.

Instead of a more traditional restructure process of redundancies, the trust’s methodology included the following aspects:

  • an extensive staff consultation process, which involved talking and listening to staff at all levels
  • staff involvement in creating visions to enable the workforce to aim for an agreed outcome
  • employees fully engaged in the change process. This involved requiring all staff to assist in identifying the problems and areas of waste and inefficiency, and offering their suggestions
  • investment improving management skills and reskilling
  • emphasis on staff motivation and training
  • steps to ensure that successes, not necessarily financial, were recognised.

Changes to contractual terms and conditions were made with the employees’ consent, which included the following:

  • flexible working
  • new posts created
  • retraining staff to take up existing and new posts
  • voluntary reduction in hours
  • job share arrangements
  • certain staff offered the option of working at home/closer to home
  • changes to shift patterns to reduce overtime costs

The cost savings achieved by the trust were supported by a number of additional measures:

  • natural wastage
  • recruitment freeze
  • reduction of agency and bank staff
  • unpaid leave/sabbatical
  • mutually agreed resignation scheme (involving severance payments at a reduced rate compared with Agenda for Change redundancy payments)
  • reduced sick pay entitlement.

If an employer decides to implement changes this may require collective consultation engaging the provisions of section 188 Trade Union and Labour Relations (Consolidation) Act 1992. This can be a difficult process not always conducive to improving morale and quality of care. Blackpool was fortunate in that, following an extensive consultation process, staff “buy in” was achieved and all changes were consensual.