Public Servants as Partners for Growth – Toward a Stronger, Leaner, and More Equitable Workforce is intended to assist the ongoing evolution of public service across the OECD. It takes a close look at the issues involved in member countries attempting to make their management of the public workforce more efficient, more effective, fairer and more dynamic as a response to the current economic and financial crises. The volume draws on the recent work of the OECD Public Employment and Management Network – PEMN – on restructuring the government workforce, competency management, and diversity policies carried out over the past two years.

The global financial and economic crisis is keeping several countries in the spiral of low growth, high unemployment and lower potential output, putting public finances under heavy fiscal restraint and undermining political credibility and stability. Countries are beginning to head towards a crisis of perceived government incompetence, which could damage the credibility and trust in public institutions and make it harder for governments to address other priorities due to the lack of legitimacy. Thus, a key challenge for countries is to come up with a comprehensive, long-term strategy for growth that finds the right balance between revitalising economic growth and consolidating public finances. Government should have a leading role in defining the strategy for growth, in partnership with the public service.

With public finances under strain and public sector employment under scrutiny, OECD member countries are looking to operational savings measures that include wage or staff reductions and government reorganisation. Any change in the management of the public workforce should strengthen administrative capacity to perform core government functions such as public service delivery. “Good” workforce management in the public service – boasting flexibility, social skills, communication, problem solving, mission and vision articulation, delegating, and decision making – is critical, and must be coupled with a comprehensive, long-term growth strategy if the civil service is to fully exploit its potential. New generations of public employees want more autonomy to carry out their activities and develop their capabilities – and it is the managers’ and supervisors’ task to support and encourage their development. Restoring trust in quality managers will help improve public employee motivation.

At a time of limited financial and human resources, adjusting and reallocating the public service workforce have become policy priorities. Strategic workforce planning and management are crucial here, so that governments are not caught in a purely reactive mode and resort to taking more immediate cost reduction measures that are ultimately detrimental (budget cuts imposed in an undifferentiated way, job cuts, recruitment freezes). Possible paths for reform include shared services, outsourcing, creation of arm’s-length agencies, developing a more flexible HRM system, redeployment arrangements, strategic reviews, and movement of staff to sub-national levels of government. But the workforce implications of any public service reform need to be considered and planned for from the outset, if governments are to secure and build capacity, maintain trust and morale, ensure continuity while meeting changing public service needs, and improve efficiency, productivity and value for money.

Governments are increasingly adopting competency management as a system for both clarifying the specific abilities – knowledge, skills and (importantly) behaviours – needed for a given job, and ensuring effective performance from employees. This shift from the traditional approach to job description, selection, development, appraisal and rewards is seen as a vehicle for bringing about necessary cultural change and injecting more flexibility, adaptability and entrepreneurship into organisations. Proper integration of competencies into a framework allows human resource management to develop strategic workforce planning, and employees to develop their career plans. Organisational readiness, stakeholder commitment and periodic review are among factors needed if the system is to succeed.

Workforce diversity makes for a stronger, fairer public service, one that better understands and meets people’s expectations. By improving representation in government of the different social groups, diversity in policy making can play a part in maintaining core public values, increasing managerial efficiency, improving policy effectiveness, raising the quality of public services, and enhancing social mobility. Governments do, however, need to see diversity as an asset, and unfortunately real evidence of the benefits has been weak. Other obstacles to introducing diversity include the lag between political and managerial timing (this is a long-term process), regulatory barriers, budgetary constraints, rigid HRM frameworks, lack of flexibility, and HRM arrangements already in place. Diversity requires a common vision, coherence, a strong link to strategic workforce planning, firm leadership, managerial flexibility, a good balance of responsibility between central government co-ordination and delegated implementation, addressing discriminatory practices already in place, and regular programme evaluation.

Fiscal consolidation goals require a high-performing public service, yet consolidation strategies call for reducing government operational expenditure – a paradox that can only be solved through reforming public service management. That reform will entail a coherent, strategic framework rooted in forward-looking assessment of organisational capabilities, with a strong focus on innovation. An integrated approach to HRM should introduce flexibility and adequate mechanisms for accountability, to foster innovation and value for money. Investment in the public workforce should balance costs and quality, and regular assessment of HR policies will be critical for reallocating resources and ensuring achievement of objectives. Competencies can strengthen performance management; diversity can enhance core public service values as well as efficiency and effectiveness; and upholding merit can boost not only capacity but also morale and commitment. Ultimately, real leadership is needed for the kind of high-quality change management capable of building confidence and sustaining capacity for reform.