Q&A: Graham White, Westminster City Council

(Westminster City Council lies in the very heart of London and contains some of the UK's most recognisable landmarks - thus needing to provide services to over 95% of all visitors to London as well as to its own 250,000-plus residents. Local government in the area has undergone a number of profound structural and philosophical changes in recent times; here Westminster's HR Director Graham White speaks on his organization's HR transformation process, the idiosyncrasies of Westminster which created challenges for the programme, and what's next on the agenda for the council's HR team.)

SSON: Graham, let’s begin with a look at Westminster City Council’s HR transformation programme. What’s been happening there – what are the aims of the programme, what are the drivers behind it and how far are you along the journey at present?

Graham White: We’re a long way on the journey now; we’ve been going since about 2003, when we’ve been outsourcing our HR activities. During the past five years we’ve had two separate HR providers and we’re now in a very good position when we’ve finally tied down the HR specification and the delivery model, and are beginning to understand the true concept of partnership where the provider is now actually risking a large percentage of their income from us based against performance criteria that they need to deliver to. At the same time we’ve also got the dual strand of the education programme, of developing our managers in the organisation to understand that you don’t have to see the whites of the eyes of the HR people to get good quality advice. So we’re in a very good position; I was brought in a year ago to do probably the final stage of this, which is to create the final HR delivery concept.

SSON: What would you say are the factors which make Westminster CC’s situation unique?

GW: I think everybody thinks they’re unique – it doesn’t matter where you work, people will tell you things are different where they are – but I think Westminster has a number of issues in its favour. We are in the centre of London; we are a city in our own right, which brings with it a whole range of issues linked with how we operate and how we deliver our services, and how we actually manage our workforce; and we are a borough which has four times the number of visitors as of residents, and so when we’re looking at how we develop our services we often have to think not only of our residents, but much broader than that.

SSON: How did you decide upon the most appropriate delivery model for your organisation?

GW: Sometimes it begins with an evolution. I think Westminster set about outsourcing like most organisations, unfortunately: they thought it was a way to save money, and while I believe good outsourcing does save money, if that’s your only objective you shouldn’t do it. So how did we decide on the most appropriate delivery model? I don’t think we did: I think we set out initially to save money, and I think for quite a period of time we simply put a broken operation from inside the organisation outside the organisation. In my time here, having joined last year, what we’ve done is fixed that model. So what was the most appropriate delivery model? Well it’s simple: it’s a fixed one, one in which staff and managers get the quality of advice and support they deserve.

SSON: You mentioned outsourcing a broken process; what would you say have the biggest challenges you’ve encountered along the way – and did you expect these to be challenges at the outset?

GW: I think there were probably three big issues for us, all linked to parties in the relationship. Number 1 was – like a lot of local government – we went into the concept of outsourcing in terms of a partnership believing that the other party would be as altruistically committed to the partnership as we were, and of course they weren’t. We’re a revenue stream for suppliers. So I think we got that wrong, and we’ve had to do a lot of work to make sure that now we’ve got a professional partnership and not simply a mutual understanding. The second element for us there was managers who have found it extremely difficult to be told they now have to do the work that in the past they’ve relied on multiple HR officers around the building to do for them. And that’s been difficult because they are professionals in their own right, but the skills of people management haven’t always been part of their core competencies going forward. And I think thirdly staff themselves – particularly staff in HR – have struggled very very much with the idea of seeing their domain, or their empire, shredded away into – in their eyes – insignificant transactional activity.

SSON: What’s next for the programme at Westminster?

GW: I think the next big stage is to move the incentivisation programme for our provider into a live operation. We’re currently piloting it with them. Come April 1 2009 our provider will be required to produce detailed analytical information on their performance, and this will be tested by the managers and their actual monthly payments will be dependent upon the quality of that. And that’s been backed up with a very detailed HR spec – something that I’ve always struggled to manage to get very early in the process, and once again it took us quite a while. I think that’s the first thing. The second thing is that we outsourced too much. We outsourced about 98% of HR and although I am often said to be the biggest supporter of outsourcing, 98% is too much. So I need to correct that issue and rebuild the very small strategic HR hub within Westminster to give it a better position in terms of its contribution.

SSON: Looking at HR more broadly now, what do you think has been the impact of the financial crisis and recession on the function – do you think HR has been pushed down the agenda by the events of the past few months and, if so, how can practitioners fight back?

GW: I think two things have happened. I think we’ve been given the burning platform that we haven’t had for a long time, and I think some HR people have grasped the nettle and taken the opportunity to demonstrate that they can add something more in recession, and I think others have done what they normally do and run off and designed forms to help with the process… I think a lot of HR will become victims of the recession as well, and I think in most cases they’ll be well-deserving of that consequential reduction in their numbers. But think where HR is owning the problem, we might see some real stepping-up – there’s no cloud doesn’t have a silver lining.

SSON: At SSON’s HR Transformation event last summer you spoke a little about the future of HR with particular reference to the virtualisation of the function, with the question "how much can you remove the human element?" So how much can the human element be removed at present, and do you think the impetus towards virtualisation has increased?

GW: I think it has – and I think we can remove anything up to 95% of what people might have known as the old "personnel services". I think we’re also dealing with demographics here, because this is about the use of technology, and I think HR and technology are coming of age at the same time; and behind that there is a new generation of manager coming through whose appetite to use technology is much higher than that of the current management structure. So I think the virtualisation of HR will continue; I don’t think it’s going to happen in one year, or two years, but I think certainly over the next ten years we will see a very defined reduction in the use of HR people, and greater reliance on the use of HR processes and support mechanisms.

SSON: And finally, what – apart from economic pressures – do you think will be the main drivers for change in HR over the next few years?

GW: I think again as I’ve said technology will be a major one. I think also although we are in something of a recession at the moment, we do have issues around demographics and an aging workforce; we do have problems with employee expectation changing very greatly; so I think there’s a growing role for HR going forward to actually create those new employment relationships and employment contracts, so that people can get what they want from their employer, and their employer can get what they need from their staff.