The following case study was provided as part of the evidence for the effectiveness of employee engagement strategies in improving performance, productivity and, in the private sector profitability. It has been used cumulatively with other submissions compiled by many leading companies and organisations to leave little room for doubt about the statistical importance of engaging employees.
This particular case study is an additional support to The Evidence Paper
In January 2010 the Welsh Government launched the ‘Managing with Less’ initiative in response to a substantial reduction in the budgets available to run the organisation. The initiative was endorsed and driven by the Permanent Secretary with the support of the Board who fully recognised the need to engage the whole workforce in the financial challenges ahead of them. Since it began, it has secured the active engagement of almost all of the 5,500 employees at all levels in all locations.
By sharing, at an early stage, as much information as possible about the situation facing them they were able to engage people in identifying and actively embracing solutions which might well have been unacceptable if they had simply been imposed.
A key part of the initiative involved briefing and training divisional leaders to talk their teams through the financial scenarios and the potential impacts of the reduction in budgets. Part of the material provided to team leaders included a table which showed the breakdown of the spend on administrative categories such as travel, ICT, stationery and overtime with the equivalent number of posts based on average salaries. This lead to some very direct conversations about the benefits of cutting ‘discretionary’ areas of spend in order to save jobs. They predicted that team members would be prepared to be much more radical in their approach to cost-saving than senior leaders and this was, predominantly, the result.
By involving everyone in the organisation and working closely with Trade Union colleagues in the design of the initiative, they were able to build a very broad consensus around the action the organisation should take to minimise the risk of needing to move to a compulsory redundancy situation. This included some tough decisions around previously negotiated areas like allowances and overtime as well as tight controls on promotions and use of external contractors.
One of the major benefits of equipping and requiring team leaders to undertake ‘Managing with Less’ sessions was the increase in face-to-face engagement across the organisation. Although the initiative was underpinned by an extensive internal communications campaign with messages from senior leaders and opportunities to send in ideas anonymously, feedback demonstrated that the opportunity to conduct this type of conversation in a team environment was highly valued. Follow-on research demonstrated that more than 70% of the organisation preferred this method of engagement for contributing their ideas.
‘Managing with Less’ was also designed to encourage and facilitate innovative thinking within the organisation – people were encouraged to contribute ideas which would increase efficiency on a corporate, departmental and local basis. They have since developed some of those ideas through their online innovation forum Re:New. This has increased participation in innovation and provided a channel for continued debate. A Re:New panel decides which ideas would benefit from further development or investment. This is already benefiting the organisation in a number of areas.
Follow-up research showed that 98% of their employees were aware of the ‘Managing with Less’ initiative, 83% participated in discussion sessions contributing ideas for increasing efficiency and reducing costs, and 86% felt that their colleagues were committed to the ‘Managing with Less’ approach and achieving the savings they needed to make.
During 2010-11, ‘Managing with Less’ resulted in reductions in spend of more than £20m across the categories which people identified as target areas. The figures were audited and included in their annual report. Progress against target areas is monitored and assured on a quarterly basis and reported back to the whole organisation. They are currently monitoring spend against the same categories for 2011-12 and are confident that they will maintain this level of reduction.
The Welsh Government have credited this style of engagement with being so successful that it allowed them to achieve the required spending reductions, ensuring they were within budget whilst avoiding the need for compulsory redundancies, and have operated an entirely voluntary scheme.