A framework for managing staff cost
reduction
Our framework sets out the NAO’s expectations
for how organisations should approach the delivery of these savings
in a way that minimises risk and maximises benefit to the taxpayer.
The framework also includes our expectations for effective ongoing
management of staff costs.
The framework is split into four parts:
Part One – Identifying and appraising options
for staff cost reduction
Part Two – Planning staff cost reduction
Part Three – Delivering staff cost
reduction
Part Four – Embedding a business as usual
approach to staff cost management
Parts One to Three cover our expectations for
good practice in the context of specific cost reduction
programmes. These will range from small scale staff cost reduction
programmes based around efficiencies within existing activities to
much broader change programmes including organisational
restructuring and use of technology. Our framework signposts
approaches for identifying cost savings that organisations might
use across this spectrum of activity, but it does not provide
guidance on how to implement them.
Part Four of the framework provides
expectations for ongoing activity around staff
cost management. While the focus of these
principles will be on improving the capability of the business to
improve staff cost management as part of business as usual, such
activity will also have a role in supporting the successful
delivery of specific programmes. Strong management information
underpins each part of the framework, in particular:
- high quality information that supports
ongoing staff cost management; and
- high quality analytical information that
supports specific decision-making.
We recognise that constraints and
barriers exist that may make it difficult or even prevent central
government organisations from applying these principles in some
instances. These include the tensions between shorter term
pressures to deliver savings in the current financial year, and the
longer term investments in organisational change and IT systems
required to provide the platform for fundamental service reform.
However, ongoing staff cost management, including having robust
systems, information and controls in place, will ensure that
organisations are better placed to respond
to such challenges.