The pressure of public scrutiny is increasing on senior, well-paid individuals in all areas of work after a Freedom of Information request. Concerns have arisen that senior public servants have been abusing their position by working in ways that are “tax efficient” and thereby inappropriate.

At a time when high pay in the private sector has been a matter of concern, it was pretty obvious that arrangements for senior positions in the public sector would soon come under increased scrutiny and calls for transparency.

With news emerging the Student Loan Company’s chief executive, Ed Lester had his salary paid through a personal service company (a legal framework with no direct employment relationship and tax advantages), the Coalition Government’s focus on reducing tax avoidance has been called into question.

Personal service companies are generally accepted as perfectly legal and legitimate mechanisms for many independent contractors to work with client organisations. This arrangement can be entirely legitimate and suit both parties, particularly where the contractor works independently with multiple clients and where permanent or direct employment is not appropriate. Such companies can be an effective way for contractors to work and have certain tax advantages.

Tax legislation generally prevents such arrangements being abused as, where HMRC takes the view the working relationship is one where direct employment is the “real” situation, the contractor would normally be liable for PAYE and National Insurance in the normal way.

This is managed through the application of IR35, introduced in 2000 with the aim of eliminating inappropriate tax avoidance behaviour and generate tax revenue.

Since the introduction of IR35, tax lawyers have expressed concern that HMRC have been “bashing” truly independent contractors and entrepreneurs with this legislation to raise revenue rather than tackling real tax evaders.

Initially at least, there has been no suggestion the particular case in question has been put in place illegally and no details about the tax treatment of the arrangement have been disclosed, though it has been suggested “tax authorities” had approved it. The SLC has apparently defended the arrangement, producing figures suggesting it was saving the organisation around £88k over two years by avoiding head hunters fees, and tax and national insurance contributions. Commentator have highlighted potential financial benefits of between £25k and £40k for Mr Lester.

Across the public sector, Attractor is aware there is, generally, a strong focus on ensuring appropriate treatment of employment and contractor relationships. Perhaps this is why the judgements made in this case have been called into question. From the details published, it seems the arrangement had been approved at a pretty high level and there may be some suspicion that pressure from politicians had swayed the decision.

With increased focus on the issue, Danny Alexander, the Chief Secretary to the Treasury has ordered an investigation to see if the practice is widespread across government. It will be interesting to see the results of the investigation and it’s certain there will be increased effort to ensure the tax treatment for all senior appointments has been as “clean” as possible.

This might require a change to payment mechanisms and employment relationships or, more simply, a quiet word in the ear of the taxman.

At the end of January 2012, a political storm over high pay in banking, especially in the bailed out and “publicly owned” banks hit the headlines once again. With the Chairman of RBS having already declined his bonus, valued at £1.4m, Stephen Hester the Chief Executive, then came under pressure to waive his bonus, valued at just short of £1m.

With politicians calling for a vote in Parliament, Mr Hester concluded the position was untenable and agreed to waive the payment. Politicians will be very pleased to have influenced some powerful people into “seeing sense”, but it’s unclear where the political influence game might stop.

On the Today programme Robert Peston, the BBC’s Business Editor, highlighted the point that RBS had “come under pressure” to make a decision on bonus payments before most of their competitors … and walked into a trap by doing so.

It seems sensible for politicians to concentrate of shaping the legal and political frameworks within which the business leaders, entrepreneurs and workers can operate independently. This point was made, carefully, by William Haig talking on Radio 4 when he stressed that government ministers should avoid making decisions on individual cases and trying to run banking businesses.

Attractor has said before that pay generally reflects market pressures – people earn what their skills are worth in the labour market. This effects us all!

It’s no wonder the wide variations in earnings between those at the top and bottom of society become exceedingly painful when times are hard and it’s understandable that people consider it invidious to see others pocketing “windfall gains”. But there is a difference between something being undeserved and “not understood”. The fact that we don’t understand how decisions are reached about pay and performance issues in a particular industry does not necessarily mean those decisions are arbitrary or unfair.

It’s hard to understand why people think they can justify the suggestion that a senior manager in a major corporation should not be entitled to 60% of his bonus. From the stories being published, Mr Heston seems to have been doing a good job of turning RBS around, getting it into a stronger financial position and ready to reap a return for the taxpayer when the “electorate’s” shares eventually get sold off. Isn’t this what taxpayers want and, more importantly, what politicians should be encouraging and supporting? Surely imposing an external and ill-informed view is even less transparent and fair than the decisions which are reached by remuneration committees and business leaders.

Will the politicians now start lobbying for all banking sector bonus payments to be waived? If this happened, it would be ignoring the rules and limits for banking bonuses the government established with the industry, backed by the Financial Services Authority. How many other industries have pay levels that seem beyond the reach of “ordinary folk”? Will they then find other unpopular industries where earnings are “not justified” in their eyes … newspapers perhaps, lawyers, footballers? Would it be right to intervene in all these areas or in particular cases?

While politicians will always seek to reflect and amplify the mood of the populous, they should understand the boundaries within which they operate. It is a poor state of affairs if politicians think they understand and can regulate pay levels, in detail, in industries that operate in complex markets.

While there are significant and challenging tensions in a free market economy and there will always be winners and losers, attempting to micro-regulate always looks like folly in retrospect. Society needs rules and frameworks that apply to everybody fairly and consistently if it want businesses, jobs and prosperity to be route to economic success for all.

Photo: rracy o; Flickr

The high level of earnings by senior people in private sector companies has hit the headlines once more with a series of outcries in response to news revealed in the Income Data Services report that FTSE 100 Directors experienced an increase of 49% in earnings over the last year.

While the increase in basic pay averaged only 3.2%, this figure was dwarfed by an average bonus payments increase of 23%, from £737,624 in 2010 to £906,044 in 2011 plus  the “crystallised? value of long term incentive plans (LTIP) and share options cashed-in during the year.

Overall IDS have revealed that -

• CEOs received an average increase of 43.5% (average earnings £3,855,172)
• Finance directors received an average increase of 34.1% (average earnings £2,001,515)
• All other directors received an average increase of 66.5% (average earnings £2,260,033)

In the press release from IDS themselves, the report’s editor, Steve Tatton reflected on the sensitivity of his findings, saying

Overall comment has been pretty negative however with very predictable condemnation from unions. Polly Toynbee has drawn attention to the diverging experience of those at the top and bottom of the earnings range, with the government considering reductions in employment rights and broader protections. Comment on these proposals has been quite dismissive. Attractor has asked the question if employees are Too Hard to Sack and would generally suggest that problems with terminating under-performing people are related to management culture and policy rather than employment law.

So what has happened in 2011?

David Cameron has reacted by saying people in public life and private enterprise should be able to justify the decisions they make about pay and has called for more information about pay decisions to be published, including the multiple in remuneration between the lowest and highest paid in the company. The government is currently consulting on the requirements for company reporting.Nick Clegg has described some pay awards as “incomprehensible”, suggesting they will be seen as a “slap in the face” for millions of people.

Attractor has covered issues of pay and rewards many times, broadly supporting the view that employers’ pay decisions reflect market forces. While this might explain high reward levels generally, attempts to explain why top bosses are doing so well at a time when most people are struggling have been quite poor. Basic pay increases of 3.2% are not so outlandishly high in the current climate – although still higher than many people will be getting.

Looking at the information on recent economic performance, there are strong clues suggesting what has probably happened. While in the 12 months to March 2011, the FTSE 100 gained around 4 percent, in an impressive run, the Footsie’s rally to a mid-February 2011 high of 6091, exhibited a 73% recovery from the low of 3512 in March 2009. It would be no surprise if directors were astute in cashing in the share options the have been rewarded with over recent years (in times when companies were encouraged to reward people for longer term success.   looking to maximise their earnings from the general increase in confidence that took place during the initial stages of recovery from the recession.

In that regard the figures don’t look incomprehensible … they seem simply to reflect well-informed decisions by directors working in highly competitive roles who are able to command very lucrative contracts. If not incomprehensible, the numbers show do highlight how far outside the reach and experience of most people this small group has become – though they are by no means alone in that respect.

If there is criticism of company reward structures, it might be legitimately said that directors too easily gain from general movements in stock values rather than from the results of their own performance. Remuneration policies would need to be more carefully crafted to ensure a company’s relative performance against broad market changes drove directors reward.

With the government implementing a two year pay-freeze to support its “austerity programme” and planning changes to public sector pensions, concerns arise that health-care organisations might be effected by widespread industrial action for the first time since the 1980s.

Unions reluctantly accepted the necessity of the two year pay freeze though are now campaigning for a significant increase for staff when that deal expires in April 2013. Unions are strongly resisting other changes to employment terms, especially the reduction n the value of pensions.

NHS budgets are under more pressure than they have experienced for a decade and employers are contemplating ways to change the Agenda for Change pay systems which were established nationally in 2004.

By the end of 2010, the organisation NHS Employers had proposed a national enabling framework for local pay negotiations which would have allowed local agreement for freezing pay increments in return for a commitment on preventing compulsory redundancies. At that time, with strong indications from the unions that they would reject local pay negotiations, the initiative seemed to stall.

NHS Employers Chief Executive Dean Royles said recently “It is essential that local employers have meaningful discussions with local trade unions and staff about the workforce implications of the financial challenges for their organisations.”

Through 2011, planning conversations have continued on the management side and NHS Employers has recently reflected employers concerns, suggesting current national pay structures place unsustainable pressures on the NHS pay bill and proposing greater flexibility and local pay deals as potential solutions. Foundation Trusts, with their freedom to negotiate local employment terms with their staff, may follow Southend University Hospitals NHS Trust in starting to change the way pay works. The Nursing Times recently highlighted a number of cases where organisations were describing these tentative steps towards devolution -

• Mid Cheshire Hospitals has been quoted as  “working alongside other providers at a regional level to consider options to negotiate alternative terms and conditions” on areas including incremental progression and sick pay,
• University Hospital of South Manchester is said to be considering “proposals for changes to terms and conditions outside of the national framework”,
• Central Manchester University Hospitals’ attempt to withhold pay increments from employees with poor attendance is being challenged by unions,
• Birmingham and Solihull Mental Health was completing an options appraisal “regarding a move away from Agenda for Change” by 2014,
• Royal Surrey County Hospital polled staff to see if they would accept changes to employment terms in exchange for fewer job losses.

Employers understand the NHS employment market is a complex one and history has taught them that competitive behaviour between neighbouring Trusts has been damaging in the past. At present it seems NHS bodies will share thoughts, ideas and opportunities for change, seeking to move “in concert” on a menu of options and proposals to be discussed with local staff.

An even more dynamic strategy seems to be emerging with Calderstones Partnership NHS Foundation Trust working to set up a spin-out social enterprise subsidiary which will employ staff on non-NHS terms and conditions. With new services being established through this vehicle, services might be run at lower cost, though transferring existing services will pose more challenges with both TUPE and equal pay requirements to be met.

So what change could and should be made in NHS organisation’s pay strategy?

Recruitment and Retention Premia

Starting with an easy one first, Agenda for Change introduced national and local Recruitment and Retention Premia (RRP) at a time when resources were available and the NHS was facing particular challenges in hiring certain roles. The nature of these payments is that they are designed to reflect market pressures and local circumstances.

The employment position has changed substantially since 2004 and in 2011 the Department of Health started to withdraw national RRPs. At a time when the national job market is extremely weak, staff retention challenges and recruitment pressures are perhaps at a low ebb, the argument for maintaining RRPs at all looks pretty weak. A systematic review of these payments would probably result in payments being suspended or withdrawn (with appropriate notice) in all but the areas of most drastic skills shortfall. Overall however, this would save very small amounts of money.

Would removing incremental pay reduce costs?

NHS Employers have made much of the additional pay costs created by the incremental pay system. Pay increments do build in a constant pay pressure (known as incremental drift) as people move up their current pay scale and Agenda for Change, in this respect, is similar to many public sector reward structures including the previous Whitley Council pay system. This cost pressure is not new for the NHS.

Evidence for the pay review suggested this was worth an average of 2.9% each year for those on lower pay bands and the cost of increments has been assessed as around 2% of the NHS pay bill. Stating things this simply does not tell the whole story however – incremental systems exhibit upward and downward pay pressures.

In normal times, staff movements – new recruits, leavers, promotions, retirements – see team-members leaving the organisation on higher pay points often replaced by employees earning less. Broadly the impact of staff turnover counteracts incremental drift in “normal times”. Of course at a time when people show a greater reluctance to move jobs, Trusts implement recruitment freezes and there may be fewer opportunities for advancement, lateral moves, promotions etc, pay pressures work only in one direction and this can increase costs for a fixed size of workforce.

As a starting point, NHS should ensure they are actively using the existing gateways to control progression and might develop other fair mechanisms to moderate and control pay progression. NHS organisations need to think carefully about removing increments as it’s possible the “rate for the job” (the target rate for employees who are performing well) might be considerably higher than the average pay in normal times.

Was Pay Modernisation a Bad Deal for NHS Employers?

Agenda for Change introduced a new pay system, with jobs being graded on the basis of knowledge, responsibility, skills and effort needed for the job. Before Agenda for Change, NHS employers used grading guidance approved under the historic Whitley Council – an approach which was fundamentally unsuited to delivering equal pay in a modern employment setting.

Agenda for Change gave the NHS a modern reward toolkit, including a clear and accepted rationale for assessing the demands of jobs across the service. While the Job Evaluation System is complex (many JE systems are) it is clearly well-crafted and suited to job design and reward management in a range of healthcare settings. Employers should be careful to protect the value and potential of this starting point as they look to develop new freedoms.

There have been long-running discussions about re-designing healthcare services, roles and jobs. Some organisations have made progress in this area but the majority have continued to work along traditional lines. Some people suggest staff representatives for healthcare professionals act as a block on service and role innovation though others would highlight a lack of innovation and energy from healthcare management.

Agenda for Change provides the tools and mechanisms to cope with modern and emerging healthcare service needs – with the capacity to evaluate any new roles needed from work redesign in a secure and consistent manner – something which NHS staff (and even employers) might learn to value as an increasingly diverse NHS develops in a manner which could fragment career opportunities

What are the modernisation needs in the emerging NHS?

The future NHS looks likely to contain a mixture of traditional and new service providers though they will continue to need a combination of clinical, professional and administrative staff where cross-service experience will have some advantages. Unions are concerned that moving to local pay bargaining will result in fragmented and unequal systems – moves they see as having significant dangers for their members. Attractor has reviewed the key reward issues facing a changing NHS before.

Of course it can’t be ignored that national pay bargaining strengthens the negotiating position of unions in respect of NHS employers and this doesn’t sit easily with the national agenda of devolution (though the real intent here seems mixed). Strengthening the local control of management teams might be an important move to empower organisations within a strategy of devolution. The experience of implementing Agenda for Change shows there are significant costs involved when organisations introduce new employment terms.

Employers will have to determine the extent to which new, local terms, the resulting negotiating responsibilities and potential for competitive pay movements are outweighed by a better negotiating position, more effective recruitment, retention and cost control. One of the challenges facing organisations will the requirement to develop capacity needed to deliver an effective local reward strategy – capacity often lost over recent years as corporate teams slimmed down to reduce costs.

The extent to which the mix of new employers have distinctly different workforce requirements should determine whether local employment terms and pay bargaining make sense. The challenge of modernising NHS services and ensuring there is an effective reward strategy to support this is one management teams need to consider as a long-term issue rather than short-term fix.

Had some really interesting discussions with senior HR practitioners this week – all touching on the shape, design and delivery of corporate services in the NHS.  Talking about the challenges facing NHS corporate functions, in particular we talked about HR Services and how senior teams should be considering areas for review and redesign using stronger evidence of efficiency and effectiveness.

We agreed NHS organisations needed help to understand their contribution, effectiveness, costs and efficiency. With better information available about those services, CEO’s could talk to their Directors about areas and ways to find better, more effective and affordable solutions to universal and ongoing organisational challenges.

Photo: kevindooley, Flickr

Over a period of years supporting public sector organisations’ support improvement action in corporate teams, especially with HR, Finance and Payroll, one of the most common topics of discussion with Directors and senior managers has been the proper place for payroll functions.

Some years ago, during a conversation with one (American) Chief Executive working in an NHS Trust that was experiencing problems with payroll services, this experienced leader expressed amazement that NHS organisations used outsourced payroll suppliers when ensuring staff were accurately and properly paid was “the most important responsibility of every employer.

Clearly he did not share the view of payroll as a low-value service, an assumption which might underpin the fact that, in UK public services, outsourcing payroll to a specialist provider is relatively commonplace.

Outsourced Solutions

Historically, payroll services have been the most likely corporate service for public bodies to buy-in from another organisation. Seen as non-core function, any in-house service would be viewed as wasting valuable time and money.

In the past, the challenge of legislative compliance combined with high volumes of relatively simple data driving most payroll processes (e.g. absence records, overtime worked, shift payments due) has made outsourcing the payroll function an attractive option.

This approach sees payroll as a”commoditized service” – a simple function which can and should be organised and delivered in the cheapest manner possible with the essential outcomes being payment accuracy and legal compliance.

During a time of austerity and cuts in public services, it seems more fashionable than ever before to outsource such services, having them delivered by a specialist payroll or multi-faceted corporate shared services provider. From 2007 onwards, public services have been seeking cost reductions in support functions by moving these services out to shared services organisations. The expectation for these projects is a combination of simplification, standardisation, automation and economies of scale will reduce costs while maintaining or improving standards. There should be no surprise there are both strong proponents and opponents of these projects, but everyone agrees delivering the benefits is pretty challenging.

For a shared services project to succeed in delivering savings while protecting quality, some fundamental changes are required, with significant review and redesign of functional roles and the business processes they are responsible for. With the trend for considering outsourcing a wider range of  administrative functions, the potential to buy in a combination of “HR and Payroll” or “Accounts and Payroll” is becoming increasingly common. In such cases the perspective of the client organisation about these support functions can be an important driver for the suitability of a particular solution.

Payroll with Finance

Where there are in-house services, the payroll function is often under the direct control of the Finance Directorate – which seems sensible because the function deals with payments – for many public sector bodies, those with a large workforce, most of the payments made in fact. The traditional view of Payroll is that it is a financial function, a vehicle for ensuring the financial plans of the organisation (in terms of employment costs) are properly and effectively implemented – paying accurately, complying with the law and avoiding financial penalties while also ensuring pay has been properly accounted for in the general ledger and the annual accounts.

A finance-focussed Payroll function will support effective financial management, not only by checking people are in the right place (according to the budget) but also in more forward-thinking organisations, the payroll and finance teams working together provided management with the capability to report on and analyse pay-related information in more detail – understanding the link between overtime and shift payments, perhaps performing some complex pay modelling for future changes, maybe even examining the link between absence patterns and agency costs.

Reviewing a debate about the “proper place” for the payroll team on the LinkedIN professional networking site recently, it was clear many were sure that dealing with the pay, tax and accounting means there is no better place for Payroll than in Finance – one person even suggested only Finance could be trusted to make accurate calculations!

In essence however, providing the HR and Payroll systems are effectively linked to and feeding the financial ledger accurately, there is no reason for the Finance department to manage the function. Some would also point out that the Finance team is not always the most skilled at liaison with managers and employees about issues which impact them personally and it is unfortunately common to hear of Finance-led payroll function being referred to in cold and callous terms when it comes to dealing with pay problems. While controls and processes are really important, it seems a little too easy for the team to lose sight of the human side of business.

Payroll with Human Resources

During the same community debate, some participants were certain the people-facing nature of payroll, a need for empathy and customer service for employees, suggested a better fit with Human Resources. It is also important to recognise that when there are problems with payment, the natural first point of call for both managers and employees will be the HR team.

Leaving the human interaction argument aside, there are other good reasons to link these two functions. HR and Payroll data are really two sides of the same coin. Both teams need to understand where people are working in the organisation, what they should be paid and who they are managed by. Where HR and Payroll data is managed separately, both departments suffer from diminished accuracy and timeliness.

As HR and Payroll technology platforms become more capable, this issue becomes an increasingly compelling design factor. Personal and contractual data is progressively shared (or in the worst cases, duplicated). The business processes HR and Payroll departments depend upon should be seen as an integrated whole and are best managed that way – ensuring both workforce and payroll information is synchronised and quality assured.

When you start to examine this perspective, it becomes increasingly apparent HR and Payroll are “joined at the hip”. Effectively the payroll team are pretty specialised, acting as the bi-directional bridge between Finance and Human Resources data management and business intelligence. An effective in-house unit would display a breadth of knowledge about employment law, terms and conditions of employment, tax and benefits legislation, pensions etc plus the expertise to support reward and remuneration modelling and decision-making.

Of course areas of employment conditions and legislation is of common interest and managing data about the workforce has the potential to strengthen management decision-making in a range of areas – including contractual variations, reward management, working hours – as the underlying intelligence available from shared data is manipulated and revealed.

These benefits are not necessarily obvious for Human Resources teams concentrating most on routine Recruitment and Employee Relations activities. But through effective partnering with, and harnessing of the knowledge and expertise within, the Payroll function, a more strategic approach to workforce planning, management and administration can be developed.

Processes and Controls

Clearly there are areas where significant risks of payroll fraud need to be managed through effective separation of duties – whether these are designed to operate between managers and back-office, Human Resources and Payroll. In the light of the shared data and critical links it might seem strange businesses work to create so much distance between the HR and Payroll functions, sometimes to the point where the relationship becomes dysfunctional – by design.

Attractor has observed business processes where the controls designed to prevent potential fraud and errors have become more important than the core purpose of providing robust, effective and efficient service for managers and employees. In such cases the work required to manage core processes is over-heavy on administrative controls and too light on good sense and use of knowledge.

While the standard approach to “separation of duties” is to create “functional breaks” in business processes, this is not the only (nor necessarily the most effective, and especially not the most efficient) approach to organising work and jobs. It can be just as effective to separate particular tasks and responsibilities within a single business unit or team to create the right controls to ensure quality while preventing deception.

Adding Value

Probably more over the next 3 years than at any time before, this question will arise as public services look for ways to reduce costs in “back office” functions. It is important that managers consider costs in the context of effectiveness, contribution and value. When organisations are considering outsourcing payroll services, they need to think carefully about the links between the new service provider and both the Finance and Human Resources functions that are being retained.

By working with client organisations to deploy tools effectively while streamlining business processes, it should be possible for a specialist service provider to improve upon the “inherited” or legacy business operations. If however, there is a simple focus on reducing part of the costs of end-to-end business process, it is possible the client will simply see unhelpful shifts in business costs elsewhere as well as running the risk of quality reductions in business outcomes.

Because the link between Payroll and Finance is one which can normally be addressed effectively through technology, working with an external payroll provider most often brings the links and dependencies on effective HR administration into sharp focus. Where the “traditional view” of payroll as a Finance function prevails, the solutions can be prone to ambiguity and potential failure.

Attractor has seen examples of organisations which expected to outsource significant proportions of its administrative burden for employment to an external provider only to realise, late in the day, there were major elements of the end-to-end business process which were to remain with them – reducing anticipated benefits while retaining most of the areas of risk.

Where a service providers’ competitive advantage has commonly been achieved by simplifying work and reducing the cost of labour by employing cheaper staff (on lower grades or even using offshoring) there can be insufficient attention to designing business processes that make effective use of the automation and integration features in systems.

Where an integrated approach is expected to be protected by outsourcing, a service provider will take responsibility for the administration of the whole employee record (both HR and Payroll) and takes on a more complex challenge – the client can hold the supplier accountable for quality outcomes – which may not be a model of operation a typical shared service business is comfortable accepting.

What have been your experiences with outsourced or in-house services?

How have you resolved some of the challenges described?

Attractor has been working with an NHS client to support its work deploying  Supervisor Self-Service – part of the Electronic Staff Record (ESR), the national HR and Payroll solution used by almost all NHS organisations in England and Wales.

Following effective change management and process review action, the Trust has now completed the pilot phase, proving business processes work and assessing the extent to which new working practices are both fit for purpose and beneficial.

At the end of the pilot phase, managers using the system have reported real benefits for them in terms of time saving, more effective working practices, access to vital staffing information and greater empowerment with the ability to act quickly on timely information.

Subject to Project Board sign-off, Self-Service will be made available to managers across the organisation in a accelerated launch phase, alongside which the functionality in Manager Self Service will be piloted.

Earlier this year (July 2011) NHS Shared Business Service (SBS), a joint venture between the Department of Health and Steria UK, announced its clients would get a share of a £1.2m ‘bonus’. SBS reports savings of 20-40% of operational costs for services it has taken over in back-office support in areas such as finance and accounting, payroll and family health services and says it has saved £50m already.

SBS continues to proactively grow it’s business by acquiring work from additional NHS Trusts with the aim of saving the NHS £250m by 2014. Attractor would highlight the point that evaluating the impact of shared services can be complex as the boundaries between client and provider can generate costs if they are not well designed managed effectively. It’s not clear from published material exactly what functions have transferred and where clients retain responsibilities and functions.

With the right service-design, an external supplier can certainly provide capacity some organisations would struggle to obtain and retain, delivering better outcomes and cost effectiveness than an in-house service. Like many outsourced transactional functions however, feedback Attractor has from SBS customers does vary, with some being very pleased with both financial results and operational delivery while others reporting less satisfaction with operational service delivery.

This market is not very mature and only time will tell the extent to which SBS and other shared service providers are successful in providing robust and cost effective transactional services across the NHS.

Following 3 years of toying with the idea and after more than 20 years of using Microsoft Windows, I recently switched to a new Apple Mac with it’s unique operating system.  ”I am a Mac” now though I’m using the Mac version of Microsoft Office to aid my transition. This helps but it’s still very different to working in the Windows environment.

The new machine and software are really good but I know it will take months to acclimatise to the OSX way of thinking. Routine tasks are all taking slightly longer than before and I am feeling less productive all day, every day. I am conscious of my “discomfort” as I stumble over tasks and actions which have required little thought or hesitation for many years.

Much of my tacit knowledge has been rendered irrelevant and I am experiencing, first hand, the impact of change which so many team members feel when we implement new software. The worst thing is, having overcome my resistance to change (stalling for 3 years), I now have nobody but myself to blame!

Drawn into a conversation on LinkedIN last week about the “proper place” for the payroll team. Many people were sure that dealing with the pay, tax and accounting means there is no better place than in Finance – one even suggesting only Finance could be trusted to make accurate calculations.

Others were certain that the people-facing nature of payroll, the need for customer service plus the links to employment contracts pushed the function closer to Human Resources.

A few people identified the “HR input -Finance output” business that payroll delivered and talked about effective separation of duties to meet audit control requirements. This is definitely on the radar as a subject of a future article.

What do you think?