02.07.14
Shifting to shared services
Guest blog by Sally Campbell
Ongoing cost pressures and HR functions facing increased scrutiny means NHS organisations are having to fundamentally rethink how they provide services. But shared services are emerging as the solution for departments needing to create efficiencies in the back office without sacrificing quality.
The announcement earlier this month that the NHS in England is set to face a funding gap of up to £2bn in the next financial year is unwelcome but unsurprising news.
Prolonged budget freezes and real-term reductions are already creating a huge challenge for individual trusts to meet the demands of a growing, ageing population. Many are finding they need to reorganise and improve their back-office functions in order to better support patient care.
This dual pressure of cutting costs without sacrificing quality or accessibility can be too much for Trusts to bear on their own. Under these conditions, shared services are emerging as a real solution, as well as providing trusts with significant advantages along the way.
Shared challenges
Cast your mind back a decade to the publication of 2004’s Gershon Review. Among the recommendations, the report highlighted the potential benefits of sharing support services in the public sector to create significant efficiencies.
However, despite a lot of activity in other areas – the LGA estimates that at least 95% of all English councils are engaged in some sort of shared service agreement – in the NHS shared services remains an immature market.
The question, then, is why the NHS has been hesitant to adopt a strategy that is advocated by Cabinet Office and proven to work for other government organisations?
A lack of understanding over what functions would best lend themselves to a shared model is an unhelpful starting point. Trusts will often be operating fragmented services across multiple locations, making it difficult to draw a boundary between what resources should be shared and what retained.
There is also a reluctance from some NHS directors to hand over services to an external supplier. I know from my own career that the NHS is an organisation unlike any other, requiring specialist expertise of unique policies and protocol. This has made many trusts weary of engaging in traditional outsourcing – the risks of working with third parties who may have little experience in healthcare are considered too great, particularly if these services are moved out of an organisation to be handled in a far-removed location. This is particularly hard-felt in the HR department; the fact that HR is so integral in organisational success has only increased directors’ temptation to keep control of HR functions themselves.
But this only strengthens the need for NHS organisations to work more closely together to find the right solution. Our own shared service centre was originally formed by and then spun out of East Cheshire NHS Trust and remains to be based in Congleton, a testament to some of the forward thinking that’s emerging within the sector.
Finally, the procurement process itself can be a turn-off, taking considerable time, effort and money just to get an agreement in place. Drawing from an existing framework that’s open to all NHS bodies like the one we provide allows organisations to quickly procure and implement a shared service solution to benefit from best practice and economies of scale.
Improving services
The reality is that, having to do more with less means single trusts simply cannot go on as they always have. Pooling back-office resources to deliver non-core back office work, such as payroll and administration, can create immediate cost savings as well as introducing long-term efficiencies through significant economies of scale.
Added value comes from simplifying and standardising processes to reduce duplication and supporting managers to self-serve. In this way, shared services ease the administrative burden on HR teams, allowing them to concentrate on business critical operations. That’s a crucial point when you consider that, since the Francis Review identified a link between employee-wellbeing and patient care, workforce indicators are now under much closer scrutiny.
But apart from reducing administration time and costs, shared services can also play a much bigger role in delivering higher value services.
Our own arrangement with East Cheshire NHS Trust is such an example. We’ve formed specialist skilled teams, including employee relations, recruitment and learning & development, which are helping the Trust and other partners improve strategic performance; in the case of the learning & development team, this has meant the development of resources and support sessions that help staff understand the changes going on around them and feel motivated and empowered to deliver positive change themselves; for the recruitment team, it’s been the implementation of a proactive recruitment service that identifies vacancies sooner, to maintain a high level of patient care. This approach has meant we’ve been able to significantly raise satisfaction with the HR service, with 99% of East Cheshire NHS Trust’s users rating it as ‘good’ or ‘very good’.
HR is a critical function in the NHS, requiring expertise, insight and dedicated individuals. By working together and sharing back office resources, these teams can unlock savings and improve services, at the same time as focusing on some of the bigger challenges their stakeholders are facing.
Sally Campbell is director of Public Sector – Health at arvato UK. She is a former HR director of NHS organisations in the north west and managing director of Cheshire HR Service, a shared service centre that was spun out of the East Cheshire NHS Trust in 2007 and remains its largest client. She joined arvato UK when it acquired the service in April 2013.