HR - a big overhead?

HR must provide better value for money, says Met HR chief  Martin Tiplady calls for cost-effective function as he implements review

HR must become more cost-effective to survive the threat of being “priced out as an expensive overhead”, Martin Tiplady, group HR director at the Metropolitan Police, has warned.

Speaking to delegates at the HR Forum last week, Tiplady called the current economic situation “an opportunity for HR to make an impact and centre stage,” but added that the function also undoubtedly faces a “threat”.

“We’ve got to look deep into our assumptions about what makes good HR, change what we do and reposition ourselves as a cheaper, more effective and more strategic offering,” he said in his keynote address.

“In too many places our offering of staff administration is irrelevant, costly and unsustainable. So we need to determine what is fit and what is unfit.”

Many HR departments have not got their operating model right, and HR-to-employee ratios must hit 1:100 and above or the function will be deemed “too expensive to survive”, he said. Tiplady said that while the national average in the private sector was 1:85, and in the best parts of the private sector it is 1:130, the public sector is relatively inefficient with a ratio of 1:80.

He added that ratios at the Met, which has 55,000 employees, ranged from 1:35 to 1:130 across 43 constabularies. “Back room functions, like HR, are under the cosh. Our response is the strategy will suffer but the processing won’t. So unless we can be wise quickly to how we can do the processing cheaper, we will get priced out.”

Transactional tasks are important but they do not add value, and HR that is viewed as peripheral, rule bound and not understanding the business is “creating a notion that HR is an expensive overhead,” he said.

“Future HR is about understanding how you fit into the business and how what you do aids and abets the product,” continued Tiplady.

“Real HR is about the products and the bottom line. If you get the business and assist your managers to achieve greater profitability, to generate success and to ‘crystal ball’ workforce skills and requirements and establish the employer brand, then you will add the value I’m talking about.”

He also highlighted medium-to-long-term workforce planning, organisational development and embedding diversity as key to HR’s survival.

In two and a half months the Met will start implementing its own £48 million HR review, which will bring about an annual £15m saving and reduce HR headcount by around 300.

Tiplady explained the organisation will be able to do this by centralising HR tasks, creating a 24-hour call centre and by moving from a 1:100 ratio to 1:110 within a year.

Source: Claire Churchard, PM Online