Stay on the rails if you're cutting staff
The current climate in further education poses a question, one that those of us who have been in the sector for some time have had to tackle more than once before: in times of austerity, how do you minimise pain and maximise gain?
The first time I had to face this problem was nearly 20 years ago. I had just taken up the post of principal at a London sixth-form college and my cunning plan to grow our way out of financial difficulty had been scuppered by an abrupt change in government policy.
During the recruitment stage, the college was very clear about the skills the new principal needed to possess. Quality issues needed addressing and serious financial challenges lay ahead. Instead of a traditional letter of application, candidates were told to write a principal's report for the governing body, outlining how they intended to turn the college around.
Once I was in post, it was obvious that the sudden change in government policy meant that the only viable option was cost-cutting. In an environment where about 75 per cent of the budget was spent on wages, that meant one thing - fewer staff. Fast-forward to 2006. I had just started at MidKent College and had to manage another restructure. Sadly, this was necessary two further times, in 2010 and 2014. Both were triggered by changes in government policy.
Looking at the financial challenges our sector is facing, I believe an increasing number of FE and sixth-form colleges will soon be forced to cut staffing costs. Here is a four-point guide, based on my experience, to managing those reductions.
1 Plan for the future
Start by drafting a realistic three-year financial forecast. We know that government policy will change and that it is almost impossible to forecast that far ahead, but it is valuable to articulate your assumptions and scrutinise them. However, be cautious about including revenue from proposals for growth or new provision.
2 Set a savings target
Now that you have your best guess for the size of the financial challenge, determine the overall savings target and the timeline for making those savings. If you opt to make staff cuts over a longer period, go for the biggest possible hit in the first year.
3 Seek governors' approval
Governors will have been briefed as you developed the strategy, but you need to gain their formal approval before embarking on the staff consultation. It is important to agree the key principles underpinning your approach - for example, minimising compulsory redundancies, minimising the number of staff put at risk or protecting front-line roles by making a greater proportion of cuts to management and support functions.
4 Take staff with you
Brief all staff on the same day and work hard to get the message right. Making savings through redundancies is relatively straightforward - the real challenge is taking the remaining staff with you and showing that the organisation cares about them, at the same time as upholding the reputation of the college and balancing the costs of redundancy.
In June 2014, we talked to nearly 500 staff in one day in three separate briefings. After discussions with the trade unions, we had a clear idea of the questions staff would want answered and addressed each one directly.
We were also explicit about telling staff how we hoped they would feel after the presentation. We wanted them to come away believing that our financial assumptions were accurate, that we had explored all the options, that we regretted the course of action being taken and, above all, that we were committed to doing everything possible to support affected staff.
Setting and meeting an ambitious timeline is essential. Minimising the period of uncertainty will give you the best chance of maintaining staff morale.
I am pleased to say that 20 years ago, after a lot of pain, we met our savings target, improved the quality of provision and were generating annual surpluses within 18 months. But that experience taught me that you should always be cautious about plans to increase revenue. Every strategy needs resourcing and your capacity for delivering new provision is greatly diminished during a restructure.
Cutting staff is the downside of what is otherwise a great job. The process is miserable, but my advice is to make the tough decisions swiftly in order to minimise the pain for staff. The biggest enemy is uncertainty - for those who have to go and those who stay. The best way forward is speedy action, with clear communication from highly visible senior staff.
Stephen Grix is chief executive of MidKent College