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The UK Chancellor has announced she wants to see public sector efficiency savings of 5% by tackling spending in local and central government. HR and payroll can contribute to this target with smarter use of technology, including AI.
In this blog
How to boost public sector efficiency
Increase public sector efficiency with AI
The scale of the challenge
Each government department will be required to identify where they can make savings and achieve them by 2029. The aim is to optimise public spending and ensure taxpayers obtain value for money at a time when taxation levels are high.
The announcement comes as a government report has revealed that legacy IT systems cost it £45 billion per year in lost productivity savings. In fact, one in four central government systems are now outdated and require significant investment.
A key area in need of effective digital transformation is public sector payroll and HR. Recent research across 126 organisations revealed that nearly half are struggling with applications that are unfit for purpose.
As a result, 46% have to use technical workarounds to help them complete tasks. Some 44% use manual workarounds, such as paper forms and spreadsheets. A further 42% have found it necessary to invest in supplementary software or tools.
The problem is that these kinds of fixes generate their own challenges. For instance, manual data entry and processing duplicate efforts, takes significant amounts of time, and increases the risk of error.
This, in turn, hits both public sector efficiency and productivity, creating hidden costs. It also makes it more difficult for public sector payroll and HR teams to adapt to changing circumstances.
To make matters worse, if systems are not properly integrated, important data can fall through the cracks. This leads to inaccuracies, which can lead to compliance issues.
How to boost public sector efficiency in HR and payroll
Assess your payroll and HR system’s ROI
Given all this, it’s important to assess whether your existing payroll and HR system is doing the job effectively and providing a decent return on investment (ROI).
This is vital if you are to justify expenditure not just to the Treasury but also to taxpayers. It’s also crucial to make a business case for digital transformation if required.
Evaluate your end-to-end payroll processes
Understand how efficient and productive they are and whether it’s possible to cut processing times. For example, see how much time payroll professionals spend on collecting data, which includes hourly timesheets. Determine how long it takes to perform a pay run and how quickly and easy it is to identify and resolve errors.
Understand how accurate your payroll system is
Pay close attention, for example, to how well your payroll solution carries out activities like deducting tax and working out holiday pay.
Work out the overall cost of operating your current payroll processes
This includes enabling software, hardware, cloud subscriptions, printing and payroll service fees. It also includes the potential cost of non-compliance, such as penalties from HMRC.
See how your system matches up
Compare the accuracy of your existing payroll system with that of an integrated HR and payroll system if you have not already gone down this route. You’ll find that seamless data synching helps reduce admin work and minimises manual errors. It also ensures you have access to the most up-to-date information, which acts as a single source of truth.
Ensure robust and rapid reporting
You should be able to generate your own robust and comprehensive reports quickly and easily as and when you require them. Such speedy access to current data supports informed decision making and effective strategic planning. It also helps drive efficiencies and enables professionals to respond quickly to changing circumstances.
Increase public sector efficiency with AI
It also makes sense for public sector organisations to stay on top of artificial intelligence developments to ensure they can continue to boost operational efficiency.
AI is more than just a buzzword or a soundbite: it’s a revolutionary technology that’s already helping public bodies around the world deliver services more effectively. It’s not a whole strategy, but a powerful tool to drive enhancement and efficiencies.
For example, the government’s has announced a new package of AI tools, nicknamed ‘Humphrey’. The name was given in memory of the fictional Whitehall official made famous in the BBC drama, ‘Yes Minister’.
Humphrey will soon be made available to help civil servants deliver effective public services more quickly and cost-effectively. Developed by a team of AI developers from the Department for Science, Technology and Innovation, its features include:
- Consult. This analyses responses from government consultations in hours. It presents the data to policymakers and experts using interactive dashboards so they can explore what the public is saying directly.
- Minute. This provides a secure transcription service for meetings, which includes customisable summaries
- Redbox. This helps civil servants with day-to-day tasks, such as summarising policy and preparing briefings.
A further government aim is to develop a framework for finding and purchasing AI solutions from the private sector.
Conclusion: Leverage technology to unlock operational efficiency
So, on the surface of it, the Chancellor’s efficiency targets may appear testing. But it’s clear that technology and digital transformation are key to delivering new levels of operational efficiency and, ultimately, value-adding cost savings.
Key takeaways
- The UK Chancellor wants to see public sector efficiency savings of 5% within four years by cracking down on “wasteful spending”
- A government report revealed that legacy IT systems cost it £45 billion per year in lost productivity savings
- Nearly half of public sector HR and payroll teams are struggling with applications that are unfit-for-purpose; 44% are still using manual workarounds including spreadsheets and paper forms.
- It is vital to assess whether your existing payroll and HR system provides a decent ROI and, if not, to take steps to address this.
- AI-enabled technology will help to boost public sector HR and payroll efficiency and accuracy.
Unlock productivity and efficiency, now
Find out more about how public sector organisations can find valuable gains through optimising payroll and HR
