Public sector struggles with amalgamation

For the past five years, seemingly countless mergers, amalgamations and downloadings have consumed government at all levels.

Widely criticized by employees and the public alike — Mike Harris’ Ontario government recently lost a by-election fought over amalgamation in the City of Hamilton — the repercussions are still being felt across the civil service as departments, businesses and crown corporations struggle to adapt to the unprecedented change.

Ostensibly intended to reduce overlap and develop efficiencies, in reality they have meant, almost invariably, job cuts and working with reduced resources; difficult circumstances for HR departments.

Politics aside, it’s been a fascinating exercise in change management for public-sector human resources professionals, who say they’ve been doing not too badly, or at least the best they can under the circumstances: combining multiple collective agreements and cultures (12 in the ongoing amalgamation of the City of Ottawa) as well as making time to ensure the basic HR infrastructure is in place.

(In this first of a two-part look at public sector amalgamation, critics — some sympathetic, some not — say public-sector HR departments have not been doing enough to help employees either prepare for the change or cope with its effects.

Next issue, public-sector HR professionals tell their story.)
“There’s probably a range of stories but it’s still not going terribly well,” says Ken Kowalski, HR manager for the Winnipeg plant of the Royal Canadian Mint and a past president of the International Personnel Management Association-Canada. One of the biggest issues is, finding the right mix between different cultures and operating styles and procedures, he says. And although it is one of the biggest challenges, in most cases it isn’t getting enough attention at the front end of the agenda.

“The focus tends to be on what product are we delivering. The cultural things tend to be left aside,” he says. The only way to improve cultural integration is to commit more resources and people to studying the cultures and figuring out how best to blend them.

The HR department has to spend more time speaking to employees, he says. “Ours is still a people business and it does require people to go out and talk to people face to face.” Unfortunately, most HR departments are so preoccupied with transactional or structural details of the merger, they don’t have time or resources to do that.

“There’s a lobbying effort that has to go on by the HR department. But I’m not sure HR has a high enough place in the public sector. They can’t get their voice heard strongly enough.”

A lot of employees are very cynical about the process and they have some right to be, he says. At the end of the day, most public-sector amalgamations are intended to reduce the number of people employed, which makes it difficult for employees to remain upbeat.

Howard Eisenberg, a change management consultant and president of Synectia Consultants, is more critical. “I’m still not aware of any HR departments that are doing this in the right way,” he says. Most of the public-sector amalgamations have hurt efficiency and service quality because of the shortsighted and poorly designed change initiatives that tax already overworked employees and destroy morale.

As proof of the lack of vision, he points to the Ontario government’s decision to cut an EAP service that was originally introduced to help employees cope with stress. “Because there weren’t that many people coming forward, they (the government) read that as no interest. But many people are so frightened to attend a seminar, to admit they’re having vulnerability issues.”

He maintains the amalgamations aren’t at all about becoming more efficient, instead they’re about cutting resources, and HR departments aren’t doing enough to stick up for their employees who bear the brunt of greater work and stress loads with little if any reward.

“HR departments are more and more like a regression to simple personnel departments dealing with the simple transactional issues,” says Eisenberg.

“There is a conspiracy of silence,” he says. Morale is terrible across the board and HR professionals aren’t doing enough about it.

Eric Cousineau, head of the HR practice with Johnston Smith International, worked extensively with the City of Toronto during the amalgamation of five local municipalities and one regional government into one “mega-city.”

“There were good parts of it and there were bad parts of it,” he says. As is normally the case, such sweeping change presented an opportunity for a fresh start and a reinvention of sorts. “The bad parts were there was not enough resources in order to both change the business and run the business at the same time.”

Some people said they were too busy running the business to worry about change so the things that needed to be done for the amalgamation were pushed aside. Or else great and dedicated employees were working 100 or 120 hours a week and got burned out. “A lot of really good people left,” he says.

Like Eisenberg, Cousineau says HR has to carve out a more proactive role in the change process.

HR can’t be bogged down in the transactional processes but has to assert themselves as the change agent in any amalgamation. If they aren’t going to contribute strategically, why do they even exist in the first place, when the transactional stuff can be outsourced, he says.

The executive team may find it annoying at first, but once the HR department starts solving discipline problems, and the staffing and absenteeism problems that characterize most amalgamations, they will quickly earn new respect.

A lot of public-sector operations had also depleted their management talent pool at a time when good management was most needed.

“They have not been strengthening their management capability over the last few years,” said Cousineau. “There was not a lot of succession planning, not enough going into career development or training and development.” Particularly harmful behaviour during the instability of amalgamation. “Under major change you need much better management than under a stable situation,” said Cousineau, because the weaknesses that are there become much more pronounced during amalgamation.

This is one example indicative of the larger problem of insufficient resources going into the process. “Change requires more resources not less,” he says. By the same token, other public sector units that are preparing for an amalgamation need to take time to craft a thorough strategy before, rather than trying to put out all the fires that pop up afterwards.

“Usually when you amalgamate in the private sector, there is a clear strategy and integration teams are in place. I don’t believe that they really had that degree of vision and understanding of what the amalgamation was all about.”

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