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2001 December Report of the Auditor General of Canada

Main Points

3.1 Our review of public service recruitment identified a culture of short-term hiring. Due to workload pressures, departments often fill vacancies with casual and term employees instead of hiring indeterminate staff. These actions are driven by the delays and problems associated with the existing recruitment and staffing system and by inadequate human resource planning and recruitment practices.

3.2 We found weaknesses in some key areas:

• The absence of comprehensive human resource planning that is integrated with operational business plans means that senior management does not have the information it needs to develop recruitment strategies. Senior management lacks information to identify the funding needed to support recruitment, and hiring managers do not focus on the broader long-term needs of the organization.
• Hiring managers need more central and departmental inventories of pre-qualified individuals that they can draw from quickly to meet their recruitment needs.
• The government needs to upgrade its Internet-based electronic recruitment system to provide better service both to applicants and to the managers who need staff.
• Improvements need to be made in the analysis of recruitment-related information and in reporting to senior management on issues, opportunities, risks, and threats.

3.3 A more global view of human resource management is needed to break the cycle of meeting recruitment needs one job at a time and to ensure that actions will be taken to meet present and emerging needs. Hiring managers need to look beyond the short-term filling of vacancies to ensure that recruitment they undertake will meet both immediate and long-term operational needs.

3.4 Human resource advisors need to change their focus from rules-based control of the process to working with line managers using a more strategic and service-oriented approach.

Background and other observations

3.5 This audit examined recruitment: the actions taken by central agencies and hiring managers to ensure that the public service will have enough skilled people to perform its work. We looked at six departments; we focussed on recruiting to the Scientific and Professional category and the Administrative and Foreign Service category.

3.6 The audit is reported in two chapters. Chapter 2 focusses on problems in the recruitment and staffing system and the need for legislative change. In this chapter we focus on improvements that do not require legislative change. We look at how managers and departments identify their recruiting needs, how they fill them, and what support hiring managers receive from their departments and central agencies.

3.7 The public service already faces hiring challenges and shortages in almost half the occupational groups we reviewed. The situation will worsen due to changing demographics, anticipated retirements, shifts in the nature of work, and competition from both the private and the public sector for candidates.

3.8 The public service of the 21st century needs effective recruitment tools and support that respond quickly and efficiently to its needs. If it continues to take months to fill vacancies, good candidates will accept work elsewhere. Concentrated effort will be needed by all parties concerned to attract and retain the candidates the government needs in an increasingly tight labour market.

The government has responded. The response of the Privy Council Office, on behalf of the government and the departments we audited, and the response of the Public Service Commission are included at the end of this chapter. The responses recognize the need to address our audit observations and the recommendations we have made for improving recruitment practices.

Introduction

3.9 The Public Service Commission of Canada administers recruitment into the federal public service under the Public Service Employment Act (PSEA). Like other human resource functions in the federal public service, recruitment is shared among the Commission, departments and agencies, and the Treasury Board Secretariat.

3.10 The Commission provides some workforce and labour market information on employment equity groups to support strategic human resource planning. It is responsible for delivering government-wide recruitment programs and providing information on recruitment, diversity, and best practices. The Commission has delegated much of the responsibility for internal staffing to departments. It has delegated full recruitment responsibility for a few occupational groups to specific departments who are the prime users of those groups. However, it retains responsibility for all other recruitment to the public service.

3.11 Departments and agencies do their own human resource planning to identify their recruitment needs. They are delegated the authority to decide whether to seek candidates outside the public service (known as an open competition). They discuss the area of selection with the Commission and provide Commission staff with a statement of qualifications and a draft poster for the position. Once the PSC has done the initial screening of candidates, the department makes the recruitment and selection decisions that meet its business needs.

3.12 The Treasury Board Secretariat is responsible for developing, communicating, and evaluating human resource policies and instruments that help departments manage their human resources. It carries out some corporate human resource planning and develops and funds corporate recruitment and employment equity programs for the government as a whole.

Focus of the audit

3.13 The purpose of our audit was to examine how well the general recruitment of individuals into the public service meets both current and future requirements. For the purposes of this audit, we have defined recruitment to mean how individuals first enter the public service and also how they become indeterminate employees. An objective was to identify current general recruitment practices and their accompanying opportunities and constraints.

3.14 The results of our audit are presented in two parts. Reading both is essential to a full understanding of the issues involved and their interrelationships. Chapter 2 focusses on the problems associated with the recruitment and staffing system of the federal public service; we identified a need for significant legislative changes. This chapter presents our observations on recruitment practices that need to be addressed regardless of their legislative framework. It is based on a review of six departments that represent the different types of departments; the audit observations and recommendations in this chapter apply to systems and practices across government.

3.15 Our audit focussed on recruitment into the Scientific and Professional category and the Administrative and Foreign Service category. These groups provide key administrative, professional, and managerial services to the public and are also the main feeder groups for the government's leadership ranks. In 2000-01, the two groups accounted for 38.6 percent of all hiring activity to the public service other than casual and student employment. Appendix A lists all the occupational groups in the two categories.

3.16 We looked at practices that hiring managers and human resource professionals in six departments use to recruit people. The departments were Public Works and Government Services Canada, Health Canada, Natural Resources Canada, Environment Canada, the Treasury Board Secretariat (as a department), and the Department of Finance. We selected the six departments to represent larger, medium-sized, and small departments with significant recruitment activity in the groups in our study. Four of the six departments operate across the country; two operate in the National Capital Region. Three are science-based; two have policy and central agency functions; and one provides services to other departments. In general, the larger the department, the more diffuse are its business lines and the more diverse its occupational groups and its employees' needs. Our selection of departments also took into account recent and planned audits and studies by both this Office and the Public Service Commission, in order to ensure a balanced coverage of departments and agencies.

3.17 We also looked at the support, guidance, and services that three central agencies provide for strategic direction, human resource planning, and recruitment—the Treasury Board Secretariat, the Public Service Commission, and the Privy Council Office.

3.18 We held focus groups across Canada with hiring managers and met with human resource advisors. We also conducted an Internet survey of 1,262 managers in the departments we reviewed who had hired employees in the two occupational categories in the past two years. We received 648 responses.

3.19 We looked at recruitment and the supporting staffing system. Our audit did not include recruitment under the Post-Secondary Recruitment Program, which was the subject of an audit we reported in December 2000 (Auditor General's 2000 Report, Chapter 21). We did not review key areas of human resource management, such as classification and compensation or labour relations. See About the Audit at the end of this chapter for more details.

Observations and Recommendations

Staff shortages already exist

3.20 To accomplish their goals and objectives, departments and agencies need competent, trained people. Attracting and retaining them is increasingly difficult for a variety of reasons, including significant departure rates (staff turnover and retirements) and competition from the private sector.

3.21 Almost half the occupational groups we reviewed in the six departments already face hiring challenges, particularly for positions that require experience. These groups include architects, biologists, chemists, computer scientists, doctors, engineers, economists, forestry specialists, human resource officers, financial managers, information service specialists, meteorologists, nurses, physical and research scientists, policy analysts, program managers, purchasing officers, and translators.

3.22 Most are facing shortages because they must compete for candidates with both the private sector and other public sector jurisdictions. There is also competition for staff within and among departments, which creates additional pressures.

3.23 This chapter discusses issues that the government needs to address, regardless of the legislative framework:

• human resource plans and recruitment strategies;
• recruitment practices, funding, and tools;
• recruitment services to managers; and
• departmental reporting.

Planning and strategies

Lack of integrated human resource planning hampers development of recruitment strategies

3.24 We expected that public-service-wide demographic analysis and human resource planning would be undertaken to provide a solid basis for identifying recruitment needs.

3.25 Long-term human resource planning by departments and the public service as a whole can give management a clear understanding of both short-term and long-term human resource needs. Managers can then make more effective recruitment decisions and can staff programs and services accordingly.

Central guidance and support for human resource planning are evolving

3.26 Both the Treasury Board Secretariat (TBS) and the Public Service Commission carry out some aspects of government-wide human resource planning. Both have sections that do forecasting, demographic analysis, and research. Both deal with the public service as a whole and with "functional communities." Functional communities are groups of employees who work in common or similar functions across many government departments; the science and technology community is an example. Most of these communities are in the occupational groups our audit covered (see Appendix B for a list).

3.27 The Treasury Board Secretariat's Strategic Planning and Analysis Division is responsible for developing human resource strategies and policies for the federal public service. Units of this Division are responsible for recruitment policy, human resource strategic planning, demographic analysis and research, and human resource information.

3.28 The Division has developed guidelines and references for departments to carry out demographic analysis, trend analysis, and forecasting for such issues as succession planning. It has developed a human resources strategic planning framework, including a Human Resource Planning Template. It also co-ordinates the Human Resources Planning Interdepartmental Network, which has a Web site for sharing information and practices. It recently produced a global overview of public service employment, analyzing the implications of an aging workforce and identifying the future recruitment needed to maintain public service employment at present levels. The Division has conducted a number of studies of the human resource management community and the information technology/information management community.

3.29 The Research Directorate of the Public Service Commission also carries out demographic analysis, modelling, and labour market analysis for employment equity groups. It researches comparative developments in recruitment, employment equity, and other related practices in both the public and the private sectors. It has prepared demographic studies of some functional communities, such as the regulatory and inspection community, which includes among its 14 occupational groups many in our area of study. Some other functional communities are the communications community, the materiel and supply management community, and the executive management community. In addition, the Commission has produced regional profiles, labour market analyses, studies of employment equity groups, and studies of merit systems in other jurisdictions.

3.30 Recognizing that their forecasting and planning work overlap, the TBS and the Commission held meetings in December 2000 to establish a joint Centre for Demographic Studies. This will provide data analysis and forecasts for the public service that can be used by various stakeholders. It will not do human resource planning itself but will provide, at departments' request, the common statistics and analysis to do their own planning. The Centre will establish a single common database so information coming from central agencies will be consistent. It also plans to train departmental staff to use the tools, techniques, and data it develops.

3.31 However, the TBS and the Commission will still retain their separate research responsibilities. The Commission will continue to do labour market analysis for employment equity purposes, and the Secretariat will analyze terms and conditions of employment and conduct pay research.

3.32 In our opinion, it is too early to assess the success of this "virtual" joint organization and whether it will address the overlap of roles and responsibilities for demographic information and research.

Demographic information is improving

3.33 We expected that demographic information would serve as a basis for analysis in developing human resource plans.

3.34 In our 1998 Report, we noted that departments lacked sufficient information on their human resources. We said they needed to review the composition and competency profiles of their current staff and prepare plans to meet identified future challenges.

3.35 In this audit, we found the situation had improved. In 2000, the Clerk of the Privy Council called for deputy ministers to provide specific plans for analyzing their departments' demographics and to set three-year recruitment targets, including employment equity targets. This call has raised awareness of the implications of demographic changes and increased the focus on them.

3.36 All of the departments we looked at were able to provide us with demographic data and analyses of historical trends. They have a good overview of their current staffing situations and their projected retirements. All of the departments have identified specific occupational groups at risk. Some of the departments, such as Health Canada, Natural Resources Canada (NRCan), and Public Works and Government Services Canada (PWGSC), have detailed breakdowns of their demographic data by business line or region.

3.37 We found, however, that the demographic information available is usually at the macro level. More detail and analysis are often needed to determine specific recruitment needs. Most departments have demographic information about potential retirements but less information about actual retirements planned by employees. In addition, most forecasts are based on maintaining the organization at present levels, with little consideration of how needs could change in the future.

3.38 We saw little evidence that departments relate their own situations to the overall demographic analysis that central agencies have done. Nor do they draw on the services that central agencies provide, with the exception of Health Canada and the Department of Finance, who requested and received support from the Commission's Research Branch.

3.39 Very few departments have qualitative information on potential gaps in skills and potential new requirements. However, we found that where the Commission has delegated full recruitment responsibility to a department for certain occupational groups, the department has usually gathered and analyzed the information in more detail. Examples are PWGSC for translators, Environment Canada for meteorologists, and Health Canada for nurses.

3.40 In summary, although more demographic information is available for human resource planning, departments need to translate it more effectively into concrete recruitment strategies.

Human resource planning varies among departments

3.41 We expected that departmental human resource planning would be based on demographic analysis and integrated with departmental strategic and operational plans to help ensure that departments have the people they need.

3.42 The six departments we reviewed illustrate the breadth of challenges faced by public service managers. Among the six departments, human resource planning varies greatly. All of them have a document they call a human resource plan, but the quality of these documents varies considerably—from a plan in development (NRCan) to a detailed plan (Department of Finance). However, few have specific recruitment targets identified to respond to current or anticipated staff shortages. Nor do they discuss related opportunities, threats, and risks. The plans made little mention of how extensively the departments use contractors and temporary service agencies and with what impact on recruitment. Exhibit 3.1 provides some key recruitment-related elements of a human resource plan.

3.43 Although departments have developed human resource plans, we found that the plans are not well communicated, understood, or accepted by line managers. In response to a question in our Internet survey on whether their departments have formal human resource plans, about half the managers said either that no plan existed or that they did not know or were not sure. Only 22 percent said the department had a formal human resource plan that helped them plan recruitment. An exception was line managers in the Department of Finance, where 91 percent of those responding said there was a plan, and 57 percent said it helped them in planning recruitment. The Department had held "town hall" meetings with all staff to communicate the results of its human resource plan.

Departments need to develop recruitment strategies

3.44 The value of a human resource plan is limited if it is not integrated with the department's strategic and operational plans so that recruitment strategies support the department's operations.

3.45 Although some departments have taken action in specific regions or sections, we found little evidence that any but Finance have made much progress in integrating their human resource plans with their business plans. Nor did we find that departments translate their needs into specific recruitment strategies with targets, detailed marketing strategies, timelines, and persons assigned to lead the strategies.

3.46 Departments have a variety of reasons for not completing recruitment strategies. Throughout much of the 1990s they focussed on cost reduction and downsizing. In addition, many departments have only recently had available the demographic information that clearly showed the problems they would soon be facing.

3.47 The absence of comprehensive human resource planning that is integrated with operational business plans means that management does not have the information it needs to develop a recruitment strategy and identify the funding needed to support it. Without a clear idea of their emerging or long-range needs, managers do not recruit for the future; they focus more on filling vacancies one by one as they arise.

3.48 The weaknesses in human resource planning and the absence of recruitment strategies in departments means they are not in a position to identify recruitment problems that might be dealt with public-service-wide. As a result, central agencies are not alerted to potential staff shortages across departments. If they were, they could plan for more effective, efficient, and economical recruitment to fill common gaps throughout the public service.

3.49 Recommendation. Deputies should ensure that human resource planning is an integral part of business planning, that the key recruitment elements and strategies are included in their human resource plans, and that the plans are communicated widely.

Recruitment practices

A culture of short-term hiring—Recruitment practices need to change

3.50 We expected that procedures for general recruitment would respond in a timely and cost-effective way to the current and future needs of the public service.

3.51 Chapter 2 discusses the potential for more delegation of recruitment to departments. Coupled with this delegation is a requirement to manage human resources, recruitment, and funding with a broader, department-wide focus.

3.52 Managers in our focus groups complained about their high staff turnover. Each time a position is vacated they have to fill it again and train another employee, resulting in lost time and lowered productivity. It is clear from our interviews with hiring managers that they are dedicated to making their programs succeed. They note that to do this, they need competent staff. Our interviews with managers showed that there are several factors affecting their recruitment behaviour and decisions:

• the need to fill some positions temporarily while employees are on assignments or on lengthy leaves (for example, parental or disability);
• the need to fill vacancies quickly due to workload pressures;
• a desire to "try before you buy"; and
• the concern that funding for their programs may not be stable enough for indeterminate hiring.

All of these contribute to the culture of short-term hiring.

3.53 In our opinion, these factors, along with a lack of nimbleness in the system and a lack of planning, have contributed to high levels of casual and term hiring activity. Managers will need to change their mindset on recruitment to ensure a better balance between the immediate need to fill vacancies and the strategic needs of their departments. But this will take leadership, direction, and support.

3.54 Temporary assignments. Managers said the creation of departmental or government-wide task forces and other temporary projects usually results in the rapid secondment, deployment, or assignment of already knowledgeable employees from one section of the organization to another. Secondments and assignments are faster than the regular staffing process. Positions vacated temporarily as a result must be filled temporarily, sometimes from elsewhere in the department by internal secondment or an acting assignment, creating a domino effect. Sometimes the position is filled directly through term hiring. However, back-filling the vacancies with term employees has administrative repercussions. The extent to which an organization uses internal secondments, temporary assignments, and term hiring needs to be analyzed to ensure that it is appropriate.

3.55 Internal competition. Managers told us that their employees in common occupational groups across the public service (such as administrative officers, computer specialists, economists, human resource officers, program managers) are often "poached" by other departments that can offer a more desirable opportunity. To fill the resulting vacancies, managers often use term hiring in the interest of speed.

3.56 Term employees seek indeterminate positions. Term employees are often seeking greater job security. As soon as they are hired, term employees can compete for indeterminate positions in competitions that are open only to public servants (known as closed competitions). When they are successful, the resulting turnover causes operational problems. Managers who have hired term employees said they cannot hire on an indeterminate basis for a number of reasons, including the need to protect a position for an indeterminate employee on assignment and a lack of stable funding.

3.57 "Try before you buy" is easier than probation. Managers state that term hiring also allows them to "try before they buy," managing employees on the job for a period before deciding whether to make them indeterminate. Managers say that if the term employee is a poor performer or does not fit the organization well, they simply do not renew the term.

3.58 Managers we interviewed said that they avoid rejecting new indeterminate employees with performance problems in the probation period because they find the system too unwieldy and time-consuming, and the result unsatisfactory.

3.59 Short-term funding. One of the reasons given for the departmental and managerial focus on short-term hiring was concern about the availability of long-term funding. Responsibility to address these concerns is shared by both the government and departments.

3.60 Managers in interviews and focus groups said consistently that one of their reasons for hiring on a term basis is uncertainty about continued funding. They are unwilling to fill vacancies with indeterminate staff when they are not sure if funding will continue for the areas under their responsibility. They do not want to be in the situation of having to lay off indeterminate staff due to a lack of ongoing funding.

A broader and long-term approach to recruitment is needed

3.61 As already noted, recruitment has tended to focus more on replacing individuals and filling these vacancies than on a structured, organization-wide process to ensure that a department will have the resources it needs. Such a process would build on improved human resource planning and recruitment strategies. It would also include succession planning and analysis of existing financial flexibilities.

3.62 Succession planning is the process of actively assessing and developing the organization's ability to sustain and replenish critical talent over time. It includes both anticipating and filling key vacancies and meeting future strategic needs. As Chapter 2 notes, the public service is facing a significant "human capital" challenge due to the high levels of retirement expected over the next decade.

3.63 Line managers told us they are aware of the demographic challenges their own working units face because of impending retirements. They can identify critical circumstances they will have to deal with as experienced employees retire for whom no replacements have been trained. They noted that the demographic challenges are often even more critical in the regions, where the pools of potential replacement employees are not as evident as they are at headquarters. We found some departments further along than others in developing succession plans; the TBS is an example, and Environment Canada, for its meteorologists.

3.64 Managers told us they do not have the funds to bring in junior and mid-level people now to receive adequate training and mentoring from experienced personnel who will be leaving in a few years. They want more bridge financing to help with succession planning for key positions.

3.65 The recently approved Graduate Opportunity Strategy (GOS) for six science-based departments is designed to recruit science graduates before senior personnel leave to ensure that highly specialized knowledge is transferred. Environment Canada has been dealing with succession planning for meteorologists through a recruitment and development program that pairs new interns with experienced personnel.

3.66 In our opinion, departments have more flexibility in salary expenditures than they are using. They need to analyze historical trends in spending to show the salary dollars that lapse each year. These lapsed dollars offer an unexplored opportunity to hire additional people in areas of critical need and to break the cycle of term hiring by offering more indeterminate positions. Departments also need to focus on whether their short-term hiring provides the resources they need to meet their long-term goals and objectives.

3.67 Recommendation. Departments should identify where increased investment in indeterminate hiring is needed to meet their long-term human resource needs.

3.68 Following Program Review, downsizing, and budget restraints, the government undertook a further review to ensure that existing programs were adequately structured and resourced. In the second round of that review, in 2001, the Treasury Board committed a total of $89 million over five years (of a total $210 million requested) to help relieve critical pressures on recruitment, learning, and retention and to help close the government's critical policy and information gaps. The objective was to strengthen the government's capacity for responding to recruitment challenges it faces.

3.69 Funding of $23 million was provided to 12 of the 18 government-wide functional communities at risk. Of that amount, $11.9 million was directed to support secretariats for 12 functional communities to build capacity. In addition, three specific recruitment and development programs for human resource specialists, compensation specialists, and science and technology recruits would receive a total of $10.6 million to cover salary costs in this fiscal year and the costs of training and certifying procurement specialists.

3.70 Funding submissions from 15 of the functional community groups had a range of proposals. Serious shortages in the levels of staff needed to meet government objectives were cited in submissions as one consequence should many of the functional communities at risk not get adequate funding. But only eight submissions mentioned some form of overall future recruitment strategy. A few of those, such as the submissions from the human resource management community and the science and technology community, had very specific recruitment targets. The rest were very general, though, and did not link the strategy to expected demands or to demographic analyses.

3.71 Most recruitment initiatives that were approved received funds for only fiscal year 2001-02. Exceptions were initiatives of the Public Service Commission and the Canadian Centre for Management Development. Treasury Board Secretariat officials said they were taking a cautious approach and would be reviewing progress after one year to see if funds were having the intended impact. By the end of June 2001, however, departments and functional communities had not received the one-year funding.

3.72 Other funding uncertainties account for some of the short-term hiring by departments. Health Canada, Environment Canada, and Natural Resources Canada work in partnership arrangements and project-based science that receive funding from outside the government. Managers are never certain whether projects will be renewed or new projects started. Some divisions in PWGSC operate on a cost recovery basis and their funding is based on revenues earned. Budgets vary with the demand for their services.

3.73 Short-term and limited-term funding are not intended to, and do not, encourage a focus on long-term solutions. This leaves managers and departments in a dilemma. They need competent employees to complete short-term projects, but managers do not want to take the risk of offering an indeterminate position without a confirmation of long-term funding.

Managers need more inventories of candidates

3.74 The managers we interviewed said they needed more and better tools to identify candidates for recruitment. Line managers and human resource professionals told us they need more inventories of pre-qualified individuals that they can draw from quickly to meet their recruitment needs. They indicated they would like a pool of candidates who meet the selection standard for the group but are not ranked in comparison with each other. From these inventories, managers can select individuals to interview who best fit the specific requirements of the vacant position.

3.75 A few inventories across the public service already exist and operate in different ways. The Commission has maintained inventories for the information technology/information management group. Hiring managers have access to this inventory database and can use their own search criteria to make their own selection of candidates to interview. Over the past year, searches of the inventory by managers ranged from 512 to 981 a month.

3.76 The Commission recently started an inventory of experienced human resource management candidates in the National Capital Region. PSC officers develop lists of potential candidates for a department, based on the department's selection criteria.

3.77 Some departments have created their own inventories for their unique needs. Where such inventories exist, they are used. Over 20 percent of the respondents to our Internet survey said they use departmental inventories to recruit staff. Health Canada has a Canada-wide inventory of nurses. PWGSC developed a questionnaire for experienced architects and engineers, which was posted on the Commission's Web site at www.jobs.gc.ca. The Commission created a database to keep an inventory and it advertised positions in professional journals. Sixty people were recruited in this way in 2001.

3.78 In some cases, a department may create a short-term inventory of candidates for a particular group and level. Health Canada has established short-term inventories to fill shortages in specific science groups and to market employment equity referrals. For the past two years, the Treasury Board Secretariat and the Department of Finance have created a joint inventory of candidates for junior administrative positions. This allowed them to fill many vacancies quickly. They also found many qualified individuals for whom they had no positions, and they shared their inventory with the Commission for use by other departments; almost every individual was placed. In previous years, the Department of Finance also developed an effective inventory of candidates for senior-level economist positions.

3.79 The creation of such inventories in more departments and across the public service would give managers an important source of candidates. They could get information quickly on potentially available candidates and develop a short list to interview. If not enough candidates were available, they could decide to advertise vacant positions. This would significantly reduce the time that hiring managers spend filling vacancies. The Government of Quebec is using this approach, advertising to develop pools of candidates for a number of occupational areas.

3.80 Recommendation. Deputy heads should ensure that departments analyze their recruitment needs in order to identify where local or departmental inventories of pre-qualified candidates need to be developed and maintained.

3.81 Recommendation. The government should analyze its recruitment needs across the public service to identify where it needs to develop and maintain central inventories of pre-qualified candidates.

E-recruitment has had a positive impact but more is needed

3.82 Many managers we spoke with identified a need for a better electronic recruiting system. The Commission has been developing its e-recruitment Web site for a number of years to improve access to public service jobs via the Internet (http://www.jobs.gc.ca/). Statistics show that the site has attracted a large number of visitors and a large volume of applicants for many types of jobs.

3.83 In 2000-01, more than 70 percent of the 277,910 applications received by the Commission in open competitions were made on-line. In a PSC survey of recent hires, 81 percent of those who had used the Internet in their job search had used the PSC site. Fifty-nine percent said it had been their most valuable job search avenue.

3.84 When a recruitment system is inefficient, however, automating it can generate as many problems as solutions. Electronic filing makes it easy for an individual to apply for many vacancies. While more applications may be received for a vacancy, managers have complained that many applicants do not meet even the basic requirements of the position.

3.85 Moreover, the high-tech Internet entry system is still feeding the old, low-tech, slow, paper-driven recruitment process. Managers complain that when they hold a competition they still have to spend many hours reviewing paper copies of applications from candidates who managers say clearly do not meet the requirements of the position. They want a system that will provide better initial screening of candidates, give managers electronic access to the applications, and reduce the paperburden on all concerned.

3.86 The existing government Web site does not have the features commonly associated with private sector e-recruitment. This need not be the case. Private sector recruitment systems provide additional features to deal with high volumes of applications. These new systems are designed to make the recruitment process more effective and less time-consuming for both the applicants and the hiring managers. Exhibit 3.2 compares features of private sector e-recruitment systems with the Commission's present system.

3.87 The Commission did seek additional funding to upgrade its erecruitment system but did not get all the funding it sought. It plans to pilot an e-recruitment system in a large region this year that will incorporate many of the features listed in Exhibit 3.2. It is also reviewing on-line testing and information on candidates' status for its Post-Secondary Recruitment Program.

3.88 Recommendation. The government should upgrade its e-recruitment system to provide better service both to managers who need personnel and to applicants.

Area of selection is being challenged

3.89 The federal public service has a presence in all parts of the country. Indeed, the government has made certain strategic decisions to locate some of its functions in the regions, in part to support local employment. Roughly 66 percent of public servants are located outside the National Capital Region.

3.90 Consistent with this strategy, the Public Service Employment Act says the area of selection can be limited to a geographic or organizational area. However, the government has also made commitments under the Social Union Framework Agreement and the Agreement on Internal Trade to eliminate barriers to workforce mobility.

3.91 Unless a department has been delegated full recruitment authority, the Commission decides on the area of selection in consultation with the hiring department. The guiding principle has been to select from an area that would meet the requirements of the Canadian Charter of Rights and Freedoms and the social union and internal trade agreements, would yield a reasonable number of qualified candidates, and would balance affordability with efficiency.

3.92 Before the use of the Internet, the Commission would advertise on behalf of departments in the local areas where candidates were being sought. With Internet advertising, the limits on the area of selection have become more transparent and are being questioned.

3.93 We reviewed all the administrative, scientific, and professional jobs posted on http://www.jobs.gc.ca/ each day from 19 March to 1 June 2001. The total was over 1,100 jobs.

3.94 Exhibit 3.3 shows that overall, 21 percent of the jobs were advertised nationally, 62 percent were advertised in specific regions outside the National Capital Region, and 17 percent were limited to the National Capital Region. This pattern closely reflects the distribution of government positions across the country.

3.95 There has been some concern that certain positions with meaningful input to policy development and program delivery are limited to the National Capital Region. However, during the period and in the categories we reviewed, jobs that pay $50,000 or more and that are likely have an impact on policy or program delivery are more often open to candidates across Canada or restricted to regions outside the national capital (see again Exhibit 3.3). Similarly, indeterminate jobs at any level are more likely to be advertised in the regions or nationally than limited to the National Capital Region.

3.96 The Commission has developed a plan for the gradual implementation of a national area of selection for open competitions. As a first step, the PSC announced that a national area of selection would be used systematically for senior-level jobs effective 1 October 2001 in the National Capital Region and 19 November 2001 in other regions. As a result, both term and indeterminate jobs will be open to persons residing or working across Canada and to Canadians residing abroad. The plan includes a number of pilot projects, conducted in collaboration with departments, that will be assessed for the impact of the national area of selection on costs, workload, and other factors before expanding it further.

3.97 In our opinion, a national area of selection for all positions would reduce the benefits of deciding to place government functions across the country. Opening all positions across the country could have a significant impact on the affordability and efficiency of recruitment. It could increase the volume of applications and therefore the time it takes to hire someone. It could increase the costs of the selection process and of moving successful candidates to the job location.

3.98 Broadening the area of selection would require better electronic recruitment tools to manage the volume of applications it could generate. It would require a more practical process that would allow managers to decide how many candidates they need to interview.

3.99 In our opinion, without appropriate changes to recruitment systems and tools, broadening the area of selection could make the existing system even more cumbersome and thus increase the use of short-term hiring.

3.100 Recommendation. The government should evaluate the impact of broadening the area of selection to ensure that actions do not have a negative effect on recruitment.

Support for recruitment

Not enough support for hiring managers

3.101 We expected that central and departmental recruitment services and advice would respond both to strategic and operational requirements and to public service staffing values.

3.102 Managers get information from a variety of sources. When making recruitment decisions, managers can draw on assistance from human resource professionals, colleagues, and a wealth of information available in print and on the Internet.

3.103 In our Internet survey, we asked hiring managers about the usefulness of advice and information they received for their recruitment decisions (Exhibit 3.4). We found that they rely mostly on departmental information and advice. Managers who used their departments' human resource professionals were significantly more positive about the usefulness of services than those who used the Commission's advisors.

3.104 The Commission provides extensive information on recruitment, both in print and on its Web sites. It recently put a lot of effort into developing various information documents, rewriting the staffing manual, and providing training courses for line managers and human resource professionals. Some departments offer their own line managers information sessions and materials on staffing alternatives.

3.105 However, it is not clear that managers have the time or inclination to review the available information. While 43 percent of the respondents to our survey found the Commission's Web site useful to very useful, more than 31 percent had not used it at all.

3.106 The Commission has developed the Manager's Handbook on Staffing and Recruitment to provide hiring managers with advice and guidance. The handbook is available on the Internet and 23,000 copies have been distributed to departments and agencies, 3,000 of them to the departments we audited. However, 43 percent of the hiring managers we surveyed in these departments had not used the handbook. Many managers we interviewed were also unaware of it. Those who knew of it noted that it provides a new manager with useful information on various approaches to hiring.

Managers are unhappy with services provided by the Commission

3.107 Our interviews and focus groups showed consistently that there is considerable dissatisfaction with the services provided by the Commission. Overall, managers do not see the Commission as "value added." They often described it as an impediment to recruitment because it focusses more on control than on providing service.

3.108 We found that the quality of support given to managers by Commission personnel varies significantly, depending on the region and the officer. When managers were positive, it was because they had developed a personal relationship with a human resource advisor from the Commission. They noted their frustration with the turnover of advisors, as this usually means they have to develop relationships again and educate new advisors about the unique nature of their departments and the types of individuals they need to recruit. They also noted that it is hard to get service when advisors they normally work with are away.

3.109 The Commission's involvement in recruitment adds to the length of the process. For individual competitions, the normal process is as follows:

• The hiring manager prepares the competition notice with the departmental human resource advisor, has it translated, and sends it to the Commission. The PSC provides advice on the statement of qualifications, area of selection, and notice period; does quality control on the advertisement and its translation; and has it posted on the Web site.
• Once it receives applications for the position, the Commission pre-screens them to ensure that each was submitted on time and from the correct geographical area for the competition, that the applicant is a Canadian citizen, and that the applicant meets the educational requirements of the job. This can take a number of days or weeks, depending on the Commission's workload and the number of applications it receives.
• Once this preliminary review is done, paper copies of the applications that pass the initial screening are sent to the hiring manager for a second review. Managers complain that they receive boxes of applications, whether they meet the minimum requirements of the position or not. They want better initial screening, especially considering how long the Commission holds on to the applications.
• The PSC may do further testing of candidates at the request of the manager to reduce the list of candidates, but this will take additional time.
• The PSC may also add candidates from its employment equity inventories. However, it does not contact these candidates to see if they are interested in the position. A hiring manager who includes one of those candidates on a short list must contact that candidate about the position.
• Once the hiring manager has identified a short list of candidates to interview, the entire package is supposed to be sent back to the Commission, which can challenge the manager's decisions. This list becomes the Commission's referral list and only then are the candidates supposed to be contacted for an interview. However, the Commission advises us that after the pre-screening, departments carry out further screening, assess and appoint candidates, and often forget to notify the Commission of the results of the process.

Levels of support by departmental human resource advisors vary

3.110 Managers first go to the departmental human resource advisors for useful information. We found that the level of support provided by departmental advisors at headquarters is quite different from that in the regions. Regional managers often made more negative comments about the services provided by human resource personnel at their departments' headquarters. Those who have spent a number of years as hiring managers talk about the need to develop a personal relationship with their human resource advisors. They note that shortages and turnovers of human resource advisors and their increased workload have had a negative impact on service.

3.111 Responses to our survey indicated that most recruiting work is done by the hiring manager and staff and not by the department's human resource personnel. Departmental human resource staff take on more responsibility for drafting the competition poster and writing the letter of offer; all intervening steps are handled primarily by the line managers and their staff. Our focus groups with hiring managers yielded similar results.

3.112 Managers told us that they had to spend a significant amount of time drafting the statement of qualifications for each vacancy. We noted that human resource advisors at Natural Resources Canada and Public Works and Government Services Canada have developed on-line tools to help hiring managers quickly develop statements of qualifications in both official languages that reflect the duties of the position. Other departments have indicated an interest in acquiring similar tools.

Human resource advisors need to really advise

3.113 In the present system, poor service from central agency and departmental human resource personnel has been attributed to a variety of factors:

• not enough operational staffing officers in the Commission to serve departments;
• not enough human resource officers in the departments because of workload and high turnover rates of those who are there;
• the risk-averse, rules-focussed approach that human resource advisors take; and
• the amount of time that human resource personnel spend processing short-term hiring transactions.

3.114 Human resource professionals in the Commission and in departments are seen more as controllers of the process than as providers of a service. They are perceived as putting up roadblocks. Managers complain that they are not trusted to take the appropriate actions to meet their recruitment needs.

3.115 As roles change, the skill sets and mindsets of human resource advisors in central agencies and in departments will also need to change. In our opinion, they need, independent of any changes to the recruiting system, a more strategic and service-oriented approach both in the departments and in the public service as a whole. They need to focus on both client needs and operational objectives, working with line managers and corporate services such as planning, finance, and information technology. While ensuring that fundamental principles are respected, they need to be oriented more toward results than process. This will require training of both new and present advisors and an eye to service and results in future recruitment of human resource professionals.

3.116 Recommendation. The government and departments should ensure that human resource professionals develop a more strategic and service-oriented approach to working with line managers.

Reporting on recruitment

Reporting within government on recruitment issues is poor

3.117 We expected that departments would report to central agencies the information needed to manage corporate responsibilities and to account to the Clerk of the Privy Council as Head of the Public Service.

3.118 Last year, the Clerk asked all deputy ministers to report on their progress toward the government's three human resource priorities (recruitment, retention, and learning). For the recruitment priority, they were to identify projections and plans for recruitment, including their plans to better reflect the diversity of Canadian society. A follow-up letter was sent this year to ask for results. In addition, the Treasury Board Secretariat and the Public Service Commission were to undertake certain recruitment actions under a three-year action plan and report their progress to the Committee of Senior Officials (COSO) Sub-Committee on Recruitment, chaired by the Clerk.

3.119 The goal set for the first year in the published action plan was for departments to identify their recruitment needs for the next three to five years. In fact, in the first response to the Clerk's call letter, few departments actually provided three-year recruitment plans that had specific targets, including employment equity targets. The updated responses this year were also quite general. Departments reported on activities they had undertaken but did not necessarily report against the planned action they had outlined the year before. Their letters identified a number of challenges and problems they have encountered but gave little specific data to indicate actual progress on recruitment.

3.120 Similarly, the report by the Commission and the Treasury Board Secretariat on the recruitment action plan describes actions they have taken in the first year. We agree with the report that there has been increased awareness of recruitment issues and that a start has been made to address them. Our analysis of the report is that it provides context but is activity-focussed. At this time, it is difficult to gauge overall progress or the impact of the initiatives on recruitment levels. We are also concerned that the report indicates that results both for the second and third years of the action plan cannot be achieved fully without significant new funding.

Information on recruitment can be improved

3.121 In our opinion, information on recruitment should enable managers in departments and central agencies to assess their progress to date and decide on directions for the future. Senior management needs to know about significant recruitment problems and other human resource management issues that could have an impact on the achievement of objectives.

3.122 Senior managers in departments need better information on several aspects of recruitment and human resource management, which could include the following:

• information on areas of expected staff shortages or overages and groups at risk;
• problems and opportunities associated with acquiring and retaining key staff;
• regular measurement of progress and shortfalls against departmental and central agency recruitment strategies;
• identification of the costs of various recruitment approaches;
• identification of the time it takes to recruit using the various approaches;
• assessment of the market environment (for example, numbers of graduates, in what disciplines, and the competition for talent);
• development of appropriate recruitment service standards and reporting against them; and
• information on best practices.

3.123 Recommendation. Deputy ministers should ensure that improvements are made in analyzing recruitment-related information and in reporting on issues, opportunities, risks, and threats.

Conclusion

3.124 We undertook this audit to examine how well the general recruitment of personnel into the public service meets both current and future requirements.

3.125 Chapter 2 notes that an alternative system of short-term hiring has evolved as managers work around the more formal hiring system. It notes that the legislative and management framework for recruitment requires radical change to ensure that a new system is more responsive to the operational needs of departments and to the long-term needs of the public service as a whole.

3.126 This chapter describes the weaknesses we found in human resource planning, recruitment practices, and recruitment services to line managers, weaknesses that further contribute to managers' focus on short-term hiring.

3.127 A more global view of human resource management is needed to break the cycle of meeting recruitment needs one job at a time. This would require departments and agencies to do more detailed analysis and reporting of recruitment information to senior management, central agencies and, where necessary, Parliament. This more global view is needed to ensure that the government will take the recruitment actions that are appropriate to address its present and emerging needs.

3.128 The public service of the 21st century needs effective recruitment tools that respond quickly and efficiently to its needs. Inventories of pre-qualified candidates and an improved e-recruitment system will help to match managers who need to fill positions with Canadians who are looking for a career in the public service.

3.129 Managers need to get more support from their human resource advisors and an increased focus on results in the services their human resource advisors provide. Human resource advisors need to be more service-oriented, focussing less on process and more on results.

3.130 The current culture of hiring on a short-term basis must change if the government is to meet the need for a strong public service in the future. Action is required to change both the system and the practices associated with recruitment.

Government's response. The government concurs with the Auditor General that the legislative and management framework for recruitment requires substantial change to ensure that new systems and practices are more responsive to both operational requirements of departments and the long-term needs of the public service.

In fact, the Prime Minister announced the creation of the Task Force on Modernizing Human Resources Management in the Public Service. Headed by Mr. Ranald Quail, the Task Force will recommend a new strategic, legislative, and institutional framework for human resources in the federal public service.

While there have been many improvements in general recruitment practices in the public service, we recognize that a great deal more progress is required, particularly in the areas of human resources planning, developing inventories of pre-qualified individuals, upgrading the government's capacity for electronic recruitment, and improving its capacity to analyze trends.

As the Prime Minister said in his reply to the Speech from the Throne, "The government will take all the steps necessary to ensure that we continue to have the talent necessary for a public service that is committed to excellence." Recruitment is critical to achieving excellence in order to maintain a first-class public service.

Public Service Commission's response. The Commission agrees with the recommendations made on general recruitment practices and the audit observations are consistent with the findings from its own studies and its Annual Report. The Commission strongly supports the view that effective human resources planning is the prerequisite to address the issue of the high level of short-term hiring. With good planning and an additional investment in people and tools, current and future human resources requirements of the public service can be met.

The Commission is Parliament's agency responsible for ensuring that new recruits are appointed to the public service on the basis of their competencies and skills. Merit finds practical meaning in the application of all the values that underlie it—competency, nonpartisanship, and representativeness—as well as in the processes that lead to appointments. This represents a unique challenge of balancing the efficiency, effectiveness, and affordability of the staffing action with the fairness, transparency, and equity of the selection process. The fact that the public service is subject to higher standards than the private sector in terms of values has been recognized in various forums, including a report entitled A Strong Foundation: Report of the Task Force on Public Service Values and Ethics (Tait Report). The Commission has laid the foundation for the future legislative and management framework with its staffing delegation and accountability regime and its values-based approach.

The Commission has recognized, for some time, that the recourse system was not meeting the needs of a modern staffing regime, and it has implemented rule changes and other measures such as disclosure and mediation. In 1999 the PSC asked its Advisory Committee to establish a working group of management and union representatives to study and report on recourse. In April 2001, the PSC received and endorsed the report, which addressed all issues that are raised in this document. The Commission subsequently presented the report for consideration to the Quail Task Force on Modernizing Human Resources Management in the Public Service.

About the Audit

Objectives

The objective of the audit was to examine how well the general recruitment of personnel into the public service meets both current and future requirements. The audit would identify current general recruitment practices and their accompanying opportunities and constraints.

Scope and approach

The audit focussed on the general recruitment of employees into the Scientific and Professional category and the Administrative and Foreign Service category. The audit reviewed activities in both the central agencies and a sampling of departments. The departments reviewed were Public Works and Government Services Canada, Health Canada, Natural Resources Canada, Environment Canada, the Treasury Board Secretariat, and the Department of Finance. While the primary central agency focus was on the Public Service Commission and the Treasury Board Secretariat, there was some contact with the other key players in the area of human resource management.

In addition to an extensive review of documentation and reliance on earlier work of the Office, this audit involved interviews with senior officials in the selected departments and central agencies, hiring managers, and human resource professionals. We held focus groups across Canada with hiring managers in the sample departments. We met with representatives of four regional councils to discuss recruitment. We also conducted a review of the recruitment Web site activity, recruitment practices in the public and private sectors, and a Web-based questionnaire to line managers in our sample departments.

During our audit, we conducted an Internet survey of 1,262 managers who were identified by the six departments as having hired individuals to the relevant occupational groups in the last two years. We received responses from 648 or 51 percent of this group.

We relied on recent work undertaken by the Information Management and Review Directorate of the Commission, and the Committee of Senior Officials (COSO) Sub-Committee on Recruitment. We examined staffing and recruitment practices of organizations in the wider federal public service (some Crown corporations and separate employers) that are not subject to the Public Service Employment Act.

Criteria

Our audit was based on the following criteria:

• Service-wide demographic analysis and human resource planning is undertaken.
• Departmental human resource planning is based on demographic analysis and integrated with departmental strategic and operational plans.
• Systems and procedures for general recruitment respond in a timely and cost-effective manner to the current and future needs of the public service.
• Central and departmental recruitment service and advice responds to both strategic and operational requirements and public service staffing values.
• Actions are taken to respond to deficiencies identified and recommendations made in previous audits, evaluations, and studies.
• There is adequate reporting to Parliament on recruitment strategies, programs, and results.

Audit team

Assistant Auditor General: Maria Barrados
Principal: Kathryn Elliott
Director: Donald J. Smith

Esther Becker
Claude Brunette
Denise Coudry-Batalla
Catherine Gendron
Ernie Glaude
François Lachapelle
Jaruwan Ruangswadipong
Marie-Eve Viau

For information, please contact Kathryn Elliott.