Audit of Recruiting and Staffing

Date: 2021-06-01
Internal Audit Branch
Internal Audit and Evaluation Sector

Table of contents

• Executive summary
• 1 Statement of conformance
• 2 Acknowledgement
• 3 Background
• 4 Audit objective
• 5 Audit scope
• 6 Audit approach
• 7 Findings, recommendations and management response and action plan
  • 7.1 Structures, policies, and guidelines supporting recruiting and staffing processes
    • Staffing policies, guidelines, and tools
    • Training, and roles and responsibilities
  • 7.2 Timeliness, and agility of recruiting and staffing processes
    • Allocation of resources to optimize the staffing process
    • Leveraging technology to enable timely and agile staffing
    • HR planning and diversity
    • Strategic decision-making on which staffing processes are used
    • Timely and reliable data for monitoring performance of staffing activities
    • Performance Monitoring
    • Streamlined staffing processes
  • Recommendation 1
• 8 Audit opinion
• Appendix A: Audit criteria
• Appendix B: List of acronyms

Executive summary

Introduction

A central theme to government priorities under the Public Service Renewal initiative is attracting and retaining a diverse and inclusive workforce by applying a variety of transparent, merit-based approaches. In 2016, emphasis was placed on reducing the time-to-staff across the Public Service. During that same year, the Public Service Commission (PSC) introduced the New Direction in Staffing (NDS), which allows departments flexibility to take a more agile approach to staffing. In 2019, the Treasury Board Secretariat (TBS) introduced “timeliness” indicators to address HR-to-Pay issues associated with the Phoenix pay system. These priorities represent a shift toward having more agile staffing processes with a reduction of administrative burden.

Staffing activities in departments are subject to external monitoring through various means, including audits by the PSC and Canadian Human Rights Commission (CHRC), and reporting to central agencies through the Management Accountability Framework (MAF) and other reporting avenues. In addition to this external oversight, the Department of Justice (Justice or JUS) has a strong internal governance framework for staffing that includes streamlined staffing policies, and procedures that are subject to oversight by the Corporate Staffing unit. This framework is further supported in the Department through published guides and tools, and the provision of updated training to Human Resources advisors and managers with delegated staffing authority. Overall, the departmental staffing framework ensures that there is clear understanding of roles and responsibilities regarding recruiting and staffing activities.

Efforts have been made in recent years to streamline policies and processes, and to implement technological tools which enable more timely and agile staffing processes. Managers are being encouraged to leverage flexible staffing options that suit their needs. However, while many efforts have been undertaken to help streamline the processes, a lack of precise data and historically having several sources to track staffing data (PeopleSoft, DW, etc.) hinders JUS from accurately calculating time-to-staff as well as identifying distinct bottlenecks in the staffing processes. As a result, data integrity needs to be strengthened, and updated time-to-staff indicators are required to adequately assess performance. The current information gap hinders efforts to further streamline processes, to monitor performance, or to assess if efforts have had the desired effect on efficiency.

Strengths

There is a sound governance framework in place for staffing within the Department. JUS has clearly articulated and streamlined policies which are aligned with government regulations. These are communicated through guides and training to ensure understanding of roles and responsibilities regarding recruiting and staffing activities. In addition to external oversight, there is internal monitoring which examines the performance and health of the JUS staffing system and informs updates to processes, tools and training. Technological enhancements have been implemented to assist with processing of files in the remote-work environment, for streamlining and automating tasks, and to provide more detailed information to support continuous improvement.

A risk-based approach is being applied towards allocation of HR resources whereby dedicated teams exist to process different types of staffing actions, and there is ongoing triage to adjust workloads as required to address priorities. Within the staffing teams, employees are organized so that junior staff process lower-risk administrative activities, while more senior staff manage higher-risk complex activities. Furthermore, our sample of files reviewed indicated that low-risk activities such as actings and extensions were not excessively documented, and that lower-risk activities for temporary appointments (i.e. casuals, terms) were also found to be processed more quickly than indeterminate processes.

Since 2016 there has been a notable shift towards managers exercising their flexibilities under the NDS to use options which allow them to hire more quickly while still respecting the principles of transparency and merit and maintaining diversity goals. Appointment decisions made by managers are appropriate to their staffing authorities, are justified, and are documented. There has been an observed increase in the use of non-advertised appointments, as well as increased use of collective processes and pools. The majority of respondents surveyed for this audit agree that hiring managers have the flexibility to select staffing options that best suit their hiring needs.

Areas for Improvement

Respondents of the survey conducted for this audit indicated dissatisfaction with access to timely, sufficient, and reliable data to enable evidence-based decision-making. In addition, an analysis of the various data sources on staffing revealed issues with the integrity of the data and inconsistencies between the various data sets. This observation was further confirmed by discrepancies found during the file review performed by the audit team.

While some improvement in the data was observed following the implementation of the HR Action Module, concerns still remain over data accuracy, in particular with dates and elapsed time that was calculated for completion of actions, which will constrain further improvement efforts. Greater input controls, such as peer review, implementation of an audit trail to record updates, and clear parameters on the use of “on hold” status in HR Action Module will strengthen data reliability.

Performance indicators for some HR priorities are in place and cascaded across the Department from the departmental Human Resources Management (HRM) plan/strategy to sector HR plans and executive commitments (for example, diversity, HR-to-Pay timeliness), however, time-to-staff performance indicators that were monitored through the Management Sector’s service level commitments (SLC) were not reported on in 2019-2020. This was due to the transformational shift to HR Action Module and the requirement to have a full fiscal year of data to be able to report through the annual SLCs. As well, with the shift to HR Action Module, there is a need to review the SLC performance indicator methodology within the context of the new data available from HR Action Module.

Audit Opinion and Conclusion

In our opinion, the Department has made positive progress on having timely and agile staffing and recruiting processes to attract a diverse, inclusive and skilled workforce in a timely fashion. Since the implementation of the NDS, departmental policies have been streamlined and simplified, and a risk-based approach is being used towards work allocation and the level of documentation needed to justify staffing decisions. Managers are encouraged to make strategic choices when selecting staffing options, which has resulted in an increased use of processes that can be executed more quickly while still respecting the principles of diversity and merit. Implementation of technological tools has helped reduce some administrative constraints, and has potential to improve the availability of reliable data which can be used to inform future efforts. Further adjustments to address concerns around data integrity will enable the establishment of updated time-to-staff performance indicators that can be monitored to guide continuous improvement.

Management Response

Management is in agreement with the audit findings, has accepted the recommendations included in this report, and has developed a management action plan to address them. The management action plan has been integrated in this report.

1 Statement of conformance

In my professional judgment as Chief Audit and Evaluation Executive, the audit conforms to the International Standards for the Professional Practice of Internal Auditing, as supported by the results of the Quality Assurance and Improvement Program.

Submitted by:

2 Acknowledgement

The Chief Audit and Evaluation Executive would like to thank the audit team and those individuals who contributed to this engagement and particularly, employees who provided insights and comments as part of this audit.

3 Background

The Public Service Employment Act (PSEA) and its related provisions and regulations set out the principles governing the employment of federal employees. The authority to make appointments within the Public Service is vested in the Public Service Commission (PSC), which can delegate this authority to Deputy Heads. In turn, Deputy Heads are encouraged to sub-delegate this appointment authority to the appropriate management level within their organization.

For several years, a central theme to government priorities under the Public Service Renewal initiative is attracting and retaining a diverse and inclusive workforce by applying a variety of transparent, merit-based approaches. In April 2016, the PSC introduced the New Direction in Staffing (NDS), which allows departments flexibility to customize their staffing approach to meet their individual needs and grants hiring managers discretion in developing and executing resourcing strategies, offering the following:

• more variety in hiring processes;
• agile approaches to staffing and policies;
• greater flexibility for managers to apply their judgement when staffing; and
• an increased focus on outcomes, including the quality of the person hired, and less on process.

Since 2016, an emphasis has been placed on time-to-staff across the Public Service, with the PSC tracking the median number of days to complete advertised processes as key indicators of success. In 2019 Treasury Board Secretariat (TBS) also introduced “timeliness” indicators to address HR-to-Pay issues associated with the Phoenix pay system. In addition, the 2019 mandate letter for the President of the Treasury Board underscores the need to “work with the Public Service Commission to reduce the time it takes to hire new public servants, with the goal of cutting in half the average time from ten to five months”. This focus on time-to-staff is to be considered while ensuring that the Public Service of Canada recruits and retains talented people from communities across Canada.

The importance of this focus was also reiterated in the December 2019 Department of Justice (Justice or JUS) Minister’s mandate letter, as well as in JUS’ 2019-2020 Departmental Plan, which outlined plans to undertake recruitment and outreach strategies to meet workforce demands and to support renewal to ensure that the department has the capacity and competencies required to meet its current and future business needs. JUS has further committed to streamlining processes in its draft Human Resources Management Strategy 2021-2024^{Footnote 1}, where the second objective under its Workforce pillar is “To create, enhance and leverage solutions in staffing processes with a view to more efficient and leaner processes.”

There are many oversight activities of HR processes to ensure compliance with the PSC’s Appointment Policy. Via the JUS Staffing Monitoring Framework, JUS undertakes ongoing and cyclical activities to monitor, assess and report on the performance and health of its staffing system. In addition, the PSC conducts independent audits of individual departments, as well as horizontal audits involving several departments across the public service. Through the MAF process, TBS reports annually on the median length of JUS’ internal advertised staffing processes. PSC’s 2017 System-Wide Staffing Audit and JUS’ 2018-19 MAF assessments determined that JUS had been falling short of the median for the number of days to indeterminately staff using an internal process, when compared to other Government Departments. JUS results have improved in recent years, going from a median of 195 days in 2018 (compared to a median of 180 days on average for the public service) to 174 days in 2020 (compared to 175 days for the public service). However, prior to this engagement no audit or review looking specifically at time-to-staff has been conducted internally or externally for JUS in recent years.

There is also monitoring that takes place to ensure that the Department is positioned to succeed in attracting a diverse and skilled workforce. For example, JUS undertakes its own monitoring of its workforce demographics, staffing processes and employment equity (EE) representation levels for designated EE groups^{Footnote 2}. In addition, the PSC launched a horizontal Audit of Employment Equity Representation in Recruitment in 2018 and published it in January 2021^{Footnote 3}. JUS is also subject to review by the Canadian Human Rights Commission (CHRC) every three years to determine if a full departmental EE compliance audit may be required. JUS was selected to undergo a full EE audit in 2020-21 with a specific focus on racialized employees. The results of this examination are expected in fall of 2021 and will guide decisions on whether further examination of diversity in staffing at JUS is warranted in a future engagement.

Finally, the COVID-19 pandemic has created a new challenging environment for the staffing process, and has reinforced the need for modern approaches that enable continuous improvement, efficiency of operations, and use of technologies at different stages of the hiring process.

4 Audit objective

The objective of this audit was to provide assurance on the timeliness and agility of staffing and recruiting processes applied to attract a diverse, inclusive and skilled workforce.

5 Audit scope

The scope of this engagement was to examine staffing processes for fiscal years (FY) 2017-18 to 2019-20 and the first two quarters of FY 2020-21. It included the following areas:

• policy direction, training, and communication related to recruiting and staffing processes;
• leveraging of technology to reduce administrative constraints within staffing processes;
• sufficient data to inform decision-making;
• continuous improvement activities to streamline and eliminate unnecessary activities, and reduce inefficiencies;
• HR planning used to identify staffing options;
• resource allocation towards high-risk staffing activities;
• project management and timeliness of each phase of staffing and recruiting processes.

This audit did not re-assess compliance elements that had already been examined internally through ongoing compliance monitoring or externally through horizontal audits and regular oversight activities. The scope of the audit in regard to EE was limited to ensuring that EE goals are not compromised by a focus on timeliness of recruiting and staffing processes.

6 Audit approach

This engagement was conducted in accordance with the Treasury Board Policy on Internal Audit, and Directive on Internal Audit and the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing. These standards require that the engagement be planned and performed in such a way as to obtain reasonable assurance that the objectives of the engagement are achieved.

The examination phase of this audit included: data analysis, interviews, document review, and a review of selected staffing files (based on a judgmental sample). In addition, a survey targeted to JUS HR professionals and managers with delegated staffing authority was conducted.

7 Findings, recommendations and management response and action plan

This section provides the findings and recommendations resulting from the audit work carried out. The audit was conducted based on the lines of enquiry and audit criteria identified in the planning phase, which are presented in Appendix A.

7.1 Structures, policies, and guidelines supporting recruiting and staffing processes

JUS has a staffing governance framework that includes clear staffing policies and guidance, as well as oversight by the Corporate Staffing unit. This framework is supported through the provision of updated mandatory and supplementary training for HR advisors and hiring managers, and policies and tools that are communicated, resulting in clear understanding of roles and responsibilities regarding recruiting and staffing.

Staffing policies, guidelines, and tools

JUS has developed its own set of departmental HR policies and guidelines which are aligned with legislation and government policies, and published on the departmental intranet (JUSnet) making them accessible to all employees across the department. HR has further supported managers by producing a number of tools, guides and checklists, which help managers plan and navigate the steps required. These guides and tools are also published on JUSnet and are communicated to all employees through department-wide broadcasts. In addition, the Corporate Staffing unit has a sound staffing monitoring framework in place, which is used to assess compliance with policies and procedures, and to inform any updates that are required to staffing tools.

Training, and roles and responsibilities

In order to be granted staffing authority, managers are required to complete a number of Canada School of Public Service (CSPS) courses. The file review confirmed that controls are in place to verify that this has been completed prior to a manager being allowed to exercise staffing sub-delegation. In addition, updated supplemental training is provided to HR advisors and sub-delegated managers based on lessons learned from ongoing staffing monitoring activities. Responses on both the Public Service Employee Survey (PSES) and the survey conducted for this audit indicate that the majority of respondents agree that training supports employees in their responsibilities, and that roles and responsibilities are understood.

7.2 Timeliness, and agility of recruiting and staffing processes

A risk-based approach is applied at JUS towards the allocation of staffing resources, managers are encouraged to leverage flexible staffing options that suit their needs, and the audit found no evidence of redundant steps in processes or unnecessary levels of documentation being required to justify staffing decisions. Efforts have been made to streamline policies and processes, and technological tools further assist in reducing administrative constraints. However, while the quality of staffing data has recently improved with the implementation of new technological tools, data quality continues to inhibit further streamlining or monitoring efforts of time-to-staff performance results.

Allocation of resources to optimize the staffing process

To optimize the processing of staffing requests, the Human Resources Branch (HRB) has created dedicated teams to deal with different types of staffing processes. Staffing operations are managed by five separate teams each dedicated to three different areas of staffing responsibility (Fast-Track Staffing, EX/LC Staffing, and Staffing Operations). Staffing advisors within these teams are organized so that more experienced resources are allocated to complex higher-risk activities (e.g. providing staffing advice to clients, processing actions for executive positions), while junior staff process lower-risk or administrative transactions (e.g. short-term actings, data entry). Fast-track actions and EX/LC actions are being processed more quickly than regular indeterminate actions. Within the various aforementioned staffing teams, employees are further organized so that more junior assistants are overseen by more experienced advisors assigned as overall team leads to coach junior staff. Within each of the staffing operations teams there is also ongoing triage to adjust workloads to ensure that resources are allocated as required to address priorities. Each Director meets regularly with their teams to reallocate work as needed, and the audit team was given examples of tools that are used to track the allocation of workload.

Leveraging technology to enable timely and agile staffing

Progress has been made towards the increased use of technological tools that enable more timely and agile staffing processes. In particular, during the pandemic, technological tools supported the processing of staffing files in a teleworking environment. For example, the implementation of digital signatures and the introduction of MS Teams enabled the timely processing of Letters of Offer and virtual interviews respectively. In addition, the HR Action Module was a major initiative implemented department-wide in November 2020, to support the planning, tracking of workload, status updates, and improved detail on timelines of various steps in staffing processes.

Although many technologies have been adopted, additional nice-to-have tools that were being considered have yet to be implemented. Interviewees and survey respondents indicated that they would benefit from complementary tools that are currently under consideration by HRB, such as candidate assessment tools, candidate tracking software, and interview scheduling tools. HRB continues to explore such tools in collaboration with the Information Solutions Branch (ISB) to support HR processes when and where required.

HR planning and diversity

Examination of HR plans that were provided to the audit team^{Footnote 4} indicated that some sectors and portfolios primarily leverage the Salary Forecast Tool (SFT) for HR planning, while others develop detailed HR plans which include employment equity goals and choice of staffing activities. However, the audit did not observe a significant difference in time-to-staff in those sectors that undertook robust HR planning versus those sectors that did not. This suggests that other factors (e.g. types of staffing actions selected, available time of hiring managers to focus on staffing responsibilities) may have more of an impact on time-to-staff. Nonetheless, it was difficult to make this determination due to issues with the availability of data.

As part of the audit, we examined whether EE goals would be adversely affected by the need to expedite time-to-staff. Our data analysis of all staffing transactions for the period within scope of this audit indicated that overall time-to-staff for employees belonging to an EE group compared to non-EE employees was similar, suggesting that EE goals have not been adversely impacted by the focus on time-to-staff.

Strategic decision-making on which staffing processes are used

Audit procedures determined that managers are employing a strategic approach by leveraging the flexibility allowed under NDS. These flexibilities include increased use of actions which can be processed more quickly, such as non-advertised appointments and Fast-Track actions (for example actings, extensions, and casuals). An analysis revealed that there has been a decrease in the use of advertised processes (internal and external). In turn, there has been an increase in the use of non-advertised appointments. In addition, it was determined that other methods were also leveraged to make staffing more agile, such as collective processes and pools of qualified candidates. This was further confirmed by our survey results which indicated that the majority of respondents agreed that hiring managers have the flexibility to choose staffing options that best meet their needs.

Timely and reliable data for monitoring performance of staffing activities

The importance of being data-driven is understood and appreciated at different levels of the Department, and a large amount of data is collected and used for mandated reporting purposes (e.g. TBS reporting, HR-to-Pay, Employment Equity). However, interviews with HR data-management professionals confirmed that significant manual treatment of data is required to create reports on staffing actions. This practice makes the production of business intelligence related to staffing burdensome and puts the reliability of the information at risk.

An analysis of various data sources^{Footnote 5} also demonstrated data quality shortcomings. JUS is currently unable to accurately calculate the time-to-staff of its processes due to the discrepancies in the various data sources. For example, it is expected that dates in staffing files would reconcile to JUS data reports. A reconciliation of a selected sample of 18 staffing files^{Footnote 6} to internal data sets revealed an average error rate of 76%.

In December of 2020 the Department implemented the HR Action Module in PeopleSoft to improve the ability to track detailed information on the progress of staffing actions. While the Module has resulted in a decreased error rate, the audit team’s analysis revealed that data quality remains an issue. In a selected sample of 22 post-HR Action Module staffing files reviewed, the audit team found a 36% error rate. In addition, manual intervention is still a common practice. For example, the Module allows users to manually alter the elapsed days in the system using the “on hold” feature. Furthermore, during interviews and a walkthrough of the Module the audit team found that it lacks an audit trail feature to record when and by whom changes are made to a process’ status or to the dates which are used to calculate elapsed time. The lack of precise data hinders JUS from accurately calculating time-to-staff as well as identifying distinct bottlenecks in the process (see Recommendation 1 below).

Performance Monitoring

The Department does currently track some HR performance indicators (e.g. TBS HR-to-Pay timeliness, and Employment Equity). However, time-to-staff indicators, which were formerly monitored in service level commitments, have been put on hold to introduce and advance work on TBS HR-to-Pay measures and the HR Action Module. The Department had resumed but not yet concluded efforts to develop time-to-staff indicators for the new HR Action Module. It would be beneficial for JUS to advance and complete this work, based on the new level of detail that will be available, in order to accurately track time-to-staff targets and bottlenecks within its processes (see Recommendation 1 below).

Streamlined staffing processes

Since the introduction of New Direction in Staffing (NDS), staffing processes and tools are regularly reviewed, and efforts have been made to reduce obvious redundancies. “Heavy workload” and “competing priorities” were the most frequently cited items that adversely impacted respondents’ ability to fulfill staffing responsibilities in a timely fashion.

Furthermore, while many tools have been developed to help streamline processes, JUS currently does not have the ability to measure if these efforts have been successful or to verify the exact location of process bottlenecks. This information gap will hinder efforts to further streamline processes based on performance measurement, or to assess if efforts have had any effect on the actual efficiency of the processes.

Recommendation 1:

It is recommended that the Chief Financial Officer and Assistant Deputy Minister (Management Sector) undertake the following:

1. Provide direction to introduce stronger controls (for example, IT controls, an audit trail of entries, or standardized user guidelines for data input in the PeopleSoft/HR Action Module) to reduce the risk of inaccurate data related to time-to-staff.
2. Based on the new information available from the HR Action Module, establish baseline information and re-instate monitoring of time-to-staff performance indicators through the service level commitments that could be shared with Management to inform decision-making, HR planning, and continuous improvement.

8 Audit opinion

In our opinion, the Department has made positive progress on having timely and agile staffing and recruiting processes to attract a diverse, inclusive and skilled workforce in a timely fashion. Since the implementation of the NDS, departmental policies have been streamlined and simplified, and a risk-based approach is being used towards work allocation and the level of documentation needed to justify staffing decisions. Managers are encouraged to make strategic choices when selecting staffing options, which has resulted in an increased use of processes that can be executed more quickly while still respecting the principles of diversity and merit. Implementation of technological tools has helped reduce some administrative constraints, and have potential to improve the availability of reliable data which can be used to inform further efforts. Further adjustments to address concerns around data integrity will enable the establishment of updated time-to-staff performance indicators that can be monitored to guide continuous improvement.

Appendix A: audit criteria

Line of Enquiry 1 – Structures, Policies, and Guidelines Supporting Recruiting and Staffing

1.1 Justice’s structures, policies, and practices, related to departmental staffing are clearly defined and communicated.

Line of Enquiry 2 – Timeliness and Agility of Processes

2.1 Justice’s staffing processes are timely and agile.

Appendix B: list of acronyms

ADAI

Appointment Delegations and Accountability Instrument

CAE

Chief Audit Executive

CHRC

Canadian Human Rights Commission

CSPS

Canada School of Public Service

EE

Employment Equity

EEA

Employment Equity Act

DAC

Departmental Audit Committee

DW

Digital Workspace

FY

Fiscal Year

HR

Human Resources

HRB

Human Resources Branch

HRM

Human Resources Management

IAB

Internal Audit Branch

ISB

Information Solutions Branch

JUS

Department of Justice

MAF

Management Accountability Framework

NDS

New Direction in Staffing

OPI

Office of Primary Interest

PSC

Public Service Commission

PSEA

Public Service Employment Act

PSER

Public Service Employment Regulations

PSES

Public Service Employee Survey

SFT

Salary Forecast Tool

SLC

Service Level Commitment

SME

Subject-matter expert

SWSA

System-Wide Staffing Audit

TBS

Treasury Board Secretariat