Audit of Staffing and Recruitment

3.0 Findings and Recommendations

3.1 Introduction

This section presents detailed findings from the Audit of Staffing and Recruitment. Findings are based on our initial risk analysis and the evidence from the audit conducted. Where criteria are met, no recommendations are provided.

In addition to the findings presented below, observations of conditions that were non-systemic and of low materiality and risk have been communicated to management for their consideration.

3.2 Governance

Staffing delegation instrument

The Public Service Commission delegates to deputy heads all the appointment and appointment-related authorities they require to fully assume their management responsibilities and execute their human resources plans.

IC has an official subdelegation instrument, effective April 2009, which is posted on IC's intranet site for subdelegated managers' access. HRB is responsible for granting departmental managers their subdelegated authorities and maintains a database that identifies all IC subdelegated managers as well as those exercising acting authorities. Hiring managers are first introduced to the instrument via IC's mandatory staffing delegation training. Hiring managers are subdelegated following their training and upon receipt of their Knowledge Assessment certification.

Overall, the subdelegation instrument is well controlled by HRB and operates according to IC policy and standards.

Integrated human resources planning

In accordance with the PSC and departmental Staffing Management Accountability Frameworks and core management controls, it was expected that integrated planning processes are in place at IC to ensure that staffing and recruitment strategies are linked to business requirements and are based on proper demographic analysis.

At Industry Canada, the Strategic Human Resources Management (SHRM) Directorate has partnered with the Comptrollership and Administration Sector to support Integrated Planning processes for the department, which include the preparation of HR plans by individual sectors. A Human Resources Planning Framework, people management strategy, demographic analyses, and common templates have been developed. The People Management Strategy for Renewal and Results, assembled from an eight-month consultation process, is linked to IC business priorities and the Clerk's Renewal priorities.

The department and the individual sectors within it are able to plan staffing in relation to a detailed workforce profile, which is updated quarterly and shared with sectors. Demographic analyses support the identification of staffing needs and risks, and the development of staffing strategies in a multi-year format. In addition, the department documents key trends to support the HR planning process, in a document called Human Resources Plans – Key trends – Reflections on planning for the year ahead.

In 2009, IC prepared a strategic Human Resources Planning Framework, including a template to help sectors identify staffing needs and gaps in relation to business goals/operational requirements. This is consistent with the five-step HR Planning methodology proposed by Treasury Board Secretariat.

The department has implemented an approach to HR planning that is consistent with the PSEA, in that it considers both current and future needs of the organization. This is reflected in the IC and HRB HR plans. Department-wide staffing strategies such as collective staffing for AS and CR positions have been implemented to meet common needs across sectors.

Finding 1.0: Progress against HR plans not sufficiently documented

The PSC expects organizational staffing strategies to set out measurable expected results and performance indicators, so that the organization is able to determine whether the strategy has been achieved. Deputy heads are expected to assess the variance between planned staffing results and actual results achieved, and make adjustments as required.

One way of assessing the variance between actual staffing activities and HR plans is to monitor progress on plans. In both 2008 and 2009, HRB identified that monitoring activities such as a mid-year review would take place at the sector level to assess progress on plans. A comparative analysis of IC sector HR plans for 2007–2008 and 2008–2009 (available on the ICWeb) found that most 2009–2010 plans did not report the extent to which expected results for staffing had been achieved the previous year, to support the reporting of variances required by the PSC and IC.

The PSC indicated in the Departmental Staffing Accountability Report (2008–2009 and 2009–2010) that IC was not sufficiently explaining variances against HR plans. In the audit, it was expected that staffing files for non-advertised processes would show in the rationale how the choice of process was consistent with the HR plan.

There were 41 non-advertised processes in the sample, and 28 rationales (68%) made reference to the HR plan. The audit concluded that while progress on HR plans is not sufficiently documented at the sector level, most managers document whether their staffing activities fit with their HR plans in the rationales for non-advertised processes that are kept in staffing files.

In September 2009, HRB documented a Human Resources Planning cycle for the following year, and made a formal request of sectors to assess progress on 2009–2010 plans.

Recommendation 1.0:

Finding 2.0: HR advisor involvement in HR planning

We expected roles and responsibilities for staffing and recruitment and related planning to be clear within HRB and among subdelegated managers.

HR advisors are responsible to assist managers in implementing their staffing processes. HR managers and advisors said the HR planning process helps them to identify and anticipate staffing needs. However, some HR advisors report that they are not always active participants in the process of developing clients' HR plans. HR advisors and managers who say the HR planning process does help them to identify staffing needs, and provides the greatest ability to rely on their plans to manage their workloads, are those who invest heavily in relationship management with their clients.

The limited involvement of HR advisors in the development of plans may impact the efficiency and responsiveness of services to subdelegated managers.

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Recommendation 2.0

Finding 3.0: Roles and responsibilities unclear

We also expected that roles and responsibilities of hiring managers and HR advisors (and within HRB), as they relate to staffing and recruitment, are clearly documented and communicated. We found that roles and responsibilities of stakeholders are defined differently in different locations.

We found that, in one location, the Instrument of Delegation of Human Resources Authorities (June 2009), some of the responsibilities of subdelegated managers are not fully documented. In contrast, the EX Appointment Policy (June 2008) describes these responsibilities, as well as the corresponding responsibilities of HR advisors in the staffing process. Some of the responsibilities of subdelegated managers documented in the EX Appointment Policy, but not in the Instrument of Delegation of Human Resources Authorities, are:

• develop the Human Resources Plan for their organization, including skills that will be required, training and development needs for their staff
• determine the sequence that merit criteria will be applied; and carry out the assessment
• develop appropriate assessment tools.

These are areas where more issues were noted in the staffing files for non-EX compared to EX appointments.

In addition, the following authority is mentioned in the instrument of delegation only for EX appointments, not for non-EX staffing authorities, even though it applies to both: Establishment of statement of merit criteria (SOMC).

A lack of clear roles and responsibilities has resulted in different expectations between HR advisors and subdelegated managers. HR advisors expressed conflict between client service and their challenge function. Subdelegated managers expressed a need for more strategic advice and for HR advisors to better understand client operations. This difference in expectations may be attributed to the inconsistent and incomplete definition of operational roles and responsibilities of each group in a single, easily referenced document.

Recommendation 3.0

Staffing and recruitment training

In accordance with the Appointment Delegation and Accountability Instrument, IC's deputy head must ensure that those who have subdelegated staffing authorities are and remain competent to exercise their appointment and appointment-related authorities, and must have access to necessary training. In particular, we expected that departmental managers and HR advisors receive training on staffing and recruiting processes and procedures, and mandatory requirements to meet employment equity, cultural diversity and linguistic duality targets.

In order to be subdelegated to do staffing at IC, hiring managers must complete either the Canada School of Public Service three-day course that provides participants with the knowledge and skills necessary to manage staffing or the IC in-house one-and-a-half-day training session. The in-house training is about IC staffing policies and guidelines and IC's instrument of delegation, and includes a review of the new PSEA.

Upon completion of their training, hiring managers must then demonstrate that they have the necessary knowledge to effectively exercise their delegated staffing authorities by successfully completing the Authority Delegation Online Assessment. Only then can they exercise the delegated signing authorities associated with their management level. This knowledge assessment is valid for a period of five years. All 49 appointments reviewed in the audit were appropriately authorized by a subdelegated manager who had successfully completed the online assessment.

Lastly, we found that IC has successfully implemented practices to support continuous learning by subdelegated managers and HRB staff in the areas of employment equity, cultural diversity and official language requirements. For example, a module on employment equity groups and accommodation measures was recently added to the initial in-house staffing course provided to all managers who are to be subdelegated staffing authority. It was reported that HRB gave sessions on systemic barriers and accommodation measures for HR advisors in the fall of 2009.

Finding 4.0: Additional staffing training required

Although mandatory and non-mandatory staffing training is available to Industry Canada subdelegated managers, HR advisors interviewed stated that one of their major challenges is hiring managers' lack of staffing knowledge even after they have taken the required training. Some subdelegated managers require more training in order to gain a consistent understanding of staffing, especially those who only do a few staffing actions a year. When interviewing subdelegated managers, we indicated that HR advisors could provide more value-added advice, which could facilitate hiring manager decision making.

Although staffing is subdelegated to the EX minus 2 level, HR advisors stated that some steps in the process are being conducted by non-delegated staff with the subdelegated manager only signing off at key decision points (i.e., SOMC, selection, letter of offer).

As for HR advisors, their learning activities include formal and informal training through courses, workshops, PSC SmartShops, briefing sessions, self-learning tools and on-the-job coaching. All junior advisors have a tutor/coach for their training and development. New HR advisors receive a three-day course on human resources and on the PeopleSoft Human Resources Management System (HRMS). In order to ensure that valid staffing advice is given, human resources advisors are also required to take the PSC's Appointment Framework Knowledge Test (AFKT) in order to validate their expertise. It was reported that 79% percent of HRB's staffing advisors have taken the AFKT.

The Human Resources Branch HR Plan for 2009–2012 notes that the PE (HR advisors) occupational group is one of the Branch's most at-risk as an average of 25 PEs leave HRB each year, either through retirement or for a position in another organization. Although HRB has managed to successfully fill the void created by these departures, a somewhat higher ratio of junior PEs to senior PEs has occurred, resulting in a greater number of resources required to train, develop and build capacity within HRB. A PE Professional Development Program has been implemented, and additional PE positions have also been added to HRB to focus on corporate people management strategies including renewal.

Without adequate training of those who are doing the staffing, there is a greater risk of non-compliance with staffing legislation and policies.

Recommendation 4.0

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3.3 Internal Controls

Staffing advice

We expected the HR Branch, as well as regional and other HR personnel, to provide appropriate tools and quality advice, aligned with IC policies and the PSC Appointment Framework, on staffing strategies to subdelegated managers.

When we found HR advisor advice documented in staffing files, it was consistent with IC policies and the PSC Appointment Framework. We also found instances of documenting ongoing communication between HRB and managers throughout staffing processes. In interviews, subdelegated managers expressed appreciation for some of the tools that are provided, such as the Statement of Merit Criteria Library, as they are very useful and save time. Managers also value advice on established staffing processes such as collective staffing, hiring or bridging students.

HRB has developed a variety of staffing tools and templates to assist subdelegated managers, including staffing checklists with a step-by-step guide to conduct internal or external, advertised or non-advertised processes. These are updated and available on IC's intranet and Wiki.

Timeliness and relevancy of information on staffing

The audit expectation was that relevant, timely and reliable information on staffing is provided by HRB and others.

The audit found that managers access staffing information from multiple sources, starting with mandatory training, and including emails, HR advisors, management meetings, IC intranet and PSC internet. Managers say that colleagues are their best source of staffing information. They also rely on consultants for information on best practices and different ways of using staffing tools.

Workforce profiles updated quarterly, and monthly for Executive Services group, make staffing information timely for managers. On the other hand, HR advisors and subdelegated managers identified that updates to tools and procedures are not always timely. Information is relevant in that it supports all key staffing decision points.

The audit concluded that subdelegated managers have access to timely and relevant information to facilitate staffing actions and decisions.

Reliability of information on staffing

Most information provided to the PSC comes from the HRMS/PeopleSoft database, for instance for the Departmental Staffing Accountability Report. HRB uses the HRMS to produce the HR Annual Performance Report and quarterly workforce profiles.

Divergent opinions were expressed by managers about the accuracy and usefulness of information coming from the HRMS/PeopleSoft. Many managers maintain their own databases and reports in parallel with the corporate HRMS to track items like staffing activities and comments, and acting appointments.

The SHRM Workforce Analysis team is responsible for ensuring HRMS data integrity. Procedures have been set up to verify areas that represent error risks, such as reorganizations. The HRMS team creates and analyses error reports and follows up monthly with HRMS coordinators in the different sector teams to obtain corrections. Another step to improve data integrity is to request system users to upload specific data on the same dates, so that employee populations are all defined for the same period.

Staffing values

This section reports our findings from the staffing files we audited for compliance to the staffing values and policies identified by the PSC and in the PSEA. We expected that when reviewing these staffing appointments, we would find that IC's staffing and recruitment practices are based on merit, are free from political influence and are fair, accessible, transparent and representative. These criteria are based on the PSEA, which establishes that appointments must be made on the basis of merit.

As per the PSC, one of the intentions of the PSEA is to modernize staffing in the public service by giving a new meaning to merit that moves away from the rules-based concept of "best-qualified" to a values-based approach that allows managers to hire qualified and competent individuals more quickly.

The PSC's Appointment Policy framework, established in accordance with the PSEA, is composed of a number of policies on specific subjects that correspond to key decision points in appointment processes.

PSC and IC priority requirements

One of the first key decision points is selecting the appointment process, which includes considering priority persons. Among the provisions of the PSEA and Public Service Employment Regulations, certain individuals have a right to be considered for an appointment ahead of all other potential candidates, for example, surplus employees or employees who become disabled.

The PSC is responsible for administering and overseeing priority entitlements. Therefore, departments must initiate the clearance process by submitting a Request for Priority Clearance through the PSC. We found that all appointments in the audit sample had requests for priority clearance and all identified priority persons had been assessed against the essential qualifications for the position.

Organizations may also establish their own list of employees entitled to referral consideration. We found two appointments, out of the 39 applicable files, where there was no evidence that IC affected employees were considered. Referral entitlements help persons cope with career transitions due to various life and employment events; therefore, every opportunity to be considered is necessary.

Finding 5.0: Written rationales for non-advertised processes need improvement

The PSEA provides greater flexibility for deputy heads to customize the appointment process to meet the needs of their organization. Correspondingly, the Appointment Policy framework includes a policy on Choice of Appointment Process. One of the objectives of this policy is to ensure that the appointment process is chosen in a manner that respects the core and guiding values and helps organizations meet their business and human resources needs.

In advertised processes, the job opportunity is advertised to potential applicants. Non-advertised processes allow subdelegated managers to make appointments without soliciting potential candidates. Therefore, adherence to the guiding values is central to non-advertised processes.

Insufficient demonstration of respect for PSEA guiding values

The PSC's Choice of Appointment Process Policy requires a demonstration of how the choice of a non-advertised process respects the values of fairness, access, transparency and representativeness. The requirement for a written rationale ensures the manager's choice of a non-advertised process is well-documented and is consistent with the appointment values. Hiring managers must also demonstrate how using a non-advertised process is compliant with pre-established criteria set out by IC's deputy head.

In our audit sample, 56% (23 of 41) of written rationales for selecting a non-advertised process insufficiently addressed some or all of the above mentioned values. In many cases, managers described characteristics of the individual applicants, whereas they are required to explain how the choice of appointment process adheres to the staffing values.

A written rationale should also provide documented support for the decision made, and may also be used to assist in explaining the decision to persons eliminated from consideration. We found in our audit sample evidence of HR advisors notifying subdelegated managers that their rationale for a non-advertised process did not comply with PSC and IC policy requirements, particularly when addressing the PSEA values. In several instances, when this advice was noted, we found the final versions of rationales on file did not reflect the advice given.

Lastly, one of the grounds for complaint to the Public Service Staffing Tribunal is abuse of authority in the choice of an advertised or non-advertised internal appointment process; therefore, a well documented decision will assist in supporting the decision. This requirement is also an element for which IC's deputy head is accountable to the Public Service Commission.

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Recommendation 5.0:

Finding 6.0: Deficiencies found in the assessment of candidates

The meaning of merit, as per Section 30(2)(a) of the PSEA, is when the person to be appointed meets the essential qualifications for the work to be performed, as established in the statement of merit criteria and, if relevant, any other asset qualifications, operational requirements and organizational needs identified in the Statement of Merit Criteria.

The audit found that most Industry Canada appointments respect the merit principle.

But we found that in 12 of 49 appointments audited, the assessment tools and methods insufficiently assessed essential qualifications and other identified merit criteria. We considered assessments insufficient when not all essential qualifications were assessed or when all essential qualifications were not fully evaluated. For example, it could not be determined if the candidate met each qualification when the assessment tool did not evaluate all of the knowledge requirements for the position. We also found instances in which the subdelegated manager's assessment of the candidate's qualifications was weak as it did not include behavioural examples to demonstrate how the criteria were met. Instead, the assessment contained a limited explanation, such as with the word "meets".

In two appointments, there were no tools or methods on file to demonstrate that the assessment of the candidate had been made against the essential qualifications and other identified merit criteria for the position.

Among the 49 appointment processes reviewed, one file contained evidence that the results of the assessment indicated the person appointed did not meet all the qualifications for the position. When this particular file was brought to the attention of HRB management, it immediately underwent a special review. HRB found that the subdelegated manager's initial assessment was reevaluated and determined the candidate met merit; however, the subdelegated manager had not updated the assessment documentation to reflect this.

To address assessment issues, the department has developed a guide called How to Assess Merit Criteria in Appointment Processes. The guide is posted on the HRB intranet for subdelegated managers' reference.

The IC Talent Management Framework and 2009–2012 Human Resources Plan forecast increased use of non-advertised processes in the department, for example by promoting people who graduate from professional development programs. HRB reports that professional development programs have not fully incorporated the structured assessment tools that would enable them to meet the stricter documentation requirements of appointment processes, as per the PSC. As a result, there is a risk that non-advertised processes in future will continue to lack sufficient documentation of merit in staffing files. All of the appointments in this audit sample with insufficient assessment of candidates (15 files) were non-advertised processes.

Recommendation 6.0:

Finding 7.0: Appointment and appointment-related decisions were not fully documented

The PSC requires IC's deputy head to ensure that all decisions involving appointment-related authorities are fully documented and accessible for five years from the last administrative action. Organizations are to ensure staffing files contain sufficient information to support key decision points and activities.

The audit found that some staffing files did not contain sufficient evidence:

• of academic credentials in 26 of 49 files;
• of an HR challenge function;

Insufficient evidence of academic credentials

The PSC has published a document listing the minimum documentation requirements for staffing files to ensure sufficient information is available to support decisions. The following documents are listed: application forms, résumés, covering letters, evidence of academic credentials, citizenship (where applicable), etc.

Of the 49 staffing files reviewed, 26 did not contain proof of education (some proofs were provided later upon HRB fact validation). In one of these cases, education was lowered in the assessment compared to the SOMC requirement, and no proof of the candidate's education (CV or diploma) was on file but was provided after the fact as part of the HRB findings' validation.

HR challenge function

Human resources advisors are responsible for providing expert and strategic advice to client managers on appointment and appointment-related decisions as well as a challenge role with regard to potential outcomes.

We found that the challenge role played by IC HR advisors in support of management decision making is not consistently documented. HR managers and advisors comment that most of this advice is provided orally. Notes to file do not seem to reflect the extent of discussions requesting managers to provide adequate validation for staffing decisions. Twelve files (24%) showed no evidence of an HR challenge function. This was mostly evident in relation to non-advertised rationales not addressing PSEA values.

On the other hand, the file review showed evidence of good practice where the HR advisor provided feedback concerning the need to reflect PSEA values in non-advertised rationales even though the manager may not have followed this guidance. HRB responded to this audit finding by stating: "We have discussed the requirement on several occasions such as the PE Forum and Regional Teleconferences but unfortunately it is not being documented because it is being provided by phone or at a meeting."

Two of the files reviewed presented good practice by providing additional notes on communications that had taken place between the HR advisor and the manager, including dates.

Recommendation 7.0

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3.4 Risk Management

IC Staffing Monitoring System

The PSC established the Staffing Management Accountability Framework (SMAF) that includes indicators used to determine how a department is carrying out its appointment authority. The PSC requires each department's deputy head to demonstrate that their organization's staffing system meets the mandatory indicators set out in the SMAF, while respecting the legislative requirements and PSEA values.

One of the key elements of the SMAF is Organizational Accountability for Results, where deputy heads are expected to establish their own monitoring practices and make improvements where deficiencies are identified. In this audit, we expected that progress against staffing and recruitment targets, including staffing service standards, would be measured and reported on.

We found that IC does have a monitoring mechanism in place to mitigate risks and to determine whether appointment processes and decisions are in accordance with legislative requirements, mandatory policies and IC policies. The Staffing Policy and Monitoring Section (SPMS), HRB, is the centre of expertise on staffing, recruitment issues and workforce adjustment. It provides support, interpretation and advice to managers and HR advisors. Its activities include policy development, monitoring and training.

IC has two monitoring processes in place, one for executives and one for non-EX staffing operations. Since implementation of the new PSEA, monitoring has been conducted for EX and non-EX staffing actions. We found evidence of these monitoring exercises in the files we reviewed. Results from monitoring are used to identify patterns and trends that are then communicated as part of the continuous learning of HR advisors and managers, in the National Capital Region (NCR) and the regions. SPMS reports regularly on trends through individual presentations and the HRB Annual Report, and to the PSC.

Monitoring information has also been rolled up in the HRB Annual Report. Some of the areas identified in the monitoring report of March 2009 as needing improvement were the same as those we identified from our file review. Specifically, these were the justifications for non-advertised processes and the candidate assessments against SOMC. SPMS also identified a weakness in documentation to support appointments and appointment-related decisions, in particular Proof of Education, which we also found in our audit of files.

In 2008, HRB established staffing service standards. Service standards are also monitored using an automated feedback tool.

Finding 8.0: Improvements made to staffing monitoring system

In 2010, SPMS improved their monitoring process whereby monitored files have a report placed on them that identifies issues and states corrective action required. Some issues that were identified through monitoring and investigations have resulted in additional tools and guidance to hiring managers and HR advisors. These include: Statement of Merit Criteria (SOMC) – A Step-by-Step Guide, a directive called How to Assess Merit Criteria in Appointment Processes, and guidance on the calculation of casual days.

Although this audit is reporting areas of non-compliance in staffing, our findings are based on activities that took place prior to the implementation of the above-mentioned monitoring process. We are unable to come to a conclusion regarding the effectiveness of HRB's newly improved SPMS monitoring system as its evaluation was outside the scope of this audit. The sustained implementation of this system will enable concerns to be communicated as soon as they are discovered so that decisions can be made and action taken, as required.

Recommendation 8.0