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PACC Committee Report

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HOUSE OF COMMONS
OTTAWA, CANADA
K1A 0A6


Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its

TWENTY-FOURTH REPORT

The Standing Committee on Public Accounts has considered Chapters 2 and 3 of the December 2001 Report of the Auditor General of Canada (Recruitment for Canada’s Future Public Service: Changing the System and Changing the Practices) and has agreed to report the following:

INTRODUCTION

Current recruitment systems and procedures in the federal “core”[1] public service are considered to be unduly complex, cumbersome and costly. According to one recent survey, over 57% of hiring actions in the federal public service take more than three months to complete and almost a third of hiring actions have taken six months or longer.[2] Consequently, to side-step the long delays that are characteristic of the formal staffing process, a culture of short-term hiring has emerged in the core public service. Although these practices may reduce the impacts of staffing delays brought about by the formal recruitment systems and procedures, this emphasis on offering short-term employment on such a large scale is unlikely to attract talented and skilled people, especially in the mid-level administrative and professional occupations.

This emphasis on short-term recruitment raises questions as to the federal government’s ability to attract and retain enough skilled and talented people to perform its work and deliver programs and services to the general population. These questions become increasingly relevant as the federal public service will need to overcome considerable challenges to renew itself in the coming years. Labour shortages in many types of occupations are expected to appear as an ever-growing portion of the federal workforce becomes eligible for retirement. The changing nature of work will also alter the composition of the federal public service; with proportionally less staff devoted to operational and support functions and more going into the scientific, technical, managerial and policy development functions. Other factors include the public’s changing attitudes about the desirability of the federal public service as career of choice and the rising competition from the private sector and other public-sector jurisdictions for skilled and talented people.

The Public Accounts Committee maintains an interest in the federal government’s ability to effectively manage its human resources. It has recently examined and reported to Parliament on issues relating to the human resource management regime in the federal government and on the administration and management of the Post-Secondary Recruitment Program. The Public Accounts Committee is very concerned about the government’s capacity to rise to the challenges involved in the renewal of the federal public service.

Given its continuing interest on this issue, the Committee met on 19 February 2002 to consider the findings of the audit report and the testimony of the witnesses on the questions relating to recruitment systems and practices in the federal public service. The Office of the Auditor General was represented by Mr. Michael McLaughlin (Deputy Auditor General), Mrs. Maria Barrados (Assistant Auditor General) and Mrs. Kathryn Elliot (Principal). Witnesses for the Human Resources Modernization Task Force were Mr. Ranald A. Quail (Deputy Minister and Head) and Mrs. Monique Boudrias (Assistant Deputy Minister and Senior Advisor). Mr. Frank Claydon (Secretary of the Treasury Board and Comptroller General of Canada) and Mrs. Glynnis French (Assistant Secretary, Strategic Planning and Analysis, Human Resources Branch) were present for the Treasury Board Secretariat. The Public Service Commission of Canada was represented by Mr. Scott Serson (President), Mrs. Amelita A. Armit (Vice-President, Staffing and Recruitment Programs Branch) and Mr. Douglas Rimmer (Vice-President, Policy, Research and Communications Branch).

OBSERVATIONS AND RECOMMENDATIONS

The Committee was very concerned about the predominance of short-term hiring in recruitment activity. Members repeatedly questioned the witnesses about how the practice of short-term hiring came to be the most common form of recruitment in the federal public service. According to the audit, the predominance of short-term hiring arose as a response to formal staffing systems and procedures that are now considered cumbersome, complicated and expensive to administer. Over time, initiatives aimed at protecting the principles of merit and non-partisanship in the public service have paradoxically led to a staffing process that is now governed under considerably prescriptive and detailed regulations. Furthermore, 30 years of accumulated jurisprudence has transformed the staffing recourse and appeals process into a quasi-judicial mechanism, making recruitment even more unwieldy and arduous.[3] To avoid appeals to staffing decisions, human resource advisors now adhere rigidly to rules and regulations, significantly lengthening and complicating the recruitment process. Regardless of the difficulties, the federal public service must continue to recruit; as well, vacancies still need to be filled in a timely and cost-effective manner. As a result, an informal short-term recruitment system has evolved to circumvent the formal systems and procedures.

In certain cases, the Public Service Commission (PSC) has delegated full staffing authority to departments, allowing them to develop their own recruitment systems and hire specific professional groups outside the public service. In those cases, the audit observed the staffing process was more efficient and faster, with most of the hiring done in the form of indeterminate employment. The audit also examined the hiring practices of selected Crown corporations and separate employers not governed under the Public Service Employment Act (PSEA), and noted that although their hiring principles and policies did not materially differ from those found in the core public service, these entities were reportedly more adroit in hiring and took less time to fill officer-level jobs, i.e., from two weeks to three months.[4]

The Public Service Commission also undertook its own review of staffing actions and the time it takes to recruit in the public service, specifically focusing on relative merit competitions which are the most elaborate and, in some cases, the slowest of hiring procedures. The PSC’s review found that, on average, it took between four to five months for staffing actions to be completed within the federal public service; however, it also noted a wide range in terms of length of time, with about a quarter of these staffing actions being completed within six weeks. The Public Service Commission also examined the recruitment performance of the Canada Customs and Revenue Agency, a separate employer not governed under the PSEA, and noted that the Agency had improved its staffing performance principally by reforming the recourse and appeal processes.[5] The above leads the Committee to make the following recommendation:

RECOMMENDATION 1

That the Task Force on Modernizing Human Resources Management in the Public Service consider amendments to the Public Service Employment Act and the Public Service Staff Relations Act to streamline, simplify and expedite the staffing recourse and appeal process.

RECOMMENDATION 2

That the Public Service Commission review its legislated mandate to ensure that it has not delegated too much of its recruitment responsibilities to departments and agencies thereby compromising its ability to ensure the hiring of a non-partisan, representative and competent public service.

The Committee was also very interested in remuneration and compensation issues. Many questions were raised about compensation, such as bilingualism bonuses, the linking of public-sector executive pay to private-sector benchmarks, and merit- or performance-related pay. The Committee repeatedly asked the witnesses about the notion of reforming the compensation structure of the public service from one based on job classification and seniority to one based on rewarding performance or based on the merit principle. With regards to linking the merit principle with remuneration, Mr. Ranald Quail told the Committee that merit and compensation were really two separate issues. Merit is governed by legislation and deals with the non-partisan appointment of a competent person while compensation issues are really the responsibility of the Treasury Board and the outcome of the collective bargaining process.[6] Mr. Claydon opined that establishing merit- or performance-based compensation through legislation may paradoxically result in a rigid remuneration system that is unable to adjust rapidly to changes in the work environment or in the labour market.[7] One Committee member suggested that the principle of merit or performance compensation could be legislated without specifying the actual remuneration structure or pay scales.[8] This prompts the Committee to make the following recommendations:

RECOMMENDATION 3

That the Task Force on Modernizing Human Resources Management in the Public Service consider the feasibility of amending the relevant Acts and Statutes to incorporate the principle of merit-based compensation.

RECOMMENDATION 4

That the Treasury Board Secretariat examine the feasibility of introducing a merit-based remuneration to the public service and, once completed, present the results of its review to Parliament, together with the estimated costs and benefits associated with such a remuneration system.

The Committee enquired about the progress to reform the job classification system. Many are concerned that the existing classification system, in combination with the collective bargaining process, have made the public service staffing, pay and benefits systems more complex. The federal government has already taken certain steps in simplifying rules and regulations and reducing the number of job classifications; currently, it is developing a classification system, but much still remains to be done. This leads the Committee to recommend:

RECOMMENDATION 5

That the Treasury Board Secretariat complete as soon as possible the development of a classification system and, once completed, table the results in Parliament.

The Committee was also concerned about shortcomings in departmental recruitment practices, notably in human resource planning and the need for departments to develop recruitment strategies that integrate their human resource plans with their strategic and operational business plans. According to the audit report, only 22% of departments surveyed said they had formal human resource plans that assisted them in planning their recruitment activities[9] and only one department claimed that it had made progress in integrating its human resource plan with its business plan. The audit further noted that departments did not translate their plans into specific recruitment strategies incorporating targets, marketing plans, or timelines.

The Committee was interested in the Public Service Commission’s plans to gradually implement a national area of selection for open competition into the federal public service. The successful implementation for such an initiative would require better electronic recruitment tools to manage the increased volume of applications it would likely generate. Widening the area of selection without better recruitment systems and tools to support it, the audit report warned, would be counterproductive, and likely result in even more short-term hiring.[10] Having considered the evidence, the Committee makes the following recommendations:

RECOMMENDATION 6

That the Treasury Board Secretariat and the Public Service Commission consult with departments and agencies to develop appropriate human resource plans and to ensure they are an integral part of their business plans.

RECOMMENDATION 7

That the Public Service Commission develop policies and procedures to create a national selection process on overall recruitment in the public service and table a report of its findings to Parliament no later than 31 October 2002.

The audit noted once again the lack of comprehensive reporting on human resource management issues to Parliament and the general public. Various aspects of the human resource management regime in the public service are reported by three central agencies: the Privy Council Office (PCO), Treasury Board Secretariat (TBS) and Public Service Commission (PSC). The PCO provides strategic direction on general issues or broad-based priorities related to the public service but they contain very little in terms of specific information on expected or actual performance. The Treasury Board Secretariat has recently developed a comprehensive framework for good human resource management but needs to do more to ensure that departments and agencies actually use the framework. The Public Service Commission should strengthen the information content of its accountability documents, focusing less on the transactions of the Commission’s affairs and placing more emphasis on outputs and outcomes generated by its activities and the challenges being faced by the Commission. This prompts the Committee to make the following recommendations:

RECOMMENDATION 8

That the Privy Council Office provide strategic direction to the Treasury Board Secretariat and the Public Service Commission to clarify their roles and responsibilities with respect to the reporting on human resource management issues to Parliament and the general public.

RECOMMENDATION 9

That the Treasury Board Secretariat and the Public Service Commission strengthen the content of their accountability documents with respect to human resources management matters, particularly in emphasizing more on outputs and outcomes of their human resource management activities, and that these reports contain information about results expected and achieved. That they begin to present the new information content and format beginning with the fiscal year ending 31 March 2003.

CONCLUSION

The Committee acknowledges the current efforts of the government to renew and strengthen the human resource management regime. Current recruitment systems and procedures have become very complex, cumbersome and expensive; staffing activity has become predominantly short-term to offset this complexity. The emphasis on short-term recruitment casts doubts on the federal government’s capacity to attract and retain the talented and skilled people it will require to continue to provide quality services and programs to the general public. Simplifying the current human resource systems will require fundamental reform of the legislative and regulatory framework governing the human resource management regime. Thus, the Committee strongly urges the Task Force on Modernizing Human Resources Management to complete its legislative and regulatory review as quickly as possible and make the required recommendations to Cabinet. This review must be successfully completed, otherwise the federal public service’s ability to meet current and future human resource challenges will be compromised. Furthermore, the Committee also urges the participating central agencies in the human resource management regime to correct the observed shortcomings in the recruitment practices and procedures, notably by strengthening comprehensive human resource planning, upgrading recruitment tools, and improving the reporting of relevant human resource information.

Pursuant to Standing Order 109, the Committee requests that the government table a comprehensive response to this report.

A copy of the relevant Minutes of Proceedings (Meetings Nos. 40 and 56) is tabled.

 

Respectfully submitted,

 

 

JOHN WILLIAMS, M.P.

 

Chair



[1]        The “core” public service refers to federal employees in the 20 departments and approximately 60 agencies that are governed under a legislative framework that is made up of three pieces of legislation: the Public Services Staff Relations Act, the Financial Administration Act, and the Public Service Employment Act.

[2]       Office of the Auditor General of Canada, 2001 Report, Chapter 2, Recruitment for Canada’s Future Public Service: Changing the System, Ottawa, 2001.

[3]        Office of the Auditor General of Canada, 2000 Report, Chapter 9, Streamlining the Human Resource Management Regime: A Study of Changing Roles and Responsibilities, Ottawa, 2000.

[4]        Office of the Auditor General of Canada, 2001 Report­, Chapter 2, Recruiting for Canada’s Future Public Service: Changing the System, Ottawa, 2001.

[5]       House of Commons, Standing Committee on Public Accounts, Evidence, 1st Session, 37th Parliament, 19 February 2002, 17:10.

[6]        Ibid., 17:00.

[7]        Ibid., 17:05.

[8]        Ibid., 17:15.

[9]        Office of the Auditor General of Canada, 2001 Report, Chapter 3, Recruitment for Canada’s Future Public Service: Changing the Practices, Ottawa, 2001.

[10]      Ibid., p. 17.