Select committee inquiry
Civil service workforce: Recruitment, pay and performance management
Closed
What the inquiry looked at
“The Committee has regularly raised issues of staff capacity, skills and workforce planning in the civil service in the past, and warned in December 2020 that the lack of specialist skills in the civil service affects both the efficiency and the effectiveness of government projects. The Government declared in 2022 that it would cut civil service numbers by 91,000 posts to pre-2016 levels. While this target was later dropped, in October 2023 it was announced that civil service numbers would be capped. The National Audit Office (NAO), in a report comparing how Government recruits, pays and performance manages its staff, found wide variances between departments in recruitment times and pay. There were also inconsistencies in departments’ HR processes, with just over two-thirds of departments not knowing what happens to staff after they are classed as underperforming. Based on the NAO report, the Committee will take evidence from the Cabinet Office on subjects including: Skills gaps; Staffing and workforce planning; Pay disparities; Retention and progression of civil servants from diverse backgrounds. If you have evidence on these issues, please submit it here by 23:59 on Sunday 21 January 2024. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. Please note that the Committee is unable to investigate individual cases. This inquiry was closed due to the 2024 General Election.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of Twenty-Third Report - Civil service workforce: Recruitment, pay and performance management ↗
Effective government depends on having a skilled and motivated civil service to administer policies, deliver services to the public and ensure government’s priorities are met. However, recruitment across the civil service is too slow, particularly compared with the private sector. From advertising the job to completing basic pre-employment checks, it takes an average of 99 days to hire staff. For candidates requiring the highest level of security clearance, it can take an additional 171 days on average to complete their security checks. Furthermore, chronic pay issues within the civil service have lowered morale and risk departments not being able to recruit and retain skilled staff.
The civil service is often seen as a single employer, but individual departments and agencies are formally the employers of their civil service staff. There are clear variations between departments in how efficiently they recruit and manage their staff, and a lack of awareness among departments of how well they perform compared to others. Most departments do not know how much it costs to hire people to work for them. Some departments do not even collect vital workforce data such as recruitment times, how many staff are underperforming in their organisation, or what happens to those who underperform.
Despite being responsible for the civil service workforce as a whole, the Cabinet Office has shown a lack of curiosity and willingness to act in areas where it should have strong oversight on workforce issues across government. For example, it does not benchmark departments on the efficiency of their recruitment processes or seek to understand where staff underperformance is a particular issue and how it is being dealt with.
The Government Chief People Officer has set out an ambitious vision for the civil service through the recent Civil Service People Plan, which runs from 2024 to 2027. This vision involves a smaller, more efficient and more productive civil service, where civil servants are rewarded for delivering for the public. However, the People Plan omits crucial detail on how it will meet its aims and how success will be judged. Progress against the People Plan will need to be monitored closely to see if its reforms empower the civil service to address the systemic workforce issues that risk undermining wider governmental effectiveness.
What the government said
The government responded on 28 May 2024.
Summary written by Accountability Index from the government's response.
The government disagrees with the recommendation to publish more detailed explanations of the Civil Service People Plan commitments, and agrees with the Committee's recommendations on recruitment, pay and reward, and underperformance data.
- On the People Plan, it disagrees with the recommendation, stating that the Plan "outlines the specific actions that will be taken" and identifies metrics to measure its impact. An evaluation strategy is "in development".
- On recruitment times, it agrees and says the recommendation is implemented, with consistent measures across the 17 Whitehall departments and first data available during April 2024, then quarterly.
- On sharing examples of efficient recruitment within six months, it agrees but says six months is "insufficient" and that an additional three months (maximum) is needed, with a target of Autumn 2024.
- On pay, it agrees, and says a new Civil Service Reward Strategy "is under development" with a target of Winter 2024. It recognises that under the delegated model departments control their own pay systems, which "limits what can be directed by the Cabinet Office".
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 10 January 2024 to its close on 28 May 2024.
- Oral evidence 5 Feb 2024
- Report 22 Mar 2024
- Government response 28 May 2024
- Correspondence 2 letters
What it recommended 7 recommendations · 13 conclusions
2Require departments to report consistent recruitment time data and establish civil service benchmarks
Concluded (the committee's words)
The time taken to recruit staff across the civil service is too slow. It takes an average of 99 days to hire new staff in the civil service, from the job being advertised to completing basic pre-employment checks. Completing security checks for new recruits can take on average an additional 171 days for candidates requiring the highest level of security clearance. The Cabinet Office acknowledges that civil service recruitment times are slow, particularly compared with private sector firms, and asserts that it is confident these can be reduced. Recruitment times vary across departments, but departmental data on recruitment and security vetting times are patchy and inconsistent, hindering efforts to understand how departments could speed up recruitment. As a first step, the Cabinet Office has set out how departments should measure recruitment times for civil service roles. But the challenge will be to make sure departments record and report recruitment times accurately, so that performance can be benchmarked with the aim of making recruitment faster. Recommendation 2: By the time of its Treasury Minute response, the Cabinet Office should require all departments to report data on recruitment times to it on a consistent and regular basis. It should use this information, along with data from external comparators, to establish benchmarks for recruitment times within the civil service.
3Define common cost-per-hire measure, require regular reporting, and share efficient recruitment examples
Concluded (the committee's words)
Most departments do not know how much it costs to recruit staff, or how they could be more efficient. 14 of the 16 main departments cannot provide full recruitment cost data. Only one department, HM Revenue & Customs, understands its recruitment costs well enough to be able to calculate its cost per hire, which is a standard metric for assessing the efficiency of an organisation’s recruitment processes. The Cabinet Office says it is developing a way of measuring and benchmarking recruitment costs consistently across departments. As part of this, it needs to specify how departments can estimate the cost of all staff time spent on recruitment activities, including that of line managers involved in hiring staff, given most departments struggle to report this cost. In addition, most departments 6 Civil service workforce: Recruitment, pay and performance management have not sought to learn from others how to make their recruitment processes more efficient. This is despite there being identified examples of good recruitment practice within the civil service, such as HM Revenue & Customs on recruitment costs and the Ministry of Justice on increasing the diversity of those it hires. Recommendation 3a: By the end of 2024, the Cabinet Office should define a common cost per hire measure that includes the cost of all staff time spent on recruitment, and require all departments to report to it regularly on their full cost per hire. b) The Cabinet Office should, within six months, share examples of efficient recruitment from within the civil service and external organisations, to encourage departments to identify improvements to their own recruitment processes.
4Set out specific actions in pay and reward strategy to address longstanding civil service pay issues
Concluded (the committee's words)
Chronic pay issues within the civil service have lowered morale and risk departments not being able to recruit and retain skilled staff. The Cabinet Office acknowledges that there are longstanding issues within the civil service relating to pay and reward. These include a long-term decline in real-terms pay, which has reduced levels of staff satisfaction within the civil service. As departments can set their own pay scales, there are also persistent disparities in how much people at the same grade are paid in different departments. There is also a lack of coherence in how departments use pay to reward civil servants for good performance. We are concerned that these issues damage departments’ ability to attract and retain staff, including specialist staff where salaries in the private sector can be particularly competitive. The Cabinet Office has promised to introduce a new pay and reward strategy for staff below senior civil service level in 2024. So far, however, there is little specific detail in the Civil Service People Plan on what the new strategy will involve and how it will address long-term pay issues. Recommendation 4: In its forthcoming civil service pay and reward strategy, the Cabinet Office should clearly set out the specific actions it will take to address longstanding issues such as declining real-terms pay; variation between roles paid at the same grade; and disparities in pay between departments, including disparities in the use of performance-related pay and the risk of indirect discrimination.
5Mandate all departments to collect data on underperforming staff, management, and outcomes
Concluded (the committee's words)
Departments do not collect enough data on staff underperformance to know if it is being managed effectively. Some departments do not routinely collect data on the number of staff who are underperforming in their organisations, and most do not monitor what happens to staff who are identified as underperforming. Without these metrics, departments cannot accurately tell whether performance is being effectively managed, and underperformance identified and addressed. If government is to achieve its ambition of a smaller, more highly skilled civil service, it will become increasingly important for departments to understand and manage underperformance. The Cabinet Office is focusing on improving the capacity of line managers within departments to deal with issues locally, which it sees as fundamental to raising performance levels. But it accepts that it could improve performance reporting, particularly as better departmental data will be needed to understand how effectively line managers are tackling underperformance. Civil service workforce: Recruitment, pay and performance management 7 Recommendation 5: By the time of its Treasury Minute response, the Cabinet Office should mandate all departments to collect data on the number of underperforming staff, how underperformance is being managed, and the outcomes for underperforming individuals. 8 Civil service workforce: Recruitment, pay and performance management 1 Civil service staffing and recruitment
1Committee took evidence on civil service recruitment, pay, and performance management
Concluded (the committee's words)
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Cabinet Office, HM Revenue & Customs (HMRC) and the Ministry of Justice about civil service recruitment, pay and performance management.1
6Civil Service People Plan lacks target performance levels and robust workforce data metrics
Concluded (the committee's words)
However, the commitments and metrics in the Civil Service People Plan do not set out target or expected levels of performance against which the Cabinet Office can measure and evaluate the success of the Plan. For example, recruitment times will be measured using a common time to hire metric, but the Cabinet Office told us it was not yet able to specify a benchmark for how many days it should take departments to hire staff.9 The People Plan also does not say how it will improve the poor state of much departmental workforce data, such as recruitment costs. The Cabinet Office said it was working to improve the data picture, for example by benchmarking all of the costs involved in recruitment.10 However, it acknowledged the broader point that departments were at different stages in terms of the quality of their HR systems and the quality of data in those systems.11 Recruitment times
7Recruitment efficiency relies on clearly defined 'time to hire' and 'time to fill' metrics.
Concluded (the committee's words)
The time taken to recruit staff is a key indicator of the efficiency of an organisation’s recruitment process. Recruitment times can be measured in a number of ways, including the time it takes from starting a recruitment campaign to making a firm employment offer – often referred to as ‘time to hire’. Organisations may also measure ‘time to fill’, or the time it takes to get a new staff member recruited and in post, which includes time taken for pre-employment and security vetting checks.12
8Average civil service 'time to hire' is excessively long, hindering recruitment efficiency.
Recommended (the committee's words)
The Cabinet Office told us that it had agreed a standard definition of time to hire with departments, defined as the time taken from a job advertisement being published to a job offer being made.13 Using a similar definition, the average time to hire across all departments in 2022 was 99 calendar days, based on departments’ reported recruitment times. Security clearance vetting time was on average an additional 171 calendar days, for recruits requiring the highest level of security clearance.14 The Cabinet Office recognised the current time to recruit was too long and said that it was not satisfied with the situation. It noted that recruitment best practice in the wider economy resulted in hiring times that were about half that reported by government departments.15
9Inconsistent recruitment time data collection across departments impairs effective civil service benchmarking.
Concluded (the committee's words)
The Cabinet Office acknowledged that departments did not collect consistent and comparable data on how long it takes to recruit and vet candidates.16 The Cabinet Office told us it is working to improve the understanding of recruitment times across the civil 8 Cabinet Office, Civil Service statistics: 2019, 24 July 2019; Cabinet Office, Civil Service statistics: 2023, 2 August 2023 9 Qq10, 15 10 Qq29, 31 11 Q97 12 C&AG’s Report, para 2.4 13 Q10 14 Q12; C&AG’s Report, paras 10–11 15 Q12 16 Q13; C&AG’s Report, paras 2.4, 2.8 10 Civil service workforce: Recruitment, pay and performance management service, including by setting common metrics for time to hire and time to fill that should result in more consistent, better-quality data that can be used to benchmark departmental performance.17 However, the People Plan states that its recruitment time metrics will only be reported for departments that are Government Recruitment Service customers, rather than all departments, which reduces the completeness of benchmarking that can be done and hence its usefulness.18 Recruitment costs and efficiency
10Most departments lack comprehensive recruitment cost data, hindering efficiency understanding and comparison.
Recommended (the committee's words)
Most departments—14 out of the 16 main civil service departments in 2022—do not collect full information on their recruitment costs and therefore do not understand how much it costs them to hire staff. The Ministry of Justice told us that, in common with most other departments, it does not track the cost of staff time spent on recruitment activities by line managers involved in hiring staff.19 HMRC is the only department that is able to calculate its cost per hire, a standard measure for assessing the efficiency of recruitment processes calculated by dividing total recruitment costs by the number of people recruited. HMRC attributed this to the fact that its recruitment is largely centrally run by HR or specialised teams. Having centralised recruitment processes means HMRC is more readily able to capture data on the time spent on recruitment activities and the cost involved.20
11Civil Service People Plan omits mandatory recruitment cost metrics, hindering consistent departmental reporting.
Recommended (the committee's words)
The Cabinet Office noted that it was seeking to improve cost data and was benchmarking all costs associated with recruitment, which would enable departments to compare cost elements such as those for advertising or employment checks.21 However, there are no metrics on recruitment costs in the Civil Service People Plan, such as cost per hire, that departments will need to report against.22 The Cabinet Office did not confirm whether it would require departments to report recruitment costs consistently, particularly those costs that departments struggle to report such as the cost of hiring managers’ time spent on recruitment. Instead, the Cabinet Office stated only that departments had “very strong incentives” to understand how to lower their recruitment costs.23
12Poor recruitment data quality prevents departments from benchmarking their performance effectively.
Recommended (the committee's words)
Most departments do not know how their recruitment performance compares to that of other organisations, either within the civil service or externally. In part this is due to the poor quality of recruitment data, as described above in relation to recruitment times and costs. The Cabinet Office explained this was why it was developing common metrics to enable departments to understand, compare and benchmark their performance internally and externally.24
13Sharing internal and external recruitment best practices is vital for improving civil service performance.
Concluded (the committee's words)
Improving recruitment performance will also involve learning from the experience of others and from external best practice. We heard several examples of efficiency and good recruitment practice within the civil service, such as HMRC on recruitment costs and centralised recruitment, and the Ministry of Justice on ensuring the diversity of staff 17 Qq10–11 18 Cabinet Office, Civil Service People Plan 2024–2027, 10 January 2024 19 Qq 27–28; C&AG’s Report, para 12 20 Q30 21 Qq29, 31–32, 53 22 Cabinet Office, Civil Service People Plan 2024–2027, 10 January 2024 23 Qq30–33 24 Q50 Civil service workforce: Recruitment, pay and performance management 11 recruited.25 The Cabinet Office acknowledged it has a clear role to share best practice and promote learning across departments, given its oversight and coordination role for the civil service workforce. It said it was already working hard to share best practice across departments, for example what departments are doing to reduce time to hire, and undertook to share learning from departmental exemplars on recruitment costs.26 25 Qq16, 52 26 Qq34, 53 12 Civil service workforce: Recruitment, pay and performance management 2 Pay and performance management Civil service pay
14Departments possess delegated authority to set non-SCS staff pay, governed by central guidance.
Concluded (the committee's words)
As part of their employer responsibilities, departments are delegated the authority to set pay for their staff below SCS level. Each department sets its own pay structure which defines pay rates for each grade. Annual pay increases are governed by the central pay remit guidance issued by the Cabinet Office, which specifies the maximum amount that civil service pay can go up each year.27
15Declining real-terms civil service pay for most grades hinders competitiveness and recruitment ability.
Concluded (the committee's words)
Civil service pay for almost all grades has seen a long-term decline. Since 2013, civil service median pay has decreased in real terms for all grades apart from the most junior grade (Administrative Assistant).28 The Cabinet Office recognised that declining real-terms pay was a “chronic” problem affecting the civil service that was “storing up increasing problems of competitiveness with the wider economy”.29 The Cabinet Office further acknowledged there was evidence that pay affected departments’ ability to recruit, citing unattractive pay as the typical reason for failed recruitment campaigns resulting in no appointable candidates.30 It added that government had sought to address the impact of pay on civil service morale. In particular, the Cabinet Office had responded to civil servants’ decreasing satisfaction with pay by making an improved pay offer during 2023, including a one-off £1,500 payment to all civil servants below SCS level.31
16Significant pay disparities between departments for same-grade staff create unhealthy competition.
Recommended (the committee's words)
Other longstanding civil service pay issues include the existence of pay disparities between departments for staff at the same grade level. For example, differences between the higher executive officer (HEO) pay band at the Department for Environment, Food & Rural Affairs (Defra) and HMRC mean that the highest HEO salary in Defra’s pay structure is £1,601 less than the lowest HEO salary HMRC offers.32 Additionally, as at March 2022, senior executive officer (SEO) median salaries varied by up to £6,100 across departments.33 Pay disparities can lead to unhealthy and unproductive competition among departments for staff, for example where there are several departmental employers in a local area or where departments are trying to attract staff with scarce specialist skills.34 The Cabinet Office told us pay disparities of this kind might reflect differences in jobs in different departments, even though those jobs had been graded at the same level.35 However, it did acknowledge that departmental pay differentials in the same location could “add tensions” and that there might be a case for greater pay coherence across departments where jobs at the same grade were more similar.36
17Substantial variation exists in departmental performance-related pay approaches and spending
Concluded (the committee's words)
Departments vary quite substantially in their approaches to performance-related pay, including how much they spend on it. For example, departmental per-head spending on performance-related pay in 2021–22 ranged from £13 to £1,366 per employee, for staff 27 C&AG’s Report, para 3.2 28 C&AG’s Report, para 1.10, Figure 6 29 Q56 30 Q54 31 Q56 32 C&AG’s Report, para 3.4 33 C&AG’s Report, para 3.5 34 C&AG’s Report, paras 16–18 35 Qq60–62 36 Qq63–64 Civil service workforce: Recruitment, pay and performance management 13 below SCS level.37 The Cabinet Office expressed surprise about the level of variation in departments’ performance-related pay arrangements, remarking that the extent of this variation was higher than it would have expected. It added that the new pay and reward strategy promised in the Civil Service People Plan would need to look harder at the role performance-related pay should play in the civil service, with the intention of rewarding employees for higher output and higher quality of work.38 We also asked the Cabinet Office how it guards against the risk of indirect discrimination where the quantity and quality of an individual’s work may be measured more easily in some roles than in others. It told us that objective data will become increasingly available in this area, and that there are “some checks and balances” in how people moderate performance across individuals.39 Performance management
18Absence of a common civil service-wide approach for managing underperforming staff below SCS
Concluded (the committee's words)
Performance management for civil service staff below SCS level is another responsibility delegated to individual departments. This has resulted in differences among departments in how they manage staff performance and support employees’ development. In particular, there is no common civil service-wide approach for identifying and dealing with staff underperformance in grades below the SCS.40 This has resulted in some departments not routinely collecting data on the number of underperforming staff in their organisations. HMRC, for example, told us it decentralised its performance management system to line managers when it introduced a new system in 2018, which means that it no longer collates central data on the number of underperforming staff.41
19Departments fail to monitor outcomes for underperforming staff, contrary to Cabinet Office expectations
Recommended (the committee's words)
Further, most departments do not monitor or report what happens to staff identified as underperforming. Monitoring outcomes for underperforming staff is essential if departments are to understand how effectively their performance management systems are supporting people to move out of underperformance or identifying alternatives for those individuals, such as changing roles.42 The Cabinet Office noted there is a balance to be struck between the time departments spend on collecting and reporting data and the time they spend on supporting managers and teams to improve performance.43 However, this is slightly at odds with the Cabinet Office’s own civil service performance management framework, which sets the expectation that departments “must track and be able to report on the progress being made with each individual” identified as underperforming.44
20Insufficient data on underperformance hinders evaluation of line manager effectiveness and departmental issues
Recommended (the committee's words)
The Cabinet Office’s approach to dealing with staff underperformance, and raising performance levels more generally, is based on improving the confidence and capability of line managers in departments. The Cabinet Office told us that as part of work to implement the Civil Service People Plan, it is setting standards that line managers will need to work towards and is providing training to support line managers.45 However, it is hard to see how performance management in the civil service can be evaluated and improved without good data on the numbers of employees moving into and out of underperformance. If underperformance numbers and outcomes are not measured, it is not clear how 37 C&AG’s Report, para 21 38 Q101 39 Qq107–109 40 Q83 41 Q79 42 C&AG’s Report, paras 4.13, 4.15 43 Q83 44 C&AG’s Report, Figure 15 45 Q81 14 Civil service workforce: Recruitment, pay and performance management departments will be able to tell if their line managers are managing underperforming staff effectively, or more broadly, whether some departments have particular issues with levels of staff underperformance. The Cabinet Office recognised that there was scope to improve reporting in this area, and said it would work with departments to understand how best to do that.46 46 Qq84, 90–93 Civil service workforce: Recruitment, pay and performance management 15
Evidence
Oral evidence sessions 1
- 5 Feb 2024Civil service workforce: Recruitment, pay and performance management4 witnesses, listed belowparliament.uk ↗
Who gave evidence 4 witnesses
- Esther WallingtonChief People Officer, HM Revenue and Customs
- Fiona RylandGovernment Chief People Officer, Cabinet Office
- Mark AdamChief People Officer, Ministry of Justice
- Sir Alex ChisholmPermanent Secretary, Cabinet Office
Correspondence 2 letters
- 26 Feb 2024Correspondence from Mark Adam, Chief People Officer, Ministry of Justice, re Civil Service Workforce: Recruitment, Pay and Performance Management, dated 19 February 2024
- 26 Feb 2024Joint correspondence from Sir Alex Chisholm, Civil Service Chief Operating Officer and Cabinet Office Permanent Secretary, and Fiona Ryland, Government Chief People Officer, Cabinet Office, re Civil Service Workforce session, dated 16 February 2024