Number 10 should focus on reforming pay and improving HR to prevent civil servants from changing jobs too frequently, argues Tom Sasse.
Rachel Wolf, who co-authored the Conservative manifesto, has written in The Telegraph that Number 10 will tackle the ‘merry-go-round’ which sees civil servants change jobs every 18 months. She argues that getting officials with more experience and expertise in post will be critical in helping the government successfully implement reforms.
This is a welcome step but implementing civil service reform isn’t easy. Government will need to gain a better understanding of its workforce, reform pay and strengthen HR if it is to succeed in tackling turnover.
Wolf is right to say that current levels of staff movement are debilitating. We published a report last year which showed that turnover in the UK civil service is much higher than in other civil services or equivalent private sector organisations.
The latest data shows turnover remains high. It has started to fall slightly at departmental level, but turnover of senior civil servants in 2018/19 increased in 10 departments compared with the previous year.
This harms Whitehall’s ability to retain knowledge, offer good advice to ministers and implement policies. As Lord Freud, welfare minister from 2010 to 2016, put it: “I sat there for six and a half years, looking at the third, fourth, fifth generation of a person doing a particular area: there is no corporate knowledge retained. That’s just a massive vulnerability.”
But these are not new problems: high turnover, limited expertise and poor institutional memory have been identified for over 50 years, and previous initiatives have struggled to tackle these problems. So how can this government succeed where others have failed?
The government should start by getting a firm grip of the problem. Rapid turnover is only really an issue in London. In other parts of the country, the civil service faces the opposite challenge: staff remain in post for too long and become unproductive due to a lack of opportunities to progress. Frequent switching is especially prevalent among officials who work on policy making and at senior levels.
There are several major structural reasons why staff are moving too quickly: there is an open internal jobs market with few controls on movement; staff have to move to get a promotion or a pay rise; and there is a culture which values those who move frequently and gain wide experience but considers staff who remain in one area to be ‘duds’. But there are also individual factors in each department, such as poor morale (often the case after mergers) or better opportunities in an adjacent organisation.
Each department should be gathering data to understand who is moving and why. But many currently don’t, several lack even basic information about the composition of their workforce, and very few conduct exit interviews. One HR director described workforce data as their department’s ‘Achilles heel’. When it comes to managing its people, Whitehall is flying blind.
Number 10’s biggest immediate challenge will be reforming pay. Civil servants can increase their pay by 10% if they switch to another team or department, but their managers can offer little incentive to stay in post and see a project through to its completion.
This system was introduced in 2010 as short-term cost saving measure – before then, most civil servants’ pay increased automatically each year, regardless of performance. The previous system was also flawed: it was expensive and created poor performance incentives.
But the current workforce model is a false economy. Staff move in order to increase their pay – and the civil service has to foot the bill in the costs of lost productivity and extra recruitment and training which follows high staff turnover.
Instead, the civil service should introduce targeted pay progression to enable those who perform well and increase their skills and capabilities to be given a pay rise. Most private and voluntary sector organisations take this approach.
This won’t be easy to implement. Government will need to develop rigorous processes for ensuring awards are seen to be fair. It may also need to look again at the civil service’s overall pay budget: pay has fallen behind inflation since 2017 and recent civil service budgets have been less generous than other parts of the public sector.
The civil service also needs a modern HR system. The world’s most profitable companies – such as the big tech companies much admired by some of the prime minister’s confidants – have taken this approach by putting the management of people at the heart of how they are run. They understand their staff’s skills, motivations and aspirations and design careers accordingly, helping staff to perform at their best.
In Whitehall, HR is too often still treated as an add-on or a compliance issue, although there are signs this is changing. Creating a much stronger role for HR will be key to developing a workforce with the right mix of specialist skills, policy knowledge and generalist capabilities; and one in which movement is driven not by individuals’ perceptions of how they can most quickly advance their career but by where the organisation needs skills and experience.
There have been multiple attempts to improve civil service skills and capabilities. In the 1960s, Lord Fulton railed against the "gifted amateur" and called rapid turnover inefficient. The Next Steps reforms of the 1980s and 1990s identified a shortage of management skills and experience. The 2012 Civil Service Reform Plan called the generalist model "dead" and envisioned a workforce with much more subject matter expertise.
Yet still the same problems persist. Our previous research showed civil service reforms have often floundered when leaders haven’t stayed in place to see them through, other priorities have diverted political attention or plans haven’t been properly thought out.
Ambitious new governments always want to embark on major policy reforms – some also understand they need the machinery that can deliver them. This one is no different – and in staff turnover and expertise it has identified a key issue. But if it wants lasting civil service reform, it will need sustained focus from the top.
Note: Final data from the Cabinet Office has not yet been released.