Employee churn costs the civil service £73m per year

16 Jan 2019 By Jonathan Owen

IfG calls for more strategic role for HR as analysis of government statistics shows turnover rates of up to 25 per cent

The workforce model of the civil service is broken, with extreme levels of churn costing the country up to £74 million each year in recruitment, training and lost productivity, the Institute for Government (IfG) has warned.

Whitehall departments are fighting among themselves in a “war for talent” when it comes to recruiting staff, according to a report – Moving On: The Costs of High Staff Turnover in the Civil Service – released by the IfG today.

It reveals how excessive levels of turnover are being caused by an open internal jobs market in Whitehall, a long-standing pay freeze and “a culture which values those who move quickly above those who develop expertise and see through projects”.

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The IfG called for HR departments to take a more strategic role that addressed issues such as long-term staffing needs and retention, and said every government department “should appoint its HR director to its board, to ensure HR has sufficient capability and a voice at the top table so that it can play a key role in the running of the department”.

The report analysed the latest data from the Cabinet Office (CO) and the Office for National Statistics, which showed the CO had the highest level of turnover in Whitehall, losing more than a quarter of its staff each year.

Seven other departments lose more than one in seven staff annually. These include the Department for Business Energy and Industrial Strategy, the Department for Health and Social Care, the Department for Digital, Culture, Media and Sport, the Department for Exiting the European Union, Department for International Trade, HM Treasury and Ministry of Housing, Communities and Local Government.

The lowest churn was at the Department for International Development, at around five per cent.

The rate at which civil servants are changing jobs was “harming productivity, undermining good policy advice and disrupting major projects”, the report said, and the problem extends to senior civil servants, who stay less than two years in post on average. In contrast, chief executives in the private sector remain in their roles for almost five years.

High levels of turnover were “the product of a workforce model that is not working,” claimed the report, and the “debilitating” rate of churn was being exacerbated by the demands of Brexit. “While staff have had to be moved to work on Brexit, some are using the new roles as a promotion opportunity before moving on quickly,” it said.

The civil service employs 430,000 staff, making it Britain’s second largest employer after the NHS.

Previous attempts to stem the tide of civil servants leaving their jobs have failed to address the problem and a more radical approach is needed, the report argued. It said the current workforce model was “unfit for the challenges the civil service faces” and should be replaced by a “system which values specialists as well as generalists; and rewards those who stay in post, build experience and see through projects, as well as those who move through a wide range of roles”.

The report also called for targeted pay progression throughout the civil service by 2021, enabling people to increase their pay while staying in post, and said permanent secretaries should be made accountable for reducing turnover.

Tom Sasse, senior researcher at the IfG and co-author of the report, said: “When multibillion pound projects can cycle through project directors with dizzying speed and whole policy teams turn over almost entirely in just a couple of years, the workforce model is clearly broken.”

Responding to the report’s findings, Dave Penman, general secretary of civil service union the FDA, said: “Fundamental reform of how pay systems operate, both in departmental bargaining and for the senior civil service, is long overdue, having been stuck in the ministerial ‘too difficult’ tray for over a decade.”

A Cabinet Office spokesperson said: “Figures show that more than half of civil servants feel a strong personal attachment to the department in which they work, but there is always more to do to support our workforce.

“That is why we are developing measures to address turnover when it is higher than expected, including introducing pay and career development incentives.”

Responding to concerns over the impact of Brexit on staff retention, they added: “The Brexit negotiations are a priority for the government and we will continue to deploy staff with specific expertise, from across government, to achieve the best result."

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