Audit of Human Resources Planning

Global Affairs Canada
Office of the Chief Audit Executive

October 2017

Executive summary

In accordance with Global Affairs Canada’s 2016-2019 Risk-Based Audit Plan, the Office of the Chief Audit Executive conducted the Audit of Human Resources Planning. The objective of this audit was to provide assurance to senior management that Global Affairs Canada has an effective management framework in place to develop and implement integrated human resources plans with the aim of achieving operational objectives and strategic outcomes. It is important to note that, organizational changes were communicated in July 2017 and the Assistant Deputy Minister, Human Resources, became responsible for the Locally Engaged Staff Bureau. This change is important as these two workforces have very different approaches to HR planning in terms of planning cycles, approvals and systems due to separate legislation. Audit recommendations were adjusted to reflect these changes.

Rationale for this audit

The Preliminary Survey of Human Resources (HR) Management and Administration of Canada Based Staff (CBS) performed by the Office of the Chief Audit Executive in 2015-2016 reported that departmental officials indicated their HR Plan should include subjects such as training, succession planning, and future orientation (Blueprint 2020). They also stated that the referenced 2015-16 HR Plan which was part of the Integrated Corporate Business Plan (ICBP) was not strategic and added little value to their organization.

What was examined?

The audit team examined the management framework supporting the annual HR planning exercise from the collection of HR information to its integration in the ICBP. The audit examined the 2017-18 Global Affairs Canada Corporate HR Plan which applies to CBS and accounts for 55% (6,252 out of 11,269) of the Department’s workforce; and the 2016-17 International Platform Branch Report on Locally Engaged Staff (LES) HR Planning which applies to LES and accounts for  45% (5,017 out of 11,269) of the Department’s workforce.

What was found?

While the regulatory requirement for reporting HR Plan to Treasury Board Secretariat (TBS) only applies to CBS, the Department does not have one HR planning process integrating CBS and LES. The Department has two adequate governance structures for CBS and LES. However, the governance structure for LES was not followed.

The business process for CBS HR planning is adequate though it does not identify possible skills shortages or measure progress. The business process for LES HR planning lacks an adequate system of HR information collection and a specific HR planning tool.

CBS and LES HR plans do not contain performance measures. Monitoring and reporting on planned HR activities have not taken place.

Conclusion

Global Affairs Canada has a management framework in place for developing and implementing integrated HR plans with the aim of achieving operational objectives and strategic outcomes. This framework requires some improvements in order to be fully integrated and to report on actual performance against HR plans.

Statement of conformance

In my professional judgment as Chief Audit Executive, this audit was conducted in conformance with the Treasury Board Policy and Directive on Internal Audit, as supported by the results of the quality assurance and improvement program. Sufficient and appropriate audit procedures were conducted, and evidence gathered, to support the accuracy of the findings and conclusion in this report, and to provide an audit level of assurance. The findings and conclusion are based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria that were agreed upon with management and are only applicable to the entity examined and for the scope and time period covered by the audit.

Brahim Achtoutal
Chief Audit Executive

1. Background

The Treasury Board of Canada Secretariat (TBS) defines human resources planning as a process that identifies current and future needs to achieve the organization's goals. As such, human resources (HR) planning should be linked to managing those resources and the organization's overall strategic and operational plans. In 2007, TBS developed a planning process for integrating human resources plans with the business planning process.

The Integrated Planning Handbook for Deputy Ministers and Senior Managers states that the legislative base for human resources planning is in the Financial Administration Act 11.1 (1)(a). As well, the Public Service Employment Act (Preamble and Section 30 (2b and 3)) contains potential uses for human resources planning. In addition, as a part of public service renewal, the Clerk of the Privy Council directed federal departments and agencies to improve human resources planning as part of integrated business planning.

A common understanding of “integration” is essential to ensure a seamless and comprehensive planning process. As per the Integrated Planning Handbook for Deputy Ministers and Senior Managers, integrating HR and business “aligns an organization’s workforce with the government’s priorities, and the organization’s mission, strategic plan and budgetary resources”. Furthermore, the Common Human Resources Business Process for CBS states that HR Planning “runs parallel to broader integrated planning activities and contains several checkpoints to ensure alignment with broader organizational planning”. In other words, as per federal guidance, the essence of the term integration is not limited to inclusion.

Global Affairs Canada seeks to further Canadian interests and values in an increasingly interconnected and complex world. Being agile and quick to innovate and deliver better results is fundamental to its mission, and its greatest asset in achieving this mission is its people. To this end it must ensure that proper workforce planning, and human resources risk management practices are in place and that it embraces the Blueprint 2020 vision as a means to help create a productive and respectful workplace in which employees can see the importance and impact of their contributions.

As at March 2017, Global Affairs Canada manages a workforce of 11,269 employees distributed^{Footnote 1} in three categories: 1) Non-Pooled (non-rotational) Canada Based Staff (CBS); 2) Pooled (rotational and mobile) CBS; and, 3) Locally Engaged Staff (LES).

• The Non-Pooled (non-rotational) annual operational HR planning process has been in place for several years and HR needs are compiled using an HR Planning Worksheet. There are 3,318 non-rotational CBS, which represents 29% of the departmental workforce.
• There are two divisions within the Human Resources Branch (HCM) responsible for managing rotational and mobile CBS. They manage the annual assignment process for rotational and mobile CBS and ADM’ decisions for the EX group. Even though branches other than HCM manage rotational^{Footnote 2} and mobile^{Footnote 3} CBS’ salary budgets, these two divisions are responsible for managing and submitting HR needs in the HR Planning Worksheet. There are 2,934 rotational and mobile CBS, which represents 26% of the departmental workforce.
• Heads of Mission (HOMs) conduct their annual operational HR planning process by submitting their LES HR needs through Stategia. There are 5,017 LES which represents 45% of the departmental workforce and those include 1,249 employees whose salaries are cost-recovered from partners and co-locators to which these LES provide services.

For the period 2016-17, HCM Branch was composed of 319 full time equivalent positions and provided HR support to 6,252 CBS with a salary and operating costs envelope of $51,554,494. The Locally Engaged Staff Services Bureau (ALD) Branch Directorate was composed of 34 full time equivalent positions and provided HR support to the 5,017 LES with a salary envelope of $4,236,680.

Before 2016-17, the HR Plan for CBS was limited to a section in the Integrated Corporate Business Plan (ICBP). In 2017-18, HCM developed a Corporate HR Plan for CBS as a stand-alone document and provided HR strategies for inclusion in the ICBP.

While the International Platform Branch (ACM) produced an HR Plan for LES in 2016-17, there was no such plan for 2017-18. The Locally Engaged Staff Employment Regulations delegates the Deputy Minister of Foreign Affairs with a number of authorities, functions and duties related to human resources, and delegated authority must be exercised in a manner which is consistent with the objectives and values of the organization. Note there is no regulatory requirement to produce an HR plan to TBS for LES.

In July 2017, organizational changes were communicated making the ADM HCM responsible for ALD^{Footnote 4}. Management indicated that Global Affairs Canada is working towards producing a 2018-19 Corporate HR Plan includes CBS and incorporates LES. 

2. Audit objective and scope

The objective of the audit is to provide assurance to senior management that Global Affairs Canada has an effective management framework in place to develop and implement integrated human resources plans with the aim of achieving operational objectives and strategic outcomes.

The audit focussed on the 2017-18 Corporate Human Resources Plan (CBS) and the 2016-17 Report on Locally-Engaged Staff Human Resources Plan (LES). The audit criteria are outlined in Appendix A.

3. Observations

This section sets out key findings and observations, divided into four general themes: integration; governance; business process; and monitoring and reporting.

3.1 Integration of the HR plan

When HCM launched the 2017-18 CBS HR planning exercise, it provided the following information to HR planners:

• HR management is integrated into work plans as an integral part of meeting business objectives: e.g. feeder groups can be developed (talent management, performance management, competency-based approach) to fill key positions before they become vacant thus ensuring a continuity of service and career development.
• Strategies in HR are developed in partnership with managers and are integrated taking into account advice from all other HR disciplines, enabling managers to meet accountabilities: e.g. managers can ensure that their plans address the complexities and interdependencies of HR issues by partnering with integrated teams of HR experts.

An HR Strategic Plan integrates both organizational and HR elements. The organizational elements need to be aligned with the HR elements. The HR plan also addresses the key success factors and organizational enablers that are required to support and sustain initiatives in the long run. The HR plan defines what needs to happen within the Department to ensure a positive impact on the effectiveness of people and the organization as a whole. This broad approach serves as a framework to guide the Department in the long term.

The audit team expected that the CBS 2017-18 Corporate HR Plan and the 2016-17 LES HR Planning Report would be adequately integrated with corporate priorities and, that the level of human resources effort required would be allocated to planned activities.

2017-18 CBS corporate HR plan

The audit team found that the 2017-18 CBS Corporate HR Plan is adequately integrated with corporate priorities. However, the level of effort in terms of human resources and timelines is not defined for planned HR activities. Management indicated that the approval of business priorities, funding and resources does not always align with the HR planning cycle and these are not under HCM’s exclusive control. 

The audit team found that HCM sets priority actions to meet HR objectives in its Corporate HR Plan. Priorities are clearly identified with their respective expected outcomes, action plan, and progress to date. The audit team noted that the Corporate HR Plan identifies HR risks from the Corporate Risk Profile exercise and that the Executive Board (ExBo) validated the top three external and top three internal risks. However, the Corporate HR Plan does not associate the level of effort with actions identified on the plan. For example, two priorities deal with the implementation of the Competency-Based Approach with expected outcomes in recruitment and in the development of training plan from the Canadian Foreign Service Institute. Neither action plan presents the level of effort and timelines required to achieve expected outcomes. As a result, it makes it difficult to measure whether expected outcomes were achieved. Defining levels of effort and timelines would allow for better monitoring of and reporting on results achieved.

2016-17 LES HR planning report

LES are subject to the Locally Engaged Staff Employment Regulation, under which HR plans are not specifically required. Although not required, as a best practice, ALD produced an HR planning document entitled 2016-2017 Report on Locally-Engaged Staff (LES) Human Resources Planning. The audit team assessed this document and found it was not integrated with corporate priorities and did not define the level of effort in terms of human resources and timelines to realize planned LES HR activities.

HOMs are responsible to plan for LES and to identify needs in their mission using Strategia. Strategia is Global Affairs Canada’s planning and reporting tool for missions abroad. It is a tool that aligns resource requirements to departmental objectives and outcomes. The result is a high level compilation of requirements by mission. The HR report for LES discussed risks, issues, and challenges linked to these requirements and listed some actions to address them. This report listed actions rather than HR strategies and the audit team noted that expected outcomes were absent. For example, it is not clear how actions would have addressed the recruitment challenges. Meanwhile, the actions proposed to address the performance management challenges are more complete and comprehensive. However, the report did not associate the human resources level of effort and timelines required to deliver on the list of actions. As a result, it makes it difficult to measure whether expected outcomes were achieved.

As it is not a regulatory requirement, ACM did not produce an HR Plan for LES in 2017-18, only a demographic report was prepared. The 2017-18 ICBP introduced major initiatives for modernizing and enhancing LES human resources management. However, the ICBP did not associate the human resource level of effort and timelines required for delivering on the following initiatives:

• Renewing and modernizing the LES regulatory framework in partnership with the Public Service Commission;
• Global reviews of Pensions and Insurance;
• Updating Total Compensation and Review methodology and capacity;
• Classification reform and introducing new generic work descriptions, benchmark positions and related compensation determination; and,
• Expanding the use of e-Recruitment software and re-launching the LES Global Pay solution.

The level of effort and timelines related to these initiatives cannot be underestimated as some of them have been going on for several years. In light of future harmonization between CBS and LES HR business processes, the absence of indicators on the level of effort and timelines to implement these harmonization initiatives makes it difficult to assess if HR plans are properly integrated with corporate objectives.

Recommendation 1:

Global Affairs Canada’s Assistant Deputy Minister (ADM) of Human Resources (HCM) should integrate the human resources planning processes for Canada Based Staff (CBS) and Locally Engaged Staff (LES) in order to ensure overall HR plans meet corporate priorities.

Recommendation 2:

The ADM of Human Resources (HCM) should ensure the level of effort and timelines required to deliver on planned HR activities are defined in the HR Plan.

3.2 Governance of the HR Planning Process

3.2.1 Governance

The audit team expected to find a governance structure in place to approve and oversee the integrated HR and business planning processes.

The audit team found that Global Affairs Canada has elements of governance for both CBS and LES. However, as the CBS and LES HR planning processes are not integrated, these HR plans are not approved by a single oversight body to ensure corporate HR plans are aligned with corporate objectives and priorities. Further, while the Department adequately adheres to its governance structure for the CBS Corporate HR planning function, the Department does not adhere to its current governance structure for LES HR planning.

2017-18 CBS Corporate HR plan

For CBS, elements of governance include: the ADM of HCM; the Corporate HR Workforce Planning and HRMS (HSEC); Branch Planners; the Business Management Offices (BMOs); Financial Management advisors; and, classification and staffing advisors. The Corporate HR Plan is approved by the ADM of HCM after consultation with HCM Directors General. Though the plans are available through the intranet, they are not currently required to be presented nor approved by a senior oversight committee.

LES HR planning report

The ADM of ACM approved the 2016-17 LES HR Planning Report. The mandate of the LES Governance Committee (LESGC) is to provide strategic direction and oversight for broad human resources issues concerning LES in Canadian missions.  The 2016-17 LES HR Planning Report was not developed in consultation with or provided to the LESGC. As a result, this committee did not have the opportunity to provide strategic direction and to play its oversight role.

The absence of a senior oversight committee increases the risk that HR plans will not meet or achieve overall Departmental priorities.

3.2.2 Roles and responsibilities

The audit team expected that roles and responsibilities for HR planning would be delineated and communicated.

The audit team found that the roles and responsibilities are delineated and communicated. Appendix B illustrates the roles and responsibilities of the main stakeholders involved in the HR planning exercise based on regulations. HR needs for CBS and LES are compiled respectively by HCM and ACM with guidance from HR advisors during this planning exercise. Global Affairs Canada’s HCM has a corporate role to enable managers to meet their accountabilities when they take classification and staffing decisions during the HR planning exercise.

2017-18 CBS corporate HR plan

Managers are accountable and responsible to determine their resourcing needs. BMOs are responsible to lead the HR planning exercise and provide guidance to directors general and directors to ensure efficient and appropriate management of financial, human and material resources. ADMs challenge and approve HR needs submitted during the planning exercise.

LES HR planning report

In consultation with the programs, HOMs compile their HR needs and identify them in Strategia. HR needs for the personnel establishment are first reviewed by the Committee on Representation Abroad (CORA)^{Footnote 5} and then by ADMs who have programs. While the Common Service Delivery Points (CSDP) carry out staffing actions for missions that use them and provide some HR advice, they do not carry out classification actions. There is no specific challenge function for HR planning of LES neither to enable HOMs nor to provide an overall picture of HR needs by region or area for example.

Recommendation 3:

The ADM of Human Resources (HCM) should review the governance structure for HR planning to include a senior oversight body that would ensure the departmental HR plans are aligned to corporate objectives and priorities

3.3 HR planning business process

The audit team expected that the HR planning process in place would be adequate and supported by tools and guidance.

2017-18 CBS corporate HR plan

The audit team found that the 2017-18 Corporate HR Plan and overall HR planning processes adequately reflect the requirements set out in the TBS Five Essential Steps to Human Resources Planning presented in Annex C, except for the identification of possible skills shortages and for the measurement of progress.

The audit team observed that sufficient guidance and tools were provided to CBS HR planners to allow for appropriate plan of human resources. HCM provided instructions on how to complete the 2017-18 HR Planning Template and related worksheets; an overview of the process; further direction on the monitoring section of the worksheet; expected outcome of the HR planning exercise; and further information to managers as well as a lessons learned provided to governance committees.

The HR Planning Worksheet is the amalgamation of all Branch HR Planning worksheets, completed during the annual HR Planning exercise. HR needs identified in the Branch Business Plans were directly linked to the HR Planning Worksheet. The audit team found that lessons learned sessions are being held following the completion of the HR planning exercise to gather comments, which are used to improve the following year’s process. 

LES HR planning report

The audit team found that the 2016-17 HR Planning report for LES does not adequately reflect the requirements set out by TBS, more so in reviewing their business goals, identifying the gaps and measuring progress. Although the LES are not subject to the requirements set by TBS, those who prepared the report used TBS basic principles.

The LES planning exercise is not strategic; it is a compilation of HOMs’ needs in consultation with the programs, which is identified in Strategia. As a result, this compilation of HR needs by HOMs provides a mission-specific vision and does not provide adequate corporate oversight to develop an overall HR plan. In addition, no evidence of post-planning lessons learned sessions for the LES HR Plan was found. As a result, the Department misses an opportunity to identify gaps and improve subsequent LES planning process cycle.

3.4 Monitoring and reporting

The audit team expected that actual performance would be monitored against planned results; HR plans be adjusted as needed; and, senior management be informed on the results of monitoring.

An important purpose of an integrated human resources planning process is to develop an effective HR plan that management will use to assist in decision-making. In order to support HR planning decisions, senior management needs workforce information that is timely, complete and accurate. Monitoring the results of HR performance is an essential part of evaluating the progress achieved in priority areas as well as allowing the Department to improve its overall performance. This assessment assists decision makers with an opportunity to re-adjust HR strategies and/or plans over time allowing senior management to be more agile in a resource reallocation context. A key element of monitoring is the establishment of clear objectives and targets that are specific, measurable, attainable and time-oriented.

The audit team found that, overall, departmental performance measures were not established as part of the 2017-18 ICBP, the 2017-18 CBS Corporate HR Plan and the 2016-17 LES HR Planning Report. Further, analysis of 2015-16, 2016-17 and 2017-18 reports on HR information indicates that, in general, the Department did not report if previous planned objectives were met. The absence of performance indicators, such as the human resources level of effort required to implement a list of activities with appropriate timelines, impedes a meaningful monitoring of and reporting on progress. As a result, senior management did not receive information to assess the development and implementation of HR plans in order to adjust them when necessary.

2017-18 CBS corporate HR plan

As part of the on-going process of submitting HR action requests throughout the year, BMOs and hiring managers do not systematically use or refer to the HR Planning Worksheet to review if the request was part of the HR plan. As a result, it is difficult to validate if unplanned HR actions were necessary to achieve the Department’s objectives.

In June 2017, HCM reported the rates of CBS actual staffing and classification actions compared to the 2016-17 HR Planning Worksheet to the Corporate Management Committee (CMC). An extract of the results is presented in Table 1 below.

As shown in Table 1 above, 42% of staffing decisions and 24% of classification decisions were included in the CBS 2016-17 HR plan. HCM did not provide CMC with an analysis of the reasons for these significant gaps between actual and planned HR actions. They did provide a briefing a few weeks later committing to a mid-year review and a dashboard to track and update progress. BMOs and HCM stated that these gaps could be explained by the fact that hiring managers may not have forecasted their needs adequately; there may have been higher than expected employee turnover, and departmental priorities may have shifted during the year having an important impact on assignments. In addition, there may have been resourcing constraints to complete staffing and particularly, classification transactions during the period as HCM carried a number of vacancies in this area in the same time period.

Currently, there is no data collected to analyse the justification neither for requesting unplanned HR actions nor for not going forward with planned ones. Such data could provide valuable information allowing HCM to refine future HR planning exercises.

LES HR planning report

The 2016-17 LES HR Planning Report stated 333 anticipated staffing actions in 2015-16 for an actual of 1,254 staffing actions. HR requirements may trigger more than one HR action. As the LES HR plan is a compilation of HR needs in Strategia, it will not reflect all HR actions that will be performed throughout the year. Strategia inputs can be ad-hoc and the tool’s reporting functionalities are not designed for this specific purpose.

Recommendation 4:

The ADM of Human Resources (HCM) should ensure future corporate HR plans include key human resources performance indicators in order to monitor actual performance against planned results, adjust as required, and report to senior management accordingly.

4. Conclusion

In conclusion, Global Affairs Canada has a management framework in place to develop and implement integrated human resources plans with the aim of achieving operational objectives and strategic outcomes. However, some improvements are required, specifically:

• The Department does not have one HR planning process integrating CBS and LES and has two governance structures for CBS and LES. Therefore a risk remains that HR plans may not be fully aligned to corporate objectives and priorities.
• The annual human resources planning process is supported by tools and guidance. The exercise for the collection of HR information on CBS needs slight improvement. For LES, an adequate system of HR information collection needs to be set up to ensure completeness of HR information. A risk remains that decisions on HR planning may be based on incomplete information that could impact departmental performance against its corporate objectives.
• CBS and LES HR plans do not include performance measures to mitigate the risk that senior management may not have sufficient information to assess HR plans. Monitoring of and reporting on actual performance against HR plans require improvement.

Appendix A: About the audit

Objectives, criteria, scope and methodology of the audit

Objectives and criteria

The objective of the audit is to provide assurance to senior management that Global Affairs Canada has an effective management framework in place to develop and implement integrated human resources plans with the aim of achieving operational objectives and strategic outcomes.

The following criteria were derived from the risks identified above.

Scope

The audit examined Global Affairs Canada’s human resources planning process for fiscal year 2016-17 and 2017-18. Specifically, it examined governance, strategic direction, tools and guidance, planning methodology, integration and monitoring. The audit addressed HR Planning for all categories of staff, which includes CBS (rotational, mobile, non-rotational and EX) and LES.

Methodology

The audit was conducted in accordance with the Government of Canada Policy and Directive on Internal Audit.  As such, the audit was planned and performed in such a way as to obtain reasonable assurance that the audit objective is achieved. 

In order to conclude on the audit objectives, the following methods were used to gather evidence:

• Identify and review relevant policies, directives, and guidelines;
• Review and analyze relevant documents related to operations;
• Data analysis;
• Interviews with departmental officials;
• Walkthroughs of processes and systems, and identification of key controls;
• Samples were selected for testing;
• Financial and non-financial information were analyzed;
• Other relevant methods as deemed necessary by the audit team; and,
• Use of evidence already gathered through the previous Preliminary Survey Report on HR Administrative Processes and other departmental audits.

Appendix B: Table of roles and responsibilities - Human resources planning

Appendix C: TBS five essential steps to human resources planning

Human resources planning is the process of identifying current and future human resources needs. It involves securing the right people, building a supportive work environment and developing the capacity to ensure the organization’s success and a confident future for the Public Service.

Appendix D: Management action plan

Appendix E: Acronyms

ACM

International Platform Branch

ADM

Assistant Deputy Minister

AID

Chief Information Officer (now SID)

ALD

Locally Engaged Staff Services Bureau

AMA

Area Management Advisors

ARAK

Property Program

ARD

Physical Resources

BMO

Business Management Offices

CBS

Canada Based Staff

CFP

Canadian Foreign Policy

CMC

Corporate Management Committee

CORA

Committee on Representation Abroad

CSDP

Common Service Delivery Point

ExBo

Executive Board

HAM

Office of the Area Management Advisor – Human Resources, DFAIT

HCM

Human Resources Branch 

HFE

Assignments and Executive Management

HFP

Assignment and Pool Management

HOM

Heads of Mission

HR

Human Resources

HSEC

Corporate HR Workforce Planning and HRMS

HSOS

Human Resources Organizations and Operations

ICBP

Integrated Corporate Business Plan

ISD

Security and Intelligence Bureau

LES

Locally Engaged Staff

OCAE/VBD

Office of the Chief Audit Executive

PRP

Intergovernmental Relations Division

TBS

Treasury Board Secretariat

USS

Deputy Minister