Fifteenth Annual Report to the Prime Minister on the Public Service of Canada

Table of Contents

I. Introduction

II. Why Public Service Renewal Matters

III. The Framework for Public Service Renewal

IV. Progress on Public Service Renewal During 2007-08

V. Focus of Renewal Efforts for 2008-09 and Beyond

VI. Conclusion

Annex 1: A Demographic Picture of the Federal Public Service

Annex 2: Progress on Public Service Renewal Since the 2007 Report

Annex 3: Second Report of the Prime Minister’s Advisory Committee on the Public Service

I. Introduction

This is the fifteenth report by the Clerk of the Privy Council to the Prime Minister on the Public Service of Canada, and the third since I became Clerk of the Privy Council and Head of the Public Service in March 2006.

In my first two reports, I spoke of my personal commitment to the federal public service and my belief in its fundamental importance to Canada and Canadians. The opportunity to serve our fellow citizens, to try to make a difference to our country, is what has long attracted Canadians to public service.

To continue to attract and retain such Canadians in the Public Service of Canada, and to provide high quality public services and policy advice in the years to come, is why public service renewal is so important to all of us, both public servants and the Canadian public.

Purpose of This Report

In last year’s report I set out what I saw as the future direction of the federal public service, and the priorities for public service renewal. This report reaffirms the necessity of renewal, reports on our progress, and looks forward to where we need to focus over the coming year and beyond.

Renewal is not about fixing something for all time but updating what we do and how we do it in order to remain relevant and effective now and into the future. It is about keeping the institution of the public service dynamic, fresh and respected. And renewal is not something others do; the impetus for renewal has to come from within, and it has to involve all of us.

Last year, underscoring the importance of renewal, the Fourteenth Report said:

…if the Public Service, as a core national institution, does not renew itself for the future as well as current service to the government and people of Canada, it risks becoming less relevant, less useful and less respected as the years go by. If we do not commit ourselves to a continuing process of renewal, the Public Service will not remain a creative national institution, central to the governance and development of our country.

The reaction to the challenge of renewal from across the public service over the past year is very encouraging. The Deputy Ministers Committee on Renewal is focusing senior-level attention on priorities for renewal. As well, from departmental management groups, to Federal Councils and networks of functional communities and youth, to individual public servants, awareness is rapidly rising, and progress is being made. This reflects a real team effort.

Renewal in the public service has benefited greatly from the work of the Prime Minister’s Advisory Committee on the Public Service, which released its second report in February 2008, and the Advisory Committee on Senior Level Retention and Compensation, which delivered its ninth report in January 2008. I am very appreciative of the time and commitment of the distinguished Canadians who serve on these Committees.

Structure of This Report

This report has six sections and three annexes.

Following this introduction, Section II elaborates on why renewal matters, and the factors driving renewal. Section III sets out the framework for renewal, organized into four priority areas.

Section IV summarizes the progress we have made over the past year in regard to the action plan to which Deputy Ministers committed following last year’s report. It also highlights some examples of innovative departmental initiatives.

Section V looks forward to 2008-09 and beyond, including our response to the second report of the Prime Minister’s Advisory Committee. It is followed by a brief concluding section.

Finally, the three annexes contain a demographic profile of the public service over the last 25 years, a detailed progress report on 2007-08 renewal commitments, and the Second Report of the Prime Minister’s Advisory Committee on the Public Service.

II. Why Public Service Renewal Matters

Throughout my career I have made a practice of meeting across the country with leaders from all sectors of our economy and society. While they have never hesitated to share their criticisms of government, including the public service, I have been struck always by their recognition of the importance of a top-notch public service to Canada’s success as a country.

International research certainly supports this view, most recently expressed by the OECD [Organization for Economic Cooperation and Development], that “good, effective government is crucial to a well-functioning economy and society.” And distinguished journalists and commentators such as Thomas Friedman have also echoed this view: “One of the most important and enduring competitive advantages that a country can have today is a lean, efficient, honest civil service.” A professional, competent, and non-partisan public service has been, and must remain, part of the Canadian advantage.

Renewal is about making sure that the federal public service preserves and strengthens its capacity to contribute to Canada’s successes through the delivery of excellent public services and policy advice. We face two key challenges in this regard: first, an aging workforce nearing retirement in substantial numbers, especially at the senior levels; and second, the increasing complexity of the issues affecting Canada and its place in the world.

The Prime Minister’s Advisory Committee neatly captured the challenges we face: “The world in which the federal Public Service operates has become more complex and …unpredictable….This new environment is characterized by an aging population, a globalized economic landscape, ever-changing information and communications technologies, the emergence of new horizontal issues, and changing public attitudes to government.” To continue to serve Canadians with excellence in the 21st century will require new approaches, new thinking and a new generation of public service leaders.

The Demographic Imperative

The federal public service is facing major demographic pressures. While the core public service of today is the same size as it was in 1983, we have aged considerably.

Today, 66% of the public service is over 40 years of age compared to 42% in 1983 (see Figure 1). Moreover, more than one-quarter of the public service population will be eligible to retire without penalty by 2012, and almost half of our current executives will be eligible to retire in the same time frame. While actual retirements usually lag eligibility by a few years, we are clearly facing major staff turnover.

In Annex 1, a detailed perspective is provided on the demography of the public service and its executives over the 25-year period from the early 1980s to today. This sets out a comprehensive picture of important trends in the Public Service of Canada.

Managing renewal must take account of three key demographic factors. First, the public service is competing for talent in the strongest national labour market in 35 years. There are many other organizations, from businesses to universities to non-governmental organizations that are actively competing to recruit Canada’s top university and community college graduates. At the same time, the information revolution and new areas for government involvement have combined to increase government demands for knowledge workers. Second, as the demographic profile indicates, Canada is becoming more diverse and the public service needs to make additional efforts to reflect this growing diversity. Third, the low level of recruitment during the 1990s means that we have a largely missing generation of future leaders, and hence we will be managing a transition to a considerably younger and less experienced generation of managers and leaders.

The Dynamic Imperative: The Only Constant is Change

Each generation of public servants has been stretched to meet new demands dictated by the circumstances of the times. Figure 2 portrays the size of the federal public service relative to the Canadian population as these have evolved over the past century. From this perspective, size is an indicator, albeit imperfect, of the waves of change in the public service resulting from wars, the growth of social programs, organizational restructuring, and the impact of deficits and surpluses.

In a February speech to public servants in Vancouver, I underscored this dynamic: “The reality is that the Public Service of today is Canada’s largest, most complex institution, with over 250,000 employees, more ‘lines of business’ than any Canadian private sector organization, more ‘points of service,’ both nationally and internationally, and ongoing pressures to revamp our ‘product lines’ in response to demands of a changing world.”

The public service of 2008 is not the same public service I joined in 1976–consider, for example, the progress toward greater gender balance in senior management (fewer than 5% of executives in 1983 were women, compared to 40% today), the much more diverse workforce, a sharper focus on service standards, and much greater public accountability to name a few changes.

But the public service needs to adapt more readily to change. We deliver services to citizens and advice to government. Citizens expect timely, efficient and fair access to information and services, as well as good value for money spent. The government seeks policy advice that is objective, imaginative and well-informed. While this is not new, what have been changing are the circumstances. Citizens want the public service to meet or exceed standards of accessibility, speed and quality prevalent in the best parts of the private sector. Policy makers see the increasing complexity, interconnectedness and global nature of issues, and expect us to be ahead of the pack, not just average. Parliamentarians and the public want greater transparency and accountability.

And expectations for the public service matter. Like any large organization, the public service cannot be error free. Over the years, we have shifted from a culture of risk management to a restrictive “web of rules,” which impedes our effectiveness and piles up checks and hurdles out of all proportion to the risks they are aimed to prevent. Finding the right balance is crucial.

III. The Framework for Public Service Renewal

In last year’s Report, four broad priority areas for renewal were identified. These were planning, recruitment, employee development and enabling infrastructure.

Planning

The foundation for shaping the public service workforce we need is a clear understanding of what skills and knowledge are needed to meet departments’ business objectives, both now and into the future. Business planning and human resource planning have to go hand in hand. Without this, recruitment and employee development will be largely ad hoc and short term.

As an example of the importance of integrated planning, over the past 25 years there has been a striking shift in the occupational makeup of the public service toward more “knowledge intensive” work. Indeed, as Figures 3A and B indicate, computer specialists are now five times more numerous than in 1983 and economists three times. Conversely, clerical positions have declined from about 24% to 14% of the public service and there are 95% fewer secretarial workers. However, business and human resource planning in the public service has tended to lag rather than shape these changes.

Recruitment

Recruiting the best possible talent to the public service is indispensable to our long-term capacity to serve Canadians with excellence. Between replacing retirees and responding to increased demands in such areas as security and health, we have been recruiting between 12,000 and 15,000 new employees per year since 2000.

To attract Canada’s best to the public service we need to restructure our approaches to recruitment. There has to be more emphasis on direct hiring by departments, especially of recent post-secondary graduates, into indeterminate positions. Our interaction with prospective employees has to change by making our processes faster and better, and deploying senior officials on university and college campuses to explain what we do and why it matters. And, we need to cast a wider recruitment net, ensuring that our hiring reflects the diversity that is Canada.

Employee Development

The development of public servants as leaders, managers, professionals and empowered employees is central to a high performance institution. This demands targeted investments by the Public Service of Canada, as well as the personal commitment of employees. Such development must occur in the context of careful attention to assessing performance, and managing talent.

Our performance in coming years will depend hugely on the skills, knowledge, seasoning and judgment of our employees, and on how well they grow as leaders and knowledge workers. We need to intensify our attention to employee development.

Enabling Infrastructure

Management in the public service is hampered by a weak enabling infrastructure—neither our tools nor our systems are efficient, let alone best-in-class.

Correcting this deficiency will take some years, and significant effort. We need to improve the governance of human resources, simplify reporting, and make sure that the basics in areas like staffing and information systems work much better.

IV. Progress on Public Service Renewal During 2007‑08

Consistent with this framework for renewal, and after extensive consultations with the Deputy Minister community, 14 specific renewal commitments were established for 2007‑08. Setting measurable objectives and monitoring progress are essential elements of our approach to renewal.

The commitments for last year are listed in detail in Annex 2, along with the results achieved on each. Below is a summary of our progress.

With respect to Planning, Deputy Ministers committed to prepare plans that integrate their human resources requirements with their business objectives and financial realities.

• 35 Deputy Ministers (out of 36 covered by these commitments) reported having such integrated plans in place, as well as distributing them to their employees and putting them on their website, or have undertaken to do so by the end of March 2008.

For Recruitment, we set a goal of 3,000 for direct indeterminate hiring of recent post-secondary graduates, as well as specific targets for hiring within the human resources, information services and financial communities.

• As of March 2008, at least 4,000 recent post-secondary graduates have been recruited or given offers for an indeterminate appointment in the public service. I am pleased by the increased personal involvement of senior public servants in recruitment. However, some specific recruitment targets for functional specialties have slipped a bit.

With respect to Employee Development, the focus was on instilling the practice of employees and their supervisors agreeing on learning plans, on creating talent management plans, on providing top level leadership development, and on strengthening performance management.

• 30 of 36 Deputy Ministers have indicated that at least 90% of their employees will have learning plans in place by March 2008.

• Talent management plans for over 300 Assistant Deputy Ministers or equivalents were completed by March 2008.

• The Advanced Leadership Program for promising leaders was launched in October 2007, with 25 participants.

• Performance management assessments for Deputy Ministers and Associates were dramatically overhauled over the past year, and the Advisory Committee on the Public Service views them as among best-in-class.

For Enabling Infrastructure, progresshas been slower. We set several modest targets relating to the speeding up of access to second language testing, transfer of employee records, greater use of generic job descriptions, and lighter reporting demands on departments.

• The Public Service Commission has exceeded the goal of reducing wait times for access to second language oral interaction testing by 50%.

• Generic job descriptions have been completed for the Computer Science group (distilling 1,500 job descriptions into 37), and similar work is well advanced in the Personnel Administration group (reducing 2,000 job descriptions to as few as 19).

In addition, departments have undertaken their own renewal initiatives. Among the more noteworthy department-specific examples are:

• Collective staffing at Health Canada – Health Canada recently completed a large collective staffing process for clerical and junior administrative staff. About 8,000 external applicants were screened, tested, interviewed, security cleared, and tested for second language capacity in a matter of four months, resulting in over 400 qualified candidates.

• Executive development at Citizenship and Immigration Canada – This program addresses the crucial transition to the executive level. Over the first two years after appointment, new executives are required to complete activities that build a shared understanding of the department’s business.

• Service Canada College – As the federal government’s premier delivery channel for direct services to Canadians, Service Canada established its own “corporate university” with high quality courses and a uniform curriculum contributing to building solid customer relations management skills for front-line staff.

• Technology for collaboration at Natural Resources Canada – The department has used state-of-the-art information and communications technology to promote collaborative approaches to work. Creative use of podcasting and blogs, and the experimental use of “wikis” in developing briefing notes are helping to break down silos, and engage younger employees.

• Succession planning at the Canada Revenue Agency – The Agency has extended succession planning beyond executives to include mission-critical positions at all levels. Formal discussions among senior managers each year ensure that top talent is spotted early and nurtured.

• Targeted recruitment at the Canadian Food Inspection Agency (CFIA) – As Canada’s largest employer of veterinarians, CFIA has moved to build long-term recruitment relations with the major veterinary colleges using internships, summer employment and bursaries (in return for focusing on academic work directly relevant to CFIA) to attract promising students.

• Increased focus on outreach beyond government at International Trade – The Deputy Minister for International Trade has embraced the importance of active outreach as a key aspect of renewal. Working with her management team, they have participated in close to 200 meetings with companies across Canada and abroad, with universities and industry associations, as well as in roundtables and major international conferences.

These 2007-08 renewal results are encouraging, at both the corporate and departmental levels.

V. Focus of Renewal Efforts for 2008-09 and Beyond

For the coming year, our approach will be to deepen and extend our renewal actions in the four priority areas set out in the framework for renewal, and to respond to the recommendations of the Prime Minister’s Advisory Committee in its Second Report. As last year, we will establish specific commitments for 2008-09 after consultation with the Deputy Minister community and other key stakeholders. But as well, to be effective on renewal, we need to encourage the active engagement of managers and employees throughout the public service.

Pushing Ahead on the Framework for Renewal in 2008-09

The Planning objective will be to extend the coverage and improve the quality of the plans of departments and agencies, in terms of rigour, concreteness and clarity of the link between business and people management goals.

Having exceeded our 2007-08 target of 3,000 for direct indeterminate Recruitment, we will set a higher recruitment goal for this year. We will also emphasize ensuring the development of essential skills and experience among new recruits. Finally, we will follow up on the advice of the Advisory Committee on Senior Level Retention and Compensation (cited in the box above) that defining and communicating the public service brand – who we are and what we do – is critical to successful recruitment and retention.

Development will focus on improving employee learning plans, as well as strengthening performance management for executives in response to the recommendations of the Prime Minister’s Advisory Committee on the Public Service. With the Management Accountability Framework (MAF) now in place, we believe we have a sound conceptual foundation on which to manage performance and accountability.

This year we will focus on setting clearer performance objectives, on reviewing performance throughout the year, on refining our evaluation of people management, and on dealing more rigorously with weak performance.

Enabling Infrastructure is an area that has so far received less attention than it deserves. Three areas will be the immediate focus of our attention.

• Staffing – This year, we will work closely with line managers to build a thorough understanding of how to accelerate getting the right people into jobs at the right time, using the flexibility offered by the new Public Service Employment Act. We will also broaden the use of generic job descriptions to reduce the burden of classification, spread the use of “fast tracking” for more routine staffing transactions, and deploy the new technology for the electronic transfer of employee records.

• Systems – This year, as one element of scaling back the web of rules, we are implementing the recommendations of the 2007 Blue Ribbon Panel on Grant and Contribution Programs, reducing the administrative burden for both recipients and government. We will also start to tackle our outmoded back-office processes, including modernizing our pay system to ensure that all employees get paid on time.

• Employee Surveys – The federal public service invited employees to respond to a comprehensive workplace questionnaire in 1999, 2002 and 2005. This year we will undertake a fourth round of the Public Service Employee Survey of all employees. In line with best practice, we will also develop a targeted, on-line annual survey, which will begin by the first quarter of 2010.

Responding to the Prime Minister’s Advisory Committee

A key recommendation of the Second Report of the Prime Minister’s Advisory Committee on the Public Service is the necessity of getting human resources governance and accountability right. Their conclusion is that the “authority and accountability for human resources management in the Public Service should be primarily the responsibility of Deputy Ministers,” and that the current overlap and duplication among departments and agencies dealing with human resources has to be cleared up.

I believe that the Advisory Committee’s critique of the excessive complexity and lack of clarity of the current arrangements for human resources governance is well founded.

First, there should be no ambiguity about Deputy Ministers having the primary responsibility and accountability for managing their employees. They are best placed to identify the skills and knowledge their business requires, to select those most suitable to meet these needs, to see to their employees’ development, and to assess and manage performance.

Second, central human resource agencies should only undertake those roles that must be carried out corporately, and the overlaps and unclear accountabilities among these agencies need to be sorted out. Necessary central roles include defining the broad framework for people management, tracking and assessing overall performance and the state of the public service, establishing common systems, and being responsible for the compensation framework.

Third, implementation of this realignment of roles and responsibilities will permit a shift of resources from these central agencies to departments.

The second recommendation of the Advisory Committee focused on strengthening performance management, particularly the importance of establishing clearer objectives, and dealing more rigorously with poor performance.

The current governance structure for human resources management, with its lack of clear accountabilities, is not sustainable. We will act to simplify the structure and clarify the accountabilities as recommended by the Advisory Committee. We will also develop specific initiatives to strengthen performance management, including dealing better with poor performance. This will build on last year’s work which strengthened the performance management system for Deputy Ministers and Associates.

Looking Forward

Actions on the four priorities of this renewal agenda will better position the public service over time to deliver integrated business, human resource and financial planning, to attract and retain Canada’s most promising graduates and mid-career talent, to hold managers and employees to a high standard of performance, and to put in place infrastructure that will support good management.

But ensuring excellence in public service now and for the next generation will require more. In addition to the active involvement of Deputy Ministers and their management teams, renewal needs the engagement of managers and employees at all levels, the persistent setting of renewal commitments, and then delivering on them year after year.

• We need a better balance between risk taking and accountability. This requires reducing the current web of rules that saps initiative and stifles innovation. Effective organizations have robust and effective risk management systems. This means creating an environment that encourages the reasonable use of discretion by managers and employees within a framework of risk management and accountability for the results.

• We need a public service workforce that is more broadly representative of the Canadian population. While the public service of today is much more diverse than the one I joined in the 1970s, we must do better still, particularly with regard to the participation of visible minority Canadians at all levels.

• We must make it easier to come and go from the public service through the course of a career. Our prevailing career model has seen employees spend all or most of their careers in the public service. While this will likely remain the choice of most public servants, constant changes in the challenges we face will make it essential that more Canadians share their knowledge and expertise with us for varying periods of time, or join us for a second or third career.

• We need leaders and employees at all levels to stay with their jobs long enough to make a meaningful contribution. This is especially true for senior public service leaders who set the tone and direction for organizations. Attaining this goal at the Deputy Minister and Assistant Deputy Minister levels will be difficult over the next few years, as we work through our demographic realities. As circumstances permit, however, we want to move to a norm of Deputy Ministers and Assistant Deputy Ministers serving no less than 3 years in an assignment.

Conclusion

In concluding this, my third report, I would like to emphasize one main message: Renewal is essential to the future of the public service; the status quo is not an option.

We are just at the beginning of what must be a multi-year, sustained renewal enterprise. We will set out, year after year, tangible renewal commitments, and deliver on them. And this renewal challenge has to involve all of us.

Finally, I want to pay tribute to my fellow public servants. Day in and day out, you provide consistently good public service to millions of Canadians and on occasion you do truly amazing things.

In February, I had the privilege of speaking to over 1,300 public servants at a town hall meeting in Vancouver. We talked about the critical “behind the scenes” roles that federal public servants play in moving Canada forward, in helping make this such an attractive country in which to live and work and raise a family.

From members of the Armed Forces just back from a tour in Afghanistan, to fisheries officers and meteorologists, to our border services and coast guard, to frontline service staff and research scientists, there was a strong sense of pride in the work they do and why it matters. In the words of Nicole Côté, Manager of Aboriginal Affairs at Environment Canada in British Columbia, a public servant participating in this event: “When you work for the public service, you really do feel that you are making a difference for your country.”

It’s hard to add to that sentiment.

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