Civil service leaders are looking at ways to reward staff who remain in post for longer after recognising that the 1% public sector pay cap had led to a higher level of staff churn, Cabinet secretary Sir Jeremy Heywood told MPs yesterday.
Heywood, the head of the civil service, said the current incentives in the pay system encouraged staff to move between jobs quickly, but he insisted that Whitehall was moving to get a tighter grip on workforce needs.
He was speaking at a Public Administration and Constitutional Affairs Committee hearing alongside civil service chief people officer Rupert McNeil, who said that new measures were being introduced to improve staff retention, including a new careers website for civil servants that would be in place by the end of the financial year.
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Heywood told the committee that the numbers leaving the civil service were less than in the private sector. "There’s no sign of it increasing, and it’s difficult objectively to say we’ve got a massive problem compared to other organisations," he said.
He did concede, however, that internal turnover was still an issue that needed to be addressed – and McNeil later confirmed that in the Senior Civil Service the rate of internal churn (staff changing roles but remaining within the civil service) had increased from 6% to 11% over the past year.
Heywood added: “This year we are looking at our Senior Civil Service salary structure. One of the issues we’ve alighted upon is that in an environment where you’ve got 1% pay increases, basically the best way in which people can get an increase of more than 1% is to move jobs and get an increase on level transfer or on promotion.
“So, in a sense there are incentives in the system for people to move around more often, created by the pay policy – which we understood, fiscal reasons and all the rest of it.”
He confirmed that Whitehall was planning to reform the pay system to address this issue, and added that it had also introduced a “pivotal role allowance” through which it can offer bonuses to staff who stay in post for longer, particularly those leading big projects.
Heywood said he had also tackled turnover at the permanent secretary level by insisting that it should be “the norm” for perm secs to stay in their roles for five years.
The government has said it has lifted the 1% cap that has been in place since 2012, following a two-year pay freeze, but has signalled that pay offers of above 1% will need to be accompanied by improvements in productivity and will likely be funded through departmental budgets.
Asked about the recent cuts to Whitehall’s headcount, Heywood said that while the overall civil service workforce has shrunk by 20%, the SCS has increased in size by about 20% since 2012.
“In the last year in particular, we’ve added quite a lot of headcount to help with Brexit, but… we have had a fundamental rebalancing within the civil service,” he said.
Heywood cited a 40% reduction in the number of clerical staff since 2010 “reflecting the onset of technology and the ability to economise in labour”. The civil service has instead increased its number of senior people, functional, digital and commercial experts, lawyers and project managers.
He told the committee that Brexit would require a further significant increase in headcount, but that the civil service was making good progress on this and would remain flexible and responsive so it can react to the way negotiations progress. He and civil service chief executive John Manzoni receive fortnightly updates on staffing needs based on a real-time analysis led by McNeil, he said.
McNeil was asked about the 2015 Baxendale report on attracting and retaining talent into the SCS, which made 17 recommendations that he said were in the process of being implemented. One was to introduce a careers website for the civil service, which will be in place by the end of this financial year, he added.
McNeil also said that the civil service’s new Leadership Academy was focusing in particular on helping staff transition between roles, and that in the spring the government would be rolling out a new recruitment platform – an applicant tracking system that will speed up processes and improve oversight at the centre.