One in four staff members left the Cabinet Office in 2017-18, along with more than 20% of employees leaving the Ministry of Housing, Communities and Local Government, an Institute for Government report has found.
Excessive staff turnover in the civil service costs the government up to £74m a year in recruitment and training costs and lost productivity, hinders project leadership of major schemes like Universal Credit and weakens institutional memory, the think tank said today.
The Moving on report highlighted that although only around 9% of staff leave the civil service each year, the proportion of civil servants moving between departments has risen sharply since 2010, from around 7% in 2010 to around 23% in 2018.
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Former cabinet secretary Sir Jeremy Heywood acknowledged last year that the civil service pay system incentivised staff to move between jobs quickly to get a pay rise. The IfG found churn rates were very high compared to civil services in other countries and in comparative parts of the private sector, such as the 12-14% in professional services firms.
By this measure, there are eight departments with an annual staff turnover of more than 15%. As well as the Cabinet Office and MHCLG, they include the Treasury, which has consistently lost around a fifth of its workforce each year, as well as the Department for International Trade, the Department for Exiting the European Union and the Department for Digital, Culture, Media and Sport.
The churn rate is higher for senior civil servants, according to the IfG, with over 40% leaving the Cabinet Office and MHCLG in 2016-17 to go to other departments. In the same year more than 30% of senior staff left their posts at the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs, the Home Office, the Department for Education and the Foreign Office. Senior turnover data was not available for DExEU, DIT or BEIS.
The report showed many managers stayed in post for less than two years. Some have changed almost entirely in just three years, including the Treasury’s welfare policy team and MHCLG’s homelessness policy team.
Report author Tom Sasse said this degree of turnover “contributes to failures on some of government’s biggest priorities”.
He added: “It is no surprise that Universal Credit, plagued with issues, went through five project directors in three years. When multi-billion 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.”
Brexit is also increasing staff churn, with the report reiterating previous IfG warnings that some civil servants are taking on promotions before moving on quickly. This is both bad for Brexit work and disruptive for the areas these staff leave behind, according to the report.
The report recommended that to tackle the excessive turnover, civil service managers should be given the ability to award pay increases to high performers and that HR practices should be changed to reward those who stay in post longer, build experience and see through projects.
Responding to the report, FDA general secretary Dave Penman said it “illustrates the true cost of this turnover”:
He welcomed recommendations to enhance the role of HR across the civil service as well as improving strategic workforce planning.
“The report recognises that stagnating pay progression has led to staff moving roles, as this is the only way to improve their salaries,” he said. “However, the Institute for Government has failed to understand the history of pay in the civil service or the inherent flaws in the system, which were evident before the current period of pay restraint.
“Civil service pay has remained largely unreformed for 25 years. Staff turnover is only one of many problems that need addressing. A series of sticking plasters, focussing on a small select group rather than the broader weaknesses in the system, will only repeat the mistakes of the past.”
However, root-and-branch reform to address the structural weaknesses in the report will require “a level of investment that the Treasury has consistently shown it is not prepared to fund”, he added.
“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.
“Whilst the rest of the public sector has embraced the ending of the pay cap as an opportunity to drive reform, the civil service is once again the bottom of the public sector pay league.”