Performance Audit - Audit Planning Memorandum
Audit Planning Memorandum
Recruitment Practices in the State Service
Background
In 2013 the State Service has over 30,000 employees across a wide and varied
workforce with 47% of the workforce employed on a part-time basis and approximately
1000 heads employed on a casual basis.
A decision has been taken by the Auditor-General (AG) to conduct a performance audit
into Recruitment Practices in the State Service. The catalyst for this performance audit
was discussions with staff at the State Service Management Office (SSMO), relevant
Unions and informal observations made to the AG that recruitment practices were not in
all instances being conducted in accordance with established practices for the
Tasmanian State Service. For example, concerns have been noted regarding current
practices pertaining to experience levels of recruitment panel members, the process
pertaining to fixed term contractors and potential conversion to permanency, as well as
the possibility for longer term casuals to find their way to permanent roles without
necessarily having to be scrutinised in the same way as a permanent applicant.
As a result of these factors the AG included a project aimed at auditing recruitment
practices in the 2013-14 Annual Plan of Work.
Previous Evaluations of Recruitment Practices in the State Service
In 2010 the Office of the State Service Commissioner completed an Evaluation Report
titled Recruitment in the State Service (‘the Report’). The Report considered both
Permanent and Fixed-Term Vacancies (Over 12 months) and Fixed-Term Vacancies (12
months or less) across the following criteria: Vacancy Identification and Advertising;
Selection Panels; Selection Processes; Referee Reports; Selection Reports; Notification of
Outcomes and Post Selection Counselling; Applicants; Use of Scribes; Post Selection
Counselling; and the Length of the Recruitment Process. The Report identified several
opportunities for improvement with a particular focus on Vacancy Identification and
Advertising; Selection Panels; Selection Process; Referee Reports and Selection Reports.
It is worthwhile noting that in 2010, when work leading to completion of the Report was
undertaken, the labour market was very tight, in the wake of the 2008-09 economic
situation. In the period 2005-2010 approximately 3,436 State Service job vacancies
were advertised each year by government agencies covered by the State Service Act
2000 (the Act). During this period those in employment favoured continuity and security
of tenure, over employment moves that potentially advanced careers to the next
developmental step, but that in doing so introduced an element of performance
uncertainty due to the associated learning curve period. In 2013, the Tasmanian State
Service finds itself in a labour market where liquidity has increased from 2010, and
candidates are willing to make an employment change to advance their career, but only
to roles or organisations that offer or are perceived to offer longer term security.
However, the labour market has not returned to the 18-24 month employment tenure
mindset that was evident throughout the economic boom period prior to the global
financial crisis.
Scoping of this Recruitment Practices Performance Audit
As part of scoping this Performance Audit, interviews were held with representatives
from the:
 State Service Management Office
 Office of the Auditor General
 Tasmanian Health Organisation (South)
 Department of Justice
 Department of Infrastructure, Energy and Resources
 Tasmanian Health Organisation (North).
Observations recorded form these discussions have informed areas for audit attention
and related audit criteria.
Audit Objectives
The objective of this audit is to assess whether:

selected general government sector entities are complying with the recruitment
requirements established by the State Service Management Office (Employment
Directions) and, therefore, with the principles established in the State Service Act
2000;

compliance with applicable legislation, policy and procedures results in an
outcome that is efficient and effective for the State Service, supports the
Service’s HR objectives and results in efficient recruitments.
Specific focus will be given to:

Consideration of casual workers and where applicable the progression of casual
workers through to fixed term and/or permanent appointment;

Rollout of the ‘Right Job – Right Person’ programme and resultant impact on
recruitment efficiencies and effectiveness;

Consideration of current selection and recruitment practices (whether or not
rollout of ‘Right Job – Right Person’ has taken place) and identification of
potential areas for streamlining selection & recruitment practices; Rollover of
fixed term contracts specifically from a candidate suitability and workforce
planning perspective;
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
Consideration of fixed term workers and where applicable the progression of
fixed term workers to permanent appointments;

Use of labour hire workers – in particular the types of positions labour hire
workers are utilised in and the frequency and tenure of their use;

Application of merit based recruitment. Specifically, it’s practice and process,
the efficiencies gained from the process and the training of individuals in
decision making positions throughout the process;

Compliance and frequency of background and reference checking; and

Consideration of Workforce Planning principles in the recruitment process.
Audit approach
The approach to be adopted in examining recruitment practices include:

Follow-up work previously undertaken by the State Service Commissioner
including:
-
the use of non-government training organisations to hire trainees and
labour hire firms:
-
Examine youth and graduate employment profiles and assess trends; and
-
Examine the extent to which agencies are taking on staff on fixed term
contracts or as casual employees and converting these to full time
employment while at the same time satisfying merit principles

Examine compliance by agencies with the merit principle generally and that
individuals authorising appointments have the appropriate delegated authority
and

Examine effectiveness of workforce planning through analysis of fixed term
contract rollovers leading to permanent appointment.
In addition, while examination of compliance with the Act, Employment Directions, and
applicable policies and procedures is a primary objective of this audit, an equally
important parallel objective is the measure of efficiency that stems from processes that
are inherently compliant. As an example, a recruitment process may be 100% compliant
with the applicable requirements, but the lack of interview training of the panellists may
lead to an appointment with short dated tenure. In this instance, while the outcome is
compliant it is not necessarily achieving the most efficient position for the State Service.
By its very nature, HR elements and practices can be measured against the requirements
of applicable legislation, policy, and process. However, because of its subjective nature
and differing requirements between various sectors and organisations, HR elements and
practices must also be considered from an efficiency perspective. This gives rise to one
of the key considerations of the audit: Is compliance with the applicable legislation,
policy and procedures resulting in an outcome that is both efficient for the State Service
and ultimately supports the HR objectives of the Service?
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Audit Scope
To conduct a ‘wing to wing’ audit of recruitment in the State Service across all
Departments would be a task that would take considerable time and resource – likely a
full time audit over an 18 month period. This is not practical.
The Audit will therefore focus on the following areas (Audit Focus Areas), as derived
from information considered during the scoping period:

Casual Workers

Fixed Term Contracts

Labour Hire Workers and

Merit Based Selection Process.
The Audit Focus Areas will be applied to the following Agencies:

Tasmanian Health Organisation – North;

Department of Infrastructure, Energy and Resources;

Department of Primary Industries, Parks, Water and Environment; and

Department of Health and Human Services.
Recruitment practices in the State Service
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Audit Criteria
Objective/sub-
Criteria
Consider points
Audit approach
objective/Audit
focus areas
Casual Workers: Have all casual
Have casual workers been
Select a sample of the most
Point of Origin
applicants been
sourced through approved
recent successful casual
sourced from
channels?
applicants and review the
approved
sources?
Have appointed casual
decision tree process.
workers been selected based
on applicable skills and
experience?
Casual Workers Have all casual
Have casual workers been
(Direct Hire):
workers have
subject of an appropriate and recent successful casual
Selection &
been subject to
applicable selection process? applicants and review the
Engagement
the appropriate
Process
and applicable
selection
process?
Are all casual workers
reported as required and
Select a sample of the most
recruitment and selection
process.
included in formal personnel Select a sample of invoices
quotients?
payable to labour hire
companies and analyse against
registered workers; and,
workers who were procured
through an approved source.
Casual Workers Is a formal and
Is a formal and signed
Consider a sample of labour
(Labour Hire)
signed agreement agreement in place?
hire workers and test actual
(Excluding
in place between
information provided by
Locums):
the State Service
Selection &
and a Labour Hire
Engagement
company?
Process
If so, does the Labour Hire
Company comply with the
requirements of the
agreement? (Specific focus
Labour Hire company against
information required under
Labour Hire agreement?
Have all casual
on background checking
Select a sample of labour hire
workers been
elements.)
workers and analyse types of
subject to the
roles undertaken by these
appropriate and
workers? Are these roles, such
applicable
that they are most efficiently
selection
and effectively filled by labour
process?
hire workers or are they roles
that could be filled internally
with revised workforce
planning practices?
Select a sample of formal
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Objective/sub-
Criteria
Consider points
Audit approach
objective/Audit
focus areas
agreements in place between
the State Service and the
respective Labour Hire
companies and evaluate
whether the agreement
considers the necessary aspects
as required by the State Service
and also as evidenced in global
best practice.
Casual Workers: Have all casual
If casual worker has
Select a sample of casual
Assess the
progressed to fixed term
workers that have been
employees
progression from promoted to fixed employee, has an
appointed to fixed term
casual worker to term contracts
employment and evaluate the
appropriate and applicable
fixed term
have been subject selection process been
recruitment process, including
employee
to a formal
the panel’s evaluation process
(including both
recruitment
applied?
to select the applicant.
direct hire casual process?
workers and
labour hire
casuals)
Fixed Term
Contracts:
Assess the
Have all fixed
Are Fixed Term employees
term employees selected for permanent
that have been
positions based on merit
progression (and promoted to
associated
permanent
process) from
contracts been
fixed term
subject to a
contract
formal
appointment to
recruitment
permanent
process –
employee.
including
selection per the
merit based
principles?
principles? *
What is the average tenure of
fixed term employees who
Select a sample of employees
promoted from fixed term to
permanent employees and
evaluate the recruitment
panel’s evaluation process to
select the applicant.
ultimately assume
Health: Consider a sample of
permanent roles?*
externally funded positions.
Consider the tenure of these
positions and comment on the
* Data analysis will carve out effectiveness and efficiency of
training positions i.e.
fixed term as the vehicle for
positions whereby
these roles.
appointment is confirmed
once training and
qualification requirements
are met.
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Objective/sub-
Criteria
Consider points
Audit approach
objective/Audit
focus areas
Fixed Term
Have fixed term
How many times have Fixed Select a sample of Fixed Term
Contracts:
contracts been
Term contracts been rolled
Contracts that have been rolled
Assess the
rolled over
over?
over and review the basis,
Number of times appropriately a fixed term
specifically in
contract is rolled consideration of
over and why.
workforce
planning
Has Fixed Term position
ultimately become a
permanent position?
Have workforce efficiencies
objectives? Is the been lost in permanent
incumbent fit for status not being confirmed
the role?
early in the decision?
justification and assessment
used to roll the contract over.*
Consider the efficiency and
effectiveness gained from this
process. *
*Data analysis will split out
roles where formal directive
was in place that role be
specifically filled as fixed
term.
Labour Hire
Are Labour Hire How frequently are Labour
Firms: Assess
firms only used
Hire firms being used as a % and type used to recruit labour
the extent of use under approved of total recruitment?
of Labour Hire
circumstances?
Firms as utilised
in the
recruitment
Determine the agency name
hire workers.
When are labour hire firms
Perform data analytics and
utilised in the recruitment
ratio analysis across firms used
process?
for Labour Hire.
Perform data analytics and
process.*
ratio analysis across Labour
Hire use across the selected
*Assessment will
agencies.
exclude Locums
and Doctors
Labour Hire
Are appropriate
What roles are being
Firms: Assess
roles are being
allocated to the Labour Hire ratio analysis across the types
the trend in the
allocated to
firms for recruitment?
types of role that Labour Hire
are being
allocated to
Labour Hire
Workers?
Are training or graduate
roles being allocated to
Labour Hire firms?
Workers.
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Perform data analytics and
of roles being allocated to
Labour Hire Workers.
Objective/sub-
Criteria
Consider points
Audit approach
objective/Audit
focus areas
Labour Hire
Is the use of
What is the cost associated
Compare the cost and benefit of
Firms: Assess
Labour Hire
with using Labour Hire
using Labour Hire Firms to that
the efficiency
Workers cost
Firms?
of internal recruitment
from a cost
effective?
perspective in
What benefits arise from
practices.
using labour hire firms?
using Labour Hire
Firms in the
Is the State Service working
recruitment
from a level platform with
process.
regard to fees associated
with labour hire firms?
Labour Hire
What is the
Workers:
tenure period for employees procured through of the tenure of employees
Measure the
employees
tenure of workers procured through
employed
Labour Hire
through labour
Firms?
hire firms.
What is the tenure of
Labour Hire firms?
What is the ‘time to hire’
period of labour hire
Perform longitudinal analysis
procured through Labour Hire
Firms.
Compare the tenure of Labour
recruitment as compared to Hire employees to employees
internal recruitment
sourced through internal
processes?
recruitment processes?
What is the reason for
Compare the time to hire of the
leaving/termination
Labour Hire process and the
applicable to labour hire
direct recruitment process.
workers?
Compare reasons for
leaving/termination for
employees sourced through
Labour Hire Firms and
employees recruited through
direct channels.
Labour Hire
What overall
What is the average $ spent Perform an analysis of the
Workers:
value is achieved on labour hire workers
training dollars invested in
Consider the
through investing throughout their tenure?
general employees compared to
value of training $ in training for
invested during
labour hire workers.
labour hire
Analyse training dollars
tenure of labour workers during
hire workers
invested compared as a
the tenure
function of tenure to determine
(non permanent period?
ROI in respect of labour hire
status).
workers.
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Objective/sub-
Criteria
Consider points
Audit approach
objective/Audit
focus areas
Selection
Do staff involved How many staff assuming
Determine the process for
Process:
in interviews
selection panel duties have
capturing staff with formal
Consider the
have formal
formal interview training?
interview training.
support
interview
mechanisms
training?
How many selection panels
Analyse how many staff have
used additional tools to
undertaken formal interview
complete the candidate
training.
provided to
interview panels;
including but not
limited to formal
What additional
support tools are assessment?
utilised?
Analyse the frequency of
formally trained staff being
utilised in selection panels.
interview
training;
interview
experience;
interview guides;
additional
selection tools;
Selection
Is the selection
What is the process for
Determine the decision tree for
Process:
panel
determining the selection
selecting a selection panel.
Consider the
composition
panel?
process for
compliant and
selecting the
does it support
selection panel.
efficiency through
the use of
Determine the requirements
How is it determined that the for the inclusion of an HR staff
selection panel is comprised member in the process.
compliantly?
Determine the criteria for
formally trained How is it determined that the approving the composition of
selection panel is comprised the selection panel.
personnel?
Does the panel
consist of a
of suitably trained
personnel?
Review a sample of the
selection process for the
member with
selection panels for roles at
formal training; a
different levels to determine
member with
compliance.
experience in the
role at hand; and
a member from
outside the
department?
Selection
Do HR personnel Have HR personnel
Review a selection of training
Process:
have formal
undertaken adequate
records for HR staff members.
Consider the
training and
training and have experience
training of HR
experience in
in interview and selection
Recruitment practices in the State Service
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Consider the involvement of HR
in the selection process? Is this
Objective/sub-
Criteria
Consider points
Audit approach
objective/Audit
focus areas
personnel in
interview and
interview and
selection
selection
techniques?
techniques?
at the front or the back end?
Where in the process is HR
most heavily involved?
techniques.
Selection
Are exit
What are the predominant
Perform an analysis of the
Process:
interviews are
reasons for leaving within
available data and information
Consider
performed?
the prior 24 month period?
from exit interview forms.
Are the reasons
Are there any trends in the
Determine the cost of
individual’s
reason for leaving
the state sector
when role was
for exit assessed reason for leaving during the recruitment for roles that
prior 24 month period?
turnover within the prior 24
and actioned?
appointed within
Is there a link between
the prior 24
positions that turnover
month period.
frequently and the
month period.
skills/experience
composition of recruitment
panels?
Selection
Are Position
Are position descriptions
Obtain a sample of position
Process: Review Descriptions
reviewed and updated prior descriptions and review the
the relevance of
reviewed with
to each instance of
Position
sufficient
recruitment for the role?
Descriptions and regularity and at
the most recent
least prior to
review date.
recruitment?
What is the process for
reviewing and updating a
position description?
Recruitment practices in the State Service
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changes control mechanisms.
Review the frequency and
interval of revisions.