PACP Committee Report

INTRODUCTION

Human resources planning is a process that identifies current and future human resources needs for an organization to achieve its goals.  This planning should serve as a link between human resources management and the organization’s overall strategic plan. 

The Office of the Auditor General examined the Department of Foreign Affairs and International Trade’s (DFAIT, the department) human resources management and found that it does not have a strategic plan for its human resources.^[1]  The audit concluded that this hampers the department’s ability to respond to growing and changing demands and to meet objectives such as coordinating Canada’s efforts abroad.

This Committee held one meeting on 15 April 2008 to examine the audit on human resources management at DFAIT.^[2]   The Committee met with Sheila Fraser, Auditor General and the following officials from the Office of the Auditor General:  Richard Flageole, Assistant Auditor General; Marie Bergeron, Principal; and Paul Morse, Principal.  The Committee also heard from Leonard Edwards, Deputy Minister of DFAIT and Michael Small, Assistant Deputy Minister, Human Resources, also from DFAIT.  In addition, Hélène Laurendeau, Assistant Secretary, Labour Relations and Compensation Operations from the Treasury Board Secretariat appeared.

BACKGROUND

DFAIT delivers on Canada’s international agenda by carrying out the functions of leading and coordinating international policy-making for the government; promoting Canadian interests and expertise abroad; and assisting Canadian business and the public by providing trade, investment and consular services.  The department has three distinct categories of employees: Canada-based non-rotational staff who generally work at DFAIT’s headquarters; Canada-based rotational staff that can be required to rotate every two to four years to missions abroad; and locally engaged staff who work in Canada’s missions abroad.

Given the complexity of the workforce of the department, its international role, and the demographic challenges it faces, the audit noted that strategic planning and management of its human resources are critical to achieving its mandate.  However, according to the audit, 58% of the department’s employees in the management category will be eligible for retirement by 2010.  In addition, for all employee categories, 26% will be eligible to retire by 2010.  The audit also noted that departures now outnumber new hires at DFAIT.  These trends stress the need for strategic human resources planning in the department.

STATUS REPORT

The Committee believes that government organizations should be able to provide an action plan on how to implement the OAG’s recommendations to the Committee prior to a hearing, especially when the audit report has been tabled in Parliament months earlier.  The Committee was pleased to receive a detailed action plan from DFAIT before the hearing that discussed how the department will implement the recommendations made in the audit.  Providing the action plan prior to the hearing indicated to the Committee that the department is serious in implementing the audit’s recommendations.  To ensure that DFAIT remains on track in implementing the recommendations, the Committee recommends:

RECOMMENDATION 1

That the Department of Foreign Affairs and International Trade provide the Public Accounts Committee with a status report by 30 June 2010 which includes an update on the implementation of the recommendations made in Chapter 3:  Human Resources Management – Foreign Affairs and International Trade Canada of the Auditor General’s May 2007 Report.

In July 2009, the Committee received updated information from the department on the status of actions it has taken to respond to the concerns raised in the audit, and this information can be found in the Addendum to the report.

STRATEGIC HUMAN RESOURCES PLAN

The OAG expected that DFAIT would have a strategic human resources plan that would describe the complement and competencies of its staff today and any staff needed in the future.  In addition, the OAG expected that DFAIT’s strategic human resources plan would outline departmental strategies to fill its workforce gaps in the short, medium and long terms and would be aligned with departmental objectives and priorities.  Instead, the audit found that DFAIT has no strategic human resources plan and therefore does not have a complete picture of the people, competencies and experience it will need in the future.  The audit found that as a result of this lack of strategic human resources plan, DFAIT was encountering challenges with respect to recruitment, promotion and assignment processes.

According to the audit, at the end of its examination, the DFAIT’s Human Resources Branch was in the early stages of collecting data to prepare a strategic plan.  This plan was completed in October of 2007.  Mr. Edwards told the Committee that DFAIT did have a human resources plan in place before the audit, but that “it was not complex enough and not designed or drafted well enough to meet our current needs.”^[3]  The Committee was incredulous that the department did not have an adequate strategic human resources plan in place before the audit. 

The Committee is pleased that the DFAIT has finalized a strategic human resources plan; however, the Committee is concerned that the period covered by the plan, 2007 to 2010, is too long and thereby would not be responsive to the changing needs of the Department.  Mr. Edwards reassured the Committee that the plan would be “renewed and refurbished” annually.^[4]  Given that the strategic human resources plan needs to be responsive to current situations, the Committee would like reassurance that the plan is indeed being updated on an annual basis.  For this reason, the Committee recommends:

RECOMMENDATION 2

That the Department of Foreign Affairs and International Trade Canada include in its annual Report on Plans and Priorities a discussion of how it expects its strategic human resources plan to change over the fiscal year.

The Committee is troubled that the strategic human resources plan does not include human resources plans for locally engaged staff in missions abroad.  The audit found that in order to ensure that DFAIT has a sustainable workforce to fulfill its mandate, a comprehensive human resources plan is fundamental to meet its demographic challenges and workforce gaps.  Mr. Edwards informed the Committee that the department has “tasked all [of its] missions to develop a post-specific human resources plan that will address the local factors affecting [its] ability to recruit, retain, and develop [its] locally engaged staff.”^[5]  The Committee agrees with the conclusions of the audit that state that a department-wide strategic human resources plan is necessary to be able to assess the challenges the department as a whole will face in the coming years.  For this reason, the Committee recommends:

RECOMMENDATION 3

That the Department of Foreign Affairs and International Trade Canada provide the Public Accounts Committee with a plan and a timeline for how it will integrate the strategic human resources plans for its headquarters and its missions abroad by 30 June 2010.

FOREIGN LANGUAGE REQUIREMENTS

Foreign language skills are key to adequately representing Canada’s interests.  The audit found that DFAIT had not been able to recruit, train and assign enough rotational staff in order to fill the 180 positions it had determined that needed a working proficiency in a foreign language.  Only 16% of the people occupying those positions actually met the language requirement and 33% had not even undergone language testing.

The Committee was alarmed that so few of the department’s employees appear to have the language abilities required for the jobs they are doing.  Mr. Edwards explained to the Committee that part of the problem with the low numbers of people who meet the language requirements “is an historical one that has to do with funding for language training particularly.  It has tended to be one part of the department that has been easiest to cut whenever we’ve had budget cuts.  So it is starved for resources… We want to ensure that we make some big reinvestments in our language training.”^[6] 

While the Committee appreciates the difficult position the department has been in in the past, it cannot agree with the department’s choice of what programs to cut.  The very nature of the foreign service officer position would seem to indicate that employees would not only be able to work in the language of the local mission, but also that the department would be able to provide assurances that its staff employed abroad could provide the best services possible by being able to work in the local language.  For this reason, the Committee strongly believes that the department should begin to reinvest in language training.  As such, the Committee recommends:

RECOMMENDATION 4

That the Department of Foreign Affairs and International Trade reinvest in language training for its foreign services officers and report on the statistics of how many officers are tested for and meet the language requirements for their position in their annual departmental performance reports.

MANAGEMENT OF LOCALLY ENGAGED STAFF

The proportion of staff working in Canada’s missions who are locally engaged is on the rise due, in part, to successive budget pressures over the last two decades.^[7]  For this reason, Canada has one of the highest ratios among Western democracies of locally engaged staff in its foreign missions.  Because of this, the OAG expected that DFAIT would have complete and accurate human resources information and strong management support to ensure its local workforce was optimally employed.

Instead, however, the audit found that the department does not have accurate and complete information to properly manage its locally engaged staff.  The audit noted instances of staff recorded as working at the wrong mission, of missions without complete employment histories of their staff on file, and of training that was not completely tracked.

DFAIT’s Locally Engaged Staff Services Bureau in Ottawa is responsible for developing and implementing the departmental policy for the management of locally engaged staff abroad and for providing services and support to all Canadian missions.  The audit found that the Bureau had difficulty in carrying out all of its responsibilities and has been unable in recent years to fully meet its mandate.

Mr. Edwards told the Committee that “too many decisions affecting locally engaged staff are centralized” in Ottawa.^[8]  He went on to say that:

My personal view is that we have tended to over-centralize and that we probably need to do something on a more regional basis perhaps, because of the local conditions, in terms of employment and so on.  I think what we need at the centre are some common rules and guidelines and so forth on how to manage staff, and a common caring environment so that locally engaged staff see themselves as a critical piece of our human resources and a key piece of our department and our department’s success.^[9]

The Committee agrees that the missions abroad are in the best position to manage themselves. The Locally Engaged Staff Bureau in Ottawa can set the broad strategic human resources plan and establish general guidelines and rules concerning the management of all locally engaged staff.  However, in order to best respect the situations in each mission abroad, the Committee believes that many of the aspects of managing locally engaged staff should be set in the specific mission.  For this reason, the Committee recommends:

RECOMMENDATION 5

That the Department of Foreign Affairs and International Trade delegate management responsibilities to the senior managers in each mission abroad so as to ensure that local needs are best being met.

SECURITY CHECKS

The Committee was especially concerned about the lack of records on whether security checks had been done on locally engaged staff.  The audit noted that in some cases there were no records of oaths of office taken by local staff or of their security checks.  This is troubling given the general awareness of security issues.  If something tragic were to happen in a mission abroad, the Committee would find it unconscionable if the department could not confirm whether any involved locally engaged staff had undergone a security check.

Mr. Edwards stated that security checks are done on all locally engaged staff.  He told the Committee that:

there is always, before we confirm the hire, what we call a reliability check done on locally engaged staff.  That means that we talk to the local security and police authorities and so forth to determine, in effect, a security clearance… We don’t hire anybody until we’ve done all that.^[10]

Given Mr. Edwards’ assurances that all locally engaged staff undergo security checks, the Committee is troubled as to why the audit noted otherwise.  When questioned about what the department does to ensure that security checks are done, Mr. Edwards told the Committee that DFAIT “constantly reminds [its] heads of mission and [its] people abroad to follow the regulations, which includes security checks and keeping the records up to date.”^[11]

The importance of ensuring security is paramount in today’s culture.  For this reason, the Committee is concerned that managers in missions abroad are only reminded of the regulations.  When asked about the consequences managers in missions abroad face if they do not adhere to the rule to ensure security checks are done and recorded, Mr. Edwards stated that:

Managers have accountabilities up the line… if [security checks] are not being done, there will be consequences for the manager in question.  Issues around performance will be recorded for future promotion; in the case of [the EX category], it could involve issues of performance and bonus pay, or not, at the end of the year.^[12]

The Committee is not sure that the consequence for managers that do not follow the regulation of perhaps not getting their bonus pay is forceful enough to ensure that the regulations for security checks are indeed being followed.  The Committee would like to see DFAIT take this issue more seriously and establish a system of random inspections of missions to ensure that managers in missions abroad follow the regulations to conduct or record security checks.  For this reason, the Committee recommends:

RECOMMENDATION 6

That the Department of Foreign Affairs and International Trade implement a system of random inspections of missions to ensure that regulations for security checks are being followed and report on the results of these inspections in its annual departmental performance report.

FOREIGN SERVICE DIRECTIVES

Since the 1960s, DFAIT has relied on Foreign Service Directives (FSDs) as an important tool to allow it to respond to the changing circumstances its employees face.  The FSDs address a number of issues that government departments must consider when assigning staff to missions, including differences in living conditions, children’s school, medical care and spousal employment.  The audit found that these issues influence the department’s ability to assign or retain employees and to deliver programs effectively at its missions.  Any changes to the FSDs must be co-developed by a subcommittee of the National Joint Council, which is a consultative body of 18 bargaining agents, the Treasury Board Secretariat, which acts as the employer’s representative, and three separate federal agencies.  The FSDs are normally reviewed every three years.

The complexity of the FSD process was first raised by the Office of the Auditor General in 1987.  The Office’s concerns about the FSDs were reiterated in its 1994 and 1997 reports, and the Office suggested that effecting change would require that the government fundamentally re-examine the FSD system and how it is managed.  Since then, a 1995 special steering committee, the National Joint Council, DFAIT’s employees and DFAIT itself have all expressed concern about the processes for developing and applying the FSDs.  The audit noted, though, that the processes have remained essentially the same and that the FSDs themselves have remained essentially unchanged for over 40 years.

The audit discussed some of the challenges faced by public servants who work abroad caused by the FSDs.  Two of the key challenges are:

1. DFAIT and other departments are having difficulty convincing their staff to go to missions in the United States because the allowances provided under the FSDs for living in the United States are seen as a disincentive to accepting a posting there.



2. Staff members posted abroad may face the choice of separation from their spouse or loss of one family income, pension benefits, and the postponement of the spouse’s career.  While there is an FSD allowance when a staff member is accompanied by a spouse, the FSDs themselves are not meant to address the spousal employment issue.  In addition to a loss of employment, spouses are not eligible for employment insurance while searching for a job in the foreign country.

On the first issue, regarding compensation for staff posted in the United States, Mr. Edwards stated that DFAIT had “not yet found a way to compensate families sufficiently for the extra personal costs they incur when serving in the United States.”^[13]  Given the importance of maintaining a good relationship with the United States, it would seem very important to have the American missions fully staffed with highly qualified employees.

On the second concerning spousal employment, Mr. Edwards assured the Committee that as a married foreign service officer who has been posted around the world, this issue was very important to him.  Currently, DFAIT provides work counselling, assistance in finding jobs in local marketplaces and training on how to find employment in missions abroad.^[14]  However, these services do not necessarily make up for lost spousal income during a posting abroad.  Mr. Edwards stated that the most difficult issue facing spouses of foreign services officers is the issue of employment insurance.  Currently, spouses cannot claim employment insurance either while they are preparing for a posting or when they come back and are searching for a job.^[15]  The solution to this issue though cannot be found in changing the FSDs; instead it involves updating the legislation that governs the employment insurance system.

Mme. Laurendeau told the Committee that the FSDs were currently being reviewed.  The main focus of the review is to realign the FSDs to better meet the changing demographics.  Other priorities are to increase responsiveness of the FSDs and to streamline and simplify the language to ensure consistency in application across the various places where they are applied.  The target date for the completion of this review is June 2008.^[16] 

The Committee strongly agrees with the audit that the FSDs must be more responsive to changing circumstances.  Indeed, the failure of the department to fully staff its missions in the United States indicates that there are serious deficiencies in the current FSDs.  The Committee looks forward to the completion of the FSD review and sincerely hopes that the review will include an action plan on how to update the FSDs.  Consequently, the Committee recommends:

RECOMMENDATION 7

That the Department of Foreign Affairs and International Trade Canada and the Treasury Board Secretariat provide the Public Accounts Committee with the results of the foreign service directives review upon completion, including an action plan on how the results of the review will be implemented.

With respect to the limits faced by spouses of foreign service officers to employment insurance, the Committee believes that far too much time has elapsed to find a solution to this problem.  Given that two-income families are the norm, rather than the exception, the Committee cannot believe that this issue has been allowed to linger as long as it has.  The Committee understands that this issue can only be addressed through changes to existing legislation and not through the FSDs.  The Committee believes that changes to allow spouses to access employment insurance should be a priority for the government.  For this reason, the Committee recommends:

RECOMMENDATION 8

That the Government of Canada present to Parliament an amendment to the Employment Insurance Act to allow spouses of public servants posted abroad to claim employment insurance either while they are preparing for a posting or when they come back and are searching for employment.

Another issue surrounding the FSDs that arose during the hearing was the process to secure adequate death and dismemberment insurance for Canadians working abroad.  The department was able to assure the Committee that government employees working in Afghanistan were finally eligible to receive improved life insurance after a negotiation within the FSD process that began in 2005.  According to the audit, negotiations to allow employees working in other high risk operations, such as Haiti, have not yet been concluded.  The Committee believes it is not appropriate that this insurance is restricted to specific places that are known after the fact to be dangerous.  It is entirely possible that high risk situations could arise anywhere in the world at any time.  For this reason, the Committee believes the FSDs should be flexible enough to ensure that Canadian public servants and their families are supported as much as possible, and as such recommends:

RECOMMENDATION 9

That the Treasury Board Secretariat, in partnership with the other members of the National Joint Council, improve the flexibility and accessibility of accidental death and dismemberment insurance for public servants posted abroad.

CONCLUSION

The audit found that DFAIT has not been planning adequately to meet current and future challenges.  The department does not have a complete picture of the people, competencies, and experience it will need in the future and it also lacks the basic information needed to manage its human resources.  The seriousness of this issue is highlighted by one of the findings of the audit that stated that in the next few years, more than half of the DFAIT’s employees in the management category will be eligible to retire.

The Committee is worried that the department’s ability to adapt to changing circumstances is limited by the lack of flexibility it has to provide Canadian staff with cost-of-living compensation and incentives for hardship conditions at missions abroad. This makes it difficult to find people willing to accept some postings abroad.  In addition, an outdated employment insurance system continues to make it difficult for spouses to receive the support they need when they move to missions.  The Committee hopes that by improving the employment insurance system and updating the Foreign Service Directives, the lives of DFAIT staff, and all other public servants working abroad, will improve.

Given that the Office of the Auditor General first raised the issue of human resources planning in the department in 2000, the Committee is concerned with DFAIT’s commitment to improving not only its human resources planning, but also its commitment to improving the safety and security of its employees who work abroad.  The Committee looks forward to seeing the department act on the Committee’s and the Auditor General’s recommendations in order to have the best foreign service that Canadians require.

ADDENDUM

The House of Commons Standing Committee on Public Accounts Committee began its study of the Auditor General’s May 2007 audit on human resources management at the Department of Foreign Affairs and International Trade in April 2008. Due to the dissolution of Parliament in September 2008 for an election, the Committee was unable to present its report on the issue in the House of Commons. When the Committee was reconstituted in the 40^th Parliament, it did not want to lose its work on this issue and thus brought the study forward to the current session. As a significant amount of time had passed, the Committee asked the organizations involved to provide an update on actions taken in response to the audit.  The department provided information to the Committee during the summer of 2009. As the Committee does not want to alter the original intention of its report based on the audit and the evidence heard, the information received is included in this addendum to the report.

The department indicated in its update that it is taking action on many of the issues addressed by the audit.  The department introduced a more formal human resources planning system as part of its integrated business planning process in the fall of 2008.  The purpose of this system was to integrate human resources planning with business planning in order to strengthen the department’s overall capacity to forecast human resources needs.  In June 2009, the department published its human resources strategic plan for 2009-2012 which addresses rotational, non-rotational and locally-engaged staff (LES) workforce needs.

In the fall of 2008, the department launched an integrated recruitment outreach campaign as part of the Post-Secondary Recruitment Campaign to strengthen its outreach capacity to students.  The department succeeded in increasing overall applications to 9,783 from 5,500 in 2007.

With respect to foreign language training, the department set and achieved a target of filling 90% of overseas positions designated as requiring an advanced level in a foreign language.  The department plans to sustain this level of foreign language competency for positions requiring advanced foreign language open for rotation in each year.  In addition, DFAIT will expand foreign language training and testing following Treasury Board approval of its Strengthening Canada’s Mission Network initiative.

In January 2009, the department established the Locally-Engaged Staff Governance Committee to provide strategic direction and oversight for the management of the LES workforce.  The primary responsibility of this Committee is to ensure that issues raised in the audit are fully addressed and that its recommendations are implemented.

To address the concerns raised in the audit about treatment of departmental staff working abroad, DFAIT, with the Treasury Board Secretariat, established the Interdepartmental Committee – Review of the Public Service Abroad.  The Committee is comprised of officials from other departments and agencies that have staff working abroad.  It has undertaken a review of the current governance processes in place, and will identify gaps related to ensuring that emerging and pressing business needs are addressed.  The Committee expects to complete its work by the end of 2009.

In 2008, DFAIT established a Spousal Employment Support Office to work directly with spouses to assist them in finding meaningful employment while overseas and to assist in reintegration to Canada after a posting.  Specific initiatives undertaken by the Support Office include offering local language training to spouses, assistance in identifying opportunities at other diplomatic missions, and considerations of spouses’ abilities to fill term positions offered by missions.