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Performance Audit of the City of Los Angeles
City's Hiring Process

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EXECUTIVE SUMMARY

Sjoberg Evashenk Consulting has completed an audit of the City of Los Angeles’ (City) hiring processes, under contract with the Office of the City Controller’s Internal Audit Division. The scope and objectives of the audit were to evaluate and assess how the City:

Identifies particular skill sets for employment positions needed to accomplish departmental objectives. Develops the job requirements, qualifications, and standards for those positions. Reaches out to identify qualified candidates that meet the job requirements. Selects and hires qualified candidates. Compares with civil service systems in other major metropolitan cities through best practices benchmarking research.

The scope of the audit primarily focused on the City’s non-Department of Water and Power (DWP) civilian workforce as the DWP and sworn workforce utilize somewhat autonomous hiring and workforce planning strategies (supported by the Personnel Department). Refer to detailed scope and methodology on pages 11 and 12 (of the pdf).

Background

The City of Los Angeles is the second most populous city in the United States with an estimated 2008 population of 4 million persons. In addition, the City operates one of the most active public service employment systems in the nation and supports a workforce of more than 51,000 civil service employees. Each year, the Personnel Department processes over 100,000 applications, conducts approximately 300 examination processes, and facilitates more than 4,000 hiring appointments from both open and promotional eligible lists.

The City’s civil service system, mandated by the City Charter, was created in 1903 through the centralization of the City’s personnel functions under a Civil Service Department and was renamed the Personnel Department through a charter amendment passed in 1967. The Civil Service Commission, consisting of five part-time Commissioners appointed by the Mayor per the City Charter, are responsible for retaining oversight of the City’s civil service system which is regulated by the Rules of the Board of Civil Service Commissioners. Though studies conducted over the years have addressed the structure of the civil service system itself, they provided little analysis of the Personnel Department’s processes. Furthermore, while the City implemented some of the recommendations proposed in these reviews such as class consolidation, most were rejected by city leaders as they were viewed as drastic changes to the civil service system that the City was not prepared to undertake.

As part of a 1999 charter reform effort, the Personnel Department’s former General Manager drafted recommendations for the Mayor’s consideration to help improve the civil service system. One area that was reformed relates to the number of exempt employees who are not subject to the provisions of the civil service system and considered “at will.” In 1995, voters passed a measure exempting department heads from the civil service system and vesting the hiring and firing authority of those employees in the Mayor’s Office, commissions, and City Council. The 1999 charter reform refined this change by broadening these exemptions to include many assistant department heads, and by allowing the Mayor and City Council to increase the overall percentage of exempt positions. Despite the increased number of exempt positions, the vast majority of city employees are covered under civil service rules and protection.

In order to receive a regular civil service appointment, employees must meet minimum qualifications for a position, successfully participate in a civil service examination for the position, receive a qualifying score on the examination to be placed on an “eligible list,” be appointed by a city department/agency/office, and serve a probationary period.

Summary of Results

Overall, we found that the Personnel Department (Personnel) continually strives to achieve its mission: “To partner with city departments to efficiently produce and sustain a diverse workforce which reflects the City's population and provides quality public service to the residents of Los Angeles.” In addition to our observations, nearly all departments we spoke with indicated that since the current General Manager was appointed in 2000, the culture within the Personnel Department has shifted from simply acting as a “gatekeeper” defending the City’s regimented and rule bound civil service system to functioning as a service department assisting other departments in all aspects of their hiring needs. Despite the challenges of working within a civil service system that is steeped in tradition and widely perceived to be cumbersome, time consuming, and bureaucratic, we found that the Personnel Department maximizes the management of the citywide hiring processes, including their efforts to recruit candidates as well as maintain and update classification specifications and examinations.

For the City to ensure that it can face the challenges of a changing workforce, population growth, and increasing complexity of the services it provides, it must establish a strategic approach to its human resources management processes. Needed will be a commitment to workforce and succession planning, building and identifying needed skills and expertise, addressing the gaps in automation and management information that exist, and adopting a future-looking citywide, rather than department-specific approach to finding, hiring, and retaining top employees. To begin, the City should consider adopting strategies that ensure eligibility lists have the best qualified candidates ranked highest through strategic use of “seniority credits.” It can also offer incentives for employees who pursue professional development and training on their own, and provide assistance by building partnerships with the City’s numerous institutions of higher education.

It is important to note that these citywide challenges cannot be addressed by the Personnel Department alone. Initiatives to improve the City’s overall workforce and hiring practices require support from the Mayor, City Council, and the City’s General Managers to successfully bring about needed change. In fact, we consistently heard from city officials and stakeholders that the Personnel Department was doing a great job with its limited resources, and our review revealed that the department was getting the most out of antiquated and manual processes it has at its disposal.

While Personnel strives to provide a high level of service and finds creative ways to work within a civil service environment, the City faces significant challenges that hamper its ability to attract and maintain a talented workforce. Based on the information gathered and analyzed relative to the audit objectives, we identified the following key issues:

The City Lacks the Systems and Resources to Perform Strategic Workforce Planning

The City of Los Angeles does not strategically plan its workforce needs in terms of future vacancies resulting from normal attrition as well as retirements, future changes in required employee skill sets, or staffing imbalances resulting from inconsistent labor agreements. Rather, the City has a decentralized and reactionary approach that simply focuses on immediate needs and filling current vacancies. The lack of planning is a result of decentralized information systems as well as lack of resources to either analyze and trend retirement data or implement a mechanism to forecast future staffing requirements, needed expertise, and skill sets. Our benchmarking survey revealed that the lack of workforce planning is not unique to Los Angeles as more than half of the cities surveyed also do not have strategic plans yet in place.

Despite lacking strategic plans and centralized information relative to its workforce, it appears that the City attracts sufficient numbers of potential candidates to meet existing hiring needs for certain positions and is not in immediate danger of losing a significant portion of its current employees to retirement. Furthermore, Los Angeles is very similar to other entities in that more employees are working past retirement eligibility due to the state of the economy—which in the short term reduces the strain of potential mass vacancies due to the aging national workforce. While retirements may not be an immediate concern, the issue could rapidly resurface as economic conditions improve in the future, which will only heighten the need for strategic workforce and succession planning. Moreover, without strategic planning, the City cannot ensure a constant flow of appropriately skilled candidates will be available to meet the City’s hiring and promotion needs and could even face a situation in the future where departments lack the qualified and trained individuals to fill critical vacancies.

Citywide Hiring Processes and Systems are Antiquated and Labor Intensive

We found that the Personnel Department’s systems related to recruiting, processing applications and examinations, and creating the eligible lists are manual and laborintensive. Also, the City’s rule-bound civil service system involves time-consuming processes. For example, to change and update minimum qualifications or examinations, Personnel needs participation by the affected departments, subject matter experts, and unions to develop and review proposed changes as well as must obtain final approval from the Civil Service Commission for any modifications. Rules also require that every position have an examination process and every minimally qualified applicant be examined—thus, under existing processes, Personnel has no options to simplify or streamline the effort and as a result the lengthy examination processes can involve literally thousands of candidates. Benchmarking data revealed that most cities surveyed do not require formal testing for most classifications and, as a result, they have shorter timeframes related to establishing an eligible list and hiring a candidate.

Despite the challenges of a working within a civil service system that is steeped in tradition and widely perceived to be cumbersome, time consuming, and bureaucratic, we found that the Personnel Department has created timeframe goals to ensure “client” departments are provided a sufficient number of candidates on a timely basis for current vacancies—even though its staffing resources have dwindled and its workload increased. Our benchmarking data revealed that cities with comparable rule-bound civil service systems with stringent examination requirements and manual processes have goals and timeframes similar to Los Angeles. Moreover, we found that the Personnel Department consistently receives positive feedback from hiring departments who appreciate its creative approaches to screen and qualify applicants as efficiently as possible.

City Policies and Practices Do Not Always Ensure the Most Qualified Candidates are Reachable

While the Personnel Department is able to provide departments with a sufficient number of candidates to fill current vacancies, there is a widespread perception among various city officials that “reachable” candidates are not always the best qualified. We consistently heard from hiring managers, Personnel Department staff, and city officials that departments often have to “settle” for candidates because the best-qualified applicants are not always reachable within the top ranks of an eligible list1. Many expressed concerns that seniority credit as well as veterans credit to a lesser extent is responsible for skewing eligible list rankings such that the best candidates are not necessarily within the top-ranks and can be “blocked” by less qualified candidates ranked higher due to more years of services with the City. Benchmarking data revealed that cities with comparable rule-bound civil service systems most often do not award seniority credits.

Another factor significantly influencing whether the best-qualified candidates are top ranked is the absence of any employee performance considerations in the examination process. Specifically, through our benchmarking efforts we found that approximately half of the surveyed cities considered performance evaluations when promoting employees, yet the City does not include past job performance in any portion of the examination or ranking of candidates on promotional eligible lists. The Personnel Department believes performance evaluations are too subjective and would result in inconsistent criteria.

In-lieu of requiring full performance evaluations for all employees given the current lack of a city-wide performance evaluation system, one approach the City could consider involves creating performance readiness self-assessment examinations that would require the participation of employees, supervisors, and managers. This information could be incorporated within the analysis to rank candidates on an eligible list rather than simply adding credits based solely on the amount of time a candidate has spent in City employment.

The City Lacks Employee Development and Training Programs

While the City may currently have sufficient numbers of individuals available to meet hiring needs, it lacks tools and programs to train and develop employees to meet future demands. Existing programs provide few, if any, incentives to encourage its workforce to embrace professional growth and expand their skills. A critical component of a holistic and strategic workforce plan involves identifying skills and competencies required by city departments now and in the future and comparing them to the actual competencies of the workforce.

The Personnel Department acknowledges the lack of professional growth and continuous learning opportunities for employees and stated that it was simply the result of a lack of resources. In Fiscal Year 2008-2009, the City is projected to spend approximately $14 per employee on citywide training and employee development (this does not include departmental training efforts that is reportedly very limited as well) which is considerably lower than the dollar amount range of $750-$1,500 quoted by the Saratoga Institute as the employee development investment benchmark for “world-class” organizations. Additionally, a 2008 report indicates that corporations spend nearly $1,200 per employee and the U.S. General Services Administration spent an average of $1,440 on training and developing employees in 2006.

Benchmarking data revealed that most of the cities surveyed had regular workforce training and development programs including customized training to meet specific departmental needs, leadership boot camps for first-time managers, rising stars program to identify future leaders and develop curriculum, crafts/skills apprenticeships, management/leadership development programs, and career development programs including tuition reimbursement.

While it would be difficult for such programs to be implemented with the City’s limited resources, city leaders could leverage resources of the local higher education institutions to encourage the offering of courses that would allow employees to obtain the education and skills to be better qualified for promotional opportunities and the City could offer incentives to those that seek growth on their own initiative.

Recommendations

In this report, we offer several recommendations to assist the City in ensuring that it can respond to the challenges of changes in its workforce and accomplish its mission, goals, and objectives, as detailed below.

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TABLE OF RECOMMENDATIONS

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