The City of Los Angeles has a workforce of approximately 55,000 employees, comprised of approximately 41,000 civilian staff at all operating departments (including the Department of Water and Power) and about 14,000 sworn personnel at the Police and Fire Departments. Nearly half of the civilian employees are age 50 or older, and many are eligible for retirement. The City has routine turnover and like all employers, faces challenges in a competitive job market.
As Baby Boomers and Gen-Xers retire, prospective employees from the Millennial and Generation Z join the City for reasons different than prior generations. Leading research in public sector recruitment and retention identified distinct differences between the generations, such as Baby Boomers being more focused on job stability compared to Millennials being more willing to change jobs to meet their needs.
The City has recognized the need to recruit and retain employees using different approaches and, in 2016, participated in a Google Innovation Lab that set a goal to:
“Transform the City of Los Angeles to become the best employer in the United States by recruiting the best, hiring the best, and developing a thriving workforce for the purpose of delivering exceptional City services.”
The Controller conducted this review to identify the leading practices adopted by the City and what challenges still exist, and to make recommendations to improve the City’s ability to select and hire employees, attract the best suited candidates, and retain and engage City employees.
THE COMPLEXITY OF SELECTING AND HIRING CITY EMPLOYEES
The City typically hires new employees through its civil service system. This system was designed to hire or promote employees based on merit rather than cronyism or nepotism. However, a number of factors can hinder the City’s ability to hire the best qualified candidates.
The City’s interpretation of the City Charter is very restrictive, and has unintentionally limited the recruitment of candidates from outside of the City and the number of employees that can be hired as exempt from civil service.
In Fiscal Year 2016-17, 17% of jobs were open to everyone, which are typically for entry level or very specialized jobs. 34% were open/promotional and City employees were given an advantage by having bonus points added to their raw employment test scores for each year of employment with the City. Hiring departments are required to consider existing City employees before external candidates, per civil service rules.
While some employees are part-time or exempt, the City cannot easily bring them into civil service. Without a way to bring people in at the mid-level management or career levels, departments recruit employees from other departments. City employees may also seek opportunities in different departments to expand their knowledge and experience.
In addition, the City’s ability to utilize exempt positions is limited; the City Charter identifies up to 150 positions that are exempt from Civil Service rules. The Administrative Code also dictates rules for City employment, including approval for exempt positions. It may be more reasonable for the Administrative Code to be the authority for all matters concerning exempt positions to allow more flexibility if administrative changes are necessary.
The City has a complex, time-consuming civil service hiring process which may result in the City losing strong candidates. As of December 2017, Personnel averaged 98 days to open an exam after a department request, and another 129 days to produce a list of eligible candidates to hiring departments (for a total of 227 days).
Personnel acknowledges that their multi-step process affects the hiring process, and reported that it is not meeting a Mayoral goal to complete exams and establish certified lists of candidates within 150 days for 90% of regular exams. Personnel reported that it met the goal 64% of the time in FY 2016-17 but improved to 68% through December 2017.1 While the City is improving, we noted that four other cities reported shorter recruitment timeframes.
For example, the City of San Diego averages 58 days, and attributed its success to a predictive model for determining when exams are given. The City of San Jose takes 40 days, as their Personnel Department has tightened the minimum job requirements and delegated much of the hiring process to departments. While these cities differ from the City of Los Angeles in total number of employees and may not have the same Charter constraints or workload, the difference in timeframes is still notable and Personnel should continue its efforts to reduce its overall processing timeline.
To address these selection and hiring issues, the City should:
- Develop a career path for experienced exempt and part-time City employees into the Civil Service system. (Responsible entity: Personnel Department working with City Attorney, City Council and the Civil Service Commission)
- Reduce the examination advantage given to existing employees relative to unlimited seniority points for non-managerial positions. (Responsible entity: Personnel Department working with City Attorney, City Council and Civil Service Commission)
- Pursue all available options to consolidate Civil Service exempt provisions into the Administrative Code. (Responsible entity: Personnel Department working with City Attorney, City Council and Civil Service Commission)
Continue to work towards shortening the exam development phase by working with job experts and vendors as planned to establish a job bank of questions for exams before recruiting by focusing on hard-to-fill positions. (Responsible entity: Personnel Department)
1 According to Personnel, they currently complete exams within 150 days 72% of the time.
BRANDING THE CITY & ATTRACTING THE BEST SUITED CANDIDATES
To attract employees, the City needs to transform how it recruits and hires. Technology has changed the way people search for jobs and how they think about those jobs.
The City has not devoted adequate resources to recruiting, which is needed to expand outreach to potential candidates, and ensure the City’s workforce is representative of the communities it serves.
Personnel has no recruiting budget and must rely on other departments to fund recruitment efforts on their behalf. As a result, the Department is limited on where it can advertise job openings and has used free social media (e.g., Twitter and Facebook). However, there are many other job search/recruiting sites, such as Indeed.com, that should also be fully utilized to optimize Personnel’s outreach efforts.
Moreover, resources are needed to reach underserved populations and bring more women into non-traditional and management roles. Women only represent 35% of the City’s civilian workforce, yet are 50% of the City’s population.
The City should increase its use of alternative paths into City employment.
The City has been able to reach local residents and underserved communities through its Targeted Local Hire (TLH) program, which provides an entry into civil service. However, while the City does hire fellows and interns, it has not developed a career path for their entry into civil service like other organizations. For example, the County of Los Angeles’ Fellows program provides a career path into mid-level management for its participants.
The City should evaluate whether salaries, job qualifications and job titles are aligned with comparable industry jobs.
The City receives thousands of applications for customer service entry-level jobs in the Department of Water of Power likely because of relatively high starting salaries, yet professional jobs in information technology may pay less than their counterparts in the private sector.
Further, City departments may not have the necessary flexibility to expand or narrow the minimum job qualifications for openings in their departments in order to appeal to prospective employees.
Lastly, while Personnel has taken some steps to address outdated job titles, such as Clerk Typist being renamed Administrative Clerk, the City’s information technology job titles are not aligned with industry job titles that are more familiar to new college graduates.
To address branding the City and attracting the best suited candidates, the City should:
- Provide the Personnel Department with dedicated funds for outreach and recruitment. (Responsible entity: City Policymakers)
- Focus on universities, organizations and events for women to address the gender gap in its workforce and provide non-traditional and management roles for women. (Responsible entity: Personnel Department working with Policymakers and City stakeholders)
- Increase the use of alternate pathways into civil service by establishing innovative partnerships with non-profit organizations to provide job training as a substitute for civil service exams. Allow City student interns and fellows to qualify for civil services and use fellowships as a pipeline for mid-level managerial positions. (Responsible entity: Personnel Department working with Policymakers and City stakeholders)
- Conduct a salary study to determine whether existing City salaries are aligned with industry benchmarks. (Responsible entity: Personnel Department and the City Administrative Officer)
- Provide hiring departments the flexibility to expand or narrow job requirements to qualify the best internal or external candidates. (Responsible entity: Personnel Department)
- Update job titles, as necessary, to correspond with industry terminology and make jobs relatable to applicants. (Responsible entity: Personnel Department)
RENEWING THE WORKFORCE & ENGAGING EMPLOYEES
A survey of state and local governments notes that turnover is one of the greatest challenges to managing their workforce. As the City renews its workforce, it must appeal to employee motivations and concerns. All employees need to be engaged to remain productive, but research suggests that Millennials and Gen-Z employees value different things than prior generations who were drawn to government service primarily for its stability and financial security.
This presents the City with an opportunity to shift its organizational paradigm, so that it appeals to and renews its workforce now and far into the future with Millennials and Gen-Zs who generally, as a group, value the following:
- Opportunity to Make a Difference in an Organization that is Aligned with their Values
- Flexible Compensation and Benefits
- Opportunities for Professional Development
- Opportunities for Promotion
- Variety, Collaboration and Interesting Work
- Flexible Work Arrangements
The City should work to improve the onboarding/work experience from the very beginning, offer more flexible benefits, provide clearer career paths, and offer more leadership and job training. These changes could be accompanied by transforming the Personnel Department into a true human resources function, with a new name to better match those responsibilities.
The City could establish a more robust “onboarding” experience for newly hired employees.
City departments typically conduct a new employee orientation on the first day to review policies and procedures, select employee benefits and complete paperwork. Onboarding is a much longer process that frequently starts before the employee’s first day and may last up to a year. Onboarding provides new employees with opportunities to meet colleagues, learn new processes, integrate into the workplace and identify how they can make a difference.
While the City offers attractive compensation and benefits, more flexibility is needed.
Employee salaries generally increase on a regular basis, regardless of performance, as negotiated between the City and labor. However, in the private sector and in a few government agencies, pay increases are primarily merit-based.
Although the City’s benefits can be appealing to employees, more flexibility to customize those benefits may better address employee needs.
The City should focus on talent management, leadership development, mentoring, and job rotations.
Millennials expect information quickly in order to develop into leadership roles rather than gaining knowledge over time. They rank training and development higher than financial benefits, because professional development prepares employees for advancement. However, leadership training and tuition reimbursement are inconsistently offered within the City. We noted BOE has mentoring and job rotation programs, which should be explored citywide.
To address issues relative to retaining and engaging employees, the City should:
- Develop a robust onboarding process for new employees. (Responsible entity: Personnel Department)
- Consider introducing some elements of merit-based pay as a means to retain high performing employees. (Responsible entity: Personnel Department working with the City Administrative Officer [CAO], Policymakers and City stakeholders)
- Provide a cafeteria-type benefit package that employees can customize. (Responsible entity: Personnel Department working with Policymakers and City stakeholders)
- Develop consistent training and development opportunities for employees and consider providing more educational opportunities to employees through a citywide tuition reimbursement program. (Responsible entity: Personnel Department, Policymakers and City stakeholders)
- Increase employee opportunities to promote or expand their work experience through job rotation and mentoring programs. (Responsible entity: Personnel Department)
The City can be the best employer in the U.S. by recruiting the best, hiring the best, and developing a thriving workforce for the purpose of delivering exceptional City services. Despite limited resources, Personnel has improved its outreach using creative means to reach prospective employees. However, there is more to be done and it will take policymakers and hiring departments to understand the different motivations of the new workforce to not only attract the best, but engage and retain them within City service.
The City should continue to shorten the hiring timeline and communicate with prospective employees at the various stages of the hiring process to prevent the best applicants from being hired by competitors. As new generations may be more likely to leave the City if it is outdated and inflexible, more emphasis needs to be made to retain employees through improved engagement. Personnel can provide the leadership for the City to effect this shift, especially if given the resources and support to become a true human resource function, rather than a department that is overburdened by a lengthy process and an emphasis on compliance.
REVIEW OF THE REPORT
On June 25, 2018, a draft of this report was provided to the Personnel Department. We met with Personnel management at an exit conference held on July 10, 2018, and considered their comments as we finalized this report. Personnel generally agreed with the issues and recommendations, providing some updated information and clarifications, including their opinion that some recommendations may be more appropriately directed to other City departments.
Personnel management indicated that they do not have authority to negotiate or determine employee compensation (Recommendations 7a and 11) or employee benefits (Recommendation 12a), noting the CAO, Policymakers and labor partners negotiate employee compensation and benefits.2 As the City’s Human Resources agency, and primary recruiter and administrator of the civil service process and employee benefits, we believe that Personnel should lead an effort to ensure City salaries align with industry benchmarks, and pursue other compensation options such as merit-based pay and flexible employee benefit packages to make the City an attractive employer of choice. Personnel management also discussed promoting other aspects of City employment as incentives, such as little to no job-related travel required by City job. Personnel management may consider hiring a consultant to study City salaries and benefits to provide City leaders and stakeholders with information to support changes.
Personnel also indicated they do not have authority to require City departments use the CLEAR evaluations system through Cornerstone (Recommendation 15). We acknowledge that departments do not report to Personnel; however, there are many instances of Administrative Code requirements related to training and developing the workforce that recognize the need for Personnel to assist departments. Personnel is an integral partner with management to ensure employees receive regular feedback on their performance and development plans. Personnel should take a more proactive role to ensure departments take advantage of enhanced systems and tools to provide for regular employee performance evaluations.
Personnel management agreed that it is important to understand how to recruit and retain Millennials, and that the City should consider the importance of its workplace environment (Recommendations 18b and c). While individual departments are responsible for their own workplace design and maintenance, Personnel should advocate for improvements that are important to the new and current workforce. Personnel also agreed that although there had been previous efforts to change City Charter civil service provisions, continuing to review for possible improvements is beneficial to the City.
We thank Personnel staff and management for their time and cooperation during this review.
1 According to Personnel, they currently complete exams within 150 days 72% of the time.
2 Employee benefits are negotiated by the CAO, approved by the Mayor and City Council with input from the Joint- Labor Management Benefits Committee.