Audit Commission and National Audit Office urge public sector employers to use new indicators to test value for money of human resources function

Public sector employers are being urged to apply a new set of indicators to test value for money of their human resources function, as well as other corporate services.

The Audit Commission and the National Audit Office are among five leading audit bodies asking HR, finance, information and communication technology, estates management and procurement to use the voluntary indicators to evaluate efficiency and release money back into front-line services.

The main HR indicators include:

  • cost of HR function per employee
  • ratio of employees to HR staff
  • average days per full-time employee per year invested in learning and development, and
  • leavers in the last year as a percentage of the average total staff.

Keith Davis, director of NAO efficiency practice, told Personnel Today: “There is an absence of a framework for testing value for money across departmental functions.

“Through encouragement and persuasion [from audit bodies and government], public sector bodies will be able to use the indicators to compare themselves against others.”

The audit bodies have piloted the indicator system across nearly 100 central government bodies, local authorities, police and fire authorities and health bodies, which Davis said was successful.

However, the indicators are only voluntary and there will be no formal assessment of whether they make any difference to the value for money of the function.

Nor do the audit agencies have plans to develop benchmarking databases in-house.

Davis added: “We are talking to providers of benchmarking services in case departments want to use this data to benchmark.”

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