There is a degree of mystery and intrigue regarding HMRC, how it works, how it’s supposed to work and the number of employees. While there is no doubt that AI technology is significantly impacting productivity and the number of enquiries handled, there are growing concerns. The revelation that AI recruitment at HMRC is now commonplace, with some “interviews” without human interaction, has shocked many people.
As always, it’s important to consider the wider picture before weighing the pros and cons of the recruitment process.
The current HMRC workforce
When looking at AI recruitment at HMRC it’s essential to put this into context, with many challenges faced in recent years. Were you aware that:-
- There are over 60,000 employees within HMRC
- The division is seen as a “core department”
- The number of tax professionals fell by 40% between 2016 and 2023
- Despite increasing challenges, the workforce has shrunk since 2010
- There are a growing number of staff aged over 60 and below 30
- HMRC has relatively few middle-aged employees
So, despite the switch to digital returns, the freezing of tax allowances, and the increasing number of taxpayers, the number of HMRC employees continues to fall, with less general and more specifically targeted funding. On top of that, wages are down in relative terms, and it is safe to say that staff morale is low.
The AI recruitment process
As ever, headlines tend to focus on a particular element of a topic without potentially giving the broader reality. While it is true that AI recruitment at HMRC is now commonplace, with some agents being hired without ever speaking to a human, this is not the case across the board. However, some of those being interviewed by AI services do include customer service advisers as well as some of the more junior roles.
The AI interview process is relatively straightforward but surprisingly lacking in depth:-
- Applicants send in their CV and a 1000-word statement
- An AI operative scans the application data
- Candidates receive a video link to a pre-recorded interview
- They are then asked six general questions
Successful candidates can accept an offer from HMRC by simply clicking a button, receiving a confirmation email, and then looking forward to day one in the office (although many HMRC advisers are still working from home). Some would say this is simple, to the point, and efficient, but does it really achieve the goal of improving the quality of existing HMRC services?
Concerns over the quality of recruitment
Many in the financial services industry were shocked to learn that, earlier this year, HMRC had drawn up plans to close helplines for six months every summer. Only when the former Chancellor of the Exchequer, Jeremy Hunt, stepped in with an additional £51 million in funding were these plans withdrawn. The extra funding is expected to increase the number of calls answered by staff, but there are serious concerns regarding transparency and quality of advice.
Despite ongoing attempts to deflect the majority of phone calls towards online services, a review by the National Audit Office found that 50% required the assistance of a human, not a robot. To put this into perspective, in the 2022/23 tax year, 25% of calls were rerouted to online services. This figure had crept up to nearly a third in the first 11 months of the 2023/24 tax year.
While understandable if the online services were appropriate and able to help, only 28% of those who were deflected to online services were satisfied with the assistance given. So, 72% of those deflected from a phone call were unsatisfied with the service.
Staff shortages and service backlogs
Whether AI recruitment at HMRC will be successful in the future as the process is modified and improved remains to be seen, but there are staff shortages and ever-growing service backlogs. Only recently was it revealed that last year, the accumulated time spent on hold waiting for an adviser was the equivalent of 800 years. Yes, you read that right!
The truth is that this has been an ongoing issue for many years, with the HMRC workforce falling since 2010 while the number of taxpayers continues to rise and tax returns become more complex. We may be at a crossover point between the full integration of AI services and reduced human interaction, but to say the jury is currently out would be an understatement.
Relatively minor enquiries or account changes take weeks/months to conclude, in-depth tax investigations can take years to complete, and the cost to consumers, businesses and those in the financial services industry continues to rise.
Trust and accountability
It is fair to say that trust in HMRC has fallen dramatically in recent years. Despite the huge budget, many professionals would argue that the quality of service has eroded. There seems to be a lack of accountability, staff morale is at rock bottom, and something as simple as registering a complaint is a complex and time-consuming action.
While it is true that AI recruitment is being used in HMRC, it’s important to clarify the position: This is not being used across the board. Also, the vast majority of UK businesses use AI in their recruitment service to a certain extent, although the total lack of human interaction encountered with some HMRC job interviews is surprising.
HMRC responded to various criticisms by clarifying that new employees undertake ten weeks of comprehensive training at the start of their employment. Critics would suggest that this is too little too late, with the barriers to entry at HMRC seemingly relatively low in some areas, leading to the appointment of inexperienced individuals to often critical roles.
Outsourcing recruitment services
HMRC has also come under pressure for outsourcing a significant element of the recruitment process to private sector companies. This may be a little unfair, with HMRC being judged on the results, not the process, as it is not the only government department or private business to outsource elements of its recruitment drive. AI is now involved in a broad range of behind-the-scenes business services, although, at the moment, it is not necessarily on the frontline, as seen with AI recruitment at HMRC.
Would it help (results and transparency) to introduce an element of human interaction to currently fully automated employment interviews?
Conclusion
If you ask any financial services provider with direct interaction with HMRC, the vast majority will report a significant reduction in the quality of services and ongoing difficulty in contacting the right people. Delays in relatively simple actions can be costly, and even though they aren’t the fault of the financial services industry, this does not reflect well. The use of AI-driven recruitment services could be seen as a proactive approach, but whether the quality is there at the moment and the results are acceptable is debatable.
We work with many clients who continue to be frustrated with their HMRC communications (as do we), which are significantly impacting their business. Our team prefers to take a proactive approach, keeping HMRC communications to a minimum while looking to address questions and queries using our expertise and experience. If you would like to discuss your personal or business matters in more detail, please contact us, and we can put a date in the diary for a chat.