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2007 State of the Service Report

Presentation by Lynelle Briggs
Australian Public Service Commissioner
Darwin, 22 April 2008

Introduction

Before I begin I would like to acknowledge the traditional owners of the land on which we are meeting today.

I am pleased to be in Darwin today to share with you some of the findings of the 2007 State of the Service report.

The State of the Service report evaluates independently the activities and operational practices of APS agencies over 2006–07, and showcases their achievements. I will highlight the NT findings where appropriate.

Last year, the report was formally recognised by a United Nations Public Service Award.  The United Nations said that the State of the Service report should be an inspiration and encouragement for others working in the public service. 

Workforce Profile

The State of the Service report paints a picture of a world of work that has changed dramatically over the past two decades.  The pace of APS life is now faster, complexity and contestability is greater, expectations are higher, and the long-term boom in our economy is fuelling an unprecedented demand for skills. 

Staffing

One of the changes that has received the most attention is the size of the APS.  The requirement to implement a range of Howard Government initiatives saw the APS grow by 5.9% in the last year when adjusted for machinery of government changes.  This follows a general upwards trend over recent years as the previous Government extended the range of services, programmes and regulations it provided through the APS.

It is important that we see the recent growth in APS numbers in the context of broader employment trends.  The APS currently accounts for about two-thirds of the Commonwealth public sector.  The broader Commonwealth public sector has declined by 35% since 1996.  Over this same period, the size of the APS has increased by 8.6%, and the total number of people employed in Australia has risen by 25%.

At June 2007 the APS had a total of 143,525 ongoing employees of which 2,079 were located in the NT or 1.4% of all ongoing employees. The number of public servants grew by 8.7% in the NT last year.

Much of the work performed today by the APS is now highly knowledge-based.  This change in focus coupled with a reduction in the number of low skill jobs in the APS, has led to a higher classification profile. 

Over the last 15 years we have seen a significant increase in the number of employees working at the APS 6 level and above.  The APS 6 level is now the biggest staffed level in the public service; exceeding APS 4 for the first time this year.  But the APS 4 group remains the largest group in the NT at 20%. This is not surprising given the higher concentration of service delivery roles outside of Canberra.

This growth, especially at our most senior levels has reflected fundamental changes in the quantity and nature of APS work.  These include:

• more value added work—complex policy and intensive personal engagement with users of Government services and service providers
• increasing accountability requirements
• increasing demands for high-level engagement with stakeholders
• the ICT revolution, which has facilitated the automation of routine or lower level jobs and an explosion in the pace and extent of communication
• increasing requirements from Ministers’ offices.

If we examine in more detail the changes over the last 15 years at the APS 1 to EL1 classifications, we can see that there has been a significant shift.

Around 1999 there was a strong increase in the proportion of APS 4s to 6s, which was offset by a similar proportional decrease in APS 1s to 3s.  This shift reflects many changes in the APS work environment at that time, including the outsourcing and automating of many functions traditionally performed by staff at lower levels and broad banding of the APS 3 and 4 classifications.  Interestingly, it’s also the time when the numbers of women in the APS first exceeded the numbers of men.

Against this backdrop of high value work and an increasing classification profile, there has been an upward trend in the proportion of staff with graduate qualifications.

Over half (53%) of our workforce now holds graduate qualifications.  This proportion is likely to increase over time, as almost two-thirds of our new starters this year had graduate qualifications.  Our senior staff are particularly well educated, with the large majority of SES and EL 2 employees holding at least one degree at a bachelor level or higher.

The APS is now also able to draw on a workforce with a much broader range of experiences.  In 2006–07, half of all vacant positions were filled by engagements from outside the APS.  This compares to a third 15 years ago and stands in stark contrast to the situation in a number of state jurisdictions where only five to ten per cent of vacancies are filled from outside.

Type of work

Public servants are involved in a wide range of work types.  The largest proportion, almost a quarter, deliver services to the general public.  Other common categories include corporate functions (22%), regulatory work (12%), administrative support (11%), policy (10%) and programme management (9%).

Almost one third (29%) of employees in the NT reported that they were involved in service delivery work, compared to 23% nation wide. Employees in the NT were also much more likely than employees in other states to describe their role as ‘other’, so outside of general public administration functions.

Diversity trends

Our workforce is increasingly diverse.

One area of particular strength is our employment of women.  The proportion of women in the APS continues to grow.  Women account for almost 57% of the APS workforce. The representation of women in the NT is even higher at 62% in June 2007.

It is great to see the continued growth in female employment at higher levels.  Women now comprise 36% of the Senior Executive Service.  If the current trend continues women’s representation in the SES will equal that of men within a decade.

While these results for women are pleasing, some agencies are now reaching the stage where they need to consider strategies for recruiting and retaining male workers, especially those in younger age groups.  It is important that, as far as possible, we maintain a gender balance throughout our classifications.

We have also made some solid progress in the employment of both older and younger workers.  The number of employees aged 55 years and over increased by more than double the overall APS growth rate in the last year to 11.2%.  The representation of employees aged 55 years and over in the NT is lower, rising slightly from 9.1% at June 2006 to 9.2% in June 2007.  There is evidence that many employees in this age bracket are returning to the APS on a more flexible non-ongoing basis after resigning or retiring.

At the other end of the age scale, for the second consecutive year, the proportion of employees aged under 25 years has increased.  These employees now represent 5% of our ongoing workforce, up from 4% two years ago.  In the last year, employees aged under 25 years were the fastest growing age group in the APS.

The representation of employees aged less than 25 years in the NT is slightly lower rising from 4.3% at June 2006 to 4.7% in June 2007.

It is too early to say that the long-term decline in the employment of young people has been reversed, but I’m optimistic that we may have turned the corner.  I am especially heartened by the results of a recent survey of 2007 Australian university graduates, in which graduates ranked the Commonwealth Government as their top career destination.¹

This year we have seen a rise in the employment of people from a non-English speaking background.  There are also signs of a stabilisation in Indigenous employment.  Numbers of Aboriginal and Torres Strait Islander employees increased this year and proportional representation steadied at 2.1%.  This result suggests that our concerted effort across the APS to support the employment of Indigenous Australians is starting to bear fruit.

In the NT, the representation of employees from a non-English speaking background remained steady at 2.1%. Not surprisingly, the NT continues to lead the way in the employment of Indigenous Australians with the representation of Aboriginal and Torres Strait Islanders rising to 17.1%.

Unfortunately, we have had no success nationally with the employment of people with disability—with the decline continuing to 3.3%. The NT was the only state or territory to improve the representation of people with a disability – from 2.6% at June 2006 to 3.0% in June 2007.  All APS agencies need to make the implementation of the objectives of the Management Advisory Committee’s report, Employment of People with Disability in the APS, a priority.  The Commission has recently developed the toolkit Ability at Work: Tapping the Talent of People with Disability to assist agencies to meet these objectives.

Where we are going well

This year’s State of the Service report shows that the APS continues to be a fundamentally healthy institution.

Employee engagement

For the second consecutive year, results from the State of the Service employee survey suggest that employees across the APS are highly engaged with their agency and with their work. 

Employees were most satisfied with their understanding of their current role, their work group and their current job.  These are particularly significant results given that there is a strong link between them and employees’ views about their productivity.  The majority of employees are also satisfied with their immediate manager, their work-life balance and their agency’s commitment to workplace diversity.

Results were not as positive in the areas of agency culture, merit, career and development opportunities, senior leaders, and learning and development.  These are areas where we can focus to further improve employees’ levels of engagement.

Employees in the NT reported a different pattern of satisfaction with most of the employee engagement factors. Compared to the APS as a whole, NT employees were much more satisfied with their current job and their immediate manager but were much less satisfied with learning and development. I know it can sometimes be difficult in the regions to give employees all the off-the-job training they would like.  But as managers you need to be innovative; use online educational options and look for internal or cross-agencies project opportunities to develop and grow your staff.

Job satisfaction

This year we saw a substantial increase in overall job satisfaction levels among our employees from 73% to 81%—which consequently is the highest result we have ever achieved.  The comparable figure this year for the NT was 88%.  Satisfaction levels increased across many areas, including good working relationships, flexible working arrangements, opportunities to utilise my skills, good manager and salary.

Three out of the five key attributes selected by the APS as a whole were the same for the NT. Satisfaction levels were similar, with the exception of opportunities to use my skills which was significantly higher in the NT. Employees in the NT were also more likely to consider opportunity to develop my skills and contribution to society in their top five workplace attributes.  

APS Values

APS employees continue to report a high level of familiarity with the APS Values and Code of Conduct.  Ninety per cent of our employees are familiar with the Values, compared to 77% five years ago.  We have seen a similar trend in relation to the Code.

Employees continue to have a high opinion of the ethical behaviour of their colleagues.  Nine out of ten employees agree that their colleagues act in accordance with the Values.  Almost as many agree that their immediate managers do so as well. 

Employees’ level of confidence that their most senior managers act in accordance with the APS Values is lower, but still very positive, with three-quarters of employees agreeing.  This result has increased significantly from the 63% recorded five years ago.

Pride

Another extremely positive result is the high levels of pride APS employees have in working both in the APS and in their individual agencies.  Seventy nine per cent of employees agreed they were proud to work for the APS.  Sixty nine per cent were proud to work for their agency.

On the back of this result, it is not surprising that 81% of employees would recommend the APS as a good place to work.  This stunning figure is very important, as research tells us that existing employees represent the most credible source of information to potential candidates about jobs in their organisations.

Employees in the NT report similar  levels of pride in working for the APS and are even more proud to work for their agency (78%). These are very positive results for the NT.  

Organisational Productivity

Positive results in employee perceptions are matched by real improvements in APS performance.  Over the last few years the APS has shown high levels of productivity growth.

• APS agencies have needed to find cost savings of around 1.75% per annum, over and above budget supplementation, to meet increases in employee wages; and
• since 1987–88 cost savings have been appropriated by governments by means of the efficiency dividend, which rose from 1 to 1.25% per annum in 2005–06.

The APS’s results are better than productivity movements across the economy as a whole.  Over the last decade average labour productivity in the Australian economy generally has increased by 1.8% per annum and by 2.2% per annum in the market sector. 

Despite these good results we need to sustain a continual focus on productivity improvement to meet the Rudd Government’s extra demands.

One important influence on productivity that we looked at for the first time this year is levels of workplace absence.  Our results indicate an appalling APS-wide absence rate of 9.4 days per person in 2006–07. 

There has been little change in these results since the ANAO’s audit of agencies’ unscheduled leave in 2003.  While some agencies have been successful at sustaining low rates of absence or reducing absenteeism, this is an area where there is considerable potential for agencies to improve their performance.

Where we need to focus moving forward

So far I have focused largely on areas where we are going well but there are five areas that require our attention to ensure that we remain a high-performing institution.

Agency Health and Agency Culture

The first challenge is a need for a greater focus on APS agencies’ corporate health. 

Corporate health is a measure of the effectiveness of agency governance, and covers areas such as:  organisational direction, leadership capability, organisational capacity, corporate governance processes, relationships and integrity, and agency culture.

The importance of monitoring corporate health is self evident. High levels of corporate health are linked directly to high levels of overall performance.  Poor corporate health can lay the foundations for poor performance.  We need to identify and address early warning signs of poor corporate health well before they start to affect the achievement of outcomes, and definitely before they develop into a national scandal. 

Last year I launched the Commission’s Contemporary Government Challenges and two publications in that series are designed to help agencies to address corporate health.  The first, Agency Health—Monitoring and Improving Performance, provides both a checklist and a range of case studies designed to help monitor and improve both systems and culture.  Building Better Governance identifies seven building blocks to better governance, with the key message that better governance is the responsibility of everybody in the APS.

I am pleased to say that we found considerable evidence this year that agencies are taking governance seriously:

• in 2006–07, 73% of agencies reviewed their governance structures
• almost all APS agencies (94%) had policies and procedures in place to ensure that appropriate assessments of risk are conducted
• almost all agencies (97%) reported undertaking at least one measure to improve recordkeeping, with 88% of agencies using four or more measures
• the majority of employees were also satisfied with their agency’s efforts.

Rigorous ongoing attention to governance issues is required to ensure that we avoid the occasional serious lapses in performance that have caused considerable damage to the reputation of the APS.  There is no room for complacency. 

One area that requires a lot more concerted effort is how to create an effective organisational culture—one that encourages high quality performance, continuous improvement, empowerment of staff and trust.  I am worried that creating such a culture still appears to be an issue in some agencies.

This year’s report found relatively low rates of employee satisfaction with various elements of agency culture.  Less than half of employees across the nation and in the NT reported satisfaction with, the management of underperformance, change management, feeling valued for their contribution, and their level of involvement in decision-making. I am particularly concerned about the even lower levels of satisfaction with the last three areas in the NT.

New Ways of Doing Business

The second critical challenge is building organisational capacity to support new ways of doing business.  It is a great time to be working in Australia’s public service. Despite some problems, the economy is sound; our people are experiencing unparalleled levels of wealth, education and opportunity; and, as we implement the policies of the new government, there will be opportunities to try new things and take on tough challenges.

The APS has improved significantly its capacity to implement more innovative ways of working over the last few years.  Some examples include:

• whole of government responses to major challenges such as Indigenous disadvantage
• more active engagement with the community in order to change behaviour and develop solutions to public policy problems, such as land degradation or public health issues
• a greater use of tailored and differentiated approaches to service delivery, designed around the needs of service users or to meet specific policy objectives
• greater use of third parties in service delivery for services ranging from respite services for older carers, to advisory services for small business.

Expenditure on the delivery of services by third parties now makes up a significant proportion of total Australian Government expenditure.  At least $40 billion, or 18% of the total Australian Government Budget, was spent on third party service provision last year.  More than half of this money went to non-government organisations.

Despite significant progress, establishing new ways of working in the APS raises a number of challenges.  There are a number of areas that require attention and action.  Of our EL and SES employees involved in whole of government work:

• only 27% believe that financial and accountability arrangements usually facilitate whole of government work
• only 29% believe that their agency’s performance management system usually recognises or rewards whole of government outcomes adequately, and
• only 32% believe that ICT systems are usually sufficiently compatible to support whole of government work.

These are far from positive results.  It is important that senior leaders take the lead in making collaboration work across organisational boundaries and in fostering a culture where innovation is the norm. 

There are also capability challenges.  New ways of working put an increasing emphasis on developing the public service’s capacity for strategic thinking, innovation, and creativity.  We require people with strong communication skills, the willingness and ability to listen to the views of others, and conflict resolution and negotiation skills.

At an organisational level, we need to develop genuine insight mechanisms within and across agencies to help understand the experience of those who use our services: individuals, families, businesses, or other organisations.  To do this, we need to focus on areas where services interact, and on design principles that untangle the maze that our service users and our employees are sometimes expected to work through. 

We also need to focus on improving our ability to implement our new ideas.  In doing this, it is important that APS agencies do more than simply respond to the changes that are occurring around them.  A proactive approach—one that leverages new technology and harnesses it to engage with citizens and do business in new ways, for example—will allow the APS to demonstrate its relevance in an increasingly contestable world.

The Contemporary Government Challenges publications, Tackling Wicked Problems and Changing Behaviour are key documents that will help stimulate debate and encourage government and public servants to make the best choices in addressing complex policy problems, especially, when they involve changing community behaviour.

Modernising APS Employment

To ensure that the APS has the organisational capacity to implement new ways of working, we need modern employment arrangements that allow us to attract and develop a diverse array of people with a range of different skills.  This is the third critical challenge identified in this year’s report.

Skills shortages

Skills shortages have had a noticeable impact on agencies’ ability to achieve outcomes.  Most agencies (88%) have had difficulties in recruiting people with required skills, in particular ICT, financial management, accounting, HR and project management. 

While I know that the Government’s public service cuts will relieve this problem – and the recently established APS Career Transition and Support Centre in the Commission will play a pivotal role in assisting agencies and their staff in this changing environment - the skills shortage facing the public service is likely to persist. Considering the ageing of the APS workforce and the highly competitive employment market, it is essential that we position the APS as a modern, flexible and attractive employer.  This requires action on a number of fronts.

Recruitment Processes

Firstly, there is significant potential to streamline our approaches to recruitment. The current legislation doesn’t prescribe lengthy or complex recruitment processes and provides agencies with considerable flexibility.  Given this, the findings in this year’s report about the excessive length of recruitment processes are disappointing, if not surprising.

Of the employees who applied for a job in the APS in the last 12 months, only half indicated that the process took less than two months².  Thirteen per cent of relevant employees reported that the processes had taken more than four months.

In too many agencies, lengthy recruitment processes appear to result from confusion on the ground between the application of merit as required by legislation and rigorous adherence to detailed internal processes.  In today’s competitive labour market, high-quality candidates will not, nor should they be expected to, wait for three months or more for us to finish a recruitment exercise.  We need to make improving our performance here a priority.

Attraction

A second component of a modern approach to APS employment is insightful marketing that highlights the things that matter most to the people we are trying to attract.

For the first time this year we asked employees what attracted them to their current roles.  Across the APS, the most important attraction factors were:  job security, interests that match the job, location, career opportunities and a desire to gain experience in the APS.

As I mentioned previously, young male workers are a group that we need to attract to maintain gender balance in the APS. The results for new entrants to the APS in this group indicate that their main attraction factors were similar to the wider APS but also included the ability to contribute to making a difference to the lives of Australians.  They were also less likely to consider the location of the job as important.

In the NT, employees reported four of the five attraction factors that the APS reported  as a whole but with job security, interests matching job and location being much more popular in the NT. Employees in the NT were also more likely to place greater importance on remuneration than were APS employees Australia-wide.

These differences highlight to agencies the importance of identifying the factors that attract different types of employees in different places, and taking a more sophisticated approach to marketing their agencies to these potential applicants.

Remuneration

Perhaps, somewhat surprisingly, remuneration only ranked 6^th APS-wide as an attraction factor.  It had a similar ranking in terms of its importance as a retention factor.  Nevertheless, it is important that the APS is able to provide at least moderately competitive remuneration packages to attract and retain the highest quality staff. This is especially the case in the NT, as remuneration appears to be a key attractor for your staff.

Although APS remuneration increases were generally in line with other sectors in 2006, our levels of remuneration are generally well below comparative positions in the private sector.  APS employees are remunerated at lower rates at all classification levels, except APS 1 and 2. 

These lower remuneration rates do not yet appear to have had a significant impact on our ability to recruit from outside the APS, but is an issue that we will need to monitor carefully.

Corporate Areas

An important theme coming through the State of the Service report this year is the role that agencies’ corporate areas play in establishing modern approaches to APS employment and in supporting line areas to achieve their goals.  It is important that corporate areas see themselves as drivers and supporters of business improvement. 

One area where there appears to be significant room for improvement is in establishing effective internal administrative processes.  Streamlining administrative processes, along with better internal communication, the recruitment of high-quality employees and a culture that supports a better prioritisation of work and focuses on these priorities, were the four actions most commonly nominated by SES and EL 2 staff as having the potential to increase the efficiency and effectiveness of their agency.

Putting a priority on developing the quality and depth of our corporate areas is essential to support improvement in these areas.

Interactions with Government

There have been changes in the way that the public service interacts with, and supports, the Government.  This is the focus of the fourth challenge for the APS identified in this year’s State of the Service report.

I believe it is time to look more closely at the interaction between public servants and Ministers to see whether we can better clarify public service and ministerial accountabilities.  A particular issue here is the significant role that Ministerial advisers play in the relationship between Ministers and public servants.  Codified standards of behaviour would help to protect the integrity and non-partisan nature of the public service.

There has been continuing debate over the way in which the public service manages the requirement for it to be both apolitical and responsive to the Government of the day.  I welcome this debate because I think the balance has swung too far.  But it is important that this debate is based on an informed understanding of the role of the APS—the APS is not and should not be seen as an independent arbiter of public interest.  Sound government will always be based on a strong partnership between public servants, Ministers and their advisers underpinned by a clear understanding of their respective roles and open communication.

The new Government recognises this and has established new standards of Ministerial conduct; will have a Code of Conduct for Ministerial advisers; and has introduced mandatory training for advisers. 

The public service needs to evolve in a way that allows it to manage contemporary circumstances and serve governments of whatever political colour effectively, without crossing the line into political behaviour. 

One way of achieving this is through effective training for public servants on their role and their obligations under the APS Values.  I believe that all new SES employees should be required to undertake training in the Public Service Values and Code of Conduct, and undertake the SES orientation program.  This is essential if they are to undertake their legislative requirements to promote and model the APS Values, by their personal example.

Similarly, it should be mandatory for all newly engaged public servants to do the online APS Induction Program because this will provide them with information about working in the APS, including the ethical framework and institutional underpinnings of the Westminster system of government in Australia.  Agency Heads should make this mandatory for all new starters, and if they don’t, you should do so in your domain.

Leadership

The final challenge identified in this year’s State of the Service report is the need for strong and effective leadership.  This year there have been improvements in employees’ assessment of the leadership capabilities of their supervisors, and a particular improvement in views about strategic thinking capability.

The national improvement in the area of shaping strategic thinking is especially pleasing in light of the strong agency and whole-of-APS focus on this issue.

There have also been some improvements in perceptions of senior leaders more generally.  Despite these improvements, employees’ perceptions of senior leaders continue to be less favourable than those of their immediate managers.  To some extent I see this as inevitable, and simply reflects the greater distance between employees and their senior managers.

The employee survey results show that the views of employees in the NT of the leadership capabilities of their immediate supervisors are somewhat more positive than the APS-wide results. However, all agencies could do more to improve the effectiveness of communication between senior leaders and their employees, and invest more in developing their EL2s and SES.

Indeed, the findings from this year’s report continue to support the need for a greater investment in the leadership capability of the EL 2 group.  Fifty-seven per cent of agencies report at least one skills gap in their SES feeder group.

They also suggest a need to better engage EL 2s in the leadership of their agency and to build much stronger links between senior and middle management.

At a broader level, the role of APS leaders is changing.  There is now greater emphasis on our leaders connecting, guiding, directing and coordinating, as more government services are provided collaboratively or through third parties, and more emphasis is placed on working with the community to address complex policy issues. 

It follows that the skills required of our leaders in this new environment are also changing.  They go beyond the traditional, yet still important, high-level analytical, conceptual, regulatory and project management skills. 

The new leadership style is characterised by a willingness to think and work in new, innovative and more entrepreneurial ways, and to reward flexibility and creativity.  It is marked by holistic, rather than partial or linear, thinking and by collaboration across organisational boundaries.  New leadership puts a much greater emphasis on relationship management.  It tolerates uncertainty, and accepts the need for a long-term focus in dealing with many of the complex policy problems that we face.

These are the sorts of leaders we should be developing as we face the challenges ahead.  To do this requires support, both from within agencies, and at a whole-of-APS level.

The way ahead

Although the role of senior leaders is crucial, leadership goes beyond this. It is the responsibility of every public servant to ensure that the APS remains a high-performing institution.

The demands on the modern APS require that all employees focus on developing their capacities and their levels of understanding so they can appreciate how their work fits into the bigger picture.  All employees need to contribute to setting directions within their agency based on their experience on the ground.

The new Rudd Government presents significant opportunities for the APS.  How we respond to these opportunities will have major implications for our relevance.  It will help to determine whether Australia can reap the long-term benefits of a period of unprecedented economic boom and make real headway in addressing some of our intractable policy problems.  It will position us for continued success into the future.

 

[1] Universum Graduate Survey 2007. (1770 Respondents). Results published in an article in BOSS magazine, Australian Financial Review, 9 November 2007.

[2] That is, the time from when they submitted their application to when they were offered the job or were advised they had been unsuccessful.

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