Enhancing productive capacity

examines the measures taken to improve our capability. It includes the following chapters:

4. Attracting, engaging and retaining the APS workforce

5. Leadership, learning and development in the APS

6. Increasing APS efficiency and effectiveness

Chapter 4: Attracting, engaging and retaining the APS workforce

The capability of Australian Public Service (APS) employees to design policy and deliver programme outcomes is central to the effectiveness of government and the well-being of Australian society. In turn, effective strategies for attracting, engaging and retaining employees are a critical component in building and maintaining capability.

APS agencies were subject to some highly challenging recruitment and retention forces during 2007–08. Agencies had to manage the Government’s additional one-off 2% efficiency dividend for the period 1 March 2008 until 30 June 2009, which meant that many agencies limited recruitment and managed employee numbers very carefully.

At the same time, they faced demands from the Government to shape a new reform agenda, while continuing to face challenges in attracting and retaining quality employees in a tight labour market. It has been well-documented that the cumulative effects of wider demographic changes, including the ageing of the labour force and the resilience of the economy, have resulted in shortages for some skills and increasing competition for others.

This chapter looks at the workforce challenges that agencies faced in 2007–08 and the strategies they used to meet them in order to attract and retain a high-quality workforce. It also draws on information from the agency and employee surveys to explore perceived levels of employee engagement and job satisfaction. Issues and data on APS remuneration— increases, levels and dispersion—are also canvassed in this chapter, as are issues relating to the APS common classification structure.

Workforce Planning

It has been recognised for some time, and emphasised in a number of reports over the last few years,1 that agencies should give priority to the implementation of systematic workforce planning to ensure that they have the required skills and capabilities in place to enable them to continue to deliver on their organisational objectives.

In April 2008, the Australian National Audit Office (ANAO) released a performance audit, Management of Recruitment in the Australian Public Service, which suggested that there was still uncertainty in the APS at a strategic level about planning recruitment needs into the future. This, and other findings in the report, for example, that ‘the lack of mature workforce planning processes impairs agencies’ capacity to address challenges arising from the changing workforce environment’,2 reinforces the need for agencies to continue to focus on improving their strategic workforce planning frameworks.

Agencies’ progress with workforce planning

A sizeable proportion of agencies in 2007–08 (79%) reported that they have in place policies and strategies designed to provide them with the skills and capabilities needed for the next one to five years. This is a significant increase on last year when only 53% of agencies reported having such arrangements in place, and sharply reverses last year’s decline from that of 2005–06 (see Figure 4.1).

Figure 4.1: Agencies’ progress with formal workforce planning, 2002–03 to 2007–08

Chart

Source: Agency survey

Workforce challenges

When agencies were asked in an open-ended question to list, in order of importance, the five biggest workforce challenges facing their agency in the next five years, most listed recruiting people with desired skills as either first or second. Retaining such skilled employees, especially in the context of an ageing workforce, was also listed as a major challenge by a number of agencies. Other challenges reported by agencies included: developing the capability of existing employees, particularly future leaders; transferring corporate knowledge (again in the context of an ageing workforce and the impending retirement of senior employees); and maintaining salary levels and competitiveness in a tight labour market and with reduced resources (a number of small agencies saw this as a particular challenge). Some small agencies also reported facing challenges in maintaining performance due to limited budgets.

Impact of skills shortages

During 2007–08, the overwhelming majority of agencies (93%) reported experiencing difficulty in recruiting or retaining skilled employees, resulting in a limited to severe impact on their capability. The shortage of information and communications technology (ICT) professionals continued to be the most pressing challenge for agencies in terms of skills shortages, although the proportion of agencies experiencing a severe impact on their ability to achieve their business objectives because of ICT skills fell slightly to 9% (11% last year). The percentage of agencies experiencing a moderate impact on their business because of skills shortages in this area remained stable at 39%.

Agencies also continued to report significant skills shortages in the areas of accounting and financial management. Figure 4.2 shows the specific skills shortages reported, and their level of impact on agencies’ business in 2006–07 and 2007–08. These results confirm that, in the context of strong economic growth and low unemployment in Australia, the APS—like the labour market generally—continues to face tight competition for a broad range of skills.

Figure 4.2: Skills shortages and their impact on agency capability, 2006–07 and 2007–08

Chart

Source: Agency survey

Attraction and recruitment

Effective strategies to attract and recruit employees are an important component of an agency’s response to the impact of a tight labour market, and an integral part of workforce planning generally. As stressed by ANAO in its performance audit, Management of Recruitment in the Australian Public Service, recruitment ‘can no longer be regarded as a “soft’’ issue’, as the APS positions itself to compete for talent. ANAO identified three distinct challenges for agencies:

To meet these challenges the report recommended that agencies consider a number of recommendations:3

The report also recommended that the Commission draw out the performance measures broadly outlined in Better, Faster: Streamlining Recruitment in the APS (2007) and develop a separate performance measurement tool to assist agencies in evaluating and reporting on recruitment outcomes, processes and costs.4

Attraction and recruitment strategies

Most agencies (81%) reported using attraction and/or recruitment strategies to attract people to their agency. The percentages were even higher in large agencies (92%) and medium agencies (89%). Consistent with the major workforce challenges identified by agencies, these strategies were aimed mainly at people with specific skills, for example, accountants or ICT professionals, with 65% of agencies reporting using strategies targeting specific skills sets.

In keeping with the APS Employment and Capability Strategy for Aboriginal and Torres Strait Islander Employees, a substantial proportion of agencies also reported using strategies to attract Aboriginal and Torres Strait Islander peoples (46% overall, up from 42% last year). Seventy-seven per cent of large agencies used such strategies. Nineteen per cent of agencies used strategies to attract younger workers (41% of large agencies). A smaller percentage of agencies also specifically targeted people with disability (14%), older workers (10%) and people from a non-English speaking background (6%).

Fifty-one per cent of agencies reported targeting graduates through a formal recruitment programme. The use of graduate programmes and other measures to recruit new entrants was much more common in large agencies (92%) than in small and medium organisations. Some small agencies reported that it was impractical for them to run their own programmes and suggested that there may be potential for a joint small agency initiative. Similarly, 83% of large agencies used cadetships (33% for all agencies surveyed), 58% used traineeships (32% overall), 29% used school-to-work transition programmes (12% overall) and 21% used apprenticeships (9% overall).

Agencies reported using a range of innovative attraction and recruitment strategies in 2007–08. A number reported increased use of electronic media to advertise vacancies, for example, advertising in professional online newsletters for specific skills, publicising graduate programmes on tertiary websites and using popular online career websites such as Seek and MyCareer. There was also increased use of online application systems. A number of agencies have introduced a more flexible approach to their requirements for job applications, for example, by giving managers the option of asking only for detailed CVs rather than requesting applications against set selection criteria.

Several agencies reported having developed ‘employment value propositions’ or branding strategies to better market the distinctive and competitive aspects of their agencies to prospective employees, consistent with the recommendations of ANAO’s recruitment audit report.

A number of agencies are also making use of innovative study-to-work initiatives such as the ‘Stepping into …’ series of programmes, developed by the Australian Employers Network on Disability (AEND). These programmes provide work experience for university students with disability in the fields of law, accounting, ICT, and human resources (HR) management and marketing. Participating organisations in 2008 included Defence, ATO and AGD.

 APS-wide approaches to recruitment

The Government’s approach to the delivery of services by the APS encourages collaboration and cooperation between agencies where this will lead to greater effectiveness and efficiency. To this end, they are considering central coordination of certain activities, such as procurement and travel arrangements. There may also be advantages to agencies in considering the potential gains to be made from more coordinated approaches to attraction and recruitment.

Several APS-wide initiatives have already been introduced to assist agencies’ efforts in attraction and recruitment, for example, the redevelopment of the online Gazette into an APS employment and recruitment website titled ‘APSjobs’. The website, launched in August 2007, was updated with a number of new features and enhancements in April 2008. These changes are detailed in the Australian Public Service Commission Circular 2008/2: APSjobs website enhancements. They include:

An existing component of APSjobs is the ‘campaigns’ page, which provides a link to current and upcoming agency-specific and APS-wide recruitment initiatives such as graduate programmes, large bulk recruitment rounds or specialist skills campaigns that are needed in the APS. Accountancy skills have long been identified as an area of critical shortage in the APS. In response, the Commission developed the centralised ‘Finance Jobs’ recruitment initiative which creates and improves opportunities for attraction due to the scale and profile of the exercise, and reduces costs by achieving economies of scale in advertising and recruitment processes.

The pilot ‘Finance Jobs’ campaign was conducted in September 2007. A second pilot conducted online and exploiting the functionality of the APSjobs website, was conducted in June 2008. The second pilot exceeded expectations with 863 candidates lodging applications, 80% of whom were non-APS employees. With 17 agencies currently using ‘Finance Jobs’, feedback received has been very positive from both agencies and candidates alike.

Another example of an APS-wide attraction and recruitment initiative is the interdepartmental ICT Professional and Skills Development Taskforce, led by Finance through the Australian Government Information Management Office (AGIMO). The Taskforce recommended programmes to improve the recruitment, retention and development of ICT specialists in the APS. Finance is sponsoring a number of programmes to increase the profile and promote the attractiveness of ICT careers.

Streamlining arrangements for the transfer of security clearances to enable ICT staff (contractors and APS employees) to move more easily between APS agencies is also being pursued.

Finance is also examining possible ways to reduce advertising costs across the APS as part of its broader work on procurement.

Recruitment and selection processes

To be successful, attraction strategies must be underpinned by efficient and fair recruitment processes. Not only can inefficient processes convey a negative message about the agency or the APS, but lengthy processes are not generally consistent with the merit principle, as the best applicants may reject job offers or take up other job offers if the process takes too long or otherwise disappoints their expectations.

Agencies’ recognition of the importance of effective recruitment processes is demonstrated by 67% of agencies having reviewed their recruitment and selection guidelines during 2007–08, primarily with a view to improving the speed and flexibility of the processes. The percentage of large and medium agencies that did so was even higher, at 88% and 75% respectively. This should contribute to improvements in the timeliness of selection processes, which have not improved since last year, employees reporting, for example, that 18% of selection exercises took over four months (see Figure 4.3).

Figure 4.3: length of recruitment processes, 2007–08

Chart

Source: Employee survey

In reviewing their recruitment processes agencies need to look at all aspects, as timeliness is only one indicator of effectiveness. Moreover, the results of this year’s employee survey indicate no significant improvement in employees’ views on the various aspects of selection processes canvassed in the survey. Table 4.1 presents the views of employees who had applied for an APS job in the previous 12 months, based on their most recent experience of a selection process, in 2006–07 and 2007–08. While the results vary considerably between individual agencies, with agreement rates ranging between 19%5 and 64%, it is of some concern that on average a higher percentage of employees than last year found the process to be overly demanding.

Table 4.1: relevant employees’ views on recruitment experience, 2006–07 and 2007–08
  Agree (%), 2006–07 Agree (%), 2007–08
Source: Employee survey
I found the process overly demanding 32 41
I found the process difficult to understand 13 19
I believe the process was transparent 43 42
I believe the process was conducted efficiently 39 39
I was provided with adequate opportunity to seek feedback on application, interview and/or other selection method 45 47
I was left with a positive impression of the agency following the selection process 36 35

Security clearances

In the context of agencies’ efforts to attract and retain skilled employees in a tight labour market, the length of time taken for security clearances is of concern—how can APS agencies manage a tight labour market and tight security provisions without compromising one over the other. The length and complication of the security clearance process can be frustrating, both for agencies whose work programmes are disrupted while waiting for clearances, and for individuals who may have to put their lives on hold for six months or more until vetting processes are completed.

In the current jobs market, a risk for all agencies is that recruitment processes delayed by onerous security clearance requirements will result in the best employees being hired by more nimble competitors. Agencies are responsible for setting their own standards for clearances, provided the minimum standards in the Protective Security Manual are met. Agencies need to be aware that, while they retain the right to add their own requirements, this may affect timeliness and the ability of the agency to get people engaged and working effectively. Some agencies, for example, have used a blanket approach, requiring all ongoing employees to have a particular minimum security clearance. A better method would generally be to use targeted or scenario risk assessment, which involves matching security levels to the requirements of individual roles. Agencies should think seriously about their security classifications to ensure they do not over-classify roles unnecessarily, leading to burdensome processing and reduced usability.

Varying requirements across agencies are also affecting the portability of security clearances. In some cases, people who are cleared at a particular level in one agency are being reassessed when transferring to another agency. As a minimum, all that is required to transfer an existing security clearance when an employee moves from one agency to another is for the employee’s personnel security file to be transferred and a new police check undertaken. Agency heads may simply adopt existing security clearances where appropriate. If an agency head still wants to undertake their own security assessment, however, they can accept the transferring agency’s security appraisal only until such time as their own assessment has been completed. If an agency wishes to employ a person with a security clearance from another APS agency on a short-term contract, as a minimum all that is required is confirmation of the existence of the security clearance from the previous agency.

Given the increasing presence of security issues in the work of agencies and the expectations from government and the community that the APS will respond swiftly and professionally, further investigation of the system for managing personnel security is warranted. There appear to be persuasive arguments for a more coordinated approach to parts of, or the whole, process.

What attracted employees to their current job?

This year’s employee survey asked employees to rate the importance of a selection of attributes of their agency in attracting them to their current job. Employees were also asked to rate how well their expectations had been met in relation to each attribute.

The top three attraction attributes APS-wide were job security, interests/experience matching the responsibilities of the job or the business of the agency, and geographical location (including commuting costs and time). This is consistent with the top three attributes nominated last year, when employees were asked to rate their top five attributes. The other top five attributes in 2006–07 were future career opportunities and desire to gain experience in the APS. This year, remuneration and ability to contribute to making a difference were rated among the top five.

Last year, when remuneration did not rate in the top five attributes APS-wide, this was seen as a somewhat surprising result, as the research generally suggests that remuneration is a relatively more important attraction attribute. This year’s fourth ranking for remuneration is more in keeping with other research findings, although it should be noted that the question was framed differently this year, with a smaller set of attributes to be rated, on a five-point scale of importance, whereas last year employees were asked to select the five main attraction attributes of their agency. Moreover, results on the importance of remuneration as an attraction attribute need to be treated with some caution, because they may be different if potential employees/graduates (rather than current employees) had been surveyed. Potential candidates, who may value remuneration more highly, may not even consider applying for APS jobs, given the relatively low APS remuneration levels in comparison with those in the private sector.

In 2007–08, the main attributes that attracted employees to their current job were:

In 2007–08, as in 2006–07, the top three attributes were similar across most groups. Results varied most for employees in the SES, who rated the ability to contribute to making a difference and the agency’s reputation for doing important work in the top three (along with interests/experience matching their responsibilities).

There was also, understandably, some variation in the attributes considered most important by younger employees, with those under 25 years of age rating future career opportunities and developmental/educational opportunities in the top three. The desire to gain experience was also a more important attribute for younger people.

While there was little variation between the percentages of men and women who nominated the top three attributes as being important, it is interesting to note that a considerably higher percentage of women than men thought the agency’s reputation for good work practices (e.g. work-life balance, people management) was important.

The geographical location of the job was a more important attribute for employees working outside the ACT, as was job security, while interests/experience matching the responsibilities of the job was more important to those working in the ACT than elsewhere.

Attraction attributes also varied somewhat depending on the type of work APS employees do. The agency’s reputation for good work practices, for example, was third in order of importance for employees working in service delivery, while employees working in policy considered it less important—slightly below the APS-wide result. Employees working in policy, on the other hand, rated the ability to contribute to making a difference as second highest in importance (equal to career opportunities), while those working in service delivery rated it sixth (rated equal fifth APS-wide). Policy workers also rated the opportunity to work on innovative or leading edge projects much more highly than did most other groups (the SES also rated it as being much more important than it was rated APS-wide).

Table 4.2 presents the attributes that were nominated as ‘very important’ or ‘important’ by the highest percentage of employees. It shows results for the APS as a whole and for a selection of groups. The most popular three attributes for each group are highlighted in bold.

Table 4.2: attributes attracting employees to their current job, 2007–08
Attraction attribute APS-wide % APS 1–6 % ELs % SES % Women % Men % Policy % Service delivery %
Source: Employee survey
Job security 84 88 71 45 86 81 65 88
Interests match job 71 68 80 79 72 71 81 62
Location 68 72 61 40 69 67 51 76
Remuneration 66 67 63 40 66 65 61 65
Making a difference 63 62 66 82 63 63 72 61
Career opportunities 63 64 60 49 65 61 72 58
Important work 62 61 62 81 63 60 70 59
Good work practices 61 65 52 44 67 54 57 65

These indications of attraction factors are highly important in marketing the APS for job seekers in particular sub-categories of the market place, such as policy, service delivery and senior management.

How well were employees’ expectations met in relation to the attributes that attracted them to their current agency?

Table 4.3 shows how expectations were met in relation to the attraction attributes in Table 4.2 for those employees who ranked the attributes as ‘very important’ or ‘important’. It presents results for the APS as a whole and for a selection of groups. The three attributes that employees in each group rated most highly in terms of their expectations being met are highlighted in bold.

APS-wide, for two of the attraction attributes rated in the top three—job security and geographical location—employees’ expectations were met to a high degree (80% and 81% respectively). In terms of interests/experience matching the responsibilities of the job or the business of the agency, expectations were not met to the same extent, with 65% of employees rating their expectations as having been well met. The groups who reported a considerably higher level of concurrence with expectations in relation to this attribute were SES and employees working in policy jobs.

It is interesting to note that, while APS-wide an agency’s reputation for doing important work was seventh in terms of attraction attributes, it was third in terms of expectations being well met (for those attributes listed in Table 4.3).

Of the attributes listed in the table, remuneration rated seventh in terms of well met expectations APS-wide, with 60% of employees who thought remuneration was an important attraction attribute reporting that their expectations were well met. EL employees and those working in policy jobs reported that their expectations in terms of remuneration were met to a greater extent than did employees APS-wide.

Table 4.3: agency attributes—employees’ expectations well met,* 2007–08
Attraction attribute APS-wide % APS 1–6 % ELs % SES % Women % Men % Policy % Service delivery %
Job security 80 78 88 86 79 81 88 77
Interests match job 65 63 68 90 65 64 73 58
Location 83 80 85 92 82 80 82 81
Remuneration 60 56 71 60 63 55 70 59
Making a difference 61 59 65 86 62 60 66 62
Career opportunities 44 41 52 74 45 42 60 38
Important work 75 73 79 91 76 73 75 77
Good work practices 64 62 62 58 62 62 60 62

*Only includes employees who ranked the attribute ‘very important’ or ‘important’.

Source: Employee survey

Employees who rejoined the APS in the last five years

Ten per cent of respondents indicated that they had at some stage and for one reason or another left the APS and then rejoined within the last five years. Those employees who had rejoined were asked to select their reasons for doing so. Table 4.4 presents the top five reasons selected. Results are presented for the APS as a whole and for a selection of groups.

Table 4.4: Reasons for rejoining the APS
Reason APS-wide (%) Men (%) Women (%) Working in the ACT (%) Working outside the ACT (%)
Source: Employee survey
Better work-life balance 43 35 48 39 46
Needed work, position available 37 43 32 32 42
Better remuneration in APS 23 16 29 22 25
Family conditions changed 21 15 26 23 20
To make a difference 19 26 15 16 23

The reason nominated by the highest percentage of employees was access to a better work- life balance in the APS (see Chapter 6). A considerably higher percentage of women than men nominated this as a reason for rejoining the APS. This was followed by the pragmatic response that work was needed and a position in the APS was available. Some employees (23%) rejoined because remuneration was better in the APS. Again, a considerably higher proportion of women than men selected better remuneration as a reason for rejoining, probably because women tend to be in lower paid sectors of the wider community. Interestingly, a much higher percentage of men than women said they rejoined the APS in order to make a difference.

Retention

Strategies for retaining valued employees are as important to workforce planning as those aimed at attracting and recruiting new employees. Consistent with results last year, however, while the majority of agencies (61%) reported using retention strategies, this was considerably less than the 81% that used attraction and recruitment strategies.

Retention strategies used by agencies include: transition to retirement strategies and arrangements involving the re-engagement of older workers with valuable skills to facilitate the transfer of those skills to other employees; retention bonuses or allowances for both older employees and those with specific skills; enhanced conditions agreed under s. 24(1) agreements or common law contracts; well-being initiatives; reward and recognition schemes; and career development opportunities.

As with attraction, the group targeted for retention by the highest percentage of agencies was people with specific skills sets, for example, accountants or other professions (48%). More agencies (30%) employed a generic retention strategy aimed at no particular group than was the case for attraction (19%). Generally, a lower percentage of agencies reported using strategies to retain specific groups than had used strategies to attract them, with the exception of older workers and women. The more frequent use of strategies to retain rather than attract older workers is not surprising, given the ageing profile of the workforce. Encouragingly, the percentage of agencies using specific retention strategies for graduates increased to 31% in 2007–08 (23% last year). Retention strategies for Aboriginal and Torres Strait Islander employees were in place in 26% of agencies—up from 21% last year. Nevertheless, there is room for agencies to place more emphasis on the retention of valued employees in their workforce planning strategies.

Many of the key issues affecting retention are discussed in other chapters—work-life balance and managing workloads in Chapter 6 and recognition and quality of senior leaders in Chapter 5. Remuneration, because it is of interest for reasons other than just retention, is dealt with in more detail later in this chapter.

Employee engagement and job satisfaction

Active employee engagement and job satisfaction are vital components of agency strategies aimed at improving performance and productivity and retaining talented employees.

‘Employee engagement’ is a broad concept that has featured increasingly in the literature dealing with people management in recent years. There have been several studies focusing on different aspects of what drives employee engagement with varying findings; however, there is a broad consensus that an engaged employee is a more productive one. Engaged employees are fully involved in, and enthusiastic about, their work. When engaged employees have discretion over their activities, including the level of effort they apply, they are more disposed to act in ways that will further their organisation’s interests.

Employee engagement is affected by a broad range of factors. These include employees’ perceptions of the culture, leadership and management of their organisation, as well as aspects of their employment that affect them more immediately, such as the behaviour of co-workers, the type of work they do, and the opportunities they are given to develop their skills and satisfy their career aspirations. Employee engagement can be described as a two-way relationship between the organisation and the employee, based on the effort expended by organisations to engage their employees, and the level of engagement employees offer their employer.

Job satisfaction is a related, but a much narrower concept. It reflects how content employees are with a range of factors that most directly influence how satisfied they are with their current job, such as working relationships and their immediate manager. Job satisfaction is one of the factors that affects employee engagement.

Employee engagement factors

This year, the employee survey again included a number of questions that are related to the concept of employee engagement. As for last year’s report, factor analysis, a statistical technique used to group together variables where responses are highly related, was used to give an overall summary picture of how the APS is performing in the area of employee engagement. Results for the 2008 factor analysis are not directly comparable with the 2007 results, as the factors, and the questions that make up each factor, are not necessarily the same.

The factor analysis this year identified a set of 12 factors which provide an overall summary of employee perceptions of issues such as Governance and Integrity, Agency Culture (and Innovation Culture), Leadership and Management, Merit and Career Progression, Work-Life Balance, and Personal Innovation and Flexibility. They do not attempt to measure how important each factor is to an employee’s overall level of engagement with their organisation. In the broadest sense, however, they can be said to provide a general indication of employee engagement in the APS. Figure 4.4 shows employee satisfaction with each of the 12 factors.

Figure 4.4: employee satisfaction with each of the 12 employee engagement factors, 2007–08

Chart

Source: Employee survey

Although the factor results are not directly comparable, they were broadly consistent with the analysis in 2006–07. Employees were most satisfied with the factor Personal Innovation and Flexibility (90%), followed by the factors Understanding Current Role (76%), Current Job (74%), Work Group (73%) and Governance and Integrity (68%). The factors that employees were least satisfied with were Agency Culture, Senior Leaders, Innovation Culture and Merit and Career Progression.

A number of these factors are examined in more detail in relevant chapters, for example, the ‘Senior Leaders’ factor in Chapter 5. The analysis indicates that results vary between groups of employees. In relation to ‘Senior Leaders’, for example, SES employees were more satisfied with this factor, as were employees working in the ACT.

Job satisfaction

In 2007–08, the employee survey asked respondents to choose the five most important workplace attributes that impacted on how satisfied they were with their job, and how satisfied they were with these five attributes. To obtain an indication of overall job satisfaction levels for the APS, a summary index was created from these results. This index ranges from zero (the employee was very dissatisfied with all of the workplace attributes nominated) to 10 (the employee was very satisfied with all of the workplace attributes nominated). An index of five equates to an employee being on average neither satisfied nor dissatisfied. Respondents with a score of six or more on the index are regarded as being on average satisfied.

This year saw a slight decrease in overall job satisfaction, with 77% of employees reporting being on average satisfied with the workplace attributes they nominated (81% in 2006–07). This year’s result nevertheless represents a high level of overall job satisfaction, with the majority of employees expressing satisfaction with most attributes. It is also worth noting that the 2006–07 result of 81% was significantly higher than the level of overall satisfaction reported the previous year (73%), and above the average level reported since 2002–03.

Job satisfaction levels in the APS are consistent with those in the broader Australian workforce. Work, Life and Time: The Australian Work and Life Index,6 a national report on work-life outcomes amongst working Australians, found that 86% of people were satisfied with their present job.7 The Household Income and Labour Dynamics Australia (HILDA) Survey also found that members of the Australian community were quite satisfied with their jobs, equating to an average score of 7.6 out of 10 in each year from 2001 to 2005.8

Job satisfaction attrIbutes

Table 4.5 sets out the range of workplace attributes from which employees were asked to choose the five most important that influenced their job satisfaction. It presents the proportion of employees in 2006–07 and 2007–08 who nominated each attribute as being one of the top five attributes, and the proportion of employees who indicated they were satisfied with that attribute.

There is a wide dispersion of views on the attributes that impact on job satisfaction. Only two of the top five attributes, for example, were nominated as important by more than 50% of respondents. The top five workplace attributes this year were good working relationships, flexible working arrangements, salary, good manager and interesting work provided. These attributes are similar to those selected last year. Interesting work provided moved into the top five this year, in place of opportunities to utilise my skills, which ranked sixth this year. The attribute, good working relationships, continues to be the number one ranked workplace attribute. It has been ranked first since the introduction of the employee survey in 2003. Satisfaction with this attribute has also remained positive, at 86%.

This year, 50% of employees nominated salary as important for job satisfaction, a slight increase on last year’s result (46%). However, the percentage of employees who were satisfied with their salary (60%), decreased in comparison with that in 2006–07 (68%). Encouragingly, more than three-quarters of those who nominated a good manager as important were satisfied with this attribute.

Table 4.5: Job satisfaction—employees’ most important workplace attributes, 2006–07 and 2007–08
Workplace attribute 2006–07 2007–08
Employees who nominated attributes as important to them (%) Employees who nominated attributes as important who were ‘satisfied’* (%) Employees who nominated attributes as important to them (%) Employees who nominated attributes as important who were ‘satisfied’* (%)
*Of the employees who nominated this attribute as one of their most important and rated it, the percentage of employees who were ‘very satisfied’ or ‘satisfied’ with the attribute in their current workplace.
Good working relationships 56 89 53 86
Flexible working arrangements 50 91 52 86
Salary 46 68 50 60
Good manager 38 75 42 76
Interesting work provided 32 77 31 71
Opportunities to utilise my skills 39 75 31 68
Regular feedback/ recognition for effort 31 62 31 52
Opportunities to develop my skills 31 64 31 62
Seeing tangible results from my work 29 80 30 75
Opportunities for career development 22 49 28 44
Chance to make a useful contribution to society 27 83 28 79
Duties/ expectations made clear 29 73 28 74
Appropriate level of autonomy in my job 25 81 26 74
Appropriate workload 19 55 21 49
Chance to be creative/ innovative 21 70 18 54

Job satisfaction by a range of groups

As with satisfaction with employee engagement factors, rates of overall job satisfaction vary across different groups in the APS workforce. Table 4.6 presents overall job satisfaction for a range of groups in 2006–07 and 2007–08. The results in 2007–08 are lower than in 2006–07, possibly reflecting tighter agency budgets and increasing demands for even greater productivity improvements by the Government.

SES employees reported the highest rate of satisfaction. Satisfaction for employees with disability is still well below the APS average. The least satisfied group this year were employees with one to five years of service in the APS (70%, down from 80% last year).

Table 4.6: Job satisfaction by a range of groups, 2006–07 and 2007–08
  Job satisfaction summary index
Summary index rating >5 group
2006–07 (%)		 Summary index rating >5
2007–08 (%)
Source: Employee survey
Indigenous employees 75 80
Employees from non-English speaking backgrounds 83 82
Employees with disability 73 75
Employees aged 45 years and over 82 81
Young employees (aged under 25 years) 81 76
Women 83 78
Men 79 75
APS 1–6 employees 81 76
Executive Level employees 82 78
SES employees 92 86
Ongoing employees 81 77
Non-ongoing employees 83 81
< 1 year service in APS 86 81
1–5 years service in APS 80 70
>5 years service in APS 81 79
All employees 81 77

APS identity and pride

Levels of pride in the APS remain high, with 79% of employees reporting that they are proud to work in the APS (consistent with last year’s result) and 80% reporting that they would recommend the APS as a good place to work. Employee views about their current agency, although positive, were not as positive as for the APS as a whole. Seventy-one per cent of employees were proud to work in their current agency (69% last year). Sixty-five per cent would recommend their current agency as a good place to work. Despite employees generally being more likely to be proud to work in the APS than in their agency, a higher proportion of employees continue to report that they consider themselves to be primarily employees of their agency (58%, compared to 42% who considered themselves to be primarily APS employees). As discussed further in Chapter 5, only 40% of SES employees ‘definitely’ saw themselves as part of a broader leadership cadre—down from 55% in 2006–07. This is an issue of concern in building better cooperation and collaboration across agencies and reflects the relative independence of agencies.

The high levels of pride in working both in the APS and individual agencies are particularly important in positioning the APS as a good place to work, as they are both key factors in attracting new employees and retaining existing employees.

Remuneration

This year’s results on what attracts APS employees to their current job rated remuneration as the fourth most important factor. Remuneration ranked third in importance among the factors that affect on employees’ job satisfaction. Remuneration developments in the APS also have a major impact on agencies’ budgets and are critical to the Government’s overall Budget strategy. This section examines developments in APS remuneration in 2007–08.

The framework within which APS agencies negotiate remuneration with their employees was revised by the new government in February 2008. The revisions reflected the Government’s general workplace relations policies, including the prohibition on the making of new Australian Workplace Agreements (AWAs). The revised Australian Government Employment Framework9 confirmed that agency-level bargaining will be retained in the APS but that collective agreements will be the basis for non-SES employees’ terms and conditions. Scope for negotiating terms and conditions outside of collective agreements is available via s. 24(1) determinations or individual common law contracts.

No data is available at this stage on agencies’ use of s.24(1) determinations or individual common law contracts, but DEEWR has data on those employees who remain covered by AWAs. While no new AWAs have been made since February 2008, 19,546 were still operative at 30 June 2008 covering around 12% of APS employees. This is a small decline from the 20,195 agreements that were in operation in June 2007, reflecting the changed policy. These AWAs are spread unevenly across classifications covering around 87% of SES, 24% of ELs and 7% of APS 1–6 employees.

Most APS employees are covered by collective agreements (CAs). There were 104 CAs operating in the APS and the Australian Parliamentary Service at June 2008.10 Twenty-eight of these have been made directly with employees and cover around 15,400 employees (10%), while the others have been made with one or more trade unions and cover around 119,700 employees (76%). A number of agencies had no operative CA at 30 June 2008. These include several departments (DBCDE, DEEWR, DIISR, Finance, RET, DCC and DHS). These agencies, consistent with the revised bargaining framework are, or will be, negotiating a CA during 2008–09 for their non-SES employees.

Movements in APS remuneration

How do increases in APS remuneration in 2007–08 compare to those in the private sector and the State and Territory public sectors? The most specific source of data available is from a survey commissioned by DEEWR and conducted by Mercer Human Resource Consulting (the APS remuneration survey) each December.11

Table 4.7 presents data on increases in total remuneration packages (which includes base salary plus benefits such as superannuation and motor vehicles) and covers employees on both AWAs and CAs. It shows that employees in most APS classifications experienced increases in remuneration in 2007 that were less than or similar to those for comparable jobs in the private sector. The exceptions were SES Band 2 and SES Band 3 employees who had increases above those in the private sector.

Table 4.7: total remuneration package, 2007* (% change on the previous year)
  APS Combined public services Private sector

*Total Remuneration Package includes base salary plus benefits such as superannuation and motor vehicles but excludes bonuses.

Source: Mercer Human Resource Consulting, 2007 Broader Market Comparison—APS SES and Non-SES Remuneration survey conducted for DEEWR.
Graduate 6.2 N/A N/A
APS 1 2.3 4.0 4.7
APS 2 2.1 4.0 4.7
APS 3 2.5 3.8 4.7
APS 4 4.1 3.7 4.7
APS 5 4.6 3.6 4.5
APS 6 3.8 3.6 4.5
EL 1 4.7 3.5 4.5
EL 2 4.6 3.4 4.5
SES Band 1 4.4 4.4 4.5
SES Band 2 5.8 4.4 4.4
SES Band 3 6.1 4.4 4.2

When the APS is compared to the average for the combined State and Territory public sectors, the median remuneration for APS classifications increased faster than remuneration for comparable jobs in the State public sectors, with the exception of APS 1–3 (which increased more slowly) and SES Band 1 employees (which increased at the same rate).

Other, less specific, comparisons can be made for APS remuneration outcomes as presented in Table 4.8. DEEWR calculates average annualised wage increase (AAWI) for all APS CAs. The AAWI for CAs entered into by APS agencies during the 12 months to 30 June 2008 was 4.2%. When calculated from the nominal expiry date (NED) of an agreement to the NED of that agreement’s replacement, the AAWI was 4.3% for the 12 months to 30 June 2008 (compared to 4.1% for the previous 12 months).

As shown in Table 4.8, salary increases contained in APS CAs (4.2%) were higher than the private sector AAWI at 30 June 2008 (3.8%), but the same as the 4.2% increase in the ABS wage cost index (which covers both the public and private sectors). However, a more accurate method of comparing APS wage increases with those of the private sector limits the comparison to those industry sectors where employees have tertiary qualifications similar to those of APS employees.12 The AAWI in collective agreements current at 30 June 2008 for industry sectors, more than half of whose employees have tertiary qualifications, was 4.1%—a result similar to the APS figure of 4.2%.

The data shows that remuneration increases in the APS over 2007–08 have generally been below or similar to those in the private sector for most classifications but generally higher than those in the combined State and Territory public sectors (except for the APS 1–3 classifications).

Table 4.8: Comparisons of wages growth, 2000–01 to 2007–08
  APS AAWI(a) (%) APS NED to NED AAWI(b) (%) Private sector AAWI(c) (%) Comparable sectors AAWI(d) (%) ABS wage cost index(e) (%)

(a) Average annual wage increases in APS collective agreements entered into during the 12 months to 30 June. Collected by DEEWR.

(b) The NED to NED AAWI measures the average annual pay increase from the nominal expiry date (NED) of the previous agreement to the NED of the current agreement. The NED to NED AAWI allows for particular comparisons of annual wage increases across APS agency agreements and should only be used in this context.

(c) Average annual wage increase in current private sector collective agreements. Note that some figures in this column have been revised since last reported.

(d) Average annual wage increase in industry sectors with more than half their employees having post-school qualifications. This data is sourced from the ABS, Census of Population and Housing. The data on AAWI by industry sector was collected by DEEWR.

(e) ABS Cat. No. 6345.0, Labour Price Indexes, Australia. Average annual index—ordinary time hourly rates of pay excluding bonuses. It is a broad measure of wages growth in both the Federal and State jurisdictions covering all employees in both the public and private sectors.

Note: There are differences in the way agreements are handled by Public Sector Branch (PSB) and the Workplace Agreements Database and Analysis Section (WADAS) at DEEWR since the introduction of the No Disadvantage Test. PSB work off the approval date whereas WADAS continue to work off lodgement date; therefore, there may be some discrepancy between which agreements have been included for the calculation of the APS NED to NED AAWI and the straight APS AAWI.
2000–01 4.8 3.5 3.9 3.9 3.4
2001–02 4.1 3.9 3.6 4.0 3.3
2002–03 4.9 3.9 3.8 4.1 3.4
2003–04 4.2 4.0 4.0 4.3 3.6
2004–05 4.2 4.0 3.9 4.4 3.8
2005–06 4.2 3.9 4.2 4.4 4.1
2006–07 4.2 4.1 3.6 4.2 4.0
2007–08 4.2 4.3 3.8 4.1 4.2

APS remuneration levels

Table 4.9 presents the median level of total remuneration package for APS employees for each classification level in 2007 (column 2). It uses the median level as a benchmark for comparing APS remuneration levels with the equivalent jobs in the State and Territory public services and in the private sector. At the APS 6 classification, for example, the combined State public services remunerate jobs at only 86% of the APS median (column 3) while the private sector remunerates significantly above the APS level. At the 25th percentile point in the private sector market, jobs equivalent to the APS 6 classification are remunerated at 113% of the APS median (column 4), increasing to 128% at the median point (column 5) in the private sector market.

Table 4.9: Comparative levels of total remuneration package, 2007(a)
  APS Median $ State public services(b) Median(c) % Private sector
25th percentile(c) % Median(c) %

(a) Total Remuneration Package includes base salary plus benefits such as superannuation and motor vehicle but excludes bonuses.

(b) Mid-point of equivalent positions in the combined State and Territory public services (excluding Tasmania).

(c) Percentage of the APS median total remuneration package.

(d) Base salary rather than total remuneration package is used for graduates as the later data was unavailable.

(e) As at July 2008. All 18 Departmental Secretaries are remunerated at the same rate ($457,080) except for higher-level Secretaries who receive 6.9% more.

Source: Mercer Human Resource Consulting, 2007 Broader Market Comparison—APS SES and Non-SES Remuneration survey conducted for DEEWR.
Graduate(d) 45902 N/A N/A 99
APS 1 41507 87 69 74
APS 2 47128 95 89 97
APS 3 53679 93 97 107
APS 4 60806 91 102 113
APS 5 67717 90 108 121
APS 6 78411 86 113 128
EL 1 98234 76 108 124
EL 2 123277 68 105 121
SES Band 1 185606 88 91 108
SES Band 2 233566 88 103 126
SES Band 3 293404 92 124 153
Dept. Secretaries(e) 457080 N/A N/A N/A

The relative position of APS remuneration levels compared to the combined State and Territory public sectors is clear—at every classification for which data is available APS employees are more highly remunerated. Remuneration varies markedly between State and Territory public sectors with NSW and the ACT being closer to APS median remuneration levels.

The relative position of APS remuneration levels compared to equivalent jobs in the private sector is also clear—all classifications except APS 1 and 2 are remunerated at a rate lower than the median rate in the private sector. Graduates are paid around the median rate of the private sector.

While the median remuneration for most APS classifications is at the 25th percentile point (or the bottom quarter) of the private sector market, four classifications in the APS are remunerated more highly—APS 1, 2 and 3 and SES Band 1. For these four classifications, the APS therefore offers a more competitive remuneration package compared to the bottom quartile of the private sector. For other classifications, the APS remunerates at a comparatively low level. The gap between the private sector and the APS is clearly the widest for the SES Band 3 classification level, although there was a relatively large increase in SES Band 3 rates during the year.

Remuneration dispersion

Pay dispersion among agencies has increased significantly both within and among agencies since the devolution of bargaining to the agency level in 1996–97.

Figure 4.5 illustrates the growth in the size of the salary ranges for APS classifications between 1996 and 2007. It provides a graphical representation of the percentage gap between the minimum and maximum of the salary band and is shown as a percentage of the minimum of the salary range. At the EL 2 classification, for example, the gap between the minimum and maximum of the salary range has nearly doubled from 17.2% in 1996 to 30.4% in 2007. Figure 4.5 presents data on the growth in salary ranges, but it does not show the distribution of remuneration within the ranges. Despite growing dispersion, the majority of employees are still paid within 5% and 10% of the median, although dispersion around the median tends to increase as classification increases.

Figure 4.5: Gap between the minimum and maximum of salary ranges, 1996 and 2007

Chart

Source: Mercer data for 2007 base salaries at the 5th and 95th percentiles; for 1996 rates, the Continuous Improvement in the APS Enterprise Agreement 1995–96

The agency-based arrangements for agreement-making have delivered significant productivity gains. Agencies have been able to use agency-level bargaining to remove restrictive work practices, introduce more flexible ways of working, introduce new technology, achieve efficiency gains in administration, change workplace culture and cope with labour market pressures for key staff.

An increase in salary dispersion under such a devolved system is a natural consequence. However, it is important to ensure that the degree of dispersion is still consistent with the concept of a unified APS. The APS as a unified career service has encouraged mobility and a collegial culture among agencies. It has been a great strength of the APS that skilled staff have been encouraged to pursue their careers across portfolios, gaining experience and depth of knowledge about government processes and policy.

There are some indications, in recent years, however, that mobility may be influenced by pay differentials between agencies to the detriment of medium-to-lower-paying agencies. It is also possible that mobility at aggregate levels is also being affected. Mobility rates among agencies, having recovered from the very low levels of the early-to-mid-2000s, fell in 2007–08 to 2.8% from 3.0% in 2006–07 (see Figure 2.9 in Chapter 2). A key issue is how to ensure the APS operates in a sustainable way so that agencies of all types and sizes can attract and retain employees with the capability to deliver on their core functions.

A discussion of remuneration dispersion is fundamentally linked to the funding arrangements and productivity performance of agencies (see Chapter 6 for a more detailed discussion of the productivity performance of the APS). The combined effect of the efficiency dividend and the partial funding arrangements for remuneration increases (where, on average, around half of the remuneration increases over the past decade or so have had to be funded from cost saving productivity improvements within agency budgets) have placed pressure on some agencies whose size, or the nature of whose activities, limited potential for generating cost saving productivity gains, year after year, at the magnitude required. For some of these agencies the need to achieve ongoing cost savings has limited the scope for remuneration increases. Analysis by the Commission indicates that smaller agencies (those with below 250 employees and especially those with fewer than 100 employees) tend, on average, to be lower-paying for most, but not all, classifications. It also appears that agencies with a cultural or Indigenous focus also tend to be lower-paying. It may be timely to consider establishing a safety valve mechanism to determine how the funding arrangements and the efficiency dividend are to be implemented, so as to ensure the ongoing viability of such agencies in what will no doubt continue to be a tight fiscal environment.

Chapter 6 of this report focuses on the impact on agencies of the additional 2% efficiency dividend, including some of the evidence presented to the Joint Committee of Public Accounts and Audit (JCPAA) inquiry into the effects of the efficiency dividend on smaller public sector agencies.

Pay equIty

There have also been concerns that this increasing wage dispersion has adversely affected gender pay equity in the APS. APSED data allows a reasonably detailed examination to be made of remuneration by gender. Table 4.10 indicates that at 30 June 2007, the median APS-wide remuneration for women was less than that for men by between 1.5 and 6 percentage points at different classification levels (except for the APS 4 classification where there was no difference).

Importantly, the gap was not larger for those classifications that had higher proportions of employees on AWAs (all SES employees, for example, were on AWAs in June 2007 with around 26% of EL employees and only 8% of APS 1–6 employees on AWAs), suggesting that the use of individual contracts is not a determining factor.

Table 4.10: Median remuneration by gender and classification, June 2007
  Men $ Women $ Pay equity ratio
Source: APSED
APS 1 37698 35180 93.3
APS 2 42854 41960 97.9
APS 3 46972 46251 98.5
APS 4 53047 53047 100
APS 5 57937 56549 97.6
APS 6 67276 65496 97.4
EL 1 83050 80928 97.4
EL 2 101299 99750 98.5
SES Band 1 130000 127920 98.4
SES Band 2 165039 160431 97.2
SES Band 3 205588 199300 96.9

Analysis of the APSED data indicates that a key reason underlying the gender gap is the longer median length of service that male employees have accumulated at nearly all classification levels (see Table 4.11). Most classification levels include, under collective or individual agreements, a number of pay points or ‘increments’ allowing for annual performance-related pay movements. The fact that male employees tend to have longer median lengths of service at their classification means that they are likely to have progressed further through a salary range than women and thus they are likely to be on higher pay points. It is interesting to note that the one classification where there is no difference between length of service between men and women—APS 4—is also the only classification where there is no gender gap in median remuneration (see Table 4.10).

Table 4.11: Median length of service (years) at classification level, June 2007
Classification Men Women
Source: APSED
APS 1 5 1
APS 2 4 2
APS 3 3 2
APS 4 4 4
APS 5 3 2
APS 6 4 3
EL 1 4 3
EL 2 5 3
SES Band 1 4 3
SES Band 2 4 2
SES Band 3 4 3

There are several reasons why men have longer lengths of service at most classification levels:

From the above analysis it appears that differences in length of service is the major factor behind the gap in median remuneration of men and women at most classification levels rather than issues of pay discrimination.

It has been suggested that there is a link between a female dominated workforce and low-paying agencies. It is possible that the differences in remuneration between agencies occurring under agency-level bargaining arrangements have had some impact on median remuneration between men and women at the APS-wide level. A range of factors will affect where an agency’s remuneration is pitched (e.g. agency size and nature and scope for productivity gains, the labour markets in which they operate, and funding arrangements).

One outcome of the interplay of such factors may be that those agencies employing a significantly higher proportion of women tend to pay in the lower part of the APS remuneration distribution. Investigating this issue would require further detailed analysis and a clear understanding of the factors behind agency remuneration approaches.

Employees’ views on remuneration

Data presented earlier in this chapter on job satisfaction and attraction factors indicated that employees’ satisfaction levels with their remuneration has fallen in 2007–08. This picture is confirmed by employees’ responses to a question which asked directly whether they were fairly remunerated for the work they do. Fifty-nine per cent agreed compared to 61% last year. The results varied significantly between those agencies for which individual results were available—from 41% to 77%. There was a high correlation between levels of job satisfaction and employees’ views on how fairly they were remunerated. Those employees whose job satisfaction index was above five were much more likely to agree that they were fairly remunerated (66%) compared to those whose job satisfaction was five or less (37%).

Other factors that were linked to employees’ views on remuneration include gender, size of agency, classification, the type of work employees do, satisfaction with work-life balance, location and whether employees were satisfied with their career progression:

This data suggests that, while actual remuneration paid does influence employees’ perceptions of whether they are fairly remunerated, other factors are also influential—in particular, employees’ levels of job satisfaction and their satisfaction with opportunities for career progression.

Classification structures

Chapter 2 presents detailed data on the changing profile of the classification structures in the APS (see Table 2.1). Over the past 15 years there have been dramatic changes. The numbers of APS 1–6 employees have declined from 83.1% of all ongoing employees at June 1994 to 72.0% at June 2008. Over the same period, EL and SES employee numbers have risen from 15.9% to 26.9%.

Key factors behind the long-term trend to a higher classification profile are the shift to increasingly skilled work in the APS and the outsourcing of some functions. However, there is also anecdotal evidence from some agencies that a reaction to the tightening labour market has been adjustment of the classification profile upward in recent years to improve their recruitment prospects, including for the skills in short supply, for which they are competing with the private sector, where the APS is positioned at only around the 25th percentile. This classification ‘creep’, where agencies are assigning a higher classification level to particular jobs, not because of changes in the work value13 of the jobs, but as a way of paying higher remuneration to attract or retain skills in short supply, has the potential to undermine the integrity of the common classification system across the APS.

Since work-level standards that underpin classification structures were devolved to agencies in the late 1990s, there has been greater scope for inconsistent classification outcomes among agencies, particularly as some agencies do not appear to recognise the importance of a sound approach to classification in their remuneration policies and practices. This may have been compounded by a loss of skills in corporate areas in this field.

Another factor affecting the common classification structure across the APS is the increasing dispersion of remuneration among agencies. There are now considerable overlaps between agencies in remuneration rates for adjoining classifications. In some cases, an employee in a high-paying agency if promoted to a lower-paying agency would have to take a pay cut if placed on the standard CA’s rates in the lower-paying agency. In practice, most CAs have a salary maintenance provision, where a person joining the agency keeps their higher pay rate; however, this can raise issues of internal equity within the lower-paying agency. It also means that the person who has been promoted receives no increase in remuneration despite moving to a classification of higher work value.

Why is it of concern that the common classification structure across the APS is facing the impact of these factors? There are two reasons. The first is that the APS should be a single internal labour market with no disincentives to internal movement on promotion. In other words, the classification structure should facilitate mobility across the APS and reinforce the concept of one career service, which is central to enhancing APS capability for working effectively on whole of government and broader collaboration approaches. The other reason is that it has the potential to adversely affect the merit principle. A fundamental aspect of the application of merit is the definition of ‘promotion’ to a higher classification level—this definition relies on the application of a common classification structure.

It is time for agencies to focus more closely on classification management and work-level standards. The Integrated Leadership System (ILS), by identifying and describing the leadership and management capabilities required at each level of the APS, may assist agencies to structure their work-level standards by incorporating the behaviours described in the ILS Leadership Pathway.

Key chapter findings

APS agencies were subject to differing recruitment and retention forces during 2007–08. While many agencies still face difficulties in attracting and recruiting particular skills in the continuing tight labour market, they have also had to plan to deal with the financial pressures from the additional 2% efficiency dividend. Responses have included carefully managing recruitment and in some cases reducing staffing. Agencies have adopted a range of measures. There was no APS-wide recruitment freeze. The Career Transition and Support Centre was established within the Commission to assist affected agencies in redeploying staff where possible.

In dealing with these difficult circumstances, the large increase in the number of agencies that report they have now undertaken workforce planning for the next one to five years is very positive. It is also encouraging that nearly two-thirds of agencies report that they have reviewed their recruitment and selection guidelines during 2007–08, primarily with a view to improving the speed and flexibility of these processes. Such reviews are overdue given that around half of selection processes were still taking over two months to complete, with 18% stretching out to over four months. The length of time taken for security clearances is of concern. There appear to be persuasive arguments for a more coordinated approach to this issue across APS agencies.

Another encouraging result is that APS employees had positive views about the key factors that attracted them to their agency and about the most important factors influencing their job satisfaction. In relation to four out of the five factors that were most important to employees’ job satisfaction, for example, satisfaction levels among employees were over 70%. The exception was satisfaction with remuneration (ranked third most important to job satisfaction and fourth most important in the factors that attracted employees to their current job), where satisfaction levels were not only relatively low, but less than last year’s levels.

It is not clear what is driving employees’ views on remuneration, as APS remuneration levels are competitive against those of the State and Territory public sectors, even the relatively higher-paying ones—NSW and the ACT. It is also the case that the APS has been relatively stable against the private sector, tending, at the median level, to pay at or below the 25th percentile of the private sector market over recent years. Job satisfaction, which is linked strongly to employees’ views on remuneration, fell slightly this year; this may be having some impact, at least at the aggregate level. Another factor that could be increasing APS- wide dissatisfaction with remuneration is the growing dispersion in remuneration among APS agencies, although it is interesting that employees in small agencies have somewhat more positive views on whether they are fairly paid despite smaller agencies tending to be, on average, lower-paying. This is an issue that would need further investigation to untangle the various factors at work.

The growing remuneration dispersion among agencies may be having an impact on the concept of the APS as one career service. A key strength of the APS is that employees have been encouraged to pursue their careers across portfolios, gaining experience and depth of knowledge about government processes and policy. There are some indications that mobility may be influenced by pay differentials between agencies to the detriment of medium-to-lower- paying agencies, and overall mobility rates among agencies fell in 2007–08. A key issue is how to ensure the APS operates in a sustainable way so that agencies of all types and sizes can attract and retain staff with the capability to deliver on their core functions.

The combined effect of the efficiency dividend and the partial funding arrangements for remuneration increases have placed pressure on some agencies whose size, or the nature of whose activities, affect their potential to generate cost saving productivity gains year after year. It may be timely for the consideration of a safety valve mechanism to ensure the ongoing viability of lower-paying agencies in what will no doubt continue to be a tight fiscal environment.

It has been suggested that relatively low rates of remuneration in the APS compared with the private sector are affecting the gender balance in the APS. Women accounted for 61% of ongoing engagements during 2007–08, thus continuing a long-term trend to increasing proportions of women in total engagements and therefore total APS employment. Women now comprise 57.6% of total APS employment. While remuneration as an attraction factor was ranked in importance at much the same level by men and women (65% and 66% respectively), men who ranked remuneration as important were less likely to report that their expectations in relation to remuneration had been well met compared to women (55% and 63% respectively). However, it is interesting to note that men were generally less likely to report that their expectations had been well met in relation to most attraction factors with the exception of interests matching the job and good work practices, where men and women had similar results, and job security where men’s expectations were slightly better met than women’s.

The pattern of engagements into the APS by gender does not generally support the notion that low rates of remuneration are a key factor in the feminisation of the APS. Those classifications that are most competitively remunerated in comparison with the private sector (i.e. graduates, APS 1, 2, and 3 and SES Band 1 employees), are generally those with the highest proportions of engagements filled by women—except for the SES Band 1 classification. Generally, as classification increases, the proportion of women in engagements falls (as can be seen in Figure 2.6 in Chapter 2). The factors behind the long-term trend in the growth in the employment of women in the APS, and the lower levels of their expectations being well met, reported by men, require further detailed analysis to be fully explained.

It would seem to be a good time to further examine both funding arrangements for agencies and classification issues to ensure that the APS operates in a sustainable way, enabling agencies of all types and sizes to attract and retain staff with the capability to deliver on their core functions.

 

1 See, for example, Management Advisory Committee 2003, Organisational Renewal, and 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au/mac>; ANAO 2001, Planning for the Workforce of the Future: A Better Practice Guide for Managers, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>

2 ANAO 2008, Management of Recruitment in the Australian Public Service, Performance Audit Report No. 31, 2007–08, Commonwealth of Australia, Canberra, p. 18, <http://www.anao.gov.au>

3 ANAO 2008, Management of Recruitment in the Australian Public Service, Performance Audit Report No. 31, 2007–08, Commonwealth of Australia, Canberra, pp. 16–28, <http://www.anao.gov.au>

4 The Commission is responding to this recommendation and analysing the suggested recruitment metrics discussed in Better, Faster to develop material for agencies to use. The results will be made available on the Commission’s website.

5 Agencies where respondents indicated levels of agreement under 25% were the Australian Agency for International Development (AusAID), the Australian Competition and Consumer Commission (ACCC), the Bureau of Meteorology (BoM), DCC, DFAT and RET.

6 B. Pocock, N. Skinner & P. Williams 2007, Work, Life and Time: The Australian Work and Life Index (AWALI), Hawke Research Institute for Sustainable Societies, University of South Australia, Magill, SA, <http://www.unisa.edu.au/hawkeinstitute/cwl/default.asp>

7 N. Skinner & B. Pocock 2008, Work, Life and Workplace Culture: The Australian Work and Life Index (AWALI), Hawke Research Institute for Sustainable Societies, University of South Australia, Magill, SA, <http://www.unisa.edu.au/hawkeinstitute/cwl/default.asp> The Australian Work and Life Index 2008 did not specifically report on job satisfaction, focusing more on the work-to-life relationship, but did find there had been little change in the overall work-life index measure between 2007 and 2008.

8 B. Headey & D. Warren 2008, Families, Incomes and Jobs, Volume 3: A Statistical Report on Waves 1 to 5 of the Hilda Survey, Institute of Applied Economic and Social Research, The University of Melbourne and the Commonwealth of Australia, <http://www.melbourneinstitute.com/hilda>

9 Department of Education, Employment and Workplace Relations 2008, Australian Government Employment Bargaining Framework, <http://www.workplace.gov.au>

10 Several of these collective agreements continue to operate but have either passed their nominal expiry date without being renewed or are no longer applicable due to machinery of government changes.

11 Mercer Human Resource Consulting, APS Remuneration survey, commissioned by DEEWR, each year from 2001 to 2007. Since 2002, the Mercer surveys present a snapshot of data at 31 December each year. In previous reports this survey was referred to as the APS Remuneration survey. As participation in the APS Remuneration survey is voluntary, there are some limitations concerning the representativeness of the data collected from the 48 participating agencies (in 2007) to the whole APS. Self-selection into the survey, for example, has resulted in a higher proportion of larger APS agencies, than medium and small agencies, participating in the survey.

12 For comparability purposes the ABS definition of tertiary education has been adopted, that is, formal education beyond secondary education, including higher education, vocational education and training, or other specialist post-secondary education or training. The qualification categories contained in the employee survey question included under this definition of tertiary education are: vocational qualification; associate diploma; undergraduate diploma; bachelor’s degree; postgraduate diploma; master’s degree; and   doctorate. It should be noted that other differences between sectors may also drive remuneration results.

13 Work value, that is, the skills and responsibility of jobs—is the fundamental basis of job classification in the APS.

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