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1 Introduction

The Australian Public Service (APS) faces a challenge in attracting and retaining skilled and talented staff in an employment environment very different to that of the past. While APS agencies now have much greater flexibility in developing their workforce strategies, they are also required to operate in an Australian labour market which is becoming ever more competitive. Public sector agencies find themselves struggling to match the remuneration pathways and other rewards that other employers are able to offer to the shrinking cohort of new skilled entrants to the labour force, who display a growing preparedness to switch employers and career paths to suit their needs and aspirations.

In this environment, APS agencies will need to adopt strategic and dynamic approaches to managing and sustaining the APS workforce, taking account not only of the younger workers from generations X and Y, but of the increasingly diverse career paths and aspirations among all employees.

More than half the current agency heads and SES officers commenced their APS careers over 20 years ago when the APS workforce and structure displayed the following key characteristics:

  • Career staff typically entered at the bottom of the APS hierarchy and were protected against outside competition as they advanced through that hierarchy.

    The majority of staff joined the APS soon after leaving secondary school and had an expectation of remaining until retirement age, steadily rising to a level in the hierarchy appropriate to their talents and achievements. A complex web of rules, entitlements and other barriers largely protected these career staff against competition from non-APS applicants for positions above the base entry level.
  • Pay and conditions were centrally negotiated and determined.

    Centrally negotiated and/or arbitrated industrial awards governed remuneration arrangements for all classification levels across all APS agencies.
  • Job classification structures were centrally controlled by the then Public Service Board.

    Staff ceilings and other centrally imposed rules around creation of new positions greatly restricted the decision-making powers of APS agency heads and line managers over the ways in which organisational units were designed and staffed.
  • Many services now outsourced or corporatised were delivered by permanent APS employees, including construction, manufacturing, labouring, transportation and medical services.
  • The graduate entry programme was a major avenue in most agencies for recruiting staff with tertiary qualifications.
  • Few employees, other than typists and ICT specialist staff, had access to computers.
  • The majority of employees2 were baby boomers. Well over half of the employees in 1984 were born between 1950 and 1964, and were then between 20 and 34 years of age.

Today, only one of these characteristics remains: around half of the APS workforce continues to comprise baby boomers born between 1950 and 1964. However, these baby boomers are now between 40 and 54 years of age and are beginning to think more about their retirement plans than about their future career paths.

All the other features listed have been swept away since the mid-1980s by the combined impact of:

  • structural changes in the Australian economy, society and labour market including work redesign, advances in ICT and, specifically in the APS, the corporatisation or outsourcing of many traditional areas of APS activity
  • a series of reforms specific to the APS, culminating in the Public Service Act 1999, which have devolved most controls over recruitment, advancement, separation and remuneration to individual agency heads.

Today, agencies, working within the constraints of their budget allocations and the current agency bargaining framework, have much greater control over how many and which employees they recruit, and over how they classify and remunerate them.

Although the impacts of these changes on the APS are still being worked through, key new elements in the structure and characteristics of the APS workforce are beginning to emerge, namely:

  • streamlining and contracting of classification structures, with staff now typically commencing at the APS 3–4 levels or higher and fairly rapidly advancing to higher levels
  • a major reduction in opportunities for low-skilled employment, due to factors such as computerisation and a gradual redefining of the role of the APS in which many internal and external service delivery functions have been corporatised or outsourced
  • increased direct recruitment to the APS of experienced workers from other sectors, now that the barriers to outsiders applying for APS positions have been removed
  • a ‘graduate’ workforce, with APS staff at all levels being increasingly likely to hold tertiary qualifications, regardless of whether they are recruited through graduate entry programmes or general recruitment processes
  • an increasingly female workforce, with the proportion of women in the ongoing APS workforce now at 53% and rising
  • a growing diversity of career patterns, due to trends such as the greater recruitment of experienced staff from outside the APS, and the rising numbers of staff accessing conditions of service promoting a greater work–life balance
  • falling rates of interagency mobility, with staff reaching the executive levels or joining the SES now being far less likely than preceding cohorts to have worked in more than one APS agency.

The APS employment environment is also becoming affected by a number of external factors, including:

  • a projected tightening in the supply of younger workers entering the Australian labour force
  • growing career mobility among generations X and Y (that is, those born after 1964 and 1979, respectively)
  • a tightening of the supply of labour in some specialist areas of significant importance to APS agencies (for example, accountancy, economics, statistics, science and contract management).

The following chapters examine how these internal and external factors are reshaping the employment environment and workforce requirements of the APS in the 21st century.

The analysis presented in Chapters 2 to 5 expands on the 2003 MAC report Organisational Renewal, which analysed in detail the emerging recruitment, retention and succession issues arising from an ageing APS, and concluded that agencies needed to address these issues through systematic workforce planning.3

Chapter 6 presents strategies that agencies will be able to adopt individually and collaboratively to manage and sustain an APS workforce with a growing diversity of career patterns, and learning and development needs.

The report features the following key recurring themes:

The projected tightening of the Australian labour market over the next two to three decades

  • Studies by the Treasury and others project a forthcoming sustained decline in the numbers of younger people entering the Australian labour force each year. As a result, the APS may need to:
    • develop effective strategies for attracting and retaining skilled younger workers
    • draw more heavily on employees from the oldest cohort of working age people (55 and above)
    • consider revamping entry level and job design arrangements to facilitate recruitment of less skilled employees.

The future role of graduate programmes

  • The 2004 MAC report, Connecting Government, found that tertiary graduates are particularly likely to possess the attitudes and skills that will attract them to, and suit them for, the collaborative whole of government approach increasingly required from the APS workforce in the 21st century.4
  • The APS is increasingly a ‘graduate’ workforce with most new entrants now holding tertiary qualifications and graduate programmes remaining strong in most agencies, even though (as Chapter 3 will show) the graduates they recruit and develop through these programmes do not appear to advance in their careers at any faster rate than staff recruited through other channels. It is therefore timely to reassess the goals and characteristics of graduate programmes.

A growing people management challenge

  • This arises from the growing diversity of career paths pursued by the APS workforce, particularly in relation to younger workers who may be less committed to pursuing a lifelong career in the APS than employees from previous generations.

The need for a concerted focus on leadership development

  • The APS is preparing to replace the 55% of EL 2s and the 70% of SES who are now aged 45 years or over. The declining proportion of staff reaching leadership levels who have worked in more than one APS agency raises concerns about the breadth and depth of experience in Australian Government processes among the feeder group of potential future APS leaders.

While the following analysis focuses largely on broad APS-wide workforce trends, it is important to note that there are significant differences between and within agencies in terms of their business requirements, the composition, behaviour and career aspirations of their workforces, and the nature of the labour markets in which they recruit.

The APS operates in a range of diverse labour markets, including:

  • the unique labour market of Canberra, where the APS is by far the largest employer, drawing on a labour force which features a very high concentration of tertiary-educated people
  • the larger and generally more competitive labour markets of the major state capitals
  • rural and remote areas
  • professional fields such as accountancy, where the APS can struggle to compete against other employers to attract quality recruits, particularly for positions located in Canberra
  • other areas of special expertise such as meteorology, agricultural economics, human rights law, international trade negotiations and legislative drafting, for which there are relatively few employers in Australia, with the APS being the most, or one of the most, important of these.

Given this diversity of employment environments, it is important to avoid oversimplification of the workforce issues facing the APS. While the following discussion pays particular attention to graduate recruits and potential future SES officers, these groups are not the most numerically significant elements of the APS workforce.

The report therefore also attempts to draw together the diverse range of perspectives from across the APS and its workforce. An important element of the research undertaken for the report was a series of focus groups that featured participation by graduate recruits, mature entrants with experience in other sectors, workers in regional networks outside Canberra, Indigenous employees both from Canberra and outside, and people with disabilities.

The report also draws on a range of literature and data sources (especially the Australian Public Service Employment Database (APSED)), a survey of agency graduate programmes and recruitment processes, and discussions with many APS agencies and external organisations.

2 Unless otherwise stated, statistical information about ‘employees’ provided throughout this report means ‘ongoing’ employees and excludes ‘non-ongoing’ (that is, temporary) APS employees.

3 Management Advisory Committee 2003, Organisational Renewal, Commonwealth of Australia, Canberra.

4 Management Advisory Committee 2004, Connecting Government: Whole of Government Responses to Australia’s Priority Challenges, Commonwealth of Australia, Canberra, pp. 53–4 and Chapter 2 of this report.