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Ch 1: Graduate supply and demand

The chapter identifies present trends in the APS graduate workforce and evaluates these in terms of the current workforce, graduate attraction to APS employment and expectations of the APS, the mobile workforce and workforce modelling.

The APS, its workforce and the employment environment have changed dramatically over the past 20 years. This is due in part to structural changes to the Australian economy, society and labour market as well as to a series of reform processes within the APS. The existing APS labour force is both ageing—with approximately 70% of current SES employees and 55% of current EL 2s aged 45 or over—and becoming increasingly diverse in its career patterns and working arrangements. A tighter labour market is in prospect, with a diminishing supply of younger workers projected to enter the labour market in the next few decades. This tightening is already affecting the APS in important specialist areas, such as accountancy.

Although graduate entry programs have long since ceased to be the main mechanisms for recruiting staff with tertiary qualifications, there are many sound reasons for retaining them, for example, invigorating the talent pool available for future EL positions. It has therefore become critically important for the APS to develop effective strategies aimed at attracting and retaining graduates. Younger people coming into the APS are displaying a greater interest in career mobility than their predecessors1; research also suggests that the so-called Generation Y (those aged 29 or younger in 2010) are increasingly expecting rapid career advancement and substantial personal development. Furthermore, they will not hesitate to switch employers should they find these opportunities to be lacking.

The current workforce

Cohort size

Figure 1.1 shows the size of graduate cohorts as a percentage of 2000 numbers. This shows a considerable decrease in graduate engagements since 2000, with the 2002 and 2004 cohorts only just over half the 2000 numbers. A number of factors may have contributed to this decline, including policy changes after the 2001 election and the 2002 recession, which had a significant impact on the Australian economy. Since 2004, numbers have increased, peaking in 2007 with a cohort size of 110.9% of 2000 numbers before beginning a steady decrease of approximately 4% per year with the 2010 cohort around 98.2% of 2000 numbers.

Figure 1.1: APS Graduate cohort size as percentage of 2000 cohort numbers

There are several possible reasons for the recent decline in graduate numbers, including the impact of the Global Financial Crisis (GFC) and the consequent tightening of budgetary constraints. It may also be the case that, the abolition of APS age retirement, there is less of a perceived need for graduates to fill future positions.

Percentage of APS who are graduates

The changes in graduate engagements have matched, to some degree, the changes in the size of the APS. However, since 2007, the graduate segment of the APS workforce has been diminishing; Figure 1.2 shows the percentage of the APS who were graduates from 2000 to 2010.

Figure 1.2: Percentage of APS who are graduates

In 2000, 0.82% of the APS were graduates. This dropped to 0.57% in 2002. From 2002 there was a steady growth to 0.76% in 2003 followed by a steady decline to 0.50% in 2004. Since 2004, there has been a gradual increase peaking at 0.92% in 2007 and a slow decline to 0.78% in 2010.

Figure 1.3: Percentage of graduates broken down by sex

The last ten years have seen a consistent difference in recruitment patterns of males and females into the graduate workforce. Figure 1.3 shows the percentage of graduates engaged since 2000 broken down into male and female. In 2000, 56.5% of graduates engaged were female and 43.4% were male. This continued to fluctuate throughout the decade with females always representing a higher percentage of graduates engaged. By 2010, the percentage of female graduates had dropped to 52%, while the percentage of male graduates had increased to 47.9%.

A number of factors may explain why the intake of female graduates is higher than that of males. These include the possibility that a higher percentage of females were graduating from university and seeking a graduate position in the APS at that time. Alternatively, this could be related to a field of study; for example, if the majority of males studied engineering or enrolled in other traditionally male-dominated subjects, their career path may not be suitable to the APS2. Another possibility is personal choice—being a public servant is more appealing to one sex than the other.

Age profile

Figure 1.4: Age profile of graduates

Between 2000 and 2010 the majority of graduates in the APS were aged 24 and under. The 25–29 age group represented the second highest number of graduate engagements followed by the 30–34 and the 35–39 age groups, both of which had a very small proportion of graduate engagements. The 40–49 and 50 and over age groups have had almost negligible engagements over the past 10 years.

The 24 and under age group is most likely to include individuals coming directly from undergraduate study (a first degree), while the older age groups are most likely to be made up of individuals who may already have a degree but decided they wanted a change in career, leading them to return to university, graduate and gain a graduate position in the APS.

Attraction and expectations

Graduate attraction to the APS

The data collected from the APS Employee Survey reveals that key attractions of work in the APS for graduates included: gaining experience in the APS; the ability to contribute and to make a difference; job security; agencies' reputations; remuneration packages; and future career and developmental opportunities.

Job security was the most attractive aspect with 44.4% of graduates rating this as ‘very important’. Many graduate programs guarantee a permanent position at the end of the graduate development year and this may be one of the reasons why job security was selected. The second highest ranked option was the availability of development and educational opportunities, at 42.2%. APS graduate programs generally support graduates to enhance and develop their skills through mechanisms such as rotations and formal training. The equal third most attractive factors for graduates were the desire to gain experience or greater experience in the APS (33.3%) and the ability to contribute and make a difference (33.3%).

Graduate expectations in the APS

The State of the Service Report also reveals graduate expectations in the APS. It shows that 44.4% of graduates surveyed indicated their expectations had been met ‘very well’ with regards to gaining experience or greater experience in the APS. Rotations enable graduates to develop experience in a number of areas within the agency, allowing them to diversify their skills. On the other hand, 11.1% believe their expectations were ‘not well’ met in relation to opportunities to work on innovative or leading edge projects, although 17.8% believe this kind of experience is of little importance.

While most graduates surveyed believed their expectations had been met, a small percentage indicated that certain expectations had ‘not been met at all.’ A total of 4.4% of graduates said that their expectations regarding the matching of their interests and experience to the responsibilities of the job or the business of the agency were ‘not met at all’. A further 2.2% indicated that their expectations regarding geographical location were not met; this may in part be due to the large proportion of graduates who choose to relocate to the Australian Capital Territory to participate in graduate programs. Another 2.2% of graduates indicated that their expectations regarding their remuneration package were also not met. This may be explained by graduates' day-to-day involvement with other staff members, some of whom will also be recent graduates but who chose to apply directly for APS 4 or higher positions rather than opting for recruitment through a graduate program, and who would earn more than those in the graduate program.

Although the overall proportions are small, by identifying areas where graduates indicated their expectations were ‘not met at all’, agencies may be able to develop strategies to deal with these issues in order to retain graduates. Addressing these would improve the Employee Value Proposition (EVP) for graduates. The EVP is the set of attributes that the labour market and employees perceive as the value they gain through employment in an organisation; it is critical to talent attraction and commitment.

In seeking to attract and retain graduates agencies need to consider the EVP associated with their graduate program. Based on the data above, this might include: providing more graduate programs in the states, which could reduce relocation costs; enhancing graduate satisfaction; and meeting graduate expectations. Agencies could also devise better-targeted rotations by identifying graduate interests and needs and giving them greater opportunities to work in areas of their choice. Agencies might also ensure that graduates' remuneration compares favourably with that of those who enter the APS with degrees through avenues other than the graduate program. Improving graduates' remuneration packages may also allow agencies to attract and retain graduates more effectively. Alternatively, increased clarity of the longer-term EVP benefits for those entering the agency through the graduate program, rather than applying for direct entry positions, might help agencies to recruit and retain graduates.

The mobile workforce

Length of service at agency of recruitment

In general, female graduates move from their agency of recruitment sooner than males, a pattern which was generally consistent across both genders between 2000 and 2006. Female length of service at the agency of recruitment declined between 2007 and 2008, while that for males remained relatively stable. The median length of service in the agency of recruitment for both males and females has been increasing since 2008. It is not clear whether this trend will continue or if it is a short-term fluctuation.

Level attained after five years

Once graduates complete their developmental year they are able to progress to higher APS classifications. The developmental year gives graduates the opportunity to advance and build their skills through rotations and the chance to work on a range of projects. Figure 1.5 represents the level graduates in the 1991, 1996, 2001 and 2005 cohorts reached after five years.

Figure 1.5: Classification level reached after five years for 1991, 1996, 2011 and 2005 cohorts

The graph shows that 4.2% of graduates from the 1996 cohort, compared with 2.20% of the 2001 cohort and 2.88% of the 2005 cohort were able to reach the EL 2 classification after five years. After five years, the majority of graduates had reached the APS 6 classification across all four cohorts. Figure 1.6 reveals that a higher proportion of graduates from the 1991 cohort were classified as APS 3–5. In contrast, the 1996, 2001 and 2005 cohorts had fewer members at the lower levels. This could be due to graduates entering the APS from their developmental year at a higher classification level. In recent years graduate programs have raised their initial entry classifications, with many graduates entering at the APS 3 level and being placed at the end of their training period in APS 4 or 5 roles.

Level attained after ten years

Figure 1.6 shows the level graduates from cohort 1991, 1996 and 2000 attained after 10 years.

Figure 1.6: Classification level reached after 10 years for 1991, 1996 and 2000 cohorts

The graph reveals that a higher percentage of graduates from the 1996 cohort progressed to higher classifications than those in the 1991 and 2000 cohorts; there are a higher proportion of graduates from the 1996 cohort who are now EL/SES employees. Most graduates were in EL 1 positions after 10 years. Based on a comparison of Figures 1.6 and 1.7, it is clear that the progression in classification became more stable after 10 years. The percentage of graduates from the 2000 cohort at the EL 1 and EL 2 classifications was less than that for the 1996 cohort. This could be due to the strong impact of the GFC on employment conditions in Australia.

Graduate retention

Graduates represent a significant human capital investment by the APS and the return on this investment is, in part, determined by the length of time that graduates spend in the APS after their graduate year. Figure 1.7 shows the proportion of graduates remaining in the APS after their graduate year by cohort.

Figure 1.7: Proportion of graduates still current in the APS after 1, 3, 5 and 7 years by cohort3

As can be seen in Figure 1.8, from 1996 graduate numbers declined, increasing again in 2001. There was a clear trend of decreasing retention of graduates after three years with an overall decline of 10% from 85% retention in the 1991 cohort, to less than 75% in the 2006 cohort. This may reflect the increased mobility seen in the Australian workforce in recent years. Addressing this issue might require specific programs that focus on the retention of graduates as well as their recruitment and initial development.

Overall, rates of graduate retention after one year have been relatively consistent during this period. This suggests that the APS receives some return on investment in graduates—in the short-term at least. If the increase in retention rates in the 2001 cohort, compared with the 1996 cohort, is reflected in the 2006 cohort, this would suggest an increasing return on investment for graduates.

Intentions to leave

The 2009–10 State of the Service Report asked graduates, ‘Do you intend to leave your agency in the next two years?’ To this question 28% responded yes, 35% were unsure, and 37% answered no. The three most frequent reasons given for why some graduates intended to leave were, a ‘desire to gain further experience’, a ‘desire to try a different type of work or seek a career change’, and a ‘lack of future career opportunities’.

Reasons given by graduates for intending to leave their agency suggest that they value mobility as a means of gaining experience and improving their career prospects. This could be due in part to a perception that the agency lacks career opportunities. Many graduates are entering the workforce for the first time, and the agency may not be meeting their expectations or there may be a lack of communication regarding the opportunities available to them.

Separation during the graduate program

Figure 1.8 shows the proportion of graduates who cease employment with the APS during their graduate program.

Figure 1.8: Proportion of graduates who separate as a graduate by year

These data show that agencies can expect to lose approximately 10% of graduates during the graduate program. Higher levels of separation in 2001 may be explained by the decline in the growth of the APS workforce, resulting in the perception among graduates that there were fewer career opportunities in the APS compared to the private sector. Since 2004, the female separation rate from the APS during the graduate year has remained slightly higher than that for males. The proportion of graduates who separate in their graduate year has been relatively stable, while in absolute terms graduate numbers have increased.

Graduate workforce modelling

Over the past decade the number of graduates in the APS has fluctuated. However, over the last three years graduate recruitment has steadily declined. Due to the instability in graduate population numbers, attempting to project more than five years becomes difficult. It is unclear whether the recent decrease in graduate numbers is the start of a larger trend, or whether it will be reversed by changes in APS strategy. In light of these issues, two likely scenarios may be considered.

Scenario 1: Declining recruitment

After fluctuations since 2000, graduate recruitment has declined at a steady rate since 2008 of approximately 4% per year. Under this scenario it is assumed that the decline will continue at this rate.

Scenario 2: Ageing workforce—Increase in graduate recruitment

The assumption of this scenario is that numbers of those retiring will grow, thereby increasing the demand for skilled labour; it is assumed, therefore, that a long-term APS focus on the recruitment and retention of skilled labour, including graduates, will increase graduate recruitment over the next five years. Within a tightening labour market, strategies will need to focus not only on increasing the number of graduates but also on maintaining a high standard of recruitment.

This scenario is based on the assumption that the APS will continue to grow and that graduate recruitment will increase in line with that of the APS. The predicted growth of the SES and the EL workforces is 2.97% and 6.39% respectively; therefore, a growth rate which would see graduates keep pace with the APS is estimated to be within these two figures and a conservative estimate was used (Scenario 2A: 3% growth) and a less conservative figure (Scenario 2B: 5% growth).

Table 1.1: Graduate workforce modelling results
Year 2011 2012 2013 2014 2015 2016
Scenario 1 1131 1086 1042 1001 961 922
Scenario 2A 1213 1250 1287 1326 1366 1407
Scenario 2B 1237 1299 1364 1432 1503 1579

Limitations

There are a number of limitations to this work. In particular, modelling of the graduate workforce is based on historical data and may not reflect future trends. In addition, it is unknown whether the separation behaviour of graduates represents an issue for the APS, or if it is a ‘natural’ pattern of movement.

The changing external environment will also affect the recruitment and retention of graduates. In a tighter labour market the supply of graduates who are attracted to the APS may decrease. However, this factor has not been included in the workforce modelling. Further analysis is required to examine the impact of the decreasing supply of graduates in the future as well as the effects of the GFC on graduate behaviour.

Conclusions

Graduates are attracted to the APS for several reasons. How long they stay in their agency may depend on whether or not their expectations are being satisfied. Their intentions to leave the APS may be affected by the perceived opportunities, or lack thereof, in their agency and the APS as a whole. The perception of a lack of opportunities may be addressed through more varied and challenging work or better communication of the opportunities available to graduates after the graduate program.

Retention of graduates after one year has remained fairly stable over the past decade. However, there has been an increase in the number of graduates who separate within their first three years in the APS. Improving the longer-term EVP for graduates, and promoting the long-term returns in terms of EVP for those entering through the graduate program may help to increase retention. This could also be done by: increasing the availability of graduate programs and ongoing work outside the Australian Capital Territory; tailoring aspects of the program to suit graduates' individual interests and experience, particularly in relation to assigning rotations; and providing challenging work to keep graduates engaged during and after the program.

Footnotes

1 Management Advisory Committee: 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra (Back to content)

2 Field of study is collected by APSED but due to the high rate of unreported data no conclusions could be made (Back to content)

3 As insufficient time has elapsed for data to be collected regarding graduates still current in the APS after five and seven years for the 2006 cohort, the data for that cohort is incomplete. It is unclear whether there will be any observable trend of graduate numbers remaining in the APS after five and seven years from this cohort (Back to content)