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Ch 5: Key findings and next steps

The APS is a complex workplace with more than 100 agencies ranging in size from nearly 40,000 employees to as few as 10. In the past, the APS workforce could have been considered a “closed” system, in that entry to the APS workforce was only possible via the most junior levels and movement into more senior positions only came from within. As a result of the changes to the Public Service Act in the late 1990’s the workforce has become an “open” system with entry into the APS workforce possible at all classification levels.

It might be argued that this change has brought about a substantial focus on the interaction between the APS workforce and the external labour market, with movement between the two holding a high degree of interest among senior leaders and HR practitioners. However, the internal APS labour market is vibrant and has a dynamic impact on the APS workforce; over 90% of all promotions in the APS occurs within an agency. There are also clear segments in the APS workforce and each of these has unique characteristics.

This paper has provided an analysis of the APS internal labour market by examining the segments of the workforce and addressing issues common to each including mobility and promotions, and included some workforce modelling scenarios for each. The key findings for each segment are listed below.

Graduates

  • Considerably fewer graduates were engaged in 2001 and 2002 than 2000, with the 2002 graduate cohort only just over half the size of the 2000 cohort. Graduate numbers have only recently regained parity with 2000 levels and represent slightly less than 0.8% of the APS workforce.
  • Between 2000 and 2010 the majority of graduates in the APS were aged under 25, while representation in the 40–49 and 50 and over age groups was negligible over the past decade.
  • The last ten years has seen noticeable differences in recruitment patterns of male and female graduates. While there have been fluctuations over the years, females have outnumbered in all years.
  • The APS’ ability to retain graduates after three years’ service has declined with the number of graduates remaining in the APS after three years almost 10% lower for the 2006 cohort than for the 2000 cohort.
  • Nearly one third (28%) of graduates surveyed for the 2009–10 State of the Service Report indicated they intend to leave the APS within the next two years; another third (35%) were ‘unsure’.
  • Based on ten-year trends, agencies can expect to lose on average 10% of graduates during the graduate year.
  • Job security was the main factor attracting graduates to the APS.
  • The primary reasons graduates give for their expectations not being met since joining the APS include: job location; matching interests/experience to their work; opportunities to work on ‘leading edge’ projects; and remuneration package.
  • On average 36.9% of graduates reached the APS 6 level after five years.
  • On average 40.9% of graduates reached the EL 1 classification after 10 years.

APS employees

  • APS 1 and 2 workforce numbers have declined both in real terms and as a proportion of the APS workforce. APS 3–6 numbers have either increased or remained steady.
  • The APS 1–2 workforce is older than most others in the APS, with approximately 55% aged 55 or older in 2010. This group is more vulnerable to the challenges created by an ageing workforce.
  • Of those APS employees eligible to retire in 2010, approximately one-quarter planned to do so within the next two years.
  • Older APS employees were less likely to intend to leave their current agency than younger employees.
  • Resignation has been the leading cause of separation for APS 3–6 employees since 2001. Results for the APS 1–2 categories have generally been consistent with this, except for 2005 which saw a large number of retrenchments and forced transfers and/or redeployments to non-APS agencies.
  • The reduction in numbers and slowing growth of the APS categories may mean that the most common entry point for the APS has moved upwards.
  • There is a complex relationship between demographic and organisational factors. While the number of APS 3 employees may be similar to that of APS 4 employees, growth rates and other organisational factors are substantially different between the two.
  • When looking at the APS 1–6 workforce, a decision should be made as to whether the primary focus is the demographics of the employees or the changes to the classifications themselves.

EL employees

  • EL 1 and EL 2 numbers have grown considerably since 1996, with growth peaking in financial year 2006–07 and slowing since 2007–08.
  • The EL 1 cohort has grown at a much higher rate than either the EL 2 or APS 6 categories.
  • Separation rates have stabilised after peaking in the late 1990s. Since 2005, these have averaged 5.45% and 6.44% per annum for EL 1 and EL 2 employees respectively.
  • There is evidence that the EL workforce is ageing although the EL 1 cohort is less affected as the higher growth it has experienced has been largely among younger members.
  • Two distinct groups within both cohorts intend to leave the APS: an older group which plans to retire within the next two years (5-6% of the EL workforce) and a younger group which intends to seek employment outside the APS (7.5% of the EL workforce).
  • Resignations, retrenchments and retirements are the main reasons for separation from the APS. While resignation numbers and retirement numbers appear to have declined since 2008–09, retrenchment numbers have increased.
  • Insufficient data is available to determine whether the Global Financial Crisis (GFC) has changed retirement or resignation patterns.
  • Annually, internal applicants needs have met approximately 70% of recruitment needs. This has remained stable despite demand for recruitment fluctuating over time.
  • Workforce modelling suggests that growth in the EL segment of the APS workforce can return to peak levels without increasing the dependence on the external labour market for recruitment.

SES employees

  • SES numbers have been increasing over the last 10 years but this has slowed considerably in the past three years.
  • The EL 2 cohort has shown similar but even stronger growth which has not slowed.
  • SES separation rates have stabilised at around 7% per annum over the past decade.
  • There has been a slight but noticeable increase in SES separation rates during the last three years.
  • The nature of SES separations has changed over the past three years; resignations have plateaued and age retirements have increased (consistent with the ageing of the SES workforce).
  • It would appear that the Global Financial Crisis (GFC) might have been affected SES resignation rates; its impact on SES retirement behaviour is less clear.
  • It remains to be seen whether the impact of the GFC on separation behaviour is a permanent behavioural shift or simply a short-term response to the GFC.
  • The majority of SES employees are either undecided about leaving their agency or have no intention of leaving within the next two years; this is the case even for SES employees beyond retirement age.
  • In the past, two-thirds of SES recruitment needs have been met from the internal labour market irrespective of fluctuations in the liability required, and this will remain the case for the foreseeable future, when modelled using two different sets of assumptions.

There were a few common themes in the findings presented here that centre on the implications of the ageing of the workforce and the increased diversity that comes with that; the impact of the workforce reductions of the mid- to late-1990s, and the yet-to-be determined impact of the GFC. All of these would provide fruitful areas of further research to aid in understanding the nature of the APS internal labour market.

Next steps

Understanding the profile and separation intentions of employees is the first step in determining how best to manage the APS workforce. The next stage of this research might benefit from a focus on ways of enhancing workforce capability capability through improved workforce management practices that are aligned to changing work and lifestyle expectations and opportunities that are likely to emerge as the workforce grows more diverse. APS leaders may need to:

  • re-think what work is and how it will be done in the future, in particular the full impacts of an ageing workforce on APS agencies;
  • consider approaches to flexible working arrangements that accommodate the growing diversity of the workplace; and
  • think more about what motivates people to come to work and how the APS can sustain that through reward, recognition and communication.
  • Consequently, the objectives of continued research might include:
  • Understanding the relationship between intentions to leave, separation rates and the attitudes and motivations of employees toward work, particularly older workers.
  • An examination of the profile and career intentions of the feeder classifications; this should also include identifying the proportion of the feeder group who are motivated towards promotion beyond their current classification level and their expectations and motivations for promotion.
  • An examination of attitudes towards more diverse working patterns among employees and managers (e.g. , part-time and non-ongoing employment).
  • Consideration of the full suite of management tools that agency heads might use to manage and refresh their workforce, including an assessment of the tools that may be needed in future to manage a more diverse workforce.

Another broad element in the APS internal labour market is the degree of mobility afforded APS employees within the APS. As a distinct workplace with more than 100 different agencies, there is substantial workplace diversity within the APS that might act as an attractor for employees: how do employees move between agencies, why do they move between agencies, and are any there patterns in the movement within the APS?

Finally, two common themes in these analyses were the workforce impacts of the downsizing that occurred in the late 1990s and the possible impact of the GFC on the career intentions of the APS. There is value in investigating these further; the former in order to investigate the longer-term impact this had and whether there are any lessons that might be applicable in any future downsizing considerations, the latter to see whether it has had any long term impact on retirement behaviour among APS employees.

Annex A: Full results of workforce modelling

Table 1: Workforce modelling results for APS 1–2 cohort
  2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Scenario 1
Projected number 25715 23927 22315 20860 19544 18351 17269 16284 15386 14566 13815
Change in numbers -1788 -1612 -1455 -1316 -1193 -1083 -985 -898 -820 -751 -689
Number of separations 4214 3862 3547 3266 3014 2788 2585 2402 2238 2090 1956
Number of promotions out of cohort 1458 1412 1368 1325 1285 1246 1208 1172 1137 1104 1072
Projected liability 3884 3662 3460 3275 3106 2951 2808 2677 2555 2443 2339
Scenario 2
Projected number 25715 23927 22315 21588 21588 21588 21588 21588 21588 21588 21588
Change in numbers -1788 -1612 —728 0 0 0 0 0 0 0 0
Number of separations 4214 3862 3547 3407 3407 3407 3407 3407 3407 3407 3407
Number of promotions out of cohort 1458 1412 1368 1347 1347 1347 1347 1347 1347 1347 1347
Projected liability 3884 3662 4188 4753 4753 4753 4753 4753 4753 4753 4753
Table 2: Workforce modelling results for APS 3–6 cohort
  2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Scenario 1
Projected number 78987 80964 83014 85143 87351 89643 92023 94492 97056 99718 102482
Change in numbers 1977 2051 2128 2209 2292 2379 2470 2564 2662 2764 2870
Number of separations 5808 5942 6080 6224 6373 6527 6688 6855 7028 7207 7394
Number of promotions out of cohort 9117 9394 9683 9983 10294 10618 10954 11304 11667 12045 12437
Projected liability 16901 17387 17891 18415 18959 19525 20112 20722 21357 22016 22701
Scenario 2
Projected number 78987 80964 83014 84106 85190 86295 87421 88568 89736 90927 92141
Change in numbers 1977 2051 1092 1084 1105 1126 1147 1169 1191 1214 1237
Number of separations 5808 5942 6080 6154 6227 6302 6378 6455 6534 6615 6696
Number of promotions out of cohort 9117 9394 9683 9835 9988 10144 10302 10464 10630 10798 10970
Projected liability 16901 17387 16855 17073 17320 17571 17827 18089 18355 18626 18903

Annex B: Full results of workforce modelling

Table 1: Workforce modelling results for EL 1 cohort
  2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
EL 1 (Average growth)
Number of EL1s 27671 29439 31320 33322 35451 37716 40126 42690 45418 48321
APS Growth 1662 1768 1881 2001 2129 2265 2410 2564 2728 2902
% annual growth (6.39%) 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39
Number of promotions to EL1 3440 3659 3893 4142 4407 4688 4988 5306 5645 6006
Average rate of promotion to 12.43 12.43 12.43 12.43 12.43 12.43 12.43 12.43 12.43 12.43
Number of engagements 1444 1537 1635 1739 1851 1969 2095 2228 2371 2522
Average rate of engagement 5.22 5.22 5.22 5.22 5.22 5.22 5.22 5.22 5.22 5.22
Liability 6546 6964 7409 7883 8386 8922 9492 10099 10744 11431
EL 1 (Declining growth)
Number of EL1s 26992 27877 28652 29306 29827 30209 30445 30597 30750 30904
APS Growth 983 885 775 653 522 382 236 152 153 154
% annual growth 3.78 3.28 2.78 2.28 1.78 1.28 0.78 0.5 0.5 0.5
Number of promotions to EL1 3331 3440 3536 3616 3681 3728 3757 3776 3795 3814
Average rate of promotion to 12.34 12.34 12.34 12.34 12.34 12.34 12.34 12.34 12.34 12.34
Number of engagements 1409 1455 1496 1530 1557 1577 1589 1597 1605 1613
Average rate of engagement 5.22 5.22 5.22 5.22 5.22 5.22 5.22 5.22 5.22 5.22
Liability 5723 5781 5806 5799 5759 5687 5582 5525 5553 5580
Table 2: Workforce modelling results for EL 2 cohort
  2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
EL 2 (Average Growth)
Number of EL2s 12870 13350 13848 14364 14900 15456 16032 16630 17251 17894
APS Growth 463 480 498 517 536 556 577 598 620 643
% annual growth 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73 3.73
Number of promotions to EL2 1277 1324 1374 1425 1478 1533 1590 1650 1711 1775
Average rate of promotion to 9.92 9.92 9.92 9.92 9.92 9.92 9.92 9.92 9.92 9.92
Number of engagements 510 529 548 569 590 612 635 659 683 709
Average rate of engagement 3.96 3.96 3.96 3.96 3.96 3.96 3.96 3.96 3.96 3.96
Liability 1786 1853 1922 1994 2068 2145 2225 2308 2394 2484
EL2 (Declining growth)
Number of EL2s 12933 13417 13851 14231 14549 14803 14986 15097 15172 15248
APS Growth 526 484 435 379 319 253 183 111 75 76
% annual growth 4.24 3.74 3.24 2.74 2.24 1.74 1.24 0.74 0.50 0.50
Number of promotions to EL2 1283 1111 1374 1412 1443 1468 1487 1498 1505 1513
Average rate of promotion to 9.92 8.28 9.92 9.92 9.92 9.92 9.92 9.92 9.92 9.92
Number of Engagements 97 110 126 149 181 232 323 539 796 796
Average rate of engagement 3.96 3.96 3.96 3.96 3.96 3.96 3.96 3.96 3.96 3.96
Liability 1380 1220 1500 1560 1624 1700 1810 2037 2301 2309