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Commissioner's address

National Public Sector Managers and Leaders Conference

Presentation by John Lloyd PSM, Australian Public Service Commissioner

Melbourne, 22 March 2018

The Future of Work - what it could mean for the APS

  1. The nature of work and the way it is undertaken is dynamic. Both change regularly.
  2. Much attention is given to changes currently underway. Some of this is evolutionary and essentially adds momentum to changes already occurring. Flexible modes of work such as teleworking, job sharing and labour hire are examples.
  3. Other changes are unprecedented. Much of this relates to digital and other technological innovation.
  4. The challenge for the Government and the APS is to adapt to this change.
  5. The effects of the changes are likely to be extensive and powerful.
  6. The whole employment equation will be impacted. Appointment, engagement, performance, remuneration, incentives, demographics, integrity, termination, retirement, leave, learning, development, talent, structure, job design, layout, location, relationships will all be affected.
  7. The capacity of our employment institutions will be tested. Tribunals, unions, employer associations, universities, legal and training providers will have to adapt. Since the 1970s some big firms employing thousands of workers and big trade unions have withered.
  8. Work is likely to be more attuned to international advantage. Countries that adapt and encourage change will be attractive. Employment growth and opportunities will migrate to countries that are successful in integrating the changes.

Future of Work – What does it Mean?

  1. Much is written about the future of work. Some of the commentary is insightful, some is alarmist. It is important to distil the key facts and predictions from the commentary.
  2. It does not mean 40% of jobs are going to disappear by 2030. When experiencing changes to work, we tend to overestimate the short term effects and under estimate the long term effects.
  3. The main facts and predictions are:

 

  1. Jobs will be impacted. Some will go, others will be modified and new ones created;
  2. The contingent, platform and on-demand modes of work will continue to grow;
  3. More people will determine when and where they work;
  4. Management hierarchies will be modified;
  5. A linear career will become the exception. Retraining and upskilling will be common;
  6. Demographic change, especially more older workers, will amplify some impacts;
  7. Strategies to engender an engaged and flexible workforce will be critical to business success;
  8. Artificial intelligence will displace some jobs. It will enhance the efficiency of others;
  9. Entrepreneurship will be more important.

APS Workplace 2018

  1. The APS is embracing change in the nature of work and the way work is undertaken. The effort has been uneven and in some cases effected with minimal planning.
  2. Many APS workplaces display flexibility. Our employment profile embraces ongoing employment, non-ongoing employment, part time, casual, working from home, job sharing, contract employment, independent contracting and labour hire modes of work. More older employees feature in the workforce structure. Incremental change is being made in how employees are recruited and how separation is managed.

Upgrade Workforce Planning

  1. Workforce planning is being changed from a focus on talent and personal development. Increasingly, it will deal with the interplay of talent, technology and the design of work and organisations.
  2. The APS has access to large amounts of workforce data. It can be used to better inform business strategy decisions. Human resource professionals have to upgrade their skills to mine the data with good effect. Executive leaders will have to become more attuned to examining workforce performance and profiles. Digital capacity offers the enticing prospect of more immediate data that will speed responses to business changes.

Teams

  1. It is accepted that dynamic empowered teams will be a route to introduce workforce agility. Also, traditional layered hierarchies will be substantially modified.
  2. The team approach has far reaching impacts. It changes the way work is assigned, how work is funded, what is measured, the kind of capabilities required and how performance is rewarded.
  3. In a well-managed environment a team will lift employee engagement and productivity. Self-directed teams will take ownership and pride in what they do. The team membership will be a mix of skills set by the nature of the project. The membership will often change as the project develops. The team will be disbanded at project conclusion. Team based work will be attended by a compelling need to manage risk in a sophisticated way and keep the team focussed on tangible outcomes.
  4. Managers will exercise influence not through structured authority, but instead through subject knowledge and coalescing the team’s energy to good outcomes. They will be more coach than manager.
  5. The profiles of leaders will be different. In some innovative workplaces it has been found that about 33% of leaders are those that would not previously be considered for such roles. Attributes to be valued are a growth mindset, adaptability, agility, collaboration, good at leading change and testing those you lead. Being more a coach than a manager.
  6. This will require a reconsideration of our approach to recruitment, leadership learning and talent management. A rethink of how we pay and reward staff and classify jobs will eventuate.

Live Long and Prosper

  1. People are living and working longer.
  2. This is having substantial work impacts:

 

  1. Pension eligibility ages have been raised in 18 OECD countries;
  2. Online courses and retraining are becoming popular in equipping people to work longer;
  3. Health and fit for work issues will emerge;
  4. Working to 70 or beyond will not only become less unusual but may be financially necessary for many.

 

  1. It is obvious that a larger older workforce will require flexibility. Older workers are likely to seek a tapered transition to retirement with shorter hours, longer leave, access to working from home, retraining and malleable superannuation arrangements. Some older workers will step down to lower level jobs as they approach the end of a working life. Although older workers may be valued for accumulated corporate knowledge, younger workers may see them as an impediment to career opportunity.
  2. We will be engaging with representative groups to get a better understanding of the issues that older workers see as important.

Contingent or On Demand Workforce – Workers on Tap

  1. Contingent workers are now a long established facet of the Australian employment framework. Industries such as construction and IT have used them for decades.
  2. A basic misconception to dispel is the attitude that contingent work is neither desired nor beneficial. Many people prefer to work in this manner. They embrace the independence, choice, flexibility and rewards it offers. Only a minority feels aggrieved or exploited because they find themselves in this segment of the workforce. The on demand economy offers consumers greater choice while letting people work whenever and wherever they want.
  3. The contingent workforce has traditionally been understood to be essentially comprised of independent contractors and labour hire employees. Some would include non-ongoing and casual employees. However, it is being transformed by the digital economy and modern business practices. The contingent workforce now includes gig, peer- to- peer and platform workers and job marketplaces such as AirTasker, Uber, and Wonolo.
  4. The spread of contingent workers is highlighting a divide between employer and union strategies. Employers embrace the need to avail themselves of the services of on demand workers. Many tasks are complex and/or intermittent and so it is a financial absurdity to employ on-going staff equipped for every role the firm requires.
  5. In contrast, the unions reacting to their falling membership urge extensive regulation of contingent workers in an attempt to protect the regulated labour market. They have a forlorn hope that the use of contingent workers will not be cost effective.
  6. APS agencies should have systems that facilitate the engagement of contingent workers. Union attempts to limit that management prerogative must not be entertained. The inclusion of clauses restricting the rights of management to engage on demand workers must be rejected.
  7. Management and supervisory practices will adapt to use on demand workers effectively. Risk and insurance arrangements have to be addressed.

Recruitment and Capability

  1. Recruitment practices will change to grapple with the new work paradigm.
  2. We have to recruit ongoing employees with a broad range of skills and capabilities. The recruitment must be efficient. Many good candidates will not see through a protracted process. We will have to offer a career that is not just financially rewarding, but also one that offers challenges and fulfilment.
  3. Our recruitment architecture will have to be contemporary and use social media. Access through job websites and work marketplaces will be advisable.
  4. The capacity to attract the best on demand employees requires a review of our practices. The innovators and most efficient workers can be hard to capture. They are often not found from traditional sources. Also, our contracting arrangements are generally overlaid with excessive red tape and detail. It would turn many innovative on demand workers away. A regular refrain from many contingent workers is that government processes are so cumbersome that the work is neither attractive nor financially appealing.
  5. Learning and development will be a frequent experience for employees. They will look for learning and development experiences that engage them and advance their career opportunities. Online learning will be fundamental.

Will Institutions and Legislation help or hinder?

  1. The future changes to work will present our work related institutions and legal framework with abundant challenges.
  2. Prescriptive enterprise agreements numbering 100+ pages do not sit well with modern empowered teams of workers. Agreements like these often include extensive union consultation obligations that can slow, hamper or even prevent substantial workplace change. The identification of work found in agreements and awards typically reflects a hierarchical structure based on traditional remuneration and supervisory models.
  3. The national system of workplace regulation will inevitably be adapted. However, under the current system there is ample capacity to modernise. The avenues that the APS is using to adjust to the new workplace imperatives include:

 

  1. A premium is placed on effective direct employer – employee relations;
  2. The engagement of contingent and on demand workers;
  3. The use of job marketplaces;
  4. Common law contracts;
  5. Individual Flexibility Arrangements.

 

  1. The current structure of remuneration linked to level of responsibility/seniority is relatively inflexible. It does not readily accommodate team work and reward attuned to effort and expertise. It is likely that those workers remaining in the formal system will demand flexible reward structures more closely tied to individual and/or team performance. An organisation retaining a structured system will find it more difficult to attract higher calibre workers.
  2. Leave and engagement strategies are expected to change. The blending of career and private life objectives will see employees taking career breaks or adjustments involving less hours devoted to work. Similarly, the challenge to retrain and upskill may result in time away from the job front. This may be manifested in learning experiences including work in different organisations, sectors or countries. Such developments will lead to innovation in career path development, leave, learning and sabbaticals.
  3. Organisational culture is constantly changing. We will seek a culture that supports notions like innovation, learning, adaptation, experimentation and resilience. It will be important to find ways inculcate the culture across diverse and dispersed work forces.

Conclusion

  1. In summary my main points are:

 

  1. The reform of the APS employment framework must continue;
  2. Senior leadership must see and then use the opportunities to work better;
  3. Clear communication to staff about the risks and opportunities associated with future work is crucial;
  4. Organisations will be restructured;
  5. Hierarchies will be modified and teams will continue to emerge;
  6. Systems to identify and learn new capabilities must be developed;
  7. The APS has to be proficient at accessing contingent, on-demand and platform workers.