Message from the Panel

The Australian Public Service (APS) exists to serve the people of Australia, through the government of the day. It is, therefore, imperative the APS is structured, skilled and resourced to meet the demands – the challenges and opportunities – that Australia will face in the decades ahead. As 2022 unfolds, Australia faces a world rife with uncertainty. The APS is a critical element of the infrastructure and institutional apparatus available to Governments to help navigate these shoals.

What is striking about these challenges is their interconnectedness – no longer can we ascribe key issues as falling within the remit of an individual department. We must reimagine an APS fit for purpose, both now and into the future. This requires an appreciation of the impact and potential of digital transformation, the diversity of the APS workforce, the changes to the work of government and the expectations of citizens. We note this is a conversation that is now three years old – beginning with the Independent Review of the APS.

The APS classification system has provided a robust and unifying framework over the last 30 years. However, with minimal structural reform over this period and ongoing expectations of significant change to the nature of work, we conclude systemic change is needed. Some levels are rarely used and guidelines are applied inconsistently. Other levels have grown significantly; the relative size of Senior Executive Service (SES) has increased by 40 per cent since 2000. The APS has largely failed to take heed of the Optimal Management Structure Framework agreed by Secretaries Board in 2014 to drive flatter and more responsive structures.

The APS workforce wants more of the flexible, less hierarchical ways of working experienced during the COVID-19 response. We heard there is a growing need for a mobile, agile workforce to manage crises and disruption as the new norm. We heard the APS workforce expects greater opportunity to apply their skills and knowledge more directly and visibly. We believe the APS should be at the forefront of public sector reforms that enable more flexible, dynamic and matrixed ways of working to deliver for citizens.

While our task was to look at the APS classification framework, we found the culture underpinning classification is critical. Consistent with the Independent Review of the APS, we found a deeply ingrained identification with rank. This flows through into rigid, hierarchical behaviour that dampens employee motivation and engagement, and impedes mobility, development and access to new skills.

In making our recommendations, we prioritised flexibility to allow different operational structures to evolve. We make recommendations to tackle undesirable behaviours, including removing the practice of referring to employees by numerical rank. We also want to see strategic people management prioritised as a key enabler of delivering government business. Our recommendations are emphatically not about reducing APS workforce numbers or remuneration. Lessons from other jurisdictions show that effective structural change leads to demonstrable cultural change to optimise delivery for citizens and government.

Modernising the classification framework will require strong leadership from Secretaries and Agency Heads, all the way through the workforce. Sustaining reforms will require an uplift in change management capability, learning from other public and private sector experiences. Culture, leadership and capability will help to drive change and are important factors in shifting hierarchical mindsets. Changing structure, while important, is but one component of the broader efforts needed to change the APS’s hierarchical culture.

We engaged extensively with APS employees, examined data on best practice and looked at relevant comparators across public and private sectors. We want to thank everyone we engaged with – you were generous with your time to support this review in the midst of a busy and unprecedented period.

Heather Smith PSM	Kathryn Fagg AO FTSE	Finn Pratt AO PSM