Section 2: Workforce capability

The APS needs to build and sustain organisational capability to respond effectively to Government priorities and to meet the needs and expectations of the community it serves

Key points

• Agencies rate their project management and stakeholder engagement capabilities highly. Areas for improvement include innovation, talent management and workforce planning.
• Investment to ensure sufficient focus on leadership and talent management has occurred.
• Building workforce diversity remains a priority for the APS with a recent increase in focus on improving employment outcomes for Aboriginal and Torres Strait Islander people.
• A credible, capable and strategic HR profession is needed to ensure the APS has the leadership and workforce capabilities required to meet its future needs. Work is underway to achieve this.

A capable and high performing public service is essential for good government. Organisational capability extends beyond the capabilities of the APS workforce. It combines people skills with the organisation's processes, systems, culture and structures to deliver business outcomes. This section of the report examines organisational strengths and development areas including those relating to senior leaders, talent management, diversity, innovation and attendance management. The role and function of HR professionals are also considered in terms of how effective strategies can improve capability.

Agency capability

An input into the 2015 State of the Service agency survey was agency self-assessments of organisational capability. The specific capabilities assessed included change management, performance management, workforce planning, project management, talent management and innovation. The results enable agencies to benchmark their capability against other agencies.

Overall, APS agencies report having a good level of project management capability. Most agencies report they are effectively engaging with stakeholders and are allocating sufficient resources to develop their organisational capabilities. Results identified the need for more work to build capability in the areas of talent management, workforce planning and innovation.

In building these capabilities, there is a need to focus on the development of systems to measure and evaluate the change. These systems provide the evidence base to support good governance in the first instance and to monitor improvement over time.

Leadership

The importance of developing APS leadership and management capabilities has been well documented, including in previous State of the Service reports. Leaders establish the strategic direction of their agencies and the broader APS. They are central to effective change management and critical in mobilising the workforce to achieve its best.

Results from the APS employee census show that the gains made in 2014 in relation to senior leadership quality, visibility and communication were maintained in 2015. In 2015, 52% of APS employees agreed the senior leadership in their agency was of a high quality, the same result as 2014 and up from 46% in 2013. Likewise, in 2015, 50% of employees believed their senior leaders were sufficiently visible and 42% agreed that communication between their senior leaders and other employees was effective. These results are similar to those achieved in 2014 (49% and 41% respectively) and an improvement on results from 2013 (47% and 38% respectively).

Agencies identified workforce planning, communication and change management as three areas where improved leadership capability is required.

Employee perceptions of the effectiveness of their immediate supervisors remained high in 2015. Satisfaction with immediate supervisors is one of the key strengths of the APS. The APS employee census measures satisfaction with immediate supervisor performance against 10 capabilities. Results for 2012 to 2015 are shown below and are available on the State of the Service website. Results show a high degree of stability.

Table 1: Satisfaction with immediate supervisor performance
Immediate supervisor capability	2012 (% satisfied)	2013 (% satisfied)	2014 (% satisfied)	2015 (% satisfied)
Achieves results	74	75	75	75
Cultivates relationships	70	72	72	72
Personal drive	73	74	74	74
Strategic thinking	68	69	69	69
Communicates with influence	69	70	70	70
Sets direction	67	69	70	69
Motivates people	61	63	64	64
Encourages innovation	64	64	63	63
Develops people	62	64	64	64
Open to continued learning	67	68	69	69
Source: Employee census

Women

Women currently make up 58.4% of the APS workforce. The representation of women in the APS has now reached parity with or exceeded men at all levels from APS 1 to EL 1. Since 1995, the representation of women in the APS has almost doubled at EL 2 and SES Band 1 levels and tripled at SES Band 2 level. The representation of women at the SES Band 3 level has increased five-fold. Twenty years ago, women made up 19% of SES employees compared with 41% in 2015.

Indigenous employment

The APS has a long-standing commitment to a workforce that reflects the diversity of the community it serves. Work is being done across the service to improve performance in this regard. For example, the Commonwealth Aboriginal and Torres Strait Islander Employment Strategy¹ supports a new target to lift Indigenous employment to 3% across the Commonwealth public sector² by 2018

In the APS, the representation of Indigenous people as a proportion of ongoing employees was 2.5% in 2014, rising to 2.6% in 2015. The APS continues to have reasonable success in attracting and recruiting Indigenous people. We are also seeing a lower separation rate amongst Indigenous employees than there has been in the past. Ten years ago the separation rate for Indigenous employees was nearly twice that of the rest of the APS. Since then the separation rate for Indigenous employees has trended downwards. A number of factors may have contributed to this improvement, including better agency-specific Indigenous employment strategies and the introduction of Indigenous Champions. Representatives from many agencies also come together as a network to identify and address issues at the APS level.

A commitment to creating a diverse workforce cannot be achieved without an accepting and supportive workforce. Supervisors and workgroups that foster a sense of inclusion are a positive force in this regard. In 2015, over 80% of employees agreed the people in their workgroup and their supervisors were accepting of people from diverse backgrounds. Sixty-eight per cent of employees agreed that their agency was committed to creating a diverse workforce.

This year's agency survey found that 57% of agencies reported they offered Indigenous cultural awareness training to employees. In these agencies, Indigenous employees were more likely to agree that their agency was committed to creating a diverse workforce. This is an important finding. It supports the greater uptake of these programs.

Figure 2: APS employee perceptions of support for diversity in the workplace

Source: Employee census

Actions to improve Indigenous employment

In March 2015, the Government announced a target of 3% Indigenous representation in the Commonwealth public sector by 2018. The target was a response to the³, which sought to address the under-representation of Indigenous people in the Australian workforce. The Commonwealth Aboriginal and Torres Strait Islander Employment Strategy was approved on 23 July 2015. The strategy seeks to build Indigenous employment in the Commonwealth public sector. It sets out actions to help agencies meet the target. The four key action areas in the strategy are:

1. Expand the range of Indigenous employment opportunities.
2. Invest in developing the capability of Indigenous employees.
3. Increase the representation of Indigenous employees in senior roles.
4. Improve the awareness of Indigenous culture in the workplace.

The Commission is facilitating implementation of the strategy. The Commission has developed a dynamic implementation guide that sets out good practice initiatives supporting Indigenous employment. The first iteration of the guide was published on the Commission's website on 30 September 2015. It will be continuously updated over the life of the strategy.

Progress towards the target will be monitored by the Commission and reported annually by agency on the Department of the Prime Minister and Cabinet's website.

Employees with disability

Representation of people identifying with disability in the APS is at 3.5%, an increase of 0.1% from 2014. However, there has been a decline in the actual number of people with disability in the APS from 4,918 in 2014 to 4,778 in 2015. This is due to changes in the structure of the APS and the overall lower number of employees.

Employees from non-English speaking backgrounds

There has been a small increase in the representation of people from non-English speaking backgrounds, from 14.3% in 2014 to 14.4% in 2015. The proportion of APS employees born overseas is around 22%. This is marginally lower than the 25% of Australians who were born overseas.

Talent identification and management

Talent management focuses on individuals with the potential to successfully undertake critical roles now and in the future. Four elements are found in talent management strategies:

1. Talent attraction and identification—sourcing external talent or identifying internal talent with the potential to be successful.
2. Talent development—making a targeted investment in the development of talented employees to build their capability for future roles.
3. Talent engagement—maintaining the engagement of talented employees with the APS, and retaining them, through career management, ongoing development and retention strategies.
4. Talent deployment—actively drawing on identified talent to fill critical workforce roles.

Almost two thirds (65%) of agencies will deploy agency-wide talent management systems over the next three years. The priority for most agencies is to align talent management with their broader strategic direction.

A positive correlation also exists between talent management capability and senior leadership behaviour. Employees in agencies with higher capability are more likely to report that senior leaders take the time to identify and develop talented employees. A link also appears between agency capability and employees' access to learning and development opportunities. In agencies that report higher levels of talent management capability, employees are more likely to agree that their agency offers access to effective learning and development opportunities.

The APS Talent Management Guide, released in 2015, is designed to support agency talent management capability. Talent management will be adopted across agencies and linked to workforce planning. The guide sets out the principles that underpin effective talent management in the APS and can be found on the Commission's website⁴.

Talent management was recently endorsed by the Secretaries Board as a key priority for the Centre for Leadership and Learning.

Attendance management

The workforce contributes to organisational capability through attendance at work and productive performance on the job. Good attendance is fundamental to workforce capability. Attendance management remains a challenge for the APS. Work is underway to investigate the causes of poor attendance and possible solutions for improving attendance.

The average rates of personal and miscellaneous leave continue to increase. Personal leave can be broken down to sick leave and carer's leave.

Table 2: APS absence rates5
	2011–12	2012–13	2013–14	2014–15
Sick Leave	7.8	8.5	8.8	9.0
Carer's Leave	1.5	1.8	2.0	2.0
Miscellaneous Leave	0.6	0.5	0.5	0.5
Total	9.8	10.8	11.2	11.6
Source: Agency survey

The increase in personal leave in 2014–15 is primarily due to an increase in sick leave of 0.2 days per employee. Considerable variation in absence rates remains across agencies. Personal leave varied across agencies from 3.6 to 20 days per employee. Miscellaneous leave varied across agencies from 0 to 2.1 days per employee⁶.

Similar to previous years, differences are evident depending on the size of the agency. Large agencies had the highest rates of personal leave with 12 days per employee. Medium-sized agencies had the highest rate of miscellaneous leave with 0.6 days per employee on average.

The APS has invested substantial resources into the management of employee attendance during 2014–15. Key initiatives include:

• the development of an APS Absence Management Toolkit containing 20 workplace initiatives. This has been made available to all APS agencies and is being formally evaluated in four agencies.
• the induction of a centralised monthly⁷ absence data collection and reporting process to assist agencies to manage workplace attendance more proactively.
• the expansion of the APS Absence Management Working Group into a Community of Practice with more than 30 participating agencies.

The APS continues to investigate drivers of workplace attendance. Data collected this year shows that there is a complex but clear relationship between employee engagement and sick leave use. Importantly, the data shows a relationship between a range of attendance management practices, such as managers being appropriately supported in managing employee attendance, and sick leave. Ongoing research projects by the Commission include a more comprehensive examination of causal factors that influence leave taking behaviour over a range of APS agencies and an evaluation of the effectiveness of the APS Absence Management toolkit.

Professionalising human resources

The case has been made, including in previous State of the Service reports, for defining the capability requirements of HR professionals in the public sector. Unlike other professional occupations for example accountants and lawyers, there are no accreditation requirements for those advising managers on people-related issues.
This can limit the attraction of HR as a career and more importantly reinforces a perception that the engagement of experienced and competent HR professionals does not rate as a business objective. Competent and experienced HR professionals are important in the APS where labour costs can account for 70% of agencies' expenditure.

A good HR leader is someone who has the capabilities to create effective business partnerships at all levels, source and use relevant business intelligence, competently outsource transactional services and improve the skills of managers
to enable them to better manage their people.

Lyn Goodear, Chief Executive Officer of AHRI, sets out the case for professionalising HR across all industries below.

Certifying HR professionals in Australia

HR has a critical role in tackling some of the most difficult workplace challenges.
If an organisation requires a workforce plan, a talent strategy or a better performance framework, it needs HR people who can do hard things. If the work structure is flawed, productivity is down or the culture is toxic, soft skills alone won't remedy the malaise.

It is not just about building HR capability, but also increasing the executive expectations of when and how to engage HR professionals to assist with critical business issues. To deal with both issues, AHRI has developed a certification model that enables HR practitioners to become 'certified' based on what they know, and also what they can actually do. This approach brings HR into line with practices that have been in place for accountants and other professions for many years. You would not ask someone to work on your financial accounts without knowing the person is qualified to do so. The same standards should apply to people.

Lyn Goodear, Chief Executive of AHRI

 

1 Forrest, A 2014, The Forrest review: creating parity, Commonwealth of Australia, Canberra, viewed 2 October 2015.

2 The Commonwealth public sector includes APS and non-APS agencies. APS agencies are those in which staff are employed under the Public Service Act 1999.

3 Australian Public Service Commission 2015, Talent Management Guide, Commonwealth of Australia, Canberra, viewed 2 October 2015, <http://www.apsc.gov.au/publications-and-media/current-publications/tale…;.

4 <http://www.apsc.gov.au/publications-and-media/current-publications/tale…;

5 Note that due to rounding, not all totals will be exact.

6 Aboriginal Hostels Limited was outlier with a miscellaneous leave rate of 5.7 days per employee and therefore, was excluded from this analysis.

7 Monthly absence data collection commenced with July 2015 data. Agencies with fewer than 100 employees are only required to report quarterly to reduce the administrative burden on their more limited corporate resources.