Growing capability

The impact of leaders on organisational performance cannot be underestimated. Leadership is key in setting direction, executing strategy, shaping culture and capability, inspiring purpose and delivering results. This can be seen in the relationship between employee perceptions of senior leaders and employee engagement (see Figure 5.1). At the agency level, higher engagement is associated with more favourable perceptions of leaders.

Source: People Matter Employee Survey (2019)

Note: Each data point represents an agency, and the dotted line is the trendline. The Senior Leadership Index is an aggregate of answers to four questions about senior managers from the People Matter survey.

The People Matter survey includes nine questions on how employees view their leaders – who are referred to as ‘senior managers’ in the survey. Between 2018 and 2019, scores for eight of the nine questions improved, while one decreased by a small amount. The largest improvements were in the areas of change management and leaders modelling values – for which the sector’s leaders should be commended.

The small decrease involved a question about leaders communicating the importance of customers and clients. This is slightly concerning given the government’s push to put customers at the centre of delivery. However, it may simply reflect a broader awareness of this customer-centric approach among employees and increasing expectations of delivery to customers.

Source: People Matter Employee Survey (2018, 2019)

A common theme of some of the case studies in this report is the importance of leadership in enabling employees to embrace risk and experiment, adopt new ways of working, and deliver for customers. From these case studies, it is clear that leadership needs to be visible, courageous and empowering at all levels of the organisation.

The Secretaries Board has taken stock of what it means to be a leader, so it can help upcoming leaders to develop the qualities they need for the work of the future. The new stewardship and leadership impact framework summarises the mindset, attributes and key capabilities required of public sector leaders (see Figure 5.2). The framework will be used to guide the evolution of the NSW Leadership Academy and extend its reach across the sector.²⁸

Leadership Impact

Impact on culture

The 2018 edition of this report discussed the importance of leading through a broad people management team, particularly in larger organisations.²⁹ One important function of such a team is recruiting and developing people who have the qualities and capabilities to help an organisation meet its current and future objectives.

Growing the sector’s capabilities means recruiting the right people to deliver a world-class public service. Recruitment is an important, high-volume activity for the sector, which is the largest employer in Australia. In 2019, nearly half a million applications were submitted through the I Work for NSW recruitment system.³⁰ The system hosted around 22,000 job advertisements and 32,000 job openings in 2019, the highest annual numbers ever (see Figure 5.3).³¹ Around 24,000 applicants won a job in the NSW public sector in 2019.

Source: Recruitment data collection (2015–19)

Note: A single job advertisement may advertise one or more openings (or vacancies), which is why there are more openings than advertisements.

The scale of recruitment in the sector prompted the 2018 Review of NSW Public Service Recruitment Reforms (the Recruitment Review). Through its programs of work, the PSC is implementing the recommendations made by lead reviewer, Lynelle Briggs AO. The recommendations fall into five categories:

• fostering a workforce for the future
• improving technology and data
• driving more robust recruitment decision making
• enabling mobility
• providing positive experiences for candidates.

Employee perceptions of recruitment are poor according to the 2019 People Matter survey. Only 38.9% of survey respondents said they have confidence in their organisation’s recruitment decisions, and 54.5% said their organisation selects capable people. Though these scores were improvements on the 2018 scores, they are still too low. Further, more than one in five respondents said they hadn’t moved to a new role because the recruitment process was too cumbersome or time-consuming. And this doesn’t even include external candidates who anecdotally are less familiar with public sector recruitment processes.

Due to poor perceptions of recruitment processes, the PSC undertook fieldwork to see how the findings and recommendations of the Recruitment Review apply across the NSW public sector. The PSC spoke with a cross-section of hiring managers, HR practitioners and internal candidates to understand their perspectives on recruitment. This included experience as users of the relevant tools, systems and frameworks that drive the recruitment process. The fieldwork provided important insights relating to candidate assessment, selection and care, and interactions between HR and hiring managers. It also showed that the sector needs to be more strategic about recruitment.

There is little awareness of the best types of assessments to use, and how to interpret the results of the assessments. Some hiring managers are confused about how to weigh the relevant factors when making a recruitment decision, particularly if a candidate does not demonstrate all the focus capabilities at the required level. Many believe an assessment of capability to be the sole factor in decision making. However, assessing a candidate’s fit for a role requires the hiring party to exercise discretion when considering the candidate’s knowledge, experience, capability fulfilment and fit in the organisation’s culture.

Time to hire, a measure of efficiency of recruitment processes, has decreased consistently since 2015 (see Figure 5.4). This improvement should be applauded, but fieldwork interviews and anecdotal evidence indicate the need for better candidate care throughout the recruitment process. For example, candidates generally receive infrequent communication from hiring managers and HR about their application. Many candidates need to actively pursue updates.

Source: Recruitment data collection (2015–19)

In addition to clear and regular communication, good candidate care during the recruitment process entails offering reasonable adjustments at any stage of the assessment and selection process. It also includes giving constructive feedback, especially to candidates who do not receive an offer of employment at the end of the process. Just because a candidate was not successful one time, does not mean they shouldn’t be allowed to learn from their experience and improve for the next time they apply for a role in the sector. Today’s unsuccessful candidate could well be tomorrow’s hire.

Ensuring the recruitment process is a positive experience for candidates will help the sector attract the best and brightest people. Research shows that the longer the time to hire, the more likely candidate dropout becomes, especially among high-quality applicants.³²

Efficiencies in recruitment can be achieved using bulk recruitment and talent pools, especially for common roles. However, only 18% of the 45 agencies that responded to the Recruitment Review survey indicated that they often or always use bulk recruitment and talent pools for common, generalist roles. The NSW Government Graduate Program is an example of how bulk recruitment, coupled with training and curated career development opportunities, can be used efficiently to attract talent to the public sector.

Some of the most successful recruiting takes place in agencies where HR provides high-touch recruitment services to hiring managers, typically through a business partner model. These dedicated HR partners are well received by hiring managers, and their help can result in significant cost savings. The Transport cluster has shown how a centralised, high-touch recruitment model can result in better recruitment processes and decision making.

Regional areas of NSW face additional challenges in recruitment and mobility. Agencies in regional NSW often have difficulty attracting and retaining talent, and sometimes struggle to give existing employees promotion opportunities. Agencies in the New England and North West region of NSW are showing how some of these challenges can be overcome by taking a regional, one-sector view of recruitment rather than a siloed, agency-by-agency view.

Regional areas of NSW face additional challenges in recruitment and mobility. Agencies in regional NSW often have difficulty attracting and retaining talent, and sometimes struggle to give existing employees promotion opportunities. Agencies in the New England and North West region of NSW are showing how some of these challenges can be overcome by taking a regional, one-sector view of recruitment rather than a siloed, agency-by-agency view.

Internal applicants are more likely to be successful in the recruitment process than external applicants. The number of internal applicants and hires has been relatively stable over the past five years (see Figure 5.5). In 2019, 42.5% of applicants were internal and 65.8% of hires were internal applicants. Some of these internal applicants may have applied for a new role to secure a promotion, while others may have applied for a role at the same level. This raises questions about whether mobility is being done effectively and efficiently, which, at times may mean mobilising people without formal processes.

Source: Recruitment data collection (2015–19)

Having a mobile workforce makes it easier to redeploy resources to match priorities and respond effectively to change and emerging trends. It is one way to get the right person into the right job, and infuse new ideas and practices into a workplace. Employee mobility is also widely regarded as one of the best ways to develop leadership capability, provide enriching careers, and build and retain capability and ‘know-how’ in an agency and the sector more broadly. This is why exploring new opportunities is part of the I Work for NSW employee value proposition.

Despite the importance of mobility, it is estimated from Workforce Profile collection data that only 1.7% of employees (or 6,000 people) moved between agencies in 2019. Furthermore, more than 40% of respondents to the 2019 People Matter survey said they had been in the same role for five years or more.

While more mobility is clearly needed, putting it into practice is not without its challenges. One challenge is the potential loss of experienced employees. However, research suggests the benefits offset the disadvantages³³, especially with efficient succession planning and handover practices in place.³⁴

Results of the People Matter survey show how mobility can help improve employee engagement. Overall, employee engagement declines as organisational tenure increases (shown by the solid line in Figure 5.6). However, the decline in engagement that occurs with increased tenure can be partially offset by moving to a new role within an organisation (shown by the dotted lines in Figure 5.6). This is compelling evidence for the value of mobility.

Source: People Matter Employee Survey (2019)

Clear alignment between organisational strategy and employee performance goals is critical to optimising organisational performance. Giving employees access to learning and development programs will help them achieve their performance and career goals. It will also help agencies to develop the right employee capabilities to deliver business outcomes, and ultimately fulfil the needs and aims of the sector.

Learning and development programs should consider an agency’s strategies for developing high-potential employees, managing talent, developing leadership and management skills, planning succession for critical roles, and other workforce planning and development programs.

There are many ways to develop an employee’s capabilities beyond mobility. Specific development activities could include undertaking stretch project work, shadowing colleagues or managers, attending conferences, joining professional bodies, completing benchmarking exercises, engaging a professional coach, or undertaking on-the-job coaching by a manager. The Education cluster is using on-the-job learning to improve the STEM skills of teachers to improve student learning outcomes.

Due to the rapidly changing nature of work – discussed in Chapter 2 of this report – the best way to build individual and team capabilities is to assess work practices and identify development needs throughout the year, either formally or informally.

Consistent with previous years, the 2019 People Matter survey data show that career development is the most substantial driver of employee engagement in the sector. Just over half of employees (50.8%) were satisfied with the career development opportunities in their organisation. A similar number (52.3%) said their organisation is committed to developing its employees. Variation across agencies and little improvement from the previous year (see Figure 5.7) suggests that all parts of the sector have work to do in this space. But this will be challenging if employees do not have performance plans. Only 71.5% of survey respondents said they have a performance and development plan that sets out their individual objectives. Without these plans, agencies will find it harder to understand employees’ goals and to plan development opportunities.

Source: People Matter Employee Survey (2018, 2019)

Note: Each column represents an agency.

Through its work with the sector, the PSC has identified capability areas where an uplift is required. This uplift can be achieved by developing the capabilities of existing employees and bringing in fresh talent through recruitment. These capability areas are discussed below.

Digital capability

Digital government involves more than using the latest technology and software applications. It means going back to first principles: focusing on user needs and figuring out the best way to meet them. Digital capability requires a shift in mindset, to think about problems creatively and solve them based on the perspectives of customers and users while also harnessing the best tools and technologies.³⁵

The PSC is collaborating with the NSW Department of Customer Service to assess the maturity of the sector, and develop and implement a plan to ensure that NSW has a digitally capable, world-class public service. As a starting point, the PSC consulted with a diverse group of digital practitioners from across the sector, via interviews, design workshops, and drop-in sessions in Sydney and regionally.

This discovery phase found varying levels of digital maturity and a strong demand to improve digital capabilities. There are pockets of excellence in the sector, such as Transport for NSW’s Digital Accelerator, which encourages collaboration between the public and private sectors on future transport issues. Another example is the digital learning programs delivered by the Health Education and Training Institute NSW. However, the sector as a whole is not digital by default in all its functions.

The PSC worked with a group of representatives from the sector to co-design a digital capability set. The capability set, which will form the basis of learning pathways for digital learning in the sector, features six capabilities:

• Customer at the centre: The concept of customers at the centre is about putting people at the heart of processes and outcomes.
• Collaboration and agility: One of the most defining changes in the modern workplace can be captured by the idea of fluid collaboration across boundaries and hierarchies. Intentional collaboration creates many opportunities for team members and stakeholders to ensure clear alignment on outcomes, and change course when needed.
• Data, decisions and ethics: The use of big data represents significant opportunities to optimise service delivery, target operations meaningfully and increase efficiency. Data is also an asset with many layers of complex sensitivities across areas relating to security, privacy and ethics.
• Ideas to impact: This capability set draws on entrepreneurial, ‘lean’ operating models designed to deliver fast results with minimum waste.
• Enabling technology: Change is constant, and new technologies are ever evolving. While the sector cannot be aware of every new start-up, a digital mindset should put the sector in a position to identify and prioritise current and emerging technologies that will help deliver better outcomes to customers.
• Digital leadership: Digital ways of working and technology have the potential to advance the way government services are delivered. To make this a reality, the sector needs strong digital leadership. Leadership that transforms work, culture and mindsets to ensure the public system operates effectively in a digital way.

Some of these capabilities – such as collaboration, customer-centricity, and values and ethics – are discussed elsewhere in this report, as they are already part of the way the sector works. Connecting and reframing these core capabilities in the digital context underpins the Premier’s Priority for a world-class public service.

The PSC plans to refine these capabilities and test learning pathways to develop them with various project teams across the sector. Capability uplift will be evaluated and will form part of an evidence base to support decisions on digital learning at scale. The aim will be to ensure that any digital capability uplift program is feasible, compatible, sustainable and relevant.

People management capability

People managers have a direct impact on the engagement and performance of their employees. It is somewhat concerning that the People Matter survey results show that first line managers feel less supported to do their best at work than other groups of employees (see Figure 5.8).

Source: People Matter Employee Survey (2019)

The PSC’s consultations with the sector have revealed that one reason people managers may not feel they can do their best at work is because they have not been helped to develop key people management capabilities. There appear to be capability gaps in a number of key areas, including having critical and difficult performance management conversations, allocating a team’s workload fairly and effectively, monitoring staff wellbeing, navigating requests for flexible working arrangements, building a collaborative and inclusive team culture, and supporting teams in the face of organisational change. These issues play out in the People Matter survey results discussed throughout this report.

The PSC’s options for better supporting managers include clarifying the expectations of successful people managers, developing practical resources based on identified capability gaps, and connecting people managers across sector so they can share and learn from their collective knowledge and experience.

Human resources capability

Together with HR leaders from across the sector, the PSC co-designed an approach to assessing the HR capability of the sector. The research, which formally concluded in October 2018, found that the NSW government sector’s overall HR capability requires improvement and reorganisation if it is to successfully manage the major workforce transitions predicted to occur as a result of digital transformation.

The report proposes areas and initiatives for enhancing the sector’s ability to manage its workforce into the future. It also suggests a sector reform narrative for commencing the sector’s journey toward the future of HR.

The PSC has been working with agencies to explore the recommendations and agree on priority areas to focus on to build and strengthen HR capability and meet current and future workforce needs. Though they are still up for discussion, identified areas for improvement include talent management, workforce strategy, workforce analytics, organisational and role design, and employee development – many of which are addressed in this report. Possible solutions are also still being considered. Some include standardising HR processes and data management, piloting a PSC-hosted HR analytics service, and designing a talent management framework.

The 14 Premier’s Priorities cannot be achieved by a single agency operating in isolation. Delivering for the people of NSW requires agencies to work together and share knowledge internally and with other sectors. Well-executed collaboration enables agencies to share knowledge, ideas, resources, skills, networks and assets, leading to better outcomes for customers.

For example, a collaboration between the Department of Communities and Justice, Revenue NSW, Legal Aid, non-government organisations and other parts of the NSW public sector has helped ease the impact of fines on vulnerable people, allowing them to pay their debts through community service instead. This approach has benefited both the individuals involved and their communities.

The NSW public sector is only one piece of the puzzle when it comes to delivering for the people of NSW. Sometimes organisations in the private or not-for-profit sectors are better placed to serve customers on the ground because of their community links or expertise. In this instance, agencies can take on a system stewardship role.

System stewardship involves agency teams strategically building collaboration between internal and external stakeholders, engaging them for specialist advice, and delegating service and policy delivery if needed. As a system steward, an agency continues to steer a system towards outcomes and has a crucial role in ensuring quality services are delivered to citizens.³⁶

Despite the importance of collaboration, both internal and external collaboration remain a challenge for the sector according to employees. While just under 80% of 2019 People Matter survey respondents believed that their workgroup works collaboratively to achieve objectives, only 50% felt there is good cooperation between teams across their agency. Further, only 53% felt that their senior manager encourages collaboration with other organisations.

Perhaps not surprisingly, the 2019 survey results reveal a strong relationship between collaboration inside and outside agencies. The employees from agencies where there was better perceived cooperation between teams also reported better promotion of external collaboration from senior managers (see Figure 5.9). This may be because internal collaboration helps disseminate knowledge gained from external collaboration, or because internal collaboration functions as a coordination mechanism for external collaboration.³⁷ In any case, agencies need to encourage and enable internal collaboration, and then extend any learnings to external collaboration.

Source: People Matter Employee Survey (2019)

Note: Each data point represents an agency, and the dotted line is the trendline.

Enabling better collaboration with internal and external stakeholders, and better system stewardship, are becoming important aspects of policy making and service delivery for many agencies. These capabilities will help to achieve the goal that unites the NSW public sector – making NSW a great place to live, work and visit by delivering world-class customer service and effective policies. This report provides more than just information about the sector’s workforce – it is a call to action. To achieve its goals, the sector will not only need to improve its capabilities in the key areas outlined in this report, but also see itself as a collaborative part of a much wider community of people and organisations dedicated to delivering great outcomes for NSW and its people.

Notes

²⁸ The Leadership Academy, established in 2015 and led by the PSC, promotes excellence in leadership by enhancing the skills and capabilities of existing and emerging leaders through a unique suite of development programs.
²⁹ Jensen, Moynihan and Salomonsen (2018)
³⁰ Recruitment data figures are currently limited to agencies that use the I Work for NSW recruitment system (exceptions include agencies in the Health cluster and Planning, Industry and Environment cluster).
³¹ A single job advertisement may advertise one or more openings (or vacancies), which is why there are more openings than advertisements.
³² Rynes, Bretz and Gerhart (1991)
³³ Bidwell (2011); Grant (1991); Somaya, Williamson and Lorinkova (2008)
³⁴ Sasse and Norris (2019)
³⁵ Digital NSW (2019)
³⁶ Hallsworth (2011)
³⁷ Hillebrand and Biemans (2003)