The sector is building capability for the future

This chapter looks at the critical strengths and gaps in capability across the sector. For individuals, increasing capabilities includes acquiring the skills and knowledge defined in the NSW Public Sector Capability Framework. Organisational capability includes individual capability, but also extends to the processes, technology, structures and partnerships required to deliver results.

Agencies acknowledge that the emphasis on providing customer excellence efficiently will require employees to gain either new or re-calibrated skills. The preliminary evidence shows this is now happening as:

  • The Capability Framework has moved from a recruitment tool to being embedded in performance management, and increasingly in development planning1.
  • Performance management is starting to be used to help build capability and develop meaningful working relationships and dialogue between employees and their managers.
  • Recruitment reforms have been used to inject new talent, but agencies are still transitioning from the old practices. While agency leaders appreciate the benefits of consistent merit-based recruitment, some line managers are sceptical about the changes.
  • The further rollout of integrated workforce management software, such as the Human Capital Management systems, may support greater mobility given their integration of employee records data and performance development processes.

The NSW Commission of Audit’s 2012 report triggered extensive changes to workforce employment and management practices in the sector. Agencies report that operational managers are increasingly embracing these practices by acknowledging how they build capability.

Service quality and collaboration are capability strengths

Employee, agency and customer data can be used to assess the strengths of the public sector in addition to discussions with agencies’ human resource and operational leads.

76% of employees agree their agency focuses on improving the work it does, and 80% agree that it provides quality services, and that it strives to match those services to client or customer needs.

75% of employees feel collaboration within their team is effective enough for it to achieve its objectives. Employees generally rank their organisations as strong, effective, respectful places to work that strive for client and customer satisfaction.

Agencies also say collaboration and service delivery are two of the top five organisational strengths across the sector.

However, perceptions differ when the focus turns to cooperation between different teams and workgroups, indicating that better influencing and negotiating capability is needed. 48% of employees agree that teams across the organisation cooperate effectively with each other. Cooperation strongly correlates with engagement in most clusters across the sector, a topic discussed further in Chapter 5.

So what do customers think? The NSW Customer Service Commissioner has measured customer satisfaction across government services relating to employees, processes and government sector values and goals since 2014. The 2016 Customer survey shows increased rates of agreement to statements about agencies being accountable for their services, being open and transparent in their decision- making, and making information easier to access.

Customers noted employee effectiveness and efficiency had improved significantly since 20152. Employee honesty and integrity were key drivers of customer satisfaction in 2016, with high safety standards a particular consideration.

While customer satisfaction has risen overall, customer expectations have risen as well. The gap between satisfaction and expectation has closed slightly, and further understanding of customer expectations will be necessary to build capability in order to close the gap.

Figure 3.1: Employee satisfaction with improving work and services

 Figure 3.1: Employee satisfaction with improving work and services

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  % agree
My organisation strives to earn and sustain a high level of public trust  83
My organisation provides high quality services  80
My organisation strives to match services to customer/client needs  80
My organisation focuses on improving the work we do  76

Source: People Matter Employee Survey 2016

Figure 3.2: Employee satisfaction with collaboration

Figure 3.2: Employee satisfaction with collaboration

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  % agree
My team works collaboratively to achieve its objectives  75
Senior managers promote collaboration between my organisation and others we work with  52
There is good co-operation between teams across our organisation  48

Source: People Matter Employee Survey 2016

Data, technology and process design are challenges

Agency and workforce capability will always be subject to changing community expectations. Discussions with agency human resources and operational executives reveal the following organisational capability challenges. Some are near-term, and others are longer-term.

  • Analysing and using data predictively. Agencies report a gap in how operational, customer and workforce data is integrated in agencies and clusters. Employees need analytical skills to use data in their everyday work, to supplement the more scientific, interpretive use of data by specialists to predict needs and issues, and support better services. However, maturity in using and applying open data, often in collaboration with the private sector, is improving.
  • Using innovative service design and delivery processes. Agencies are examining current and proposed government programs to identify more efficient and effective service delivery models. Alternative delivery models can include a mix of government, private and not-for-profit service providers. This mix can require new skill sets in brokering and designing services and managing contracts to achieve outcomes. Agencies new to this process find their appreciation of the skills required deepens as they understand the process better.
  • Improving vendor and contract management. Agencies report a gap in influencing and negotiation at the ensure consistent service throughout the term of a contract. implemented to help provide better services and drive productivity. The largest proportion of public sector expenditure on contingent labour is for specialised ICT skills for both short and long-term roles, pointing to an internal capability gap and the need to be agile in response.
  • Using technology innovatively. Technology is being implemented to help provide better services and drive productivity. The largest proportion of public sector expenditure on contingent labour is for specialised ICT skills for both short and long-term roles, pointing to an internal capability gap and the need to be agile in response.
  • Improving financial management for non-financial managers. Agencies recognise that budget management is a valuable and necessary skill, particularly for employees progressing to leadership roles. Some agencies report gaps in asset and liability management and, linked to this, a lack of awareness of managing financial and operational risks.

How the sector plans to close the gaps

Agencies report that people- and culture-based solutions are key to addressing their organisational capability gaps, chiefly through recruitment, performance management and learning and development.

Recruiting sector capability

Chapter 2 examined the influx of talent at the senior executive level, but what has been the recruitment experience at the workforce level? Has there been an increase in sector capability through efficiently selecting the right people?

Most agency human resources and operational leads feel that while they are attracting higher-quality candidates, there are mixed results with the GSE Act processes used. For example, while simplified applications processes have cut the time taken to hire, it remains high overall, restricting agility and often losing recruits to more nimble non-government organisations. Some agencies say they are still developing the skills to apply the capability-based processes efficiently.

Figure 3.3: Average recruitment decision time (days), 2014–2016

 Figure 3.3: Average recruitment decision   time (days), 2014-2016

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2014 2015 2016
94 69 61

Data displayed relates to single openings only.

Source: I work for NSW recruitment data.

Figure 3.4: Agency self-assessment of quality of recruitment experience, percentage of agency positive responses

 Figure 3.4: Agency self-assessment of quality of recruitment experience, percentage of agency positive responses

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  • 62% say high-quality candidates with the right skills are being hired
  • 60% feel rigorous assessment practices positively affect quality of hire
  • 57% say the average time taken to fill positions is decreasing
  • 54% are using recruitment effectively to build a talent pipeline
  • 49% are planning recruitment effectively
  • 43% have evaluated improvements in quality of hire
  • 39% are using talent (recruitment) pools or mobility to source talent

Source: Agency survey 2016

Recruitment decision time is presently measured by the number of days from when an ultimately successful applicant submits their application until the date they are hired. It has steadily decreased over the last two years, but remains high overall.

Selection processes for ongoing employment in the public service include at least three capability-based assessment methods. Agencies that choose to use psychometric assessment tools as an assessment method report that line managers remain sceptical about their use, despite their predictive validity when used with interviews. Managers are also unsure how to combine the results of the various assessments to make effective selections.

Many agencies use bulk recruitment approaches when a large number of vacancies occurs at the same time, or to form a ‘talent pool’ when several vacancies are likely to arise in a 12 month period. Talent pools are lists of people (whether or not existing public sector employees) who have undergone a rigorous assessment and satisfied the pre-established standards for a role or type of role.

Agencies note some line manager scepticism about using the talent pools developed outside of their agency or available throughout the sector. Line managers were sometimes unaware how to access pools in other agencies, with few formal systems in place. Many also did not understand the full extent of the talent pre-vetted by this process, or found that pools were sometimes unavailable for the roles needed.

People Matter Employee Survey 2016 results support the need to improve recruitment processes, with 51% of employees stating their organisation generally selected capable people.

This result is one of the six key influences on employee engagement overall, discussed further in Chapter 5.

41% of employees agree that their organisation’s recruitment and promotion decisions are fair. One third agree that their organisation’s recruitment processes are efficient. Most disagree.

These results indicate that agencies are yet to realise reliable recruitment practices based on attracting the right talent, choosing the right capability-based assessments for their context, and/or using talent pools when appropriate. The role of leaders in driving efficient, fit-for-purpose assessment processes that consistently produce better outcomes is critical to this.

The NSW Government Graduate Program is an example of leading-practice recruitment that has built capability across the sector. Since the first intake in 2015, an effective marketing approach has nearly doubled applications to 2070 and the number of agencies participating has increased to 13, with every cluster represented. It now also includes an ICT stream in recognition of the difficulty of building capability in this area of increasing importance. Candidates are selected against a range of core capabilities and motivations. The shortlisting process removes names and personal information to limit the risk of unconscious bias and assessors are trained to be aware of cognitive bias. Graduates are matched to agencies based on their preferences, and any attributes and qualifications the agencies identified as necessary.

When agencies advanced in their strategic planning process were asked how they planned to build the capability needed to achieve their strategy, 62% nominated recruitment as a solution. However, the evidence shows that the impact of the recruitment reforms has been limited due to some resistance or the acknowledged capability gaps on the part of hiring managers. The graduate program is an example of the outcomes that can be achieved when efficient, merit-based processes are embedded in a talent acquisition strategy that includes workforce planning, a clear value proposition for candidates and supportive onboarding.

Building sector capability through effective performance management and development

Another core workforce management tool is regular, targeted performance management and development initiatives to increase individual knowledge and skills.

The sector’s approach to workforce performance management has improved. In 2012, about half of employees said they had received regular feedback on their performance (52%) and received a formal review (49%).

In 2016, most employees have individual performance plans, with 62% reporting they have a current individual performance plan, and 59% have received useful feedback that helps them deliver the required results. 71% of employees feel they can have open, honest conversations with their managers about the quality of work required. Progress among clusters is varied, with implementation adapted to their context.

Agency human resources leaders, however, say that while in previous years agencies were only just developing plans to discussing employee performance, they are now also using them to build capability for the individual and organisation. There is a long way to go, however. 89% of agencies reported that managers had varying levels of capability in performance management, and 52% reported challenges in managing unsatisfactory performance effectively.

44% of employees feel their managers deal well with poorly performing colleagues.

In response, agencies are putting significant effort into providing their people managers with the knowledge and skills to hold effective, regular conversations that emphasise lifting performance. For example, 83% of agencies are building managerial capability in aligning work goals with organisational needs, 80% are building capability in providing quality feedback, and 71% are building capability in managing unsatisfactory performance.

Agencies rate effective performance management as their most significant organisational capability gap (38% of agencies), and their third-highest improvement priority overall (also 38%).

Sector capability can also be built through education, experience and exposure. Employees are open and positive about opportunities, with a strong desire to progress their careers (69%), and most reporting they had the development opportunities to do their job well (63%) and could access learning and development in their organisation (61%).

While most employees believe that their organisations are committed to their development (53%) — a topic that is also highly correlated to overall engagement scores — less than half are satisfied with the career development opportunities available (45%).

As discussed in Chapter 1, agencies report that providing adequate internal development opportunities is a key challenge. This reinforces the case for more mature mobility practices across the sector to build capability.

Spotlight: The ICT experience

Figure 3.5: Growth and disruption in ICT roles, 2016–2021 forecast

 Figure 3.5: Growth and disruption in ICT roles, 2016-2021 forecast

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Technology services Technology/App building Enterprise implementation (including service management) Enterprise governance
Delivery and operation Development and implementation Development and implementation Change and transformation

Source: The ICT Workforce in the NSW Public Sector 2016.

Agencies have reported in focus groups that there is a shift to a hybrid or blended skill set in the way the sector delivers ICT with the required skills becoming more complex, in line with service delivery innovation. 3

Ten agencies recently submitted workforce management plans as part of a sector-wide ICT workforce planning activity. Part of this planning exercise was a functional capability assessment based on the ICT Capability Framework. Agencies reported that the required ICT skills are becoming more complex and strategic, and this is reflected in the volume of higher graded roles and diverse skill sets in demand. 4

The types of roles performed in ICT have changed, and will continue to evolve in response to broader trends5. This means that while certain roles may be disrupted or changed in technology services and technology/ application building domains, other roles in project management, cyber security, data analysis and service architecture will grow, either in volume or in the capability complexity required6

According to agency workforce plans, between 4–20% of roles are being filled by contingent labour, with nearly half of these roles related to short-term requirements (such as the enterprise planning system rollouts), and 37% for a long-term need not currently being met. The latter reflects in part the difficulty some agencies have reported in filling gaps in high-demand ICT roles under current remuneration structures.

Further data collected from NSW Procurement, including the vendor management system provides insight into which types of roles are being recruited as contingent labour. It shows that the most significant expenditure across the sector is on ICT roles and in specialist skills, which are typically project-related.6

The capabilities identified as strategic priorities by agencies include strategic architecture, managing reform and change, using technology and effective communication. In business as usual roles, agencies are seeking skills in planning and prioritising work, delivering results and service management.7

Of the 19 core capabilities agencies think they will need in the future (out of a possible 20 capabilities), agencies will need to build significant capability in eight, including in managing and developing people, inspiring direction and purpose, and managing reform and change. Procurement and contract management is also required. In ICT-specific skills, strategic skills8 in business change are required, including change and relationship management and change implementation. This aligns with the leadership data discussed in Chapter 2, and agency reports on current capability gaps more generally.

With ICT skills in demand across the economy, many agencies report constraints in recruitment times and attracting and retaining talent when other organisations can offer generous salaries. As a result, a range of approaches are being employed by agencies to address capability building within their organisations.

Offering existing employees learning and development opportunities was identified as the most common way to build internal capability (41%) – more popular than recruitment (17%) and structural or organisational change (28%).

While the sector is currently using contingent labour to fill many of the capability gaps identified in ICT, it is too early to tell if this will be sustainable. Longer-term, the sector has developed a number of pragmatic initiatives, which include an ICT Community of Practice to help increase the capability of the sector’s ICT workforce. Agencies have also joined with the Department of Finance, Services and Innovation and the PSC to develop strategies and tools to manage, structure, recruit and develop a skilled and capable ICT workforce9. One recent project is the ICT Career Pathway Framework, which is a capability-based career planning tool that aims to improve talent mobility by identifying indicative horizontal, diagonal and vertical pathways between common ICT roles, as well as to support strategic workforce planning.


1 Agency survey 2016

2 Customer Service Commissioner, 2016 Customer Satisfaction Measurement Survey, October 2016

3 That is, a shift from delivery and operations to strategy, architecture, design, analytics and management (vendor, people and general management)

4 Public Service Commission, The ICT Workforce in the NSW Public Sector, October 2016

5 The PSC engaged Deloitte to help develop a high-level report on trends influencing ICT and explore their workforce impacts in the NSW public sector.

6 Note limitations in the quality and accuracy of data regarding contingent labour not sourced from the vendor management system mean caution in interpretation is required

7 Public Service Commission, The ICT Workforce in the NSW Public Sector, October 2016

8 Drawn from the Skills Framework for the Information Age (SFIA), the NSW government sector’s ICT-occupation specific capability set

9 Further information can be found in the NSW Government ICT Strategy: