Chapter TwoAcquiring and building capability

Efforts to fill roles remain compliance-focused

Reform introduced by the Government Sector Employment Act 2013 (NSW) (GSE Act) established an ethical framework for recruitment and promotion based on merit. A candidate’s merit is assessed against the capabilities required for a role, acknowledging that most roles share common capabilities that can be carried across to other agencies, roles or processes.

This approach assumes that a hiring manager thoroughly understands the capabilities required for a role, and how best to assess them. The introduction of simplified, generic role descriptions has made it possible to recruit for common roles in bulk and build talent pools. While many agencies were already using these features internally, the arrangements have been extended across the sector, meaning agencies can now access pre-selected candidates from other agencies.

From an employee’s perspective, rather than ‘owning’ a role, they are now assigned a classification of work (if a non-executive) or senior executive band based on the capabilities the role requires. The recruitment assessment, underpinned by the common capability framework, allows employees to move to similar roles across the sector quickly and efficiently, to broaden their experiences and build their careers.

The full benefit of these reforms is yet to emerge. This section discusses the state of the sector in recruitment, mobility and performance management. To date, recruitment remains compliance-focused, and cross-sector mobility has yet to gain traction. However, employee perceptions of performance management show evidence that agencies and employees are actively engaging in the process.

Recruitment reforms are yet to have a full impact

The way roles are filled indicates that the flexibility offered by the reforms has not been widely accepted. HR leaders report that the recruitment process remains largely single-role focused and reactive to unanticipated vacancies, with low uptake of planned and/or bulk recruitment. Candidate selection remains focused on candidates’ prior agency or process experience, and hiring managers do not trust the new assessment processes to effectively and efficiently deliver the required results. The quality or performance of those selected for jobs is rarely used to evaluate the efficacy of the recruitment process. The 2016 Agency Survey reported that 30% of agencies measuring the quality of hiring had assessed their practices as ‘developed’ or ‘highly developed’.1  Further, HR and hiring managers do not appear to collaborate effectively to determine the best way to fill roles.

These doubts are reflected in employee perceptions of recruitment. In 2017, employees across the sector continued to report low levels of confidence (35%) and high levels of concern (34%) about the way recruitment decisions were made in their agency. These scores ranged between 15.8% and 84.8%, indicating a wide spectrum of perceptions.

Figure 2.1: Employee perceptions of recruitment, 2017

  Strongly agree (%) Agree (%) Neither agree nor disagree (%) Disagree (%) Strongly disagree (%) Agreement 2017 (%)
I have confidence in the way recruitment decisions are made  8 27 31 19 15 35
My organisation generally selects capable people to do the job 9 44 26 15 7 52

Source: People Matter Employee Survey

Average recruitment decision time, which measures how long it takes to make an employment offer, has steadily decreased to 45 days2 . This would decrease further if bulk recruitment and talent pools were used more often to fill roles.

Figure 2.2: Average recruitment decision time, in days, 2014–17

Average recruitment decision time, in days, 2014–17

Click to view

Year Time to Hire
2014 94.5
2015 70.0
2016 67.1
2017 45.7

Source: I work for NSW e-recruitment

An example of the untapped potential of bulk recruitment is recent work in filling the 9/10 senior policy adviser role. There are currently 599 people at this classification in the Public Service, and 120 commenced in the role in 2016–17. A whole-of-sector talent pool was established in January 2017 for this classification, with candidates pre-assessed against a standard capability set, and only requiring an interview with a prospective agency to determine their fit. To date, 22 people successfully secured a role, with an average recruitment decision time of seven days, while individual recruitment processes for the same role continue.

NSW Government Graduate Program shows best-practice recruitment results

The NSW Government Graduate Program was established to attract and retain talented graduates, contribute to public sector capability and develop a cohort of future sector leaders. Its progress shows the outcomes that can be achieved through best-practice recruitment, as intended by reforms introduced under the GSE Act. In this program, candidates are shortlisted against a range of core capabilities and assessed in bulk using three valid and reliable capability-based methods delivered by trained assessors. Selected candidates are matched to agencies based on their qualifications, preferences and agency specifications, then rotated through three roles across the sector over 18 months. This promotes mobility, helps the graduates develop professional networks and builds their foundational skills and knowledge.

Figure 2.3: NSW Government Graduate Program growth, 2016–18

  Applications received    Successful placements
2016   1,218  25
2017  2,077


(expanded to include an ICT and digital stream)

2018  2,809  200*

Source: Public Service Commission
*The 2018 final program numbers are approximate only.

Line managers have assessed graduate performance against focus capabilities3 as consistently meeting or exceeding expectations. The greatest improvements in the 2016 cohort in their first year were in the business enabler and relationship capability skill groups. Ninety per cent of 2016 graduates improved their financial competency and 65% improved their commitment to customer service, from baseline. The program has also exceeded sector averages for diversity representation.

Figure 2.4: NSW Government Graduate Program diversity outcomes over first two intakes

Applications received 2016 and 2017 Successful placements Gender Those with a disability Aboriginal and Torres Strait Islander (successful)

133 candidates

17 of 92 government sector agencies participating

  • 51.8% female
  • 48.2% male
  • 57.9% female
  • 42.1% male
  • 3.1% of applications
  • 3.8% were successful
  • 0.6% applications
  • 1.5% successful

Source: NSW Government Graduate Program

The graduate program has expanded rapidly and is predicted to have an intake of 200 in 2018. However, this is still relatively small compared with the size of the overall workforce, with 17 participating agencies from a potential 92. Given the volume of people recruited each year at the 3/4 and 5/6 levels, this program has the potential to grow and extend participation to more agencies.

Mobility remains an untapped opportunity

Enhanced mobility is one of the great opportunities of GSE Act reforms. It allows employees to easily transfer between agencies to gain a breadth of career experience and improve engagement. It allows employers to rapidly respond to service needs and plan for large systemic changes. PSC modelling also suggests that employees who have been in the same organisation for more than two years are less engaged with their organisation and take more paid unscheduled absences than newer employees, irrespective of age or salary.4

However, mobility is yet to become a standard part of the capability acquisition mix, with 39% of agencies reporting in 2016 that mobility and talent pools were generally used to source talent. The successes are visible only in a few clusters and in the highest bands of the senior executive cohort.

Agency and HR leaders report that employee mobility is limited to within agencies, rather than extending across agencies or the sector. Data on separations and exits from the sector supports this.

Figure 2.5: Separation from employer and sector exit rates by service, 2017

  Rate of separation from agency(%) Sector exit rate (%) Rate of movement within public sector (%)
Public Service 12.7% 10.8% 1.9%
NSW Health Service 10.5% 7.3% 3.2%
Transport Service 10.0% 9.2% 0.8%
Other Crown services 6.0% 5.7% 0.3%
NSW Police Force 4.0% 3.6% 0.3%
Teaching Service 2.9% 2.9% 0.0%
State-owned corporations 67.6% 67.4% 0.1%
External to Government Sector 11.6% 10.1% 1.6%
Total Public
10.3% 8.7% 1.6%

Source: 2017 NSW Workforce Profile
Note: Large changes to State-owned corporations reflect the transfer of employment arrangements to the private sector.
Rounding may mean that individual items within this table do not tally to the corresponding total.

This data does not reflect employee mobility within an agency (for example, moving to different teams or internal promotions), preventing the analysis of the total mobility in the sector. More effective collection and comparison of this data would better inform agency leaders about the supply and demand for mobility within their agency.

A perceived lack of systemic opportunities to gain experience and exposure is reflected in responses to the Employee Survey. Fifty per cent of employees agreed that their organisation was committed to their development (down from 53% in 2016), and 48% were satisfied with the career development opportunities in their organisation (up from 45% in 2016). Both career development questions are key drivers of overall employee engagement scores in 2017.

Employees cited family considerations as a key barrier to a future career move, but a lack of visible opportunities was the second most cited reason.

Figure 2.6: Employees’ perceptions of barriers to mobility, 2017

Perceived barrier selected % employees 
Personal/family considerations 33%
Lack of visible opportunities 31%
Lack of promotion opportunities
There are no major barriers to my career progression  30%
Geographic location considerations 28%

Source: People Matter Employee Survey

Hiring manager capability affects mobility uptake

The experience of candidates in the NDIS (National Disability Insurance Scheme) Workforce Mobility Pathway highlights some of the challenges in fostering cross-sector employee mobility

The rollout of the NDIS will change the way people with disability, service providers and governments interact. To support the scheme’s implementation, all NSW-delivered disability support services will transfer to the non-government organisation (NGO) sector. This will result in significant changes to the way the Department of Family and Community Services (FACS) operates, and its staffing profile.

About 900 FACS staff members, mainly in common roles, will not move to the NGO sector. These employees have entered, or will enter, the NDIS Workforce Mobility Pathway, to create a sector-wide talent pool. Affected FACS employees will be assessed against the capability framework, for matching to vacant roles at their level. The process from interview to filling a role typically takes about 21 working days, depending on internal agency processes.

Between January and October 2017, 115 employees (about 13% of the pool) were reassigned. Because this was a smaller number than anticipated, hiring managers’ decisions were analysed to better understand recruitment practices and potential barriers to mobility. A sample of 51 cases in which hiring managers declined to interview or appoint pathway participants to vacancies was examined. Two of the most common reasons that hiring managers gave were:

  • that the candidates did not have enough content knowledge about the proposed work
  • that the candidates did not have sufficient experience in the processes or environment of the hiring agency or department.

This is consistent with feedback from HR practitioners that hiring managers require additional support, training and direction to better understand hiring for capability and transferable skills. The agency architecture can then help new employees build specific process experience.

In November 2017, the Secretaries Board agreed to a set of actions to significantly improve the uptake of employees from this pool.

Executive mobility is underpinned by robust performance planning

At the executive level, robust performance planning and talent review processes, and the sector-wide support of leaders has resulted in a more developed mobility approach.

In late 2016, the Secretaries Board undertook a talent review of Senior Executive Band 3 employees to identify cross-sector mobility opportunities that met the capability needs of agencies, as well as individuals for more complex roles or where a lateral move would build a depth of experience. Cross-cluster rotations were then executed throughout 2017. The Secretaries Board will consider how a similar process may be applied in the coming year to the Senior Executive Band 2 group, as well as another Band 3 rotation.

Sector leaders report that they are now conducting talent reviews at the Band 1 and 11/12 levels where mature processes have been developed. This is based on access to rigorous performance data and a robust understanding and application of the capability framework. Review results inform leaders’ decisions about the career development and mobility of employees, and appear to be a precondition for cross-agency mobility.

Figure 2.7: Upward mobility for Public Service senior executives during GSE Act transition, 2014–17

  2014 2015 2016 2017
Proportion of Public Service senior executives under GSE Act provisions (%) 1 19 64 100
Upward mobility (headcount) N/A 1 38 29

Source: 2017 Workforce Profile; Government Employee Number.

Most Public Service executives were enthusiastic about their own mobility, with 77% interested in moving to an executive role in another NSW public sector department or agency in the future.5

In the next phase of efforts to improve cross-sector mobility, a model that clearly defines the capabilities and scope required of an 11/12 grade manager or subject matter expert role will be developed. These managers play a key role in communicating agency change, direction and purpose to work teams. Defining their capability requirements will help provide consistency to the way each agency evaluates these roles. The spectrum of capabilities that agencies expect in these roles is currently inconsistent, which impedes mobility and skill development.

Further support for hiring managers may also help agencies build the awareness, trust and skill required to fill roles effectively based on candidate capability, then close any skill gaps in agency or process experience after commencement. Agencies that have shown success in using the GSE reforms to fill roles have embedded recruitment specialists in the business to support hiring managers. Supporting managers to gain maturity in capability-based assessment, and providing them with sector-wide validated data extracted from human capital management systems, will help them use the full range of hiring options.

Employees see the value in performance development frameworks

Performance management is a core workforce development practice intended to build an individual employee’s capabilities and their performance. Key to this is ensuring that the employee’s performance and development objectives are aligned to their team and agency’s broader objectives.

The GSE Act made performance management systems a mandatory requirement for heads of agencies to develop and implement for their NSW Government Sector employees6 . The performance management framework sets out the core requirements of a performance management system and the essential elements of an agency’s performance management approach.

Last year’s State of the Sector report noted that line managers needed to improve how they conducted performance reviews. It showed that:

  • 83% of agencies had initiatives in place to help managers align employee work goals with organisational needs
  • 80% were building manager capabilities to provide quality feedback
  • agencies selected this as their most significant overall capability gap and the third-highest improvement priority.7

Feedback from employees indicates that the focus on building people management capabilities is having an impact. In 2017, 67% of Employee Survey respondents reported that at the time of the survey8 they had a current performance and development plan that set out their objectives. This marked an improvement of 15.5 percentage points since 2014. Sixty-three per cent said they had received useful feedback from their manager that enables them to deliver the required results, up from 59% in 2016.

Figure 2.8: Employee perceptions of performance development, 2016-17

  Agreement 2017 (%) Agreement 2016 (%)
In the last 12 months I have received useful feedback on my work to enable me to deliver required results*
63 59
My performance is assessed against clear criteria*
54 53
I have received appropriate training and development to do my job well
62 63
I am satisfied with the opportunities available for career development in my organisation
48 45
My manager appropriately deals with employees who perform poorly*

  Source: People Matter Employee Survey
*Responses included in the Performance Management Index

Employee perceptions of performance development processes varied across agencies in 2017. However, an analysis of the range and distribution of survey scores indicates a general trend towards improved experiences.

Figure 2.9: Change in Performance Management Index scores across agencies, 2016–17

Change in Performance Management Index scores across agencies, 2016–17

Click to view

Agency Difference
Institute of Sport -9.30886
Cancer Institute NSW -7.57385
Infrastructure NSW -6.52852
Southern NSW Local Health District -5.95329
Trustees of the Museum of Applied Arts and Sciences -5.36689
Health Care Complaints Commission -4.84848
Office of the Children's Guardian -4.693
Judicial Commission -4.36508
Independent Commission Against Corruption -4.29769
Audit Office -3.74513
Agency for Clinical Innovation -3.02172
State Transit Authority -2.40285
Water NSW -1.62602
Library Council of NSW -1.61469
Treasury Corporation -1.3464
Bureau of Health Information -1.29552
Health Infrastructure NSW -0.97799
Sydney Trains -0.97367
South Western Sydney Local Health District -0.83988
Public Service Commission -0.68914
Justice Health and Forensic Mental Health Network -0.48904
Office of Environment and Heritage -0.43966
Hunter New England Local Health District -0.27417
Schools -0.1896
Office of Local Government -0.16632
Far West Local Health District -0.00552
Legal Aid Commission 0.09052
Service NSW 0.110523
Ombudsman's Office 0.256273
Board of Studies, Teaching and Educational Standards 0.271443
Central Coast Local Health District 0.412934
Murrumbidgee Local Health District 0.579338
Environment Protection Authority 0.689877
Transport for NSW 0.733326
Office of the NSW Rural Fire Service 0.810234
Independent Pricing And Regulatory Tribunal 0.852314
The Treasury 0.919175
Local Land Services 0.960913
Health Education and Training Institute 0.98131
Nepean Blue Mountains Local Health District 1.010171
Sydney Local Health District 1.018873
Department of Family and Community Services 1.044787
NSW Police Force 1.335533
Office of Sport 1.342225
Fire and Rescue NSW 1.3533
NSW Electoral Commission 1.421164
Sydney Children's Hospital Network 1.503639
Sydney Opera House Trust 1.597975
Northern NSW Local Health District 1.702352
Essential Energy 1.794491
NSW Crime Commission 1.842736
Police Integrity Commission 1.854396
Department of Industry 1.894534
Department of Education 1.949399
Mid North Coast Local Health District 1.984724
South Eastern Sydney Local Health District 2.19315
Western NSW Local Health District 2.232921
Sydney Cricket & Sports Ground Trust 2.339261
NSW Trains 2.344869
Roads and Maritime Services 2.44221
Crown Solicitor's Office 2.804254
Department of Finance, Services & Innovation 2.881904
Natural Resources Commission 2.893519
HealthShare NSW 3.022996
Health Professional Councils Authority 3.182376
Department of Planning & Environment 3.42521
Northern Sydney Local Health District 3.472352
Western Sydney Local Health District 3.488411
Department of Premier and Cabinet 3.501401
eHealth NSW 3.537919
Department of Justice 3.543302
Ambulance Service of NSW 3.626197
Destination NSW 3.865489
Parliamentary Counsel’s Office 4.152824
Parliament of NSW 4.185929
Information and Privacy Commission 4.513889
Ministry of Health 4.683925
Mental Health Commission 5.320988
Illawarra Shoalhaven Local Health District 6.025374
Office of the NSW State Emergency Service 6.654584
Australian Museum Trust 6.814049
Health Pathology 7.374331
Insurance & Care NSW 7.580695
SAS Trustee Corporation 9.014054
Health System Support Group 10.32567
Barangaroo Delivery Authority 10.7971
Clinical Excellence Commission 11.14583
Office of the Director of Public Prosecutions 12.37874
Multicultural NSW 14.29226
Art Gallery of NSW Trust 15.05003

Source: People Matter Employee Survey
Note: The green line denotes sector average change.

Agency human resource leaders report that introducing a performance management culture requires patience, time and effective change management. They also report that:

  • managers are still building capability in linking individual performance goals to organisational objectives so an employee can see how their performance contributes to organisational outcomes
  • performance management does not yet produce adequate and/or reliable data linked to agency performance outcomes or to inform other workforce management processes
  • agencies are still developing their performance rating moderation processes to ensure managers measure performance consistently.

Analysis shows employee perceptions of performance management improve with seniority. This may reflect the work that sector leaders report doing to ensure executive performance agreements are linked to sector-wide KPIs – such as customer satisfaction and engagement – and their participation in regular, structured, sector-wide conversations on these topics. Leaders note that the next phase will be to ensure this flows to the employee level, where just over half (54%) agree their performance is assessed against clear criteria. Agency-level performance management targets may also help to further improve overall performance.


1 2016 State of the NSW Public Sector Agency Survey.

2 NSW Commission of Audit, NSW Commission of Audit Interim Report: Public Sector Management, January 2012, p. 96.

3 Focus capabilities are defined as those for which an employee assigned to a role must demonstrate immediate competence; that is, from day one of engagement.

4 Public Service Commission, 2017Workforce Profile Report, Chapter 9. Contains additional analysis regarding paid unscheduled absence.

5 Public Service Senior Executive Mobility Survey, March 2017

6 The Government Sector comprises the Public Service, the Teaching Service, the NSW Police Force, the NSW Health Service, the Transport Service of New South Wales, any other service of the Crown (including the service of any NSW government agency), and the service of any other person or body constituted by or under an Act or exercising public functions (such as a State-owned corporation), being a person or body that is prescribed by the regulations for the purposes of this definition.

7 2016 State of the NSW Public Sector Agency Survey.

8 Agencies with human capital management systems typically report that 100% of employees have plans, yet the responses to the corresponding Employee Survey question indicates a lower percentage. This may reflect the impact of new employees who do not yet have plans.