I am pleased to deliver the State of the NSW Public Sector Report for 2018. It is the seventh in the series and my first as NSW Public Service Commissioner since taking over from inaugural Commissioner Graeme Head in May this year. I have spent much of the last six months listening, learning and consulting widely to gain an understanding of the sector’s workforce issues. This has included meeting with senior officials, secretaries, deputy secretaries and human resources leaders, right through to the frontline staff members who deliver vital services each day to the people of NSW.

My initial impressions are very positive. The sector is comprised of high-performing, motivated individuals, dedicated to delivering enduring outcomes for the community. This report highlights some of our strengths and successes over the last 12 months. It also identifies challenges and areas for improvement in the year ahead.

The NSW public sector is Australia’s largest employer. It employs about 396,000 people, or 329,000 full-time equivalents across 10 clusters. Its sheer size and complexity underscore the importance of sound workforce management practices.

A total of 170,832 employees responded to the 2018 People Matter Employee Survey, equating to a response rate of more than 50% for the first time. The feedback from our people is invaluable. Employee engagement remains relatively strong and steady, and scores on most survey questions also improved.

We also saw the satisfaction of consumers and businesses with government services achieve a steady state in the last year, following a positive uplift in 2016.

The sector grew this year for the first time since 2012. Most of this growth came from the hiring of teachers, police officers, and nurses and other healthcare professionals. The number of Public Service senior executives also increased in 2018, and while much of this was due to the state’s extensive infrastructure development and expanded service delivery to citizens, we will need to closely monitor the size of this cohort in coming years.

Progress continues to be made as we strive to meet the Premier’s Priority to achieve greater diversity in the sector. Particularly strong gains have occurred in relation to Aboriginal and Torres Strait Islander employment. In 2018, there were 87 Aboriginal and Torres Strait Islander senior leaders in the sector, an increase of 30 compared to 2014. Based on the current rate of change, we will likely achieve the Premier’s Priority target of 114 Aboriginal and Torres Strait Islander senior leaders by 2025 ahead of time.

The Premier’s Priority target of women holding 50% of senior leadership roles in the government sector by 2025 is also seeing progress. In 2018, representation reached 38.7%, an increase of 1.3 percentage points on the previous year. While this is encouraging, the sector is at risk of not reaching the overall target if it does not accelerate its year-on-year improvements. This is high on my agenda as Commissioner and will require continued leadership, focus and action from myself, the Secretaries Board, and other sector leaders.

We have seen the gender pay gap increase from $252 in 2017 to $949 in 2018. This was the first widening of the gap since 2015 and relates to changes to the gender balance in lower paid roles, with fewer male than female employees in these positions. While this trend is concerning, over the same period, the number of females in higher salary ranges also increased, however this increase was not sufficient to fully offset the impact of the gender balance changes in lower paid roles.

The representation of people with disability within the NSW public sector reached a low of 2.5% in 2018. In January 2018, the Public Service Commission (PSC) and the Department of Family and Community Services (FACS) released Jobs for people with disability: A plan for the NSW public sector, which set a sector-wide target of 5.6% representation by 2027. In partnership with FACS, I intend to lead a focused effort to reverse recent trends and improve employment experiences and outcomes for people with disability across the sector.

Improving recruitment is vital. About half a million people applied for roles with the NSW public sector in 2018, and more than 22,500 of them were appointed. Prior to his departure, the then Commissioner initiated a review of recruitment practices, conducted by Lynelle Briggs AO. The findings were presented to me in June and are summarised in Chapter 2. Work is already underway to address key recommendations. These include fostering a workforce for the future, improving the use of digital technology and data, driving more robust decision-making, enabling greater mobility and providing a more positive experience for job applicants.

We saw employee perceptions of performance management improve again this year, with two-thirds of agencies improving their scores in this area. It is important we maintain momentum and better link employee performance to the outcomes the sector is striving for.

Bullying remains a concern for the sector. While the rate has reduced considerably since 2012, more work is needed to drive positive and productive behaviours throughout the sector. The PSC will be exploring ways to build upon the Respect. Reflect. Reset. campaign of 2017 at a more local level.

Leadership has been a key focus area across the sector for the last few years, and this seems to be paying off with employee perceptions of the qualities of senior leaders continuing to improve. The Leadership Academy, introduced in 2015, is producing high quality leaders, with almost 300 people having completed a program since its inception. The PSC has commenced a review of the Academy’s progress, and its potential for further evolution and effectiveness moving forward.

The NSW Government Graduate Program, introduced in 2016, has seen 300 graduates join the sector, and we are expecting close to 200 participants in 2019. It was pleasing to see the program ranked 12th in the Australian Financial Review’s Top 100 Graduate Employer 2018 list and to win the Fusion Award for most popular Government and Defence employer.

Flexible working is an area where the sector is also showing momentum. In December 2017, the PSC published a framework to help agencies implement the Premier’s commitment to make all government sector roles flexible on an ‘if not, why not?’ basis by 2019. Flexible working can help solve business challenges, and is a proven driver of engagement for our people.

In preparing this report, I have thought deeply about the issues facing the NSW public sector. Part of my role, and that of the PSC, is to identify and share good practices to improve the experience of the sector’s customers and employees. However, I am very much aware that progress is not always linear or uniform. There are challenges ahead, but the PSC will work with the sector to ensure that it is prepared for the future.

I look forward to continuing to build collaborative and productive relationships with the sector, with the aim of developing a world-class workforce capable of delivering the very best outcomes for the people of NSW.

Emma Hogan
Public Service Commissioner
November 2018