Strategic Workforce Plan 2012 2016

Strategic Workforce Plan 2012 2016 Executive Summary The Treasury Strategic Workforce Plan is a statement of intent for the next four years in relation to the department s people strategies. It is based on the department s operating context, an assessment of the workforce, required capabilities and an assessment of any critical capability gaps. The Strategic Workforce Plan should be read in conjunction with more specific annual operational workforce plans. Workforce planning is an element of organisational strategic planning and needs to be considered as part of a broader range of strategies to enable the department to deliver its outputs. The Strategic Review found that the Treasury is operating in an increasingly complex policy environment. This has implications for the work of the department and how it operates to deliver its mission over the short-to-medium term. Over the coming years the department will need to deliver its outputs in a resource-constrained environment. The current and anticipated operating environment is characterised by a reduction in overall staff numbers through to 2015-16. The move to an operating environment of reducing resources and workforce numbers contrasts with the previous period of sustained workforce growth. Irrespective of the size of department, the Treasury is committed to ongoing improvements to its efficiency and productivity which requires an increased focus on departmental outputs and priorities as well as staff numbers. A range of trends have contributed to the composition of the current workforce over the last decade. Treasury is relatively young compared with other APS agencies but the proportion of staff aged 55 years and over has grown over the last decade. Staff tenure, and therefore experience working for the Treasury and the APS has declined over the last decade. The proportion of women in the workforce has increased over the past decade but the proportion of women at senior levels in the organisation (EL2 and above) remains low. Part-time employment has increased significantly but is much more prevalent amongst female staff. Graduate recruitment has become increasingly important. Indications are that there is a reasonable supply of graduates with economics, law and accounting qualifications coming through academic institutions, although economics is increasingly studied as a component of more generalist degrees such as commerce and business. Traditional graduate qualifications are being supplemented with a more diverse mix of qualifications and it is likely that the Treasury, as a whole, now has a more diverse skill base than it has historically. The Strategic Review of the Treasury concluded that overall, the Treasury is relatively well placed to continue to deliver on its mission. Treasury staff have a good mix of skills and capabilities which allows the department to consistently produce accurate and thorough policy advice to the Government. To remain influential and sustain high standards of delivery, the Strategic Review found 1

that the Treasury needs to maintain and build the skills and capabilities of staff. The Board s recent focus on the PMS Refresh has emphasised the importance of fair and consistent appraisals to staff development and the importance of actively managing performance. Workforce planning consultations have shown no major concerns about critical gaps in the department s skills base but staff development needs to remain focused on key capabilities such as those identified in the Strategic Review. This includes an increased emphasis on: project management, quantitative skills, modelling development and design, public sector accounting, and a greater understanding of financial markets. Consultations also raised the importance of staff with leadership and management skills. As the department downsizes, risks to staff wellbeing become more acute and may require new interventions. Meeting the expectations of ambitious and capable staff becomes more difficult as resources are increasingly constrained. There may be reductions or perceived reductions in promotional opportunities and career progression. Staff with highly developed skills and capabilities are the most likely to be able to move employers in a tight employment market. A flexible and mobile workforce is more important as staff numbers reduce. The current transfer rounds enable staff to move based on their own preferences. There is an increasing requirement to also move staff to priority areas which may not be their preference, and that need to take place outside a transfer round. There will be pressure on managers to actively manage staff, including underperforming staff. This requires a greater focus on consistent and accurate appraisals and more active underperformance management through the Performance Management System. Increased capability contributes to preserving overall organisational capacity. Current capabilities must be maintained and new capabilities developed as the workforce downsizes. There is a risk that as the workforce reduces, staff may not feel they are able to participate in development opportunities. Reducing budgets may also impact on the availability of training and development which creates risks for the department s overall capability. Many areas of the department already operate in a highly pressured environment. As overall resources reduce, workplace stress is expected to also increase and managers will have an increasing duty of care. The four workforce strategies for 2012-16 focus on increasing the department s capabilities and capacity while downsizing. Recruitment: The overall reduction in external recruitment will be balanced with the targeted engagement of new employees with the capabilities necessary to meet current and future needs. External recruitment will continue to be monitored by the People Committee. Development: A reduction in the overall workforce means that staff need to be able to develop their individual capabilities to meet current and changing organisational requirements. Development strategies include the talent and leadership systems which will enable staff to develop their individual skills and experience satisfying career paths. This may include individual staff moving to areas where they can better develop their skills. The Board s focus on the Performance Management System and the PMS Refresh has highlighted the importance of constructive performance management. As part of the PMS Refresh all staff and managers have received guidance and training about discussing performance and undertaking fair and consistent appraisals. Managers will be 2

encouraged to provide clear and timely informal feedback that enables individual staff to continue to develop and to maintain their focus on managing underperformance. Mobility: An agile workforce provides capability and capacity that can be shifted to key projects or areas to meet workload peaks or capability gaps. As resources become more constrained, staff need to have the ability to think flexibly and adapt quickly to new working environments. This level of mobility should be balanced with the development of deep capabilities, gained over longer periods, as specialised knowledge remains critical to the department meeting its outputs. Staff may be encouraged to remain in some areas over longer periods to develop the depth of knowledge and experience required or may need to move to different areas to continue to develop these skills. Effective knowledge management and transfer systems are necessary to support the efficient movement of staff between areas or projects. Mobility should be balanced with the development of deep capabilities. Inclusiveness: Workforce capabilities are strengthened by more explicitly valuing diverse and complementary leadership behaviours. The Progressing Women suite of strategies will build a more inclusive workplace where the technical, management and leadership skills of all staff are better harnessed and will foster diverse and innovative thinking. Reports will be provided to the People Committee and the Executive Board regularly and as required, to ensure that the department continues to closely monitor its workforce. The strategies will be refined in light of experience and in the event of any significant changes in our operating environment. 3

Introduction The Treasury s Strategic Workforce Plan provides an overarching assessment of the department s operating environment and the composition of its current workforce and capabilities. Drawing on this assessment, the plan identifies people management strategies to mitigate anticipated risks and maintain and develop workforce capability during a sustained downsizing phase. The strategies focus on workforce capability on the basis that increased workforce capability will help to preserve the department s overall capacity as actual numbers reduce. The plan will be reviewed in the 2013-14 financial year. The people management strategies have been identified following consultations with the People Committee, GEMs and individual managers, and with reference to workforce data and analysis. Operating Environment The Treasury is operating in an increasingly complex policy environment, which has implications for the work of the department and how it operates to deliver on its mission over the short-to-medium term. The Strategic Review of the Treasury found that the operating environment is likely to continue to move at a rapid pace as international and domestic issues present new challenges for policy makers. In an increasingly interconnected global economy, the Treasury will be expected to continue to provide advice across a wide range of policy issues. Over the next few years, the rising economic, trade and geopolitical weight of Asia will present both opportunities and challenges for Australia, including a growing middle class in the Asia-Pacific region and continued demand for our resources. The Australian economy will also continue to be impacted by global developments, including volatility in the international (real) economy and financial markets and longer-term transformations as the world undergoes significant structural change. Australia will need to respond to demographic change, particularly the ageing of the population, and the challenges presented for raising productivity, achieving continued growth in living standards, and fiscal sustainability including the sustainability of the revenue base. Businesses, individuals and governments will also be impacted by the rapid pace of technological change, as well as the challenge of environmental sustainability. These trends present both challenges and opportunities. Pressure from the community for government provision of superior goods, such as aged care, health, disability and education, is also likely to continue to rise, as it has done in the past, but will be exacerbated by the population ageing. For the Treasury, this means heightened expectations from the public, business and government for greater relevance and enhanced engagement and communication. The department will need to meet these increasing expectations and deliver its outputs in a resource-constrained environment. Over the next four financial years, the department s budget is expected to reduce and to require a reduction in actual staff numbers each year. In this context, the department will need to continue to find efficiencies. Workforce decisions made during this period will have a critical impact on the department s capability and capacity in future years. The move to an operating environment of reducing resources and staff numbers contrasts with a period of sustained growth. Since 1999 the department has doubled in size with a brief period of 4

consolidation between 2010-11 and 2011-12. Over the next four years the department s workforce will move through a period of downsizing. The estimates to 2013-14 do not include any new funding for terminating measures (see Chart 1). Using this assumption, ASL is likely to return to around 2004-05 levels by 2015-16. A downsizing workforce presents a number of challenges for the department in terms of increasing capability in order to help preserve capacity. It will be important to continue limited and targeted recruitment, to retain and develop critical capabilities, to manage career opportunity expectations, and to efficiently use workforce resources to deliver required outputs. The graduate program will remain an important recruitment strategy. Indications are that there is a reasonable supply of graduates with economics, law and accounting qualifications coming through academic institutions, although economics is increasingly studied as a component of generalist degrees such as commerce and business. The total number of graduates completing economics and econometrics at the group of eight universities has reduced by 15 per cent from 419 to 358 completions between 2001 and 2010. Over the same period there has been an increase in the number of graduates completing commerce, business and management courses, which has seen completions increase by 21 per cent from 3106 to 3769. The 2012-2016 period will also require a managed reduction of workforce resources and a reduction in work outputs in line with reduced staff numbers. Chart 1: Core Workforce: Average Staffing Levels Actual and Estimated 2004 to 2014 Core Workforce Average Staffing Levels 1100 1000 900 800 700 600 500 Growth Consolidation Downsize ASL Actual Total ASL Estimated Total As the department downsizes, the risks to staff wellbeing become more acute and place a higher premium on existing strategies and may necessitate new interventions. Meeting the expectations of ambitious and capable staff becomes more difficult as resources are increasingly constrained. There may be reductions or perceived reductions in promotional opportunities and career progression. Staff with highly developed skills and capabilities are the most likely to be able to move employers in a tight employment market. There will be pressure on managers to more actively manage staff. This requires a greater focus on consistent and accurate appraisals and more active management using the Performance Management System. 5

It is important to maintain current capabilities and to build new capabilities as the workforce downsizes. Increased capability contributes to preserving overall organisational capacity. However, there is a risk that as the workforce reduces and workloads increase, staff cannot or will not participate in development opportunities. Reducing budgets may also impact on the availability of training and development. As a result, there are risks for the department s overall capability. A flexible and mobile workforce is more important as staff numbers reduce. The current transfer rounds enable staff to move based on their own preferences. This practice is effective and will continue to be managed by the People Committee. However, there is an increasing requirement to move staff to priority areas, which may not be their preference or which may need to take place outside a transfer round. The Treasury has already implemented a number of key priorities and strategies to manage its current and future workforce and address some of the risks. The Strategic Review, the Progressing Women initiatives and the Podger Review of Revenue Group have prioritised organisational and people management approaches to ensure the department continues to deliver high quality advice and remains relevant. The recommendations of these reviews are more important in a downsizing phase. The projects currently being undertaken will help support the department s capabilities and capacity without increasing the workforce. Workforce Snapshot The workforce snapshot provides an overview of the workforce and outlines a range of trends in the composition of the department s workforce. Changing numbers: workforce composition Table 1 shows that the department s total FTE decreased from 1031.2 to 942.1 between March and September 2012. Total FTE includes approximately 20 non-ongoing employees in both March and September. Group specific FTE also include staff temporarily attached to the Executive to help drive key initiatives flowing from the Strategic Review and the Progressing Women initiative. Table 1: Workforce composition showing total FTE by employment type and Group as at 30 September 2012 Group 31 March 2012 30 September 2012 Executive 10.4 12.4 Fiscal Group 140.6 131.5 Macroeconomic Group 169.4 170.3 Markets Group 221.0 190.5 Revenue Group 249.2 214.5 Corporate Strategy and Services Group 240.6 222.9 Total All Groups 1031.2 942.1 6

Changing people: turnover There has been a sharp decrease in ongoing employee turnover levels in the first quarter of 2012-13 compared with previous financial years (see Chart 2). The annualised turnover rate for 2012-13 (as at 30 September 2012) is 6.6 per cent (compared with 11.2 per cent annualised rate from 30 September last year). Turnover rates have remained relatively stable for the past seven years and averaged 10.9 per cent across this period. Employee turnover has been declining since the completion of the voluntary redundancy and incentive to retire processes in quarter four 2011-12. These processes may have brought forward the intention-to-leave decision for a number of employees. Career opportunities in the public sector in general have reduced and this would also contribute to a decline in turnover levels. Chart 2: Ongoing Employees - average turnover by financial year, as at 30 September 2012 14% 13% 12.8% 12% 11.1% 11.4% 11.8% 11% 10.3% 10% 9.5% 9% 9.3% 8% 7% 6.6% 6% 5% 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13* Note: *2012-13 data is annualised. Voluntary redundancies, incentives to retire and employees who terminated while they were on a NATS status are excluded. Changing generations: age profile Although the median age of 34 years has remained unchanged since 1999, the proportion of employees aged 55 years and over has more than doubled from 3.4 per cent to 7.4 per cent over this period (see Chart 3). Forty-two per cent of employees aged 55 years and over are classified at the EL2 level or above, representing a high number of the department s more experienced staff. This emphasises the importance of effective succession and knowledge management processes to facilitate succession planning and ensure corporate knowledge is retained. 7

Chart 3: Ongoing employees - change in proportion by age group, 1999 compared to 2012 5.0 Change 1999 to 2012 (percentage points) 4.0 3.0 2.0 1.0 0.0-1.0 Under 25 years 25-34 years 35-44 years 45-54 years 55 years and over -2.0-3.0 Chart 4 shows that the Treasury has a relatively young age profile with just over half (50.4 per cent) of the workforce aged 35 years and under. A young workforce has implications for the department in terms of providing flexibility, catering for different learning styles and managing career expectations. This compares with 49.2 per cent of staff at 31 March 2012 who were aged 35 years and under. Across the APS, 28.4 per cent of staff are aged 35 years or below. Chart 4: Ongoing Employees - Age Profile (at 30 September 2012), compared to the APS 1 45.0% 41.7% 40.0% 35.0% 30.0% 25.0% 24.5% 27.9% 24.7% Treasury 29.5% APS 20.0% 15.0% 10.0% 5.0% 8.7% 3.9% 17.2% 7.7% 14.1% 0.0% Less than 25 years 25 years to 34 years 35 years to 44 years 45 years to 54 years 55 years and over 1 APS figures are from the 2010-11 State of the Service Report. The 2011-12 report will be released in November 2012. 8

Changing diversity: gender profile In 2012, the Treasury s workforce comprised 53 per cent males and 47 per cent females. Chart 5 shows an upwards trend in female representation in the Treasury s workforce since 1999 although there was a slight decline between 2008 and 2010. Female representation increased in 2012, returning to the 2008 level. Increasing female workforce representation in the Treasury is consistent with the trend for the APS as a whole. For the APS, female representation was 49 per cent in 1999 and by 2012 the proportion of females had increased to 57 per cent. Chart 5: Profile of the Treasury s total workforce by gender, 1999 to 2012 70 Per cent 60 50 40 30 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Proportion of females Proportion of males Female employees have higher representation than male employees at all APS classifications except APS 6. Female employees have higher representation at EL1, however they have lower representation at the EL2 and SES classifications (see Chart 6). Chart 6: Ongoing employees gender proportion by classification, as at 30 September 2012 30% 25% 20% 15% 10% 5% 0% APS 1-4 APS 5 APS 6 EL1 EL2 SES Band 1 SES Band 2 SES Band 3 Male Female 9

Changing experiences: tenure Compared to 1999, average employee tenure (which generally correlates with working experience) in the broader APS and the Treasury has decreased across most classifications (see Chart 7). This reduction in Treasury tenure levels has been driven by the recent large graduate intakes. Chart 7: Ongoing employees change in average years tenure (for the Treasury and APS) by classification, 1999 to 2012 Change 1999 to 2012 (average years) 3.0 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0 APS1-4 APS5-6 EL1 EL2 SES Treasury Tenure APS Tenure Changing attendance: part-time profile As at 30 September 2012, the proportion of the Treasury s ongoing workforce who worked part-time was 11.3 per cent with 19.7 per cent of female employees and 3.6 per cent of male employees working part-time. Over 40 per cent of female employees aged between 35 and 44 years were parttime (see Chart 8). Chart 8: Proportion of staff working part time (at 30 September 2012), by Age Range 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0.0% 0.0% 10.4% 2.4% Less than 25 years 25 years to 34 years 40.9% 35 years to 44 years Female 20.2% 19.7% 5.4% 5.1% 45 years to 54 years Male 3.6% 55 years and over 10

The number of part-time employees increased 500 per cent from 22 to 109 between 1999 and 2012 (see Chart 9). These changing work patterns highlight the importance of frameworks that support all employees seeking flexible working arrangements. Chart 9: Treasury part-time staff as a proportion of total ongoing staff 10 9 8 7 6 5 4 3 2 1 Per cent 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Female Male Changing profile: classification profile In line with broader APS trends since 1999, the proportion of employees at the APS 1 to APS 4 classifications has decreased, while the proportion of employees at the APS 5 to APS 6 classifications have increased (see Chart 10). There have also been reductions in the proportion of both EL2 and SES classifications and a slight increase in the proportion of employees at the EL1 classification. Chart 10: Ongoing employees change in classification proportions, 1999-2012 10.0 Change 1999 to 2012 (percentage points) 8.0 6.0 4.0 2.0 0.0-2.0-4.0-6.0 APS1-4 APS5-6 EL1 EL2 SES 11

New Staff Commencements The graduate program has increasingly become the main recruitment process for new staff (see Chart 11). With the Treasury now facing a tighter budget environment and tighter constraints being placed on the engagement of external recruits, the graduate program will continue to represent a high proportion of total commencements over the coming years. As at 30 June 2012, 43 per cent of all staff in the policy groups had commenced with the Treasury as Treasury graduates, with 50 per cent of all staff in the Macroeconomic Group and in Fiscal Group having commenced as Treasury graduates. Although data is not currently available, anecdotal evidence suggests that there are also external recruits within the Treasury who commenced their APS career through a graduate program. Graduates have remained a key pipeline of talent for the department s workforce, with intakes ranging from 52 to 73 since 2009. There are currently 39 graduate acceptances for the 2013 intake (policy and corporate graduates). Data from the Australian Association of Graduate Employers indicates that there is a reasonable supply of economists, lawyers and accountants completing these degrees through academic institutions. The total number of students completing economics and econometrics at the Group of Eight universities reduced by 14 per cent between 2001 and 2010. In the same time period, the number of students completing commerce, business and management courses increased by 21 per cent and the total number of students completing law rose by five per cent. Of students completing law, on average 58 per cent were women. The Treasury has emphasised the recruitment of generalist capabilities in its graduate intakes, however the department has sought specialist quantitative capabilities in recent years. An increasing number of students are studying commerce degrees, with varying levels of economics content. The longer term implications of this change may not be immediately apparent, but university commencements and completions will need to be monitored regularly. Chart 11: Proportion of graduate recruits compared to all ongoing policy group commencements, 1999 to 2012 80% Per cent 70% 60% 50% 40% 30% 20% 10% 0% Prior to 2001-02 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Graduates External Recruits There is no reliable data about the qualifications of the Treasury s current population. This will be improved over time to better understand workforce capabilities. However, information about the qualifications of Treasury graduates over time is available. 12

In 1999, the graduate selection criteria were revised to facilitate the selection of non-economists, with required capabilities clearly defined in the marketing material to ensure that as far as possible the mix of graduates reflected the balance of work in the Treasury (see Table 2). Around 51 per cent of the Treasury s graduates over the period 2001-2013 had economics qualifications, although this has declined in recent years. Over the same period 46 per cent of graduates held qualifications in commerce or related subjects. In 2005 and 2006, there appears to have been a peak in the proportion of graduates with qualifications in law. Since that time, the average proportion of graduates with law qualifications has declined. Based on current acceptances for 2013, this intake of graduates will be the most academically diverse cohort over the period 2001-2013 with the highest proportion of Other degree types (including Arts, Political Science, Engineering, History and Languages). Graduate Year Table 2: Disciplines studied by Treasury graduates, 2001 to 2013 Economics Law Commerce, Business, Finance Quantitative degree Other (including Arts) number % number % number % number % number % 2001 26 66.7 11 28.2 16 41.0 N/A N/A 8 20.5 2002 19 45.2 7 16.7 19 45.2 7 16.7 15 35.7 2003 27 45.0 21 35.0 32 53.3 10 16.7 15 25.0 2004 19 42.2 13 28.9 25 55.6 N/A N/A 16 35.6 2005 17 51.5 19 57.6 15 45.5 N/A N/A 12 36.4 2006 18 45.0 17 42.5 24 60.0 N/A N/A 12 30.0 2007 26 63.4 11 26.8 14 34.1 6 14.6 16 39.0 2008 38 70.4 18 33.3 13 24.1 2 3.7 18 33.3 2009 26 50.0 14 26.9 22 42.3 10 19.2 19 36.5 2010 42 57.5 20 27.4 31 42.5 16 21.9 22 30.1 2011 25 39.7 8 12.7 36 57.1 14 22.2 19 30.2 2012 18 34.0 17 32.1 21 39.6 8 15.1 15 28.3 2013* 16 45.7 8 22.9 20 57.1 6 17.1 17 48.6 Average 2001-2013 50.5 30.1 46.0 16.4 33.0 Note: Percentages do not sum to 100 each year as most students study more than one discipline. The average proportion of graduates with quantitative skills is calculated on the basis of the years for which data is available. *2013 graduate intake data is based on acceptances by graduates as at 29 October 2012. Chart 12 provides a retention rate comparison between Treasury graduates and external recruits (employees not recruited as graduates) who commenced with the department from 1999 to 2012. The comparison suggests that longer term retention is higher for external recruits. However the retention of graduates is slightly higher than external recruits until 36 months after commencement. After 36 months, the retention rate for external recruits is higher and the gap widens to almost 10 per cent over the longer term. 13

Chart 12: Ongoing employees average external recruit retention rates compared to Treasury graduates for employees who commenced between 1999 and 2012 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 12 24 36 48 60 72 84 96 108 120 Months from Commencement Average External Recruit Retention Average Graduate Retention Note: Employees who joined through a Machinery of Government change or temporary transfer arrangement are not included. Workforce data analysis shows that since the year 2000: Around 30 per cent of graduates separated from the department having never changed groups. On average, these graduates would remain in the group they commenced with for 2.5 years; Around 26 per cent of all graduates still with the department as at 30 June 2012 and who commenced between the years 2000 and 2011 have remained in the same group they commenced with (including the 2011 cohort who have had limited opportunity to transfer); For the graduates that remain with the Treasury and have moved from the group they commenced with, their more common career paths since 2000 have been: Revenue Group > Fiscal Group or Macroeconomic Group > around 30 per cent then separated from the Treasury; Markets Group > Fiscal Group > around 30 per cent then separated from Treasury and 17 per cent transfer on to Macroeconomic Group; Fiscal Group > Revenue Group > around 40 per cent then separate from the Treasury; Macroeconomic Group > Is least likely to have graduates transfer with 77 per cent of MEG graduates having either remained with the group since commencement or terminated without transferring. Average time to transfer between groups after commencing with the department has been declining since the 2000 graduate cohort from just over three years to just under two years. The effect of the introduction of graduate rotations within the graduate program on internal movement post 2012 will be monitored. 14

Current and Future Capabilities Organisationally, the Treasury has identified six workforce capabilities deep understanding (understanding our mission, the economic and policy environment, and the views of our stakeholders); influence and reputation (building trust with our ministers, other organisations and stakeholders, and influencing the policy agenda); collaboration (collaborating with internal and external stakeholders to develop effective policy); improvement and adaptability (being flexible, adaptable and innovative); proactivity and vision (anticipating policy, implementation and organisational issues); and efficiency and productivity (managing costs, allocating resources, and enabling efficiencies). Sustaining and developing these capabilities is critical to high-quality policy advice, administration and implementation. The Treasury s Performance Management System (PMS) focuses on developing individual capabilities which underpin organisational performance. The key strategies used to develop and sustain these key organisational capabilities are outlined in Attachment A. The Strategic Review of the Treasury concluded that overall, the Treasury is relatively well placed to continue to deliver on its mission. Treasury staff have a good mix of skills and capabilities which allows the department to consistently produce accurate and thorough policy advice to the Government. The Treasury is considered a leader in applying rigorous economic and analytical frameworks to a variety of public policy issues. The department s strengths are its conceptual and analytical frameworks; quantitative, economic and modelling skills; and taxation and market regulation expertise. However, to remain influential and sustain high standards of delivery, the Strategic Review found that the Treasury needs to maintain and build the skills and capabilities of staff. In particular, the Strategic Review found that the Treasury needed to enhance staff engagement skills outside normal transactional consultation processes, better understand how businesses operate and make decisions; embrace innovation and use information technology tools; and enhance project and program management capabilities. During workforce planning consultations, managers did not identify any critical capability gaps and emphasised similar areas of focus to those raised in the Strategic Review. This included an increased emphasis on project management, quantitative skills, modelling development and design, public sector accounting, and a greater understanding of financial markets. Managers also indicated that the department would benefit from staff with increased business numeracy, improved strategic thinking and a better understanding of the global and geopolitical environment. They also raised the importance of staff with leadership and management skills. Strategies The people strategies for 2012 to 2016 are designed to increase the department s capabilities and capacity to meet expectations and deliver its outputs while downsizing. The strategies are responses to the department s operating environment, analysis of the current workforce and workforce trends and identified risks. The people strategies are focused on the four themes of recruitment, development, mobility and inclusiveness. 15

Recruitment Recruitment strategies are critical to maintaining an innovative and diverse organisation. A recruitment freeze limits the opportunities to refresh and renew the workforce. The overall reduction in external recruitment will be balanced with the targeted engagement of new employees. With fewer opportunities for new engagements, new employees will be selected to enhance the capabilities and experience of the department s current workforce. Graduate recruitment will continue. Graduate numbers will be less than in previous years, where the program was key to the department s growth. Graduates are well-qualified and high potential entry level staff. They have the ability to quickly learn and develop and to progress through the department. Severely restricting the size of the program in the past had subsequent negative consequences, with staff shortages apparent at particular levels over a long period of time. Maintenance of the program is critical to ensure a skilled and diverse future workforce. External recruitment will be limited during the downsizing phase. Bulk rounds will continue and the department will select a small number of staff with the experience and skills at a more senior or specialised level than is provided through graduate recruitment. Strong controls around external recruitment will be managed through the People Committee. The People Committee will consider the requirement for and will approve targeted recruitment of specialist skills where necessary. When the department moves past the downsizing phase, there will be fewer requirements for central control. More flexible recruitment practices will be used to meet short-term or specific capability and capacity requirements. This will not commit the department to a permanent increase in staff numbers. The use of temporary transfers and non-ongoing contracts are particularly important for the G20 where the requirement for specific skills and additional staff is for a specific purpose and period only. Development Career and professional development increase the capability of individual staff and the overall capacity of the department. Career development is also an important element of retention. The Treasury must retain the staff it needs. Capable and experienced employees are the most likely to be able to change employers in a competitive labour market. They are also of highest value to an organisation as it reduces overall staff numbers. The Progressing Women initiatives, and the department s career development and talent and leadership systems, will enable staff to develop their individual skills and support the Treasury to remain a high performing organisation. The current systems are being reviewed to implement an effective and holistic career development system. This will focus on talent and leadership development that assists staff to achieve their potential. A mentoring system is being introduced as part of the improved talent and development framework. This includes both formal and informal mentoring. Staff whose career goals and interest would benefit from experiences outside the department should be supported to move to develop their own careers. 16

Graduates will represent a high proportion of new staff. The representation of graduates across the department will increase. As a result, the leadership pool will be increasingly dominated by Treasury graduates with limited external experiences to draw upon. Graduates are typically recruited directly from university and the Treasury is their first professional workplace. Career development opportunities therefore need to be focussed on broadening the experiences of staff recruited through the graduate program using options such as building on the department s existing external secondments to other APS agencies and to the private sector. Graduate rotations increase workforce experience. Rotations were implemented in 2012 and are a graduate development mechanism that increase graduate s breadth of experience and creates strong working relationships across the department. Current graduates identified long term benefits through the rotation model with its emphasis on experiential learning across different Groups. The development outcomes and satisfaction with managers and graduates will be formally reviewed after three years. Graduate and manager feedback will inform ongoing monitoring. The department s leadership pool needs to be diverse and provide the department with senior staff who have a depth and breadth of relevant experience. This will require a consistent, but select, augmentation of our existing leadership pool. Leadership and development opportunities will target a broad range of staff. The Progressing Women initiatives are significant to ensuring this outcome. The focus on developing a more inclusive workplace develops capabilities and improves the opportunities for current and future staff to innovate and contribute to the work of the department. Projects which are important for the Progressing Women agenda include the PMS refresh, the roll out of unrecognised bias awareness training, the promotion of more flexible working arrangements, and by exposing Treasury staff to alternative leadership styles and attributes through the leadership series. In concert, these initiatives will broaden and diversify the department s leadership pool and will ensure it remains innovative and influential. No critical capability gaps were identified through the Strategic Review or by managers during workforce planning consultations. Areas for further emphasis were identified and are being addressed. A project management pilot is underway to develop a course that suits the department s needs. Significant progress has been made to develop the department s stakeholder engagement capabilities beyond transactional consultation practices. Staff will continue to participate in workshops identifying consultation tools and approaches as part of the department s emphasis on doing business through collaboration with stakeholders. The PMS Refresh has emphasised the importance of fair and consistent appraisals to staff development and the importance of actively managing performance. A downsizing environment provides career development opportunities through increased exposure to different work, to working within different teams, through greater leadership opportunities and by fostering increased innovation across the department. The PMS Refresh has increased staff focus on performance and has provided guidance and training to all staff and managers about discussing and appraising performance. This has fostered more active 17

Mobility performance management and increased the emphasis on addressing performance. Managers will be encouraged to provide clear and timely informal feedback that enables individual staff to continue to develop. The PMS Refresh has not ended with the finalisation of training but is ongoing. In this context, the momentum gained by the PMS Refresh will be harnessed to ensure the system is applied fairly and consistently, which is a key driver of high performance. Reducing resources requires a workforce that is adaptive, responsive and flexible. Some staff may need to be moved on short notice and for short periods to address capability and capacity gaps. This requires an agile workforce which has mobile capability and capacity and can be shifted to priority projects or areas experiencing peaks in workload. Some managers have commented that the peaks in workload are becoming higher and longer-lived and that troughs are less obvious and of less duration than had previously been the case. In an operating environment facing constrained resources, the department will continue to develop and identify staff with the ability to think flexibly and with the resilience to adapt quickly to new working environments and uncertainty. Internal transfer rounds and expressions of interest will facilitate the movement of staff resources quickly on either a permanent or short-term basis and across multiple projects or divisions. Mobility should be balanced with the development of deep capabilities. In these cases, staff mobility may be structured over longer periods to develop the depth of knowledge and experience required. It will also be important to deploy staff with specialised skills where these are a priority across the department and may be necessary to move staff to areas where they can continue to develop their skills. An agile workforce also requires well developed knowledge management and knowledge transfer systems. These systems ensure that staff who move into an area or are placed on a project for a short period can get up to speed more quickly. Effective knowledge management and transfer also ensure that the department can capture and access the experience and knowledge of staff who have been in a role or division for a longer period. The movement of staff within the Corporate Strategy and Services Group may be limited due to the range of specialist technical skills required in this Group. These include information technology, contracting and procurement, human resources, and parliamentary, media and event management skills. However, specialised corporate skills in event management, logistics and project management are directly relevant to the work of G-20 and staff with these skills will be moved to assist with the delivery of the G-20. This makes use of internal capability without an increase in permanent staff numbers. Further operational skills for the G-20 will be secured through temporary transfers and non-ongoing contracts where possible to ensure the department secures an appropriate skill set for the duration of the G-20. Inclusiveness The Treasury s capabilities will be strengthened by more explicitly valuing diverse and complementary leadership behaviours and by building a more inclusive workplace. The Progressing Women initiatives will provide the Treasury with a sound foundation for building a more inclusive workplace. These initiatives are even more important during a downsizing phase, as 18

the overarching aim is to create satisfying jobs and career pathways that all staff value, at all levels and in all work areas. Progressing Women comprises a suite of strategies including: Leadership, governance and accountability; Workplace policies; Training and networks; Performance assessment and career development; and Measuring success. An Inclusive Workplace Committee has been established as a decision making body to address the Progressing Women initiatives and which includes representatives from the private sector and is accountable for achieving outcomes. The Treasury s target is around 35 per cent female representation in the SES by 2016. Projects which are important for the Progressing Women agenda include the PMS refresh, the articulation of the new talent and leadership system, the roll out of a formal mentoring scheme, the roll out of unrecognised bias awareness training for staff, the introduction of a leadership series which provides Treasury staff with information about different leadership styles and attributes, and the establishment of a flexible working forum which will develop options to support a high performing and flexible workforce. Governance The People Committee has oversight of workforce planning activities and is responsible for reviewing draft workforce plans and consulting with groups before plans are provided to the Board. In accordance with the governance framework, the strategic plan will be refreshed at the beginning of the 2013-14 financial year and will be reviewed at the beginning of the 2014-15 financial year for the period 2014 to 2018. The Strategic Workforce Plan will be adjusted to meet any new and emerging trends and departmental requirements. Monitoring, Evaluation and Review Metrics to evaluate progress against the Treasury Workforce Plans will be drawn from a range of sources, including Aurion, the APS State of the Service Reports, APS State of the Service Employee Census, and comparisons to benchmarks in the Treasury Workforce Planning Data Set. Reports will be provided to the People Committee and the Executive Board regularly and as required to ensure that the department continues to closely monitor its workforce. The strategies will then be refined to address any significant changes. In the longer term the success of the Strategic Workforce Plan will be evaluated through the measuring success project. Conclusion Once the above building blocks are in place, these strategies will provide a fully articulated people strategy for the Treasury which will help us manage the challenges associated with the downsizing of the department while maximising opportunities for staff development and ensuring valued and rewarding work for all staff. 19

Attachment A Treasury s Organisational Capabilities and the key strategies used to develop and sustain them. Our capabilities Deep understanding Understanding our mission, the economic and policy environment, and the views of our stakeholders. Influence and reputation Building trust with our ministers, other organisations and stakeholders, and influencing the policy agenda. Collaboration Collaborating with internal and external stakeholders to develop effective policy. Improvement and adaptability Being flexible, adaptable and innovative. Proactivity and vision Anticipating policy, implementation and organisational issues. Efficiency and productivity Managing costs, allocating resources and enabling efficiencies. Sustaining and developing our capabilities Building a thorough and shared understanding of our identity, mission, value-adding role, priorities and frameworks. Applying a whole-of-economy approach to our advice and analysis. Understanding our policy environment and the viewpoints of clients and stakeholders. Anticipating emerging issues. Comprehending what policies are set out to do, their alternatives, their impacts and their implementation. Drawing on international policy approaches and experiences. Establishing, maintaining and using internal and external networks. Building economic, legal, accounting and other technical expertise and capacity, including economic modelling. Developing quantitative expertise. Developing and maintaining corporate memory through updating blueprints, developing procedural manuals and effectively using knowledge and information management systems. Adopting innovative and authoritative thinking, based on high-quality research, analysis and development, and use of best practice frameworks and tools. Providing authoritative advice on fiscal and economic numbers. Enhancing conceptual and analytical capacities to ensure frameworks and tools are at the forefront of international developments. Contributing to public debate. Providing compelling policy advice. Developing relationships with stakeholders based on two-way communication and mutual respect. Engaging ministers and stakeholders early in policy development. Applying quality assurance processes in our work. Establishing and participating in forums to support and drive creativity and innovation. Appropriately sharing knowledge and information across Treasury, including with overseas posts. Responding to stakeholder input. Building effective relationships with external stakeholders to influence policy directions. Finding new, lateral and savvy approaches to solving problems, including long-term perspectives. Being able to respond rapidly to new priorities. Collaborating, coordinating and communicating. Accepting different views, and challenging and testing current approaches. Evaluating our work and acting on what we learn. Using and refining frameworks, including for financial management, data management, forecasting and modelling, evaluation and risk management. Being proactive and forward-looking. Scanning the environment for opportunities and risks. Taking a strategic and long-term view to policy development and implementation and organisational support functions. Identifying risks and factoring risks into planning processes. Forewarning ministers about risks. Ensuring policy is informed by the experience of Treasury officers and stakeholders. Improving output quality and system streamlining, including through managing knowledge, being flexible in the use of expertise, building skills and simplifying processes. Investing in data, systems and technology to improve quantitative analysis across the portfolio. Ensuring resource allocations are well informed, consistent with Treasury s mission and responsive to changing priorities, including risk management. 20