Executive Summary

Staff numbers in the Public Service are down on an annual basis for the first time since 1999, and the increase in average salary has dropped back significantly to 1.5 percent (down from the historical highs of 5.0 to 6.0 percent during the previous four years). Public Service wage and salary increases during the 12 months to June 2010 were lower than the private sector.

Departments are starting to make hard decisions that affect the size and composition of their workforce; 780 public servants were made redundant this year (up from 301 in 2009). The number of employees resigning has fallen significantly, with a corresponding increase in the average length of service; public servants are staying in their jobs for longer and 43 percent of new hires are on fixed term employment agreements.

These factors, coupled with external changes in the labour market, impact on many of the survey results which are summarised below:

_ In the year to 30 June 2010, the number of Full Time Equivalent (FTE) employees in the Public Service decreased by 118 to 44,554 (down 0.3%). This was the first June to June decrease since 1999.

_ In the year to 30 June 2010, 780 employees in the Public Service were made redundant; an increase of 479 from the previous year. The 780 redundancies were offset by an increase of 736 FTEs in uncapped parts of Corrections (581) and the Ministry of Social Development (155).

_ The average redundancy payment was $48,891. The average length of service of employees made redundant was 13.6 years (up from 10.0 years in 2009).

_ The average base salary increased by 1.5 percent to $63,655 (the average base salary increased by 5.3% in 2009). The median base salary for public servants as at 30 June 2010 was $54,981 ($54,529 in 2009).

_ Wages and salaries in the Public Service are increasing at a slower rate than the private sector. Statistics NZ's Labour Cost Index (LCI) recorded an increase of 0.5 percent in Public Services wages and salaries during the year to the June 2010. Over the same period, private sector wages and salaries increased by 1.5 percent.

_ Performance pay is more targeted than in previous years, with fewer public servants receiving payments but these payments are of higher average value. Twenty six departments made performance payments, but only 4 percent of public servants received them (down from 11% in 2009).

_ Core unplanned turnover (resignations, retirements, dismissals, and deaths of open term employees) for the Public Service as a whole dropped by 1.5 percentage points over the year, to a historical low of 9.2 percent (10.7% in 2009). The turnover rate dropped to around 8 percent in the first six months of the 2009/10 financial year, and then increased to around 10 percent in the second six months.

_ Turnover dropped in 25 of the 35 departments, with decreases ranging from 0.5 to 11.6 percentage points.

_ In the year to 30 June 2010, 7263 employees were recruited into the Public Service. This is the lowest number of new recruits recorded since the survey began and represents a drop of 19 percent from the previous year. The proportion of new employees on fixed term contracts rose to 43 percent in 2010 (up from 38% in 2009).