Executive Summary

Strong Employment Growth. Growth in Public Service employment has been stronger than in any of the preceding three years. The total number of public servants increased by 10% or 3,420 people. After adjusting for changes to the scope of the survey, the total number of permanent employees increased by around 1,900 (6%).

Public Service pay gap reduces. Pay increases in the Public Service over the past year have reduced the gap in salaries between the Public Service and the labour market as a whole.

High uptake of Superannuation scheme - especially among older and more highly paid staff. With the introduction of the State Sector Retirement Savings Scheme (SSRSS) 51% of public servants are now members of an employment-based retirement savings scheme, compared with 14% prior to the introduction of the SSRSS. Older employees and more highly paid employees were the most likely to join the SSRSS.

Turnover rates stable. Turnover rates have remained similar to those in the past few years. Unplanned turnover rates in departments averaged 12% compared with 11 % for the previous year and similar rates for the three years before that. Total turnover rates (including fixed-term staff) have been slowly decreasing.

Mixed picture for EEO groups. There has been an increase in the number of women and Asian people in the Public Service, while the representation of Māori and Pacific peoples has been fairly constant for the past few years (reflecting wider labour market trends). The proportion of senior managers (and managers generally) who are women has increased steadily since 1998, while the representation of Maori, Pacific, and Asian groups in senior management positions has been stable or slightly falling over the past 2-3 years.

Gender pay gap unchanged. The gender pay gap in the Public Service was less than half that in the labour force as a whole, once differences in occupational structure were taken into account. The gender pay gap in the Public Service in 2004 was about the same as that in 2003.

Collective bargaining steady. The proportion of employees covered by current Collective Agreements (CAs) has risen from 48% to 51% due to a fall in the number on expired collectives.

Ongoing skill shortages confirm tight labour market. Many departments continue to report recruitment difficulties and skill shortages. Most reported that they had difficulty matching remuneration levels elsewhere in the labour market, including those of other Public Service employers. These pressures were exacerbated by the tight labour market.

Background

This paper presents labour market information on the Public Service, as at 30 June 2004. It is set against a backdrop of generally tight labour market conditions across the economy, with high levels of skill shortages and wage growth, and historically low levels of unemployment.

The information comes mainly from the Human Resource Capability (HRC) survey, which gathers anonymous unit-record data on staff 1 in Public Service departments. This year, the HRC survey data have been supplemented by data from the survey of collective employment agreements carried out by Victoria University. This survey provided further data on around 15,500 Public Service employees (or 80% of those on current collective agreements). The report also includes data from Statistics New Zealand's labour market surveys.

Staff Numbers

The number of permanent staff in the Public Service increased over the year to 30 June 2004 at a higher rate than in previous years. Table 1 below shows that the total number of public servants has increased by 10% over the past year. Permanent (open-term) staff increased by around 1,900 employees (6%) once changes to the scope of the survey 2 were taken into account. This was around twice the rate of increase during the 2002/03 year. 31 departments increased in their number of permanent staff, while four departments decreased in size (see Appendix 1).

Table 1: Public Service Employment 2003 - 2004

             
 

Open-term

Fixed-Term

Total

FTE

Headcount

FTE

Headcount

FTE

Headcount

2004

33,131

34,477

2,514

3,388

35,645

37,865

2003

31,107

32,200

2,012

2,245

33,118

34,445

% change

7

7

25

51

8

10

Employment in the State sector as a whole has increased by 3%, in line with the overall growth in jobs in the labour market 3 .

Pay Movement

Figures 1 and 2 below show the different long-term and short-term patterns in pay movement in different sectors. Figure 1 shows the Public Service falling behind the private sector and other parts of the State sector through the mid to late 1990s. Figure 2 shows that this trend has changed since 2002. Public Service pay increases since 2002 exceeded those in the private sector and were similar to those in the public health sector. Pay increases in the education sector continued to be higher than in other parts of the State sector.

Figure 1: Pay movement 1994 - 2004

""

Source: Statistics NZ - Labour Cost Index - All Salary and Wage rates

Figure 2: Pay movement 2002 - 2004

""

Source: Statistics NZ - Labour Cost Index - All Salary and Wage rates

In the past year, permanent public servants who remained in the same job received an average pay increase of 6.1% (4.8% in 2003) - compared with estimates of between 3.8% and 5.1% for the labour market as a whole.

The effect of these movements has been to reduce the gap in salary levels between the Public Service and the labour market as a whole. At the median Public Service job size, salaries across the labour market were paid around 4% (7% in 2003) more than Public Service salaries. The gap continues to be wider for larger jobs than for smaller jobs.

Superannuation

As at 14 July 2004, 14,373 public servants had joined the State Sector Retirement Scheme (SSRSS). This was equivalent to 46% of the group eligible 4 to join the SSRSS in the Public Service.

Prior to the introduction of the SSRSS about 14% of the public servants were in an employer subsidised superannuation scheme, with 49% of this group being members of GSF. The proportion of public servants on employer subsidised superannuation schemes increased to 51% after the introduction of the SSRSS.

There was little difference in uptake of the SSRSS by gender, with the uptake by males only slightly higher at 47% compared to 45% for females. There was higher uptake among higher salary groups, with 56% uptake for those earning $50,000 or more, compared to 42% for the group earning less than $50,000.

Figure 3: SSRSS Uptake by Salary Group

""

Uptake of the SSRSS was lower in the younger age groups. For those aged less than 40 years, the uptake was 41% compared with 50% for those aged 40 years or over. Higher paid employees tend to be older, but for all salary groups the uptake is greater for the older age groups.

Figure 4: SSRSS Uptake by Age Group

""

Associate professionals, the largest occupation group in the Public Service, had the lowest uptake (37%) for SSRSS. Professionals, managers and the science/technical occupation groups had the highest levels of uptake for SSRSS (54%-55%).

By ethnic group, Pacific peoples had the lowest uptake (33%) and the Asian group had the highest uptake (56%). Although Pacific public servants are generally a younger and lower-paid group than non-Pacific public servants, the uptake of SSRSS was still lower for older Pacific peoples and Pacific peoples on higher salaries than non-Pacific peoples in these groups.

Nelson was the region with the highest level of uptake (56%) and Auckland the lowest (37%).

Collective Bargaining

The proportion of employees covered by current collective agreements has risen from 48% to 51% due to a fall in the number on expired collectives from 8% in 2003 to 3% in 2004. 58% of employees were union members, the same level as last year.

56% of employees on current collectives were covered by agreements that did not contain wage rates. The remainder contained a mix of discrete wage rates, such as steps, and references to ranges of pay rates. These references included links to general remuneration systems that covered employees outside the specific collective agreement.

Gender Pay Gaps

Because pay varies considerably between occupations, simple pay gap comparisons between sectors that have different occupational compositions are problematic. Controlling for the effect of the occupational structure of the Public Service gives an adjusted gender pay gap 5 of 8% 6 in the Public Service, compared with 17% for the labour force 7 as a whole. While this is larger than last year's Public Service figure of 6% 8 , this is mostly due to changes to the scope of the survey. If these employees are excluded, the adjusted gender pay gap in 2004 remained at 6%.

As in 2003, just over half the unadjusted gender pay gap in 2004 could be attributed to men working in larger-sized jobs, as measured by established job evaluation methods. However, 27% of the gap was attributed to the occupations women tended to work in being paid less than those men tended to work in, even after factors such as job size, length of service and age were taken into account.

Pay Gaps for Ethnic Groups

For Māori, the occupation-adjusted pay gap in the Public Service was 6% (6% in 2003 9 ) and 10% (9% in 2003) in the labour force as a whole. For Pacific peoples, the gaps were 10% (9% in 2003) in the Public Service and 14% (15% in 2003) in the labour force. The occupation-adjusted pay gap for Asian public servants was 5% (5% in 2003). Figures for Asian peoples in the labour force are not available.

The younger age profile of each of these ethnic groups in the Public Service (and the wider population) has an effect on pay gaps. When the pay gaps were adjusted for age and occupation, the pay gaps in the Public Service fell to 5% for Maori, 7% for Pacific peoples and 5% for Asian peoples. Comparable figures for the labour force are not available.

There are also gender pay gaps (adjusted for age and occupation) within different ethnic groups in the Public Service:

  • Māori women were paid on average 3% less than Māori men and 11% less than all men
  • Pacific women were paid 3% less than Pacific men and 13% less than all men
  • Asian women were paid 3% less than Asian men and 12% less than all men.

Employment Stability and Security

The Public Service is still characterised by long-term and largely full-time employment relationships. Tenure patterns in the Public Service have not changed much over the five years since comprehensive turnover data have been available. Around a third of public servants have already been with their department for more than ten years, and around half of the rest of the employees are projected to also reach ten years service before they leave. Turnover rates tend to be much higher for younger employees.

Turnover

The core unplanned turnover 10 rate for the Public Service was 12% (13% for women, 10% for men) for the year to 30 June 2004. The unplanned turnover rate has been stable over the five years that this measure has been available, while the gross turnover rate (which includes people on fixed-term employment) has been slowly decreasing.

Managers, and Personal and Protective Services Workers (mainly Prison Officers) have had relatively low turnover, while other groups such as Professionals and Office Clerks have had turnover rates consistent with the overall Public Service rate. In 2004, the two smallest groups, Customer Services Clerks and Trades and Production Workers (who together employ 5% of permanent public servants), had the highest turnover rates.

Redundancy

The number of people who received redundancy payments 11 has continued on the downward path that has been evident for the last four years. In the year to June 2004, 168 people received redundancy payments, the lowest number since data on redundancy payments began being collected in 1991 and down from 188 in 2003. These payments had an average value of $37,133, down from $42,804 in 2003.

Part-time Employees

9% of public servants worked part-time 12 (less than 30 hours per week) compared to 25% of employees in the labour force 13 .

Parental Leave

452 employees completed a period of parental leave during the year to 30 June 2004 14 . 55 (12%) of these were men. The average length of parental leave for women was 201 calendar days compared with 34 days for men. All but seven of the men took six weeks leave or less, and only one took more than 12 weeks parental leave.

19% of the women taking parental leave took 12 weeks or less. The average salary of women taking up to 12 weeks parental leave was around $900 higher than those who took more than 12 weeks parental leave.

Annual Leave

74% of permanent public servants were entitled to four weeks annual leave or more.

Recruitment Difficulties, Skill Shortages and Skill Gaps

Eighteen departments reported recruitment difficulties in the year to 30 June 2004. Remuneration continues to be the most common recruitment barrier across departments. Departments reported difficulty competing with private sector rates for occupations such as call centre operators, managers and communications staff, and competing against remuneration rates within the Public Service for some occupations such as policy analysts.

The tight labour market was also reported as a barrier to recruitment with low numbers of applicants, particularly for frontline positions. Some departments recruit from the same labour pool as the construction and transportation industries where there has been considerable growth in employment and wages in recent years.

Skill shortages exist when employers have difficulty filling vacancies for positions where pay and conditions are reasonable. The most commonly reported skill shortage was for policy analysts, particularly senior policy analysts. It was reported that there was strong competition in a small labour market and a lack of suitably qualified and experienced candidates available for senior policy positions.

Other skill shortages reported by more than one department were for HR advisers, analysts, administrative staff, health and safety advisers, psychologists and a range of IT positions.

Reported skill shortages that were department specific were prison officers, community probation service managers, social workers and social work supervisors, veterinarians, food technology professionals, legal secretaries, archives analysts, speech language therapists, advisers in early childhood education and statistical methodologists.

Common methods reported for dealing with skill shortages were using contractors, secondments, recruiting from overseas, and internal training.

Management skills were the most commonly reported skill gap. Some departments had developed internal leadership development programmes to address these problems. A lack of policy capability was the second most commonly reported skill gap. General causes for the gap were a lack of: experience, quantitative skills and subject matter knowledge. Some departments reported a lack of knowledge and expertise in the Treaty, Māori and Pacific issues and language.

The tight labour market, and competition for staff in occupations common across agencies in the Public Service, were the most common factors departments expected to have a significant impact on future capability. These factors were expected to compound remuneration pressures, with some departments continuing to find their remuneration levels not competitive enough to attract or retain good staff. Changes in government policy, service delivery and technology were also commonly reported as factors that would affect future capability.

Equal Employment Opportunities

Table 2 below shows the overall representation of EEO groups in the Public Service and the employed labour force (where available). The Public Service continues to employ high proportions of EEO group members when compared with the employed labour force. While the representation of each of these groups in the Public Service has increased since 1998, these increases have been broadly in line with the change in their representation in the wider workforce. The proportions of Māori and Pacific peoples have levelled out over the past three years, also in line with wider labour market trends.

The relatively high proportion of women in the Public Service occurs mostly because the Public Service employs people in occupations that women tend to work in (such as social workers, case workers and clerical staff).

Māori had a high level of representation in the Public Service across all major occupation groups when compared with the labour force as a whole. The picture was more mixed for Pacific peoples, who were highly represented in the clerical, associate professional and manager groups.

Table 2:  Representation of EEO Groups 1998-2004

                   

EEO Groups

1998

1999

2000

2001

2002

2003

2004

     

%

%

%

%

%

%

%

Ethnicity 15

Maori

Public Service

15.5

16.1

16.9

17.0

17.6

17.4

17.3

Employed Labour Force 16

9.2

8.7

10.2

9.8

10.7

10.6

9.8

Pacific peoples

Public Service

5.9

6.2

6.6

6.6

6.8

7.1

7.1

Employed Labour Force

4.3

4.8

4.8

4.5

5.2

5.2

5.2

Asian peoples

Public Service

3.0

3.0

3.3

3.4

3.6

4.1

4.7

NZ European/Pakeha

70.1

71.4

70.5

69.8

69.0

68.8

67.7

Non-NZ European

14.2

12.6

12.6

12.7

13.5

13.0

12.3

Other Ethnic groups

1.8

1.5

1.4

1.3

1.5

1.4

1.7

Women

Public Service

54.5

56.3

56.2

56.5

57.5

57.8

59.0

Employed Labour Force

48.5

49.1

49.0

49.3

49.1

49.2

48.5

Robust data on people with disabilities in the Public Service are not available for 2004. In 2001, the Public Service employed a high number of people with disabilities (18.5%) compared with the labour force as a whole (14.6%), based on Statistics NZ's 2001 Disability Survey.

Table 3 below shows that the proportion of senior managers who are women has been increasing fairly steadily since the data began being collected in 1998. But the representation of the other groups shown in Table 3 has tended to fall over recent years. While 47% of new senior managers over the past year were women and 17% were Maori, these two groups also left the senior management ranks at a fairly high rate. The net effect of this for a was a small reduction in the proportion of senior managers who are Maori, while for women it resulted in an increase of one percentage point.

Table 3: Representation of EEO Groups in Senior Management 1998-2004

                   

EEO Groups

1998

1999

2000

2001

2002

2003

2004

     

%

%

%

%

%

%

%

Maori

8.2

7.6

8.7

9.7

10.4

10.2

10.1

Pacific peoples

1.4

1.7

1.4

1.9

1.6

1.4

1.3

Asian peoples

2.4

2.2

1.8

1.6

1.4

1.4

1.3

Women

29.4

32.7

33.6

32.7

35.5

35.1

36.2

Appendix 1: Full-time Equivalent Number of Employees, 2002-2004

               

Department

Total FTE Staff - June 2004

Comparison With Previous Periods

Female

Male

Total

2003

% change

2004/2003

2002

% change

2004/2002

Agriculture & Forestry

545

810

1355

1291

4.9

1219

11.2

Archives

61

49

109

109

0.6

110

-0.8

Child, Youth & Family Services

1847

616

2462

2187

12.5

2154

14.3

Conservation

628

1210

1838

1763

4.2

1727

6.5

Corrections

1594

3026

4620

4285

7.8

4266

8.3

Crown Law Office

102

39

141

129

9.0

126

11.8

Culture and Heritage

37

33

70

57

21.6

54

30.3

Customs

401

638

1039

838

24.0

771

34.8

Defence

21

36

57

52

8.1

49

14.6

Economic Development

362

339

700

653

7.2

725

-3.4

Education

1760

537

2297

1849

24.2

1742

31.9

Education Review Office

138

61

199

173

14.6

180

10.5

Environment

130

89

219

172

26.8

138

58.0

Fisheries

127

240

366

336

9.0

313

16.9

Foreign Affairs & Trade

323

313

636

622

2.3

610

4.4

Government Communications Security Bureau

74

202

276

253

-

-

-

Health

700

385

1085

1012

7.2

818

32.5

Housing

95

56

151

142

6.1

129

17.1

Inland Revenue Department

2910

1670

4580

4523

1.3

4418

3.7

Internal Affairs

572

491

1063

984

8.0

940

13.1

Justice1

1540

808

2348

2254

4.2

2160

8.7

Labour

754

569

1322

1199

10.3

1081

22.4

Land Information New Zealand

227

325

552

583

-5.3

614

-10.0

Māori Development

205

131

335

343

-2.3

302

10.9

National Library

251

107

358

357

0.4

364

-1.7

Pacific Island Affairs

23

30

53

44

20.5

42

26.2

Prime Minister & Cabinet

57

53

110

105

4.9

103

6.7

Research, Science & Technology

39

23

62

59

5.5

49

28.6

Serious Fraud Office

16

17

33

33

2.5

33

0.6

Social Development

4240

1662

5903

5485

7.6

5085

16.1

State Services Commission

95

60

155

154

1.1

153

1.4

Statistics New Zealand

345

345

690

604

14.4

654

5.6

Transport

43

30

74

68

8.2

66

11.7

Treasury

154

175

330

326

1.2

307

7.4

Women's Affairs

24

1

25

20

21.9

32

-21.9

Youth Affairs2

-

-

-

20

-

21

-

Total3

20447

15195

35643

33118

7.6

31585

12.8

1 For 2003 and 2002, the figures combine the previous Ministry of Justice and Department for Courts

2 Incorporated into Social Development 1 October 2003

3 Includes chief executives, who are not included in the departmental figures, and staff whose gender was unknown.

Appendix 2: Collective Bargaining and Employment Term - June 2004

           

Department

% of staff

% of staff

IEA

CA

Expired CA 1

Open-term

Fixed-term

Agriculture & Forestry

47

53

0

95

5

Archives

30

70

0

84

16

Child, Youth & Family Services

40

60

0

89

11

Conservation

39

61

0

85

15

Corrections

35

61

5

96

4

Crown Law Office

84

0

16

90

10

Culture and Heritage

61

39

0

73

27

Customs

29

71

0

99

1

Defence

100

0

0

93

7

Economic Development

72

28

0

96

4

Education

57

39

3

67

33

Education Review Office

30

70

0

95

5

Environment

51

49

0

91

9

Fisheries

73

0

27

95

5

Foreign Affairs & Trade

30

70

0

94

6

Government Communications Security Bureau

40

60

0

99

1

Health

86

13

1

87

13

Housing

50

50

0

94

6

Inland Revenue Department

30

70

0

97

3

Internal Affairs

59

41

0

93

7

Justice

44

47

10

92

8

Labour

65

35

0

92

8

Land Information New Zealand

47

0

53

94

6

Māori Development

97

0

3

86

14

National Library

37

63

0

91

9

Pacific Island Affairs

100

0

0

100

0

Prime Minister & Cabinet

100

0

0

80

20

Research, Science & Technology

100

0

0

88

13

Serious Fraud Office

100

0

0

100

0

Social Development

37

63

0

95

5

State Services Commission

100

0

0

87

13

Statistics New Zealand

63

0

37

88

12

Transport

100

0

0

97

3

Treasury

100

0

0

99

1

Women's Affairs

52

48

0

93

7

Total 2

45

51

3

92

8

1 Includes agreements that have been expired for more than 12 months but which are still in active bargaining.

2 Includes chief executives, who are not included in the departmental figures.

1 The survey includes all permanent and temporary employees but does not include employees who work on a casual or as-required basis.

2 1035 employees in the Ministry of Education and the Department of Corrections were reclassified from casual employees (outside the scope of the survey) to either permanent or temporary employees.

3 Statistics NZ, Quarterly Employment Survey - Total Filled Jobs, June 2004.

4 Employees who were eligible to receive an employer subsidy through the SSRSS were open term staff who were either not in a superannuation scheme prior to 1 July 2004 or were in a superannuation scheme with an employer contribution less than the SSRSS employer contribution (including withholding tax). None of the figures in this section include employees who joined the SSRSS but were not eligible for an employer subsidy.

5 The gender pay gap is defined as the difference between the average salary of women and the average salary of men, and is expressed as a percentage of the average salary of men.

6 The unadjusted gender pay gap in the Public Service in 2004 was 17% (16% in 2003), compared with 14% for the labour force as a whole.

7 Source: Statistics NZ, New Zealand Income Survey, June 2004

8 Figures for 2003 differ slightly from those shown in last year's reports due to recent corrections to the 2003 data supplied by departments.

9 Occupation-adjusted figures differ from those shown in last year's report due to changes in the method used.

10 Core unplanned turnover is primarily due to resignations of open-term employees, but also includes retirements, dismissals, and death. Planned turnover includes cessations of staff on fixed-term employment agreements and cessations due to restructuring. The turnover rate for the Public Service is derived from the exits from departments. As a result it includes movements between departments and so the actual level of "loss" to the Public Service through unplanned exits is below the 12% reported here.

11 Redundancy payments include severance payments and enhanced early retirements.

12 The increase on last year's figure of 6% was due to changes in the scope of the survey.

13 Source: Statistics NZ, New Zealand Income Survey, June 2004

14 This information has not been available in previous years.

15 Public Service ethnicity data double-counts people with more than one ethnicity, so that a person who is figures and Samoan will be counted in both Household and Pacific peoples. The labour force figures shown, which are sourced from Statistics NZ's Household Labour Force Survey (HLFS), use a priority reporting system that has the effect of slightly reducing the figure for Pacific peoples. Labour force figures for the remaining ethnic groups shown in Table 2 are not available from the NZIS. The figures shown are a percentage of people whose ethnicity is known rather than the total population.

16 Labour force figures in Table 2, and all other parts of this report, are based on the number of employees in the labour force (i.e. excluding the self-employed). This provides a more direct comparator to employees in the Public Service.

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