Workforce diversity

Public Service chief executives have committed to a collective vision of State Services that reflect, understand and value the communities they serve.The Public Service workforce needs to have the diversity and cultural competence to design and deliver customer-centred services to an increasingly diverse New Zealand.

Chief executives in collaboration with the SSC continue to demonstrate commitment by embedding their system-wide Diversity and Inclusion work programme to gain improvements in their agencies as well as in the system.While there is current focus on sharing statistical and best practice information, growing professional networks and communities of practice, and identifying opportunities for co-ordination and collaboration, further areas of work include taking a deeper dive into drivers of ethnic pay gaps, rainbow issues and exploring new approaches to addressing bias that reflect the latest evidence and design thinking. The SSC expects to report on this work and the results achieved over time.

The Public Service is committed to supporting all employees and building workforces and workplaces that better reflect the diverse community we live in and recognises the strategic imperative of inclusion and diversity, as not just a ‘right thing to do’ for equal opportunity or social justice, but because it also makes great business sense. To best serve our customers - the New Zealand public, our Public sector workforce also need to understand, value and reflect it.

Women participating at all levels in the Public Service

The representation of women in the Public Service workforce continues at a high level, with 60.9% of employees being female at 30 June 2018.This is the highest level since first measured in 2000 (56.2%).This compares with only 47.5% in the overall New Zealand labour force in the year to June 2018 (from Stats NZ’s Household Labour Force Survey).The type of work in the Public Service may partly explain this high representation as many Public Service occupations such as ‘Social Workers’, ‘Case Workers’ and ‘Clerical and Administration Workers’ also have a high representation of women in the wider labour market.

Female representation at the senior leadership level is lower than the proportion of women in the Public Service, but has increased strongly over the past decade.As at 30 June 2018, the percentage of women in the top three tiers of senior management was 48.8%, up from 38.4% in 2008 (see the following visualisation).

Building Diversity in Public Service Chief Executives

Of the 32 Public Service chief executives (CEs) at 30 June 2018, 14 were women (including two in acting roles). As at 30 June, women account for 44% of CEs, up from 41% in 2017 and 22% five years ago in 2013.

Unlike in the past where female CEs tended to occupy smaller roles, more of them are now appointed to larger jobs. Their average job size increased by 15% between 2016 and 2018, with the job size gap below their male colleagues narrowing to an average gap of 6% across 2018, compared to a 27% gap in 2016.

At as 30 June 2018, ethnic diversity amongst the CEs comprises 93.1% European, 17.2% comprises and 3.4% Pacific Peoples (these add to more than 100% as it includes those with multiple ethnicities).

The Public Service is ageing

The proportion of the Public Service workforce that is 55 years or older has increased over the last 18 years, from 10.3% in 2000 to 24.2% in 2018.This broadly reflects what happened in the overall New Zealand labour force where the proportion of workers aged 55 years and over went from around 12% to 23% over the same period.

However, the proportion of the Public Service workforce that is 55 years or older is slightly lower than last year, suggesting that the ageing of the workforce has slowed.Contributing to this is the relatively large increase in in the Public Service workforce over the past year.New recruits are generally younger than the existing workforce.The average age of those recruited into Public Service departments in the year to 30 June 2018 was 37 years, compared to 46 years for the existing workforce.

The following graph shows that for most occupational groups the average age has increased over the past decade.However, the rate of the increase has slowed over the past few years, with Policy Analysts and Inspectors and Regulatory Officers actually getting younger on average.Pacific and Asian employees have a younger age profile than European staff and this may contribute to greater diversity in the Public Service in coming years.

Increasing ethnic diversity

There is increasing ethnic diversity in the Public Service.Although Europeans still made up the highest proportion (69.2%) in 2018, this has decreased steadily over the past 18 years. past representation (16.0%) in the Public Service workforce continued at high levels compared to the overall New Zealand labour force (12.8% in the year to June 2018).There was a strong increase in the representation of Asian (10.1% up from 9.4% last year) and Pacific (9.1% up from 8.7% last year) staff.Contributing to this is likely to have been the relatively large increase in in the Public Service workforce over the past year.New recruits tend to be more ethnically diverse than the existing workforce, and the share of those recruited into Public Service departments in the year to June 30 2018 that were Asian or Pacific (12.4% and 9.6% respectively) was more than for the existing workforce.

The increase in Asian and Pacific staff is particularly pronounced in Auckland where they comprised 21.6% and 22.5% of Auckland Public Service employees in 2018 respectively.However, while Pacific staff are well represented compared to the overall labour force (where they make up 6.1% of the labour force), Asians continue to be under-represented (they make up 14.1% of the overall labour of Pacific and Asian ethnicities are still under-represented in the top three tiers of Public Service management.This will take time and deliberate effort to increase as non-European ethnicities are also under-represented at lower levels of management.The lack of ethnic diversity in management is a key challenge.

There are other ethnic differences in terms of Public Service occupations.European staff are over-represented as Managers and Policy as and Pacific staff are well represented as Inspectors and Regulatory Officers, and as Social, Health and Education Workers but less so in other professions.Pacific and Asian staff are highly represented as Contact Centre Workers and Asian staff as ICT Professionals and Technicians.

The SSC obtained customised 2006 and 2013 census data from Statistics New Zealand to get a better picture of migrant flow into the Public Service.Around 25% of Public Service employees in 2013 were born overseas, up from around 22% in 2006.This compares to 27.6% of all employed New Zealanders in 2013, 27.4% of those working in the private sector and 36%-38% of those working in health and State Sector tertiary education.Around 38% of Public Service employees in Auckland were born overseas.

Migrants who became New Zealand Public Service employees have come from over 50 countries. Commonwealth countries have provided the largest proportion of overseas-born public servants, led by the United Kingdom, Australia and South Africa, followed by India, Fiji and Samoa.By comparison, in the private sector a higher proportion of overseas-born employees have migrated from countries such as China, South Korea and the Philippines.

Disability in the Public Service

The HRC does not collect any data on disability in the Public Service.Instead, the SSC sources customised information on the Public Service from Stats NZ.Information from Stats NZ’s 2013 Disability Survey estimates the rate of disability in the Public Service to be 16%, lower than that for the overall workforce (19%), although this difference is not statistically significant.The Public Service has similar rates of sensory and physical disability, but much lower rates of psychiatric or psychological disability.The rate for disabilities caused by accident is low in the Public Service, which may be related to risk of injury being lower in a predominantly white collar context.The disability rate for managers and professionals is less in the Public Service compared to similar roles in the overall workforce.However, for other lower paid Public Service occupations, the disability rate is similar.

The SSC is working with Stats NZ and other relevant agencies to investigate developing practical guidance for employers around disability information.

Workforce information for the Rainbow communities

Rainbow is an umbrella term to describe people who are lesbian, gay, bisexual, transgender, lesbian, and intersex.

Earlier this year the Public Service rainbow network identified a key issue being the lack of information about the rainbow communities within the public service.

Findings from the Workplace Dynamics Survey 2016[2] indicate that around 7% of public servants identify as having a non-heterosexual sexual orientation, although this may be under-reported.Measuring the rainbow communities is important because we want our workforce to reflect, understand and value the diversity of the communities we serve.

Research shows some LGBTIQ+ people do not feel safe enough to be themselves at work because of their sexual or gender identity.A US study in 2014 identified that 53% LGBT employees are closeted at work and 35% feel compelled to lie about their personal lives while at work.[3]

Understanding if our people feel comfortable or safe bringing their whole selves to work is important as research shows working in a ‘gay friendly’ environment has a positive impact on job satisfaction and can lead to greater happiness, openness, confidence, work productivity and a feeling of loyalty and pride in the organisation.[4]

The SSC is addressing this lack of information by:

  • Improving agencies ability to collect this information by producing standards and guidance on workforce information.
    • This year the SSC released a new standard, and accompanying guidance, on workforce information.This sets an expectation that Public Service agencies shift to collecting information on what gender their employees identity with. Gender identity is how a person identifies their gender (Female, Male or Gender Diverse).
    • Stats NZ is finalising a Standard on collecting sexual identity/orientation data.Once completed, the SSC will issue guidance to support implementation of this Standard by the Public Service.This will help the Public Service collect this information in a standardised manner.
  • The SSC are also working with the Rainbow communities on developing a survey to measure gender and sexual diversity in the public service, and to measure aspects of inclusiveness within the Public Service for the Rainbow communities.This survey will be conducted in the first half of 2019.

Notes:

[1]Stats NZ (2014). Measuring the gender pay gap. Available from www.stats.govt.nz.

[2]Jones, D., Blumenfeld, S., and Plimmer, G. (2018, June) LGBTIQ+ experiences in the New Zealand Public Service (including some NGO and local government data).Presentation to State Service Commission, with PSA (Public Service Association, 26 June 2018.Work in progress.Deborah Jones,Stephen Blumenfeld and Geoff Plimmer, Centre for Labour, Employment and Work, Victoria Business School, Victoria University of Wellington.

[3]Human Rights Campaign Foundation (2014) The Cost of the Closet and The Rewards of Inclusion, https://www.hrc.org/resources/the-cost-of-the-closet-and-the-rewards-of-inclusion

[4]Colgan, F., Creegan, C., McKearney, A. and Wright, T. (2006) Lesbian, gay and bisexual workers: equality, diversity and inclusion in the workplace?London: Comparative Organization and Equality Research Centre.Retrieved from http://hr.fhda.edu/_downloads/Lesbian_Gay_and_Bisexual_Workers_Equalit.pdf

Pay gaps

Gender pay gap decreasing

The gender pay gap in the Public Service has decreased for the third year in a row.As at 30 June 2018, the average salary was $84,100 for men and $73,900 for women, up 3.0% for men since 30 June 2017 and up 3.4% for women.This means the gender pay gap decreased by 0.3 percentage point to 12.2%.This decrease is calculated using data from all Public Servants, so there is no sample error around this result.This is the lowest gender pay gap in the Public Service since measurement began in 2000.However, the rate of decrease over the latest year is the slowest since 2015.

The factors contributing to the gender pay gap are complex and can be difficult to disentangle.A key factor contributing to the fall in the gender pay gap over the past year is the increasing numbers of women in senior leadership roles.This is shown both by the record high female share of senior leaders (48.8%), and the fall in the gender pay gap for senior leaders (down from 9.7% in 2017 to 7.4% in 2018). At the chief executive level, female chief executives are now leading larger organisations than previously.

A factor that prevented the overall gender pay gap from falling further was that around 60% of the increase in female employment in the Public Service over the past year was in contact centre, social work and clerical roles.These roles tend to pay lower salaries.

Note that the gender pay gap is measured as at 30 June 2018.This means that it does not include the impact of the 1 July pay round.It also does not reflect Cabinet’s requirement that all employees in the core Public Service will receive an hourly rate of at least $20.55 by 1 September 2018, which will likely cause a small downward shift to the gender pay gap.

Analysis of the HRC data has generated the following insights:

  • Gender pay gaps tend to increase with age, with a particular jump between the 40 to 44-year age group (7.9% in 2018) and the 45 to 49-year age group (14.0%).There is evidence of structurally lower gender pay gaps for those currently aged below 45 years of age - the gender pay gap for the 40 to 44-year age group had been at a similarly high level five years ago, and the gap for the 35 to 39 year age group (now 8.1%) had also been much higher ten years previously.A key driver for this cohort effect is that women aged 40-44 years are more likely to hold senior managerial roles in 2018 than in 2013.This cohort effect should contribute to further falls in the overall gender pay gap as older cohorts with higher gender pay gaps retire from the Public Service.
  • Gender pay gaps vary greatly among departments, ranging from 36.6% in the Ministry of Defence to 0% in Oranga Tamariki (where there was no gender pay gap) in 2018.Differences in the gender pay gap across departments are generally driven by the extent to which departments have gender imbalances in their workforces.For example, women make up 82.1% of clerical and administrative roles in the Public Service, but only 60.9% of the total workforce.This occupational segregation - women being more likely to be working in lower-paid occupations - is a key driver of the gender pay gap for many departments, especially for small departments with a narrow range of occupations.
  • Even within the same occupational groups there are compositional differences between the genders in terms of seniority and experience.For example, women make up 53.5% of managers in the Public Service in 2018, but only 48.8% of senior managers (although this is up from 38.4% in 2008).
  • We estimate that differences in occupational group, seniority and experience (through age) between men and women explains around 58% of the overall gender pay gap of 12.2%.

One factor that has not been adjusted for in this analysis is the impact of caring responsibilities on career progression and pay. Anecdotally this is another key driver affecting the gender pay gap. Caring responsibilities vary significantly across genders.As at 30 June 2018, there were 567 employees on parental leave (1.1% of the Public Service workforce) made up of 555 females and 12 males (i.e. 98% of people on parental leave at 30 June 2018 were women).

While data analysis can help to highlight some of the factors that contribute to pay gaps, it does not negate them as factors that need to be addressed in order to reduce the gender pay gap further.

Median gender pay gap

The SSC has reported the Public Service gender pay gap using average (mean) pay since 2000. This differs to Stats NZ’s approach [1] of using median pay when reporting the gender pay gap for the entire workforce. Median pay is the middle amount of pay earned - half of employees earn less and half earn more. Median pay better reflects the pay a typical employee receives.On the other hand, mean pay better reflects the effect of employees with very low or very high pay.

In 2018, the Public Service gender pay gap using median pay was 10.7%, up from 9.7% in 2017.This follows a large decrease last year from 11.1% in 2016. The gender pay gap using median pay is more volatile over time than that using mean pay. This is the sixth time since 2000 that the gender pay gap using median pay has increased after decreasing the previous year. This has only happened twice over the same period for the gender pay gap using mean pay. The structured nature of pay for many parts of the Public Service workforce, with large numbers of employees receiving the same pay, are driving this volatility in gender pay gaps using median pay. In 2018, female median pay was in an area of the pay distribution where a there are a large number of employees receiving the same pay. This has had the impact of slowing the increase in female median pay since 2017 and widening the gender pay gap using median pay.

The gender pay gap using median pay for the entire workforce, as reported by Stats NZ, was 9.2% (down from 9.4% in 2017). The visualisation above shows how the gender pay gap measured using median salaries has declined over time for both Public Service (down from 16.7% in 2000) and the overall New Zealand workforce (down from 14.0% in 2000).

Ethnic pay gaps not improving

Unlike the gender pay gap, ethnic pay gaps have not shown improvement over time. Like the gender pay gap, ethnic pay gaps can relate to occupational segregation or the occupation profile of a particular ethnic group. particular Pacific and Asian public servants are over-represented in occupation groups that are lower paid. The graph below shows that in the Public Service men tend to be paid more than women, and Europeans tend to be paid more than other ethnicities. Although Pacific men had the largest increase in average salaries in 2018, Pacific women had one of the lowest one Asian and Pacific ethnicities are also underrepresented in the top three tiers of management in the Public Service.

Chief executives are committed to ensuring that ethnic pay gaps have the same scrutiny afforded to them as gender pay gaps.Work to address ethnic pay gaps is led by a group of State Services chief executives with support from the SSC and agencies. The current priority is to explore the drivers of ethnic pay gaps and identifying ways to address them. This will take time and a deliberate effort to address drivers of these gaps as non-European ethnicities are also under-represented at lower levels of management. A first step in addressing ethnic pay gaps is increasing ethnic representation in the overall workforce, and this is happening.

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