Chapter One: Executive Summary

Introduction

The policy and practice of equality and diversity are important components of building a diverse, capable Public Service that both reflects the New Zealand community it serves and is able to deliver better services to that community. Equality and diversity are about equity and fairness in employment for all, while recognising the employment aspirations of equal employment opportunities (EEO) groups: women, Māori, ethnic and minority groups, and people with disabilities.¹ The Commission has published reports on equality and diversity in the Public Service on a regular basis over the last two decades. Currently, such reports are published biennially. This report is the latest in this series.

In 1997, the State Services Commission (the Commission) set ambitious targets for EEO in the Public Service as part of the EEO Policy to 2010: Future directions of EEO in the New Zealand Public Service. The desired outcome of this policy was that all forms of unfair discrimination in employment would be eliminated by 2010. This was measured by three factors, including that there would be employment of EEO groups at all levels in the workplace (State Services Commission, 1997).

These targets were aggressive, and the Public Service has yet to meet them - although good progress, particularly in the representation of women at more senior levels of the Public Service, has been made. Women now account for 39.8 percent of senior management in the Public Service, up from 32.7 percent in 2001. As an indicator of equality, the representation of women in the senior management of the Public Service outstrips the private sector by a considerable margin. The latest Human Rights Commission 2010 Census of Women's Participation found that women made up only 19 percent of senior management teams in the top 100 companies in the New Zealand Stock Exchange (NZSX), a representation level half that of the Public Service.

Gains have also been made in ethnic diversity, with increases in the percentages of Pacific and Asian peoples working in the Public Service, and increases in the respective percentages of Māori, Pacific and Asian managers in the Public Service.

The State Services Commissioner has a role under section 6(g) of the State Sector Act 1988 to 'promote, develop and monitor equal employment opportunities across the Public Service'. This year the State Services Commission's (the Commission's) Equality and Diversity report has focussed on diversity in senior management.² Its findings provide useful research and information to influence the Commission's current work programme on Leadership Development and Talent Management (LDTM), and to inform the wider State sector audience of progress and best practice for equality and diversity.

This report is based on:

· trend analysis of quantitative Public Service data relating to diversity from 2001 to 2010

· an international literature review of both the private and public sectors to provide context for the data³

· interviews with Public Service chief executives (CEs) and one State Services CE, Public Service senior managers, and executive recruiters to identify best practice initiatives to promote and support diversity in senior management, barriers to the growth of diversity, and advice for future leaders seeking more senior roles in the Public Service.

Diversity enhances performance

The literature indicates that workplace diversity improves performance. In mature Organisation for Economic Co-operation and Development (OECD) economies, countries with dominant male-centred policies and weak family policies experience low female labour market participation, birth rates and growth (Mortvik and Spant, 2010). Organisations that have women most strongly represented in senior management and on boards perform the best (McKinsey, 2007). Teams with a gender mix are more likely to experiment, share knowledge, complete tasks and consider a wide range of issues and options, resulting in better decision-making and service delivery that reflects the experiences and needs of the people being served (Ministry of Women's Affairs, 2009).

These results hold true in both the private and public sectors. The OECD concludes that 'diversity plays a part in maintaining core public values, increasing managerial efficiency, improving policy effectiveness, raising the quality of public services and enhancing social mobility' (OECD, 2009). While most of the international literature focuses on women, many findings have wider application for other under-represented groups.

What works

International literature indicates that widespread, sustainable workplace diversity in the Public Service has four main features:

· a widespread vision, based on an understanding that diversity enhances performance, as well as being fair and equitable

· proactive, committed leadership from the top down

· action in all areas, including recruitment and appointment processes, flexible work practices, mentoring, coaching, up-skilling and diversity training for all managers and staff

· accountability, including performance indicators and targets to monitor the performance of agencies and individuals.

The New Zealand Public Service Equal Employment Opportunities Policy (the EEO Policy), published by the Commission in 2008, reflects these four features and provides government-wide advice, stating: "the integration of equality and diversity throughout the Public Service will be a key aspect of strategic planning and performance, and CEs will provide the lead in working towards this".

What gets in the way

At the beginning of the decade there was a strong belief in the 'pipeline' theory; that is, organisations only had to get under-represented groups through the door at entry level and they would automatically rise up through the ranks, creating diversity at all levels. The reality has proved more challenging.

Key barriers that continue to affect women's career progression may include the challenges of balancing work and family responsibilities, stereotyping and preconceptions about women's roles and abilities, and lack of visibly successful senior role models. For Māori, Pacific and Asian peoples, cultural differences may also come into play, along with direct and indirect discrimination. It is possible that the younger populations of Māori, Pacific and Asian populations may inhibit their representation in senior management. Meanwhile, the location of Parliament in Wellington requires Public Service head offices and most senior management roles to be based in the capital, when Māori, Pacific and Asian populations are primarily based in Auckland.

How the Public Service is doing

Since 2001, there have been gains in gender and ethnic diversity in the New Zealand Public Service.⁴ There has been a trend towards a greater proportion of female public servants, with women now making up 59.7 percent of the workforce. There have also been small increases in the percentage of Pacific and Asian peoples, although the percentage of Māori has dropped slightly. In senior management, progress in gender diversity is slow, but positive in some areas. As discussed above, the proportion of female senior managers has risen from 32.7 percent in 2001 to 39.8 percent in 2010, although the number of female CEs has declined.

The proportion of Māori in senior management has declined since 2001 to 8.3 percent, approximately half of the 16.4 percent Māori representation in the Public Service. The proportion of Pacific peoples in senior management has also declined slightly, while the percentage of Asian peoples remains unchanged. However, there has been an increase in overall representation in the Public Service to above seven percent each for both Pacific and Asian peoples.

Interviews conducted with State services CEs, Public Service senior managers and executive recruiters for this report indicates that their perceptions and experiences correlate with the data findings. No one interviewed questioned the benefits of diversity. However, concern was raised about the rate of progress in diversity, particularly at senior management level.

Interviews indicated there was a perception that the situation has stalled or, in some cases, is getting worse. There was also a perception that CE roles are increasingly daunting for under-represented groups, and that 'like begets like', creating a self-perpetuating cycle. Compounding this problem is the length of tenure of senior roles and lower turnover rate for senior managers compared with the Public Service as a whole, which means that new initiatives to improve diversity may take many years to yield results.

All interviewees stressed there is no lack of goodwill or good intentions on the part of Public Service leaders. However, current initiatives have failed to produce improved diversity in important areas, particularly CE appointments and representation of Māori and Pacific and Asian peoples in senior management.

The challenges to implementing diversity in the New Zealand Public Service align with experiences in both other jurisdictions and the private sector. Findings from international literature show that both public and private organisations around the world are grappling with the best ways to attract and retain workforces that truly reflect the diverse range of their populations, customers and client groups.

The New Zealand Public Service is doing as well as, or slightly better than, its counterparts in Australia and the United Kingdom, particularly when it comes to women in senior management. Our public sector is well ahead of the private sector if the representation of women on boards and in senior management is an accurate indicator.

¹ EEO groups are defined in the State Sector Act 1988.

² This report focuses on women, Māori, Pacific and Asian peoples. Disability has been excluded from this report as, in addition to being the focus of the 2008 Equality and Diversity report, the Commission no longer keeps statistics.

³ Much of the literature focuses on gender rather than ethnicity.

⁴ The statistics in this report are for the period 30 June 2001 to 30 June 2010.