Section 3 Recruitment, Retention and Redundancies

Recruitment

In the year to 30 June 2010, 7,263 employees were recruited by Public Service departments. This is the lowest number of new recruits recorded since the survey began in 2000 and represents a drop of 19% from the previous year. Table 6 shows the number of new employees over the 5 years to 2010.

Table 6: Number of new employees, 2005 to 2010

Statistics from the Government Jobs Online website¹¹ indicate that recruitment activity picked up in the second half of the 2009/2010 financial year. This increased activity is probably due to existing vacancies being backfilled, and not new jobs being created. Figure 7 shows the number of Public Service jobs advertised as at the first of each month.

Figure 7 Public Service jobs listed on jobs.govt.nz as at the 1^st of each month

New recruits by occupation group

Social, Health and Education Workers (22%) and Clerical and Administrative Workers (19%) had the highest proportion of new recruits. However, these two occupations groups also have comparatively high turnover rates which meant most of the recruitment was to replace staff that left.

Inspectors and Regulatory Officers had the third highest proportion of new recruits (18%). This occupation group has very low turnover (7%) and is by far the largest occupation group in the Public Service (9,454). The increase for Inspectors and Regulatory Officers can be attributed to the Department of Corrections. Compared to the previous year, Policy Analysts had the largest reduction in the number of new recruits (down 42%) followed by Legal, HR and Finance Professionals (down 34%).

Fixed term contracts

Departments are increasingly opting to offer new employees fixed term contracts (temporary) rather than permanent contracts (ongoing). The proportion of new employees on fixed term contracts rose to 43% (from 38% in 2009 and 34% in 2008). Despite the increase in the proportion of new employees on fixed term contacts, the overall proportion of fixed term roles dropped slightly to 5.8% (from 5.9% in 2009). This decrease was due to a drop in the number of new employees and a reduction in the number of fixed term contracts being extended. Table 7 shows the number and proportion of employees on fixed term contracts.

Table 7: Fixed term contracts

There is significant variation by occupation group with 65% of Clerical and Administrative workers recruited on fixed term contracts compared with 18% new employees in Inspectors and Regulatory Officers. In the 12 months to 30 June 2010, the average length of a fixed term contract was 12 months (the same as the previous year).

Turnover

Core unplanned turnover (resignations, retirements, dismissals, and deaths of open term employees, see definitions in Appendix 4) dropped by 1.5 percentage points over the year to 30 June 2010 to a historical low of 9.2% (down from 11% in 2009). Table 8 shows the gross and core unplanned turnover rates for the Public Service from 2005 to 2010.

Table 8: Turnover rates in the Public Service, 2005 to 2010

Figure 8 shows monthly turnover rates which have been annualised (multiplied by 12) so they can be compared with the annual core unplanned turnover rate. After dropping to historical lows of around 8% in the first six months of the 2009/10 financial year, turnover increased to around 10% in the second six months of the financial year. The annual figure of 9.2% is the lowest core unplanned turnover rate since the survey began in 2000.

Figure 8 Core unplanned turnover by month

The slight increase in turnover since January 2010 could be attributed to improved employment prospects and public servants beginning to explore other job opportunities. "The labour market reached a turning point in late 2009/early 2010 as the economic recovery gained momentum. The economy grew by a total of 1.5% over the December 2009 and March 2010 quarters. This helped employment rise by 1.0% in the March 2010 quarter."¹²

Turnover by department

Figure 9 shows a large variation in annual turnover rates for individual departments (25.5% down to 4.3%). The overall decrease in core unplanned turnover was driven by decreases in 25 of the 35 departments; decreases ranged from 0.5 to 11.6 percentage points. Five departments recorded increases in core unplanned turnover ranging from 0.1 to 6.0 percentage points.

Figure 9 Core unplanned turnover by department

Turnover by occupation group

Table 9 shows core unplanned turnover by occupation group. With the exception of Clerical and Administrative Workers, turnover decreased in all occupation groups over the 12 months to 30 June 2010. The largest decrease in turnover occurred in Contact Centre Workers which dropped by seven percentage points.

Table 9: Core unplanned turnover by occupation group

Tenure (length of service)

The 2010 HRC data shows that average tenure increased to 8.5 years (from 8.2 years in 2009). Increases in average length of service of employees are due to the continued low turnover. The trend since 2005 is shown in Table 10. This increase may indicate that Public Servants are staying in their jobs, and there are fewer opportunities than in previous years for Public Servants to change roles.

Table 10: Tenure in the Public Service, 2005 to 2010

Redundancies

In the year to 30 June 2010, 780 employees in the Public Service were made redundant; an increase of 159% from the previous year. Similarly the proportion of employees leaving the Public Service because of redundancy increased significantly to 14% (up from 5% in 2009 and 2% in 2008).

The average redundancy payment was $48,891. The average length of service of employees made redundant was 13.6 years compared to the previous year of 10.0 years. This may explain some of the increase in the amount of redundancy payment made.

Table 11 shows the number of redundancies, average redundancy payments, and average length of service of those being made redundant for the years 2005 to 2010.

Table 11: Redundancies and average payments, 2005 to 2010

Figure 10 shows the number of redundancies for each department. Over the past year nearly 40% of the redundancies in the Public Service occurred at Inland Revenue. Of the 308 redundancies at IRD, 270 resulted from a voluntary redundancy process run across the department between 1 July 2009 and 30 September 2009. Selection criteria ensured that reductions to frontline customer facing roles were kept to a minimum, and that necessary skills and experience critical to the department were retained. The additional 38 redundancies at Inland Revenue occurred as a result of business unit specific reviews and structural changes across the year.

Figure 10 Redundancies by department

Figure 11 shows that in the six months to 30 June 2010 there were 236 Public Service redundancies, compared with 544 in the first six months. The 262 redundancies in August 2009 include 233 redundancies at Inland Revenue.

Figure 11 Redundancies by month

Twenty six departments made redundancy payments in the year to June 2010. The average age of those made redundant was 50. Table 12 shows that the occupation groups with the largest number of redundancies were Managers (139), Clerical and Administration Workers (130), Contact Centre Workers (119) and Inspectors and Regulatory Officers (106).

Table 12: Redundancies by occupation group, 2007 to 2010

¹¹ www.jobs.govt.nz

¹² Labour Market Update - June 2010, Department of Labour