The given analysis will primarily focus on the workforce planning practices and trends of the Australian public sector. Since many important and essential public services are delivered solely on the basis of government funding, the efforts in the sector revolve around cost maintenance or reduction, which implies efficiency. In addition, the public sector faces diversity challenges despite the recent achievements and measures in promoting diversity. The data derived from the research is multifactorial and multifaceted, which is why it is challenging to derive a complete picture of the situation, but specific examples from the public sector enable an insightful assessment of the current situation in regard to workforce planning practices in the public sector of Australia.
Labour Demand and Supply Issues and Trends
It is important to note that the Australian public sector’s supply of workforce has been increasing since the pre-COVID-19 period. Due to the pandemic, the unemployment rate increased “to 707,300 in October 2021, but remains 15,900 (or 2.2 per cent) below the level recorded in March 2020” (National Skills Commission, 2021, p. 4). Although the highest recorded level of unemployment was during the outbreak of the virus, the post-effect is still present. Before the pandemic, the increase in labor supply was driven by older adults entering the labor market, especially women. An increase in supply means that “these are concerning developments, with estimates showing that 58.6% of casuals are not guaranteed a minimum number of hours of work in their job” (Birch and Preston, 2020, p. 341).
For the most part, the public sector supply and demand follow the private sector trends with lesser risks of wage losses. The introduction of novel changes, such as New Public Management (NPM), incentivizes the public sector to operate more efficiently with a smaller size of workers by focusing on “functional flexibility, the vertical substitution of staff, meeting externally established performance indicators and outsourcing” (Henderson et al., 2016, p. 368). Therefore, the public sector is experiencing a higher supply of labor rather than a demand for it.
Supply and Demand Forecasting Techniques and Challenges
It should be noted that supply and demand forecasting is a challenge on its own when it comes to the public sector. The main reason is the fact that the New Public Management approach adopted by Australia and UK encourages the public sector to operate similarly to the private sector by being customer or citizen-oriented. In other words, the performance measured revolves around citizen satisfaction with the services received. Although the approach promotes meritocracy for each agency on the basis of its performance, it led to a higher degree of disaggregation in the public sector (Anzsog, 2021). Each agency primarily operates as a separate business planning its own labor practices as long as the latter is adherent to the legal requirements.
Therefore, any form of forecasting is also done by each agency, which creates a major challenge in assessing the sector-wide situation. Knowing the fact that the supply exceeds the demand for labor, it is safe to state that managerial assessment and market research are the most common techniques since they provide invaluable insight into current changes in the supply of labor.
The Australian public sector forecasts the supply and demand of labor by assessing the market dynamics and conducting internal managerial assessments. It is important to note that “the supply-side model is based on a stock-and-flow process, and the need-side model extents previously published analytical frameworks using the population health needs-based approach” (Asamani, Christmal, and Reitsma, 2021, p. 2113). The emphasis is put on conducting or analyzing market research, which provides essential data to understand the supply and demand curves of the labor market.
Workforce planning in the public sector is mainly determined by performance, workload distribution, and funding. Under New Public Management practice, public sector organizations are reluctant to hire new workers unless it is absolutely necessary. Other means of work distribution are attempted prior to employing new employees (Anzsog, 2021). For example, the impact of the pandemic and related economic disturbance did not affect the public sector significantly as it did the private sector. The main external factors include demographic changes, growth, organizational structure, and economy.
An agency as a unit of the public sector operates by serving citizens as customers, and thus, any demographic changes in the population directly affect workforce planning. In addition, economic growth and expansion also influence the public sector since it is funded by taxpayers’ money, where an increase in the economy leads to more funds being awarded to top-performing agencies.
Workforce Diversity Issues
The Australian public sector has an array of issues when it comes to diversity. The main one is gender diversity, which is common in the public sector due to the problematic approaches used to address it. It is stated that “organisational strategies to achieve gender diversity have tended to focus on ‘bottom-up’ approaches such as mentoring or leadership training” (Gould, Kulik, and Sardeshmukh, 2017, p. 6). However, the most effective measure is the one conducted “top-down,” because “female executive representation in 1 year had a positive impact on female representation in the executive feeder group in the following year.
The trickle-down effect was strongest in the first 2 years, but still significant after 5 years” (Gould, Kulik, and Sardeshmukh, 2017, p. 6). In other words, the gender diversity issue is a problem in the public sector, which is being addressed in an ineffective manner. In addition, it is stated that “public sector organizations have been shown to have high levels of workplace bullying, despite the widespread adoption of zero-tolerance policy” (Hurley et al., 2016, p. 12). The problem is highly disruptive to the existing employees and diminishes the already hindered appeal of the public sector for potential workers.
Critical Workforce Planning Issues and Challenges
The main challenge in the public sector when it comes to workforce planning is resource scarcity, which was the primary culprit of all previous problems as well. The lack of revenue and substantial growth, as well as pressure to perform outstandingly on the basis of arbitrary metrics, forces the public sector to imitate the private sector. Skill shortage has always been a core element of the public sector, which is why agencies are adopting efficient measures to outsource and ration resources (Henderson et al., 2016). Diversity challenges are manifested in the fact that the problem is addressed from the “bottom-up,” which is ineffective (Gould, Kulik, and Sardeshmukh, 2017).
In other words, a major organizational change needs to take place, where diversity is improved through representation on a “top-down” basis. Employee satisfaction is linked to the pay and stability associated with public sector employment, and since the resources are scarce, hiring more employees is not productive in order to preserve the current level of wages for the existing workers.
Strength of the Issues
The issues are persistent primarily due to the inherent design of the public sector. In order to ensure competition, the sector became highly fragmented and separated, which incurs a system-wide inefficiency due to poor cooperation. Although competition is useful in order to foster better efficiency, the latter element alone cannot ensure effective workforce planning. There are mostly two choices when it comes to labor planning, which are either retaining currently skilled workers and their pay at a desirable range with an increased workload or hiring new workers with less experience at the risk of losing the current skilled workforce due to lowered pay. The option is evidently skewed towards the former since it is challenging to find and retain skilled public sector workers, and most of them became this skilled due to years of service in the sector.
The functioning of such organizations and movements makes it possible to simultaneously solve the problems of achieving economic and social efficiency. The solution to these problems means, on the one hand, a reduction in the expenditures of state and local budgets for financing production and the supply of such public goods, and on the other hand, maintaining a high level of supply of these goods, which best meets the needs of society as a whole. When assessing the effectiveness of state participation in the economy, it can be noted that the choice between the market and the state is a choice between two imperfect alternatives.
In conclusion, the Australian public sector, as well as the entire labor market of the nation, has a higher supply of labor compared to demand. In the public sector, the demand is low due to its inherent design under the New Public Management framework, which forces the sector units to operate as businesses, where the performance is measured with citizen satisfaction metrics. Due to resource constraints in almost all agencies, the public sector focuses on measures of efficiency, outsourcing, and resource rationing in order to operate with a smaller number of employees. The latter artificially reduces the demand curve in the sector substantially. Many diversity and workplace issues are unaddressed or addressed ineffectively due to the lack of prioritization.
Anzsog. (2021) ‘Has new public management improved public services?’ Anzsog.
Asamani, J. A., Christmal, D. C., and Reitsma, G. M. (2021) ‘Advancing the population needs-based health workforce planning methodology: a simulation tool for country application’, International Journal of Environmental Research and Public Health, 18(4), p. 2113.
Birch, E. and Preston, A. (2020) ‘The Australian labour market in 2019’, Journal of Industrial Relations, 62(3), pp. 341–364.
Gould, J. A., Kulik, C. T., and Sardeshmukh, S. R. (2017) ‘Gender diversity from the top: the trickle-down effect in the Australian public sector’, Asia Pacific Journal of Human Resources, 56(1), p. 6-30.
Henderson, J. et al. (2016) ‘The impact of rationing of health resources on capacity of Australian public sector nurses to deliver nursing care after-hours: a qualitative study’, Nursing Inquiry, 23(4), pp. 368-376.
Hurley, J. et al. (2016) ‘Nexus between preventive policy inadequacies, workplace bullying, and mental health: qualitative findings from the experiences of Australian public sector employees’, International Journal of Mental Health Nursing, 25(1), pp. 12-18.
National Skills Commission (2021) ABS Labour Force Results. Web.