The workforce retention dividend - valuing knowledge and skills in the public sector workforce

Labour force participation Public sector Public service Australia South Australia
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This report demonstrates the hidden costs of public sector job losses. 

Key findings:

  • Rapid loss of public sector workers, especially those with more experience and skill, will result in the loss of corporate knowledge and hinder the transfer of skills within the South Australian public service. This loss represents a considerable value which needs to be taken into account in public sector workforce planning.
  • Over the next five years an accelerating retirement rate of public servants will coincide with the significant expansion of the resources sector. Combined these forces will result in tightening of the South Australian labour market. In this environment it will be more difficult to attract and retain experienced workers in the public sector. Loss of knowledge and skill in this context is particularly problematic. It may harm the ability of the State Government to deliver its programs effectively and efficiently.
  • It is possible to estimate the approximate average value (investment) of a public service worker over his or her tenure in order to understand the implications of the State Governments public sector workforce employment reductions strategy (1600 FTEs or approximately 1913 persons on an FTE to person ratio).
  • The total cost of hiring 1913 persons is approximately $38,259,200. The average total expenditure on training for them during their tenure is $25,308,460.
  • Therefore, the total recruitment and training expenditure on average for the 1600 FTE public sector workforce reductions is around $63,567,660.
  • The State Government needs to develop a better understanding of the implications of staff losses for the knowledge and skill base of the public service as a central element of public sector workforce planning.
  • The central challenge to be faced by policymakers is the potential loss of a large number of experienced and skilled public sector workers over a relatively short period of time and the growing difficulty of sourcing suitable replacements in a tighter labour market.
  • There is an urgent need to develop a multi-faceted approach to attraction and retention that addresses a range of drivers and barriers. Some progress is being made in this respect. The Treasurers announcement, in the 2011-12 State Budget of the introduction a new Retention Provision represents a constructive contribution to this and should be implemented universally across the public sector.
  • There will be particular challenges associated with attraction and retention of public servants in regional South Australia where employment demand generated by mining projects has the potential to starve the public sector of various occupational skills.

Related identifier: ISBN: 978-0-9871950-4-3

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