The federal bureaucracy continued to grow more top-heavy last year, prompting a crackdown on the number of executives it employs.

The latest State of the Service Report shows the proportion of middle managers – staff employed at executive level 1 or 2 – rose slightly to 27.4 per cent over 2012-13.

A decade earlier, only 19.4 per cent of employees were ELs.

Former Labor finance minister Penny Wong expressed concern earlier this year at the extent of so-called "classification creep", saying she wanted agencies to have "more sustainable management structures".

Government workplaces have since begun to target EL officers and senior executives.

The giant Department of Human Services told its staff in July it was "clear there are more employees at the executive level than are needed for the efficient and effective operation of the department".

The Department of Health is also trying to increase its ratio of junior officers (APS levels 1 to 6) to EL staff, by ensuring that non-specialist ELs actually manage staff rather than work alone.

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However, the State of Service Report warns that the job losses now under way may stymie the development of the bureaucracy's future leaders.

More than half of government agencies nominated "limited career advancement" prospects as one of their top workforce risks.

The report said the movement of staff from APS level 6 to EL2 "represents a significant workforce planning issue for the maintenance of a healthy APS leadership talent pool".

"... as the APS enters a period of downsizing, agencies will need to balance an overall reduction in absolute numbers against preserving the right mix of skills and opportunities for career advancement for talented leaders."

The Public Service Commission published a review of public servants' work levels last month.

It found "classification creep has occurred at least to some extent", highlighting a "tendency to classify some positions on bases other than work value, particularly to attract and retain staff".

The report noted that competition for talented staff between government agencies sometimes led to promotions that were inappropriate for the job actually done.

"Where particular skills are in short supply, some agencies will raise the classifications of positions to attract staff to their organisation."

The review found this problem was particularly widespread in Canberra.

"Because this labour market is tight, some agencies offer positions at a higher classification level compared to comparable positions on offer in other agencies."