Public service churn rates 'not high enough'

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Experts say staff turnover at some of the federal government's largest departments is worryingly low and there are fears looming upheaval will stagnate the healthy circulation of workers in other parts of the bureaucracy.  

Latest figures show nine large departments or agencies with turnover rates of less than 7 per cent last year, well below the national average of 13 per cent. 

The two lowest churn rates among the organisations with more than 1000 staff each were at the Department of Immigration and Border Protection where 4.2 per cent of workers moved on last year and the Australian Tax Office, which recorded 4.5 per cent turnover.

This was followed by the Department of Agriculture (5.1 per cent), Bureau of Meteorology (5.3 per cent), Defence Department (5.5 per cent), Department of Veterans Affairs (5.8 per cent), Human Services (6.1 per cent), Customs and Border Protection (6.2 per cent) and the Department of Foreign Affairs and Trade (6.5 per cent).

All recorded more sluggish staff mobility compared to previous years and, out of this group, agriculture department turnover dropped the most from 11.1 per cent in June 2012.

National public service manager for recruitment company Hays, Kathy Kostyrko, said 15 per cent to 20 per cent was a healthy range of turnover.


"People are far less likely to move in a bad economy," she said.  

An immigration spokeswoman said the low rate was not a concern while an ATO spokeswoman said her agency's low turnover - which had dropped a small amount from 5 per cent since June 2012 - reflected the fact it hired specialists who strongly identified with the organisation and its work.

Former senior public servant turned consultant Stephen Bartos said turnover of less than 10 per cent led to people hanging onto a job for too long, which led to a lack of motivation and creativity. 

"Some departments are aware of this and they're trying to encourage internal mobility," he said. 

"Anecdotally we're hearing the rate of movement inside departments is very slow as people are just clinging onto certain jobs."

Australian Human Resources Institute chairman Peter Wilson said morale might drop further with the Abbott government looking as if it was going to make all the classic mistakes when it came to restructuring staff.

This included communicating through brief memorandums and directives rather than face-to-face, setting ambitious targets and leaving department secretaries to change workplaces without enough support.

Mr Wilson said this approach could hurt the government's main aim which was productivity.

"Public sector workers have felt the sword of Damocles dangling over them for a long time," Mr Wilson said. "Morale is low and productivity is low.

"The more transparent you are with staff, the better. It's not just changing people's jobs, it's a psychological issue.

"It's not usually managed well at this stage in a government's life. "

Mr Wilson was not as concerned about turnover rates of 6 per cent as other experts.

He said churn rates of 2 per cent to 5 per cent were common throughout the economy two decades ago and had increased with the spread of globalisation and employee mobility, most visibly in Generation Y.

Mr Wilson said he was cautious about turnover rates above 20 per cent, because of the massive and often forgotten cost of replacing good staff.

"The cost of a really well-performing person moving from their job voluntarily, or getting rid of someone that should have stayed, is two years' pay," he said. 

"It takes you three to six months to replace them, then it takes 12 months for a person to come up to the equivalent level of productivity of the worker they replaced and, finally, 20 per cent of all external hires fail.

"Some people are very good at interviewing and you find they're hopeless in the job and you've got to deal with it.

"And you lose your best people first, because they're the most competitive."