Government agency hiring hurts private companies, lobby group says

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Many ministries are growing rapidly, raising concerns that they will divert staff from private companies.

A business lobby group said there were signs that inflated public sector pay rates were exacerbating private recruitment problems due to pandemic border bottlenecks.

Civil Service Commissioner Peter Hughes said the growth since 2016 was important but necessary.

RNZ asked for an update of official figures from 18 major agencies which showed they had added almost 10% more staff between them in one year and 20% in two years.

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They now had 52,000 employees, compared to 47,800 a year ago and just under 44,000 in 2019. *

One, the prime minister’s own department and the prime minister’s office, grew by almost 80%, from 186 to 332 employees in one year – although he says it will be downsized again soon.

The Department of Social Development hired more than 3,000 people in the year through April – for a real gain of 1,200 once staff leave – and that’s a third more than two years ago.

Selwyn MP Nicola Grigg suggested to a recent select committee that the expansion was disruptive.

“Food companies are finding that a large part of their potential workforce has been sucked into MPI [Primary Industries]”said Grigg.

“Regional councils will say they can’t get planners for love or money because they go to MFE [Environment]. “

The big four consultancies – Deloitte, EY, KPMG and PwC – were losing people to New Zealand Trade and Enterprise, she added.

A large employer of consultants, the Ministry of Enterprise, Innovation and Employment has grown by more than a quarter in two years, to reach 5,200.

Asked by Grigg whether government was getting the right balance, Minister of State Services Chris Hipkins acknowledged that public sector recruiting created “short-term pressure.”

Selwyn MP Nicola Grigg has suggested the expansion is disruptive (file photo).

ROBERT KITCHIN / Tips

Selwyn MP Nicola Grigg has suggested the expansion is disruptive (file photo).

But he told the select committee that the expansion was often tied to work only related to Covid-19 like border control, non-competing industries like Oranga Tamariki (which added 1,000 employees in two years), or in fact allowed private companies to do more.

In building and construction, the ministries of education and health had a huge work pool. “So this is, I guess, the catch-22 of additional government spending in these areas, it creates greater opportunities for the market,” Hipkins said.

“To fuel these opportunities in the market, you need people to do this work. And so yes, we are competing in these spaces.

Business New Zealand executive director Catherine Beard said there were signs the competition was spiraling out of control.

“We hear anecdotally – especially, obviously, in Wellington, because that’s where the government is located – that people are leaving for better paid government roles, and more than the private sector thinks those roles are actually worth. “said Beard.

“When the public sector gets too far ahead of the private sector… it depletes the resources of the productive sector. “

The data showed that public pay, especially at the mid-level for policy and administration or business-like work, was getting out of sync, she said.

Beard added that the government could do more to give work to private Covid-19 companies, such as in MIQ.

The recruitment campaign is not weakening in agencies including the Ministry of the Environment or the MFE, which is two thirds larger than two years ago, exceeding 600 employees.

Planning Institute chief executive David Curtis said he was tapping into the country’s limited stock of planners at an unusually high rate.

“I know that on their last tour, MFE was looking for over 60 planners. “

It was a few weeks ago, during a unique great promotion that recognized his great work program, including the overhaul of the law on resource management.

“It’s fair to say that while we support the government’s reform agenda, the current MFE recruiting cycle has certainly added to the pressures. “

State Services Minister Chris Hipkins acknowledges that public sector recruiting has created

ROBERT KITCHIN / Tips

State Services Minister Chris Hipkins acknowledges that public sector recruiting has created “short-term pressure.”

Curtis said planners were in demand and pay rates were high in the private and public sectors.

A record number of students were now enrolled in planning courses, which provided a glimpse of the end of a long tunnel of years of skills shortage, made worse by the poaching of planners from other countries, a- he declared.

Civil Service Commissioner Peter Hughes said he was “very comfortable” with the expansion, up 25 percent from 2016 to last year (the commission is still calculating the numbers for 2020-2021 ), compared to a 13 percent expansion of private sector jobs.

“We have experienced significant growth,” Hughes told RNZ in a statement. “We know exactly where it happened and why it was necessary.”

The main drivers have been population growth – up 11% since 2013 – investments to implement government priorities and the response to the pandemic and unexpected events such as mosque attacks.

The investments included “510 social workers for housing and the provision of social services, 260 contact center operators, 200 social workers, 130 correctional officers, 125 educational counselors, 90 youth workers, 45 parole officers and 25 speech therapists.” , said Hughes.

“Extraordinary circumstances demanded an extraordinary response, but I don’t see this continuing too far into the future.”

Various agencies have listed the reasons for their expansion, including:

  • DPMC: Additional work on Covid-19, the Health and Disability System Review Transition Business Units and the Royal Commission of Inquiry into the Terrorist Attack. “The increases in staff… will be followed by subsequent decreases as their work comes to an end. “
  • MSD: “Unprecedented demand” for income support, employment services and other payments, including the wage subsidy and the Covid-19 income relief payment.
  • MFE: “A growing work program, including reform of resource management, jobs for nature, and land and water use policy.
  • MFAT: Added 19 new recruits to an Apec 21 team.
  • SIS and GCSB: Reflects government investment
  • MBIE: MIQ, plus regional economic development work.
  • Education: Addition of learning support coordinators and program manager roles. Conversion of some entrepreneurs into employees.
  • Health: Covid19.
  • DOC: More staff in biodiversity and operations related to the 2018-19 budget and the establishment of the Jobs for Nature team.

*Agencies were asked to provide staffing figures comparable to the Civil Service Commission figures for mid-2020. In a few cases the figures were roughly but not directly comparable.


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