Government of Western Australia

Public Sector Commission

Forward Thinking

Workforce Challenges for the Public Sector

Copyright 2009 by the Public Sector Commission The Commission has no objection to this document being copied, in whole or in part, provided there is due acknowledgement of any material quoted from this document. Copies of this document are available in alternative formats upon request. Public Sector Commission 197 St Georges Terrace, Perth WA 6000 Phone: Email: Website: (08) 9219 6227 admin@psc.wa.gov.au www.publicsector.wa.gov.au

Publication Date: May 2009

Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 1: Overview - Strategic Directions for the Public Sector Workforce 2009 - 2014 . . . . . . . . . . 4 Section 2: The Western Australian Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 3: Factors Affecting the Public Sector Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Social Factors Affecting the Public Sector Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Economic Factors Affecting the Public Sector Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Technological Factors Affecting the Public Sector Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Environmental Factors Affecting the Public Sector Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Other Factors Affecting the Public Sector Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 4: Regional Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 5: Western Australian Workforce Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 6: The Next Step - A Call For Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Executive Summary
A major objective for the Western Australian public sector is to continue to provide high quality services to the community of Western Australia . A critical component of this is the development and maintenance of a skilled, flexible and sustainable public sector workforce . In May 2009, the Public Sector Commission released Strategic Directions for the Public Sector Workforce 2009 - 2014 (Strategic Directions) that contains initiatives to address the main workforce challenges faced by the public sector . Strategic Directions was developed in consultation with public sector agencies, to identify practical workforce solutions that will be implemented to support successful delivery of public services to the community . The implementation of these initiatives will ensure that short term challenges are met, and that the public sector is well positioned into the future . The analysis undertaken during the development of Strategic Directions has been collated and a summary presented in this publication, Forward Thinking . Since 2001, Western Australia has benefited significantly from economic growth largely driven by the resources boom . In this period, the public sector faced a labour and skills shortage alongside a growing population, ageing workforce and increasing demand for public services . Recent events in the global economic environment have signalled changes ahead for both the world and State economy . The impact on Western Australias economic future will depend on the economic growth of its major trading partners in Asia . Unexpected job cuts - particularly in the mining and financial sectors - and other economic factors, are leading to medium-term forecasts of rising unemployment and low economic growth both at a National and State level . These factors, along with many others, require public sector agencies to ensure that the delivery of their services is able to adapt to fluctuations in the economy . The Western Australian public sector is the largest employer in the State . In order for high quality services to continue to be provided, public sector agencies must be equipped to understand and resolve a range of factors that are affecting its current and future workforce . These factors are multi-dimensional and include the impact of the global credit crisis, the recent resources boom, shifts in populations and social diversity (amongst others) . A further significant challenge for Western Australia is its ageing workforce . Almost 50% of the Western Australian public sector workforce is aged 45 years or over and 19% are 55 years or over1 . The employees in this latter age-group may exit the sector in the next five to ten years . Recruitment amongst younger age groups is therefore essential for ongoing service delivery . The ageing population is also likely to affect the service delivery profile of the public sector due to the likely increase in healthcare and welfare needs . To facilitate sustainable service delivery, agencies can address these workforce issues through the People, Leadership and Structure related initiatives identified in Strategic Directions .

In 2008, 24% of the States public sector was located in regional or remote areas of Western Australia . Changing population factors - rise and decline - as well as other economic, social, environmental and technological factors affect the delivery and provision of public services through determinants such as need and efficiency . Regions are particularly susceptible to these fluxes due to the geographical vastness of our State . In addition, a wide range of factors affect the retention of employees in regional areas such as housing affordability, professional and personal isolation, wage competition and the cost of living . Broader economic circumstances such as job losses or declining economic demand will have differing impacts on individual regions which agencies will need to identify and respond to in order to secure a high level of service delivery . Due to the rapidly shifting economic environment and flow-on effects to the workforce, these are challenging times . The biggest asset of the Western Australian public sector is its employees . It is for this reason, coupled with the workforce factors affecting the public sector, that it has become critical for public sector agencies to develop workforce plans . The profile and needs of the Western Australian community are changing, and the public sector workforce needs to adapt and be flexible in its approaches in order to respond effectively . Strategic Directions and Forward Thinking assist agencies to identify a wide range of factors that will affect their workforce and consequently their workforce planning initiatives . The successful achievement of this workforce strategy rests on the commitment and creative thinking of all public sector agencies . The identified initiatives in Strategic Directions, and the effective resolution of issues identified in Forward Thinking are the joint responsibility of all public sector agencies . This collaboration across public sector agencies will guarantee a stronger future for all Western Australians .

Section 1: Overview - Strategic Directions for the Public Sector Workforce 2009 - 2014
In the years leading up to the global financial crisis, Western Australia experienced remarkable economic growth . From 2001-02 to 2007-08, Western Australias real gross state product (GSP) rose by an average growth rate of 5 .1% a year, compared with a National average of 3 .3% . The total increase in GSP in those years was 34 .9%2 . In recent years the booming economy has contributed to a period of population growth, large infrastructure programs, service expansion to regional areas and low unemployment, which has led to skills and labour shortages in Western Australia . Despite the recent slowing of the economy, the Western Australian public sector still faces pressure to respond to the changing needs of its diverse communities, which are spread across its geographically large State . The Government of Western Australia is committed to managing the workforce challenges facing the public sector . Strategic Directions is a product of sector-wide consultation and research into the challenges of the next five years, and provides initiatives that will be implemented to support successful delivery of public services to the Western Australian community . While the economic context has changed recently, the aim of developing and maintaining a skilled and flexible workforce will continue to be a major objective for the public sector and is addressed through Strategic Directions . Strategic Directions identifies the key areas that require immediate attention - people, leadership and structure - with a particular focus on the following outcomes: Attracting a skilled workforce Retaining valued employees Building the capacity of the public sector Providing strategic leadership Meeting regional needs Ensuring an efficient and flexible public sector Strategic Directions outlines 38 initiatives for public sector agencies to consider implementing in order to develop a sustainable future workforce . The initiatives provide public sector agencies with an opportunity to work together and strengthen partnerships to ensure high quality services continue to be provided by the Western Australian public sector .

Section 2: The Western Australian Public Sector

This section provides an overview of the public sector workforce profile and identifies some key demographic issues . The Western Australian workforce consists of 1,143,200 people3, with 12% of these employed in the State public sector (141,731 people as at June 2008)4 . Figure 1 shows the percentage of people employed by public sector agencies . Figure 1 - Top 10 Agencies within the Western Australian Public Sector based on Workforce Size (June 2008)5

Over 60% of the public sector is employed in the health, education and law enforcement sectors6 . Clearly, all Western Australians have a very direct interest in these areas, and it is imperative for the public sector to prioritise the development of a sustainable workforce for these agencies . Agency size, however, is not the only factor that needs to be considered . There are many smaller public sector agencies that provide essential services and it is also critical for these agencies to employ a workforce that is able to deliver the high quality services the community expects . The median age of public sector employees is 45 years . The age profile of males to females in the Western Australian public sector as at June 2008 is illustrated in Figure 2 . The public sector is characterised by an ageing workforce, with employees aged 45-54 representing the largest segment of the workforce . There are far fewer employees at the younger and mature ends of the spectrum . Figure 2 - Age and Gender Profile of the Western Australian Public Sector, June 20087

The public sector workforce has been gradually ageing since the late 1980s, as illustrated in Figure 3 . The relative number of employees aged 55 years and over has been increasing since 1989, while the relative number of those aged below 25 years has decreased in the same period . Just over 6% of current Western Australian public sector employees are aged below 25 years, while almost half are over 45 years of age . Figure 3 - Age Profile of the Western Australian Public Sector, June 1989 - June 20088

The ageing profile of the workforce is largely a product of the post-World War II baby boom (those born between 1946 and 1964) . Approximately 19% of the current workforce is aged 55 years or older, and if most of these people exit the public sector during the next five years, the impact on the workforce and recruitment will be severe . Up to 19% of the current Western Australian public sector workforce may exit employment in the next five to ten years. Together with the ageing profile, there are many other workforce factors that the public sector needs to address over the next five years . Consultation and research has identified some key issues that require a response from the public sector9 . The breadth of these issues, and the implications for the public sector workforce, are detailed in Section 3: Factors Affecting the Public Sector Workforce . Approximately one quarter of the States public sector workforce is employed in regional Western Australia . In many ways, public sector agencies in regional and remote areas face many of the same challenges as those agencies based in the lower metropolitan area . Regional areas, however, face additional challenges, some which are detailed in Section 4: Regional Western Australia . Given this, it is imperative for all public sector agencies that provide services in regional areas to develop effective responses to manage current and future workforce issues . The profile of the existing public sector workforce, as identified in Section 2, highlights issues that must be addressed . At a broader level, the demographic profile of Western Australia is changing, which means there are new community expectations and increased demand for government services . This demand must be met by a competent and complete public sector workforce .

Section 3: Factors Affecting the Public Sector Workforce

The Western Australian government is committed to responding to a range of social, economic, technological, environmental and other factors that have emerged and are having an impact on the public sector workforce . Some factors that are affecting the public sector workforce are outlined below . Table 1 - A Snapshot of Factors Affecting the State Public Sector Workforce

Social Factors
Population profile:
Between 2006 and 2026, the population in Western Australia is projected to increase by 30% . During this period there is expected to be a 16% decline of youth aged under 15 years and a rise of 66 .9% of people aged 65 years and over10 .

Education participation rates:

While Western Australia has consistently had a lower education participation rate than the national average, the gap has recently widened16 .

Economic Factors
Unemployment:
In February 2009, Western Australias unemployment rate rose to 4 .2% . The States unemployment rate is forecast to rise to 5 .8% by 2011-12, before improving thereafter17 .

Fertility rates:
Australias population and fertility rates have steadily declined since the early 1960s (3 .5 births per woman in 1961 to 2 .0 births per woman in 2007)11 .

Wages:
Strong labour market conditions have seen a steady build-up of wages pressure in Western Australia, reflected by a 5 .1% growth in the Wage Price Index through to September 2008; the fastest growth of all States and Territories . Wages growth is expected to slow due to weaker employment demand18 .

Indigenous:
Between 2001 and 2006, Western Australia recorded the highest estimated resident Indigenous population growth rate of 18%, compared with the national average of 13%12 .

Lifestyle friendly practices:

Over the past 30 years, the proportion of Western Australians working part-time has risen from 17% to 27% of those employed13 .

Housing affordability:
With large increases in established house prices culminating in 2006, housing affordability in Western Australia fell sharply . More recently, relatively flat prices, rising wages and lower interest rates have improved affordability marginally, though house price to income ratios still remain high by historical comparison19 .

Cultural diversity:
In 2006, approximately 27% of Western Australians were born overseas . Western Australia has the highest proportion of people born overseas compared with other States and Territories14 .

Investment:
Investment over the past few years has been very strong in Western Australia particularly in the mining and construction sectors . This had a tightening effect on the labour market . Since the global financial crisis, however, investment prospects have declined particularly in terms of infrastructure20 .

Welfare:
Compared with the national average, Western Australia has had a relatively low proportion of households on income support15 .

Technological Factors
Information technology connectivity:
Western Australia has the second highest Internet connectivity of all States and Territories with 59 .4% of dwellings having an Internet connection21 .

Other Factors
Immigration:
In 2007-08, 149,365 people emigrated to Australia (settler arrivals) . Western Australia was the 4th most popular State or Territory for emigrants, receiving 15 .2% of settler arrivals25 .

Medical technology/life expectancy:

In 1988, the life expectancy of Western Australian men was 74 years and 80 years for women . For the period 2004-2006, life expectancy increased to 79 years and 84 years respectively22 .

Migration patterns:
From 2006-07 to 2007-08, net overseas migration into Western Australia increased by 35 .8% . In 2007-08 net overseas migration accounted for 60 .7% of the growth in Western Australias population26 .

Environmental Factors
Energy and climate change:
Australian average temperatures have risen by 0 .7C over the last century, and the warming trend appears to have emerged from the background of natural climate variability in the second half of the 20th century . Rainfall has increased over the last 50 years over north-western Australia, but decreased in the south-west of Western Australia23 .

Wages/industrial relations:
The average weekly earnings in Western Australia for the December 2008 quarter was $1022, which was 12% above the national average weekly earnings27 .

Population:
74% of the States population lived within the metropolitan area in June 2007 . The southwest of the State has the highest concentration of people, but in 2006-07 the Kimberley experienced the fastest population growth in the State (3 .8%)24 .

Social Factors Affecting the Public Sector Workforce

In June 2008, Australias population was estimated at 21,374,000, with Western Australias population making up 10% (2,163,000) of the national total . In addition to significant growth, Western Australias population profile has also changed considerably . This is evident in Figure 4, which contrasts the current demographic profile of Western Australia with the profile of previous years . Figure 4 - Western Australias changing population profile28

Low Natural Population Rates Prior to 2002

In 2002, after a long period of decline, the fertility rate hit an all time low in Western Australia of 1 .7 . In 2007, it had risen to 2 .01, the highest fertility rate since 1978 .

Western Australias Population is Ageing

In 1996, 18 .3% of Western Australias population was aged 55 years or older . In 2006, 22 .9% of WAs population was aged 55 years or older .

FACTS
Western Australias Population is Seeking More Flexible Work Arrangements
In 1978, 17 .2% of the workforce worked part-time . In 2008, 27 .3% of people worked part-time .

Overseas Migration has Increased

Over the ten years to June 2008, Western Australia grew by close to 348,000 people, of which overseas migration accounted for 55 .6% .

The changing population profile means changes to the way that the public sector provides its services . It also has implications for the profile of the public sector workforce that is required to deliver quality services and the skills that are required of the public sector workforce . For example: a reduced birth rate, combined with an ageing population, has gradually diminished Western Australias available workforce an ageing population, as well as increased longevity, has resulted in greater demand for public health services changing workforce demographics caused by generational preferences has led to an increased focus on factors such as workforce diversity, mobility, development and enabling employees to make a contribution an increase in demand for more flexible working arrangements, typically for family and personal reasons, has created a need for public sector agencies to evolve from traditional employment arrangements to more contemporary and innovative approaches an increase in overseas migration to Western Australia has led to increased demand for housing, health and education services sensitive to the social and cultural requirements of the population .

Economic Factors Affecting the Public Sector Workforce

In recent times, global financial markets have experienced significant downturn, which has had a flow-on effect to economies worldwide, including the Western Australian economy . In contrast, the years leading up to this downturn were times of significant economic growth for Western Australia, with the mining industry playing a major part in contributing to growth . From 2001-02 to 2007-08, Western Australias real gross state product (GSP) rose by an average growth rate of 5 .1% a year, compared with a National average of 3 .3% . The total increase in GSP over this period was 34 .9%29 . The strong State growth was characterised by low unemployment, increased business investment and high consumer confidence; however, it brought about a tight labour market (with skill and labour shortages), significant wage pressures, declining housing affordability, and accelerating rental prices30 . It was expected that Western Australia would continue to enjoy positive economic growth, albeit at a slower rate; however, recent changes in global economic conditions are resulting in some downward revision of forecasts . Recent projections suggest a major slowdown in economic growth next year, with a forecast of 1 .5% growth for 2009-10, down from the previous projection of 6 .25%, and a significant drop from the actual GSP of 5 .2% in 2007-0831 . While the global financial crisis has significantly contributed to the downturn, signs of easing economic growth had already begun to emerge, with growth in consumer spending slowing down and retail sales growth becoming sluggish32 .

Investment and Trade

Prior to the financial crisis, high global demand for commodities was driving investment in the Western Australian resources sector, leading to employment and population growth . More recently, global commodity prices and demand have declined, including many of the States key exports, such as iron-ore, which experienced a sharp fall in price in the latter part of 2008 . The decline in commodity markets is expected to continue due to the slow-down of the global economy . In response, major producers in the State are cutting production and delaying expansion plans33 . Despite the scaling back in mining-related investments, the outlook for the State economy in the first half of 2009 appears relatively strong due to the large number of investment projects currently underway, or committed . These projects relate largely to engineering construction in the resources sector34 . The future outlook will depend significantly on the economic growth of the States major trading partners in Asia, particularly China - the States largest export market . Economic growth for China in 2009 is forecast at 6 .7%, a decline from the previous forecast of 8 .5% and growth in other emerging and developing countries is expected to slow down, but remain positive35 .

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Housing Costs
In Western Australia, the strong State growth over the past few years has contributed to a housing boom that resulted in a sharp decline in housing affordability . Nationally, housing prices have been increasing rapidly, with the average house price now equivalent to over 7-years average earnings, compared with 3-years average earnings between 1950 and the early 1980s36 . Though housing prices have begun to fall, both State and nationally, they are expected to remain high with rental prices continuing to inflate due to high occupancy rates37 .

Labour Market
From 2000 to 2008, employment in Western Australia expanded by 25% (in seasonally adjusted terms) . This growth equalled around 225,000 jobs, of which more than two-thirds were full-time38 . In 2007-08, the State continued to experience strong employment growth (3 .6%) and low unemployment (3 .3%)39, with an average participation rate of 68 .7% for 200840 . The strong economic growth of the past few years has contributed to a severe skills and labour shortage; however, this may be offset in the future as a result of the changes in the global economic context . While the employment forecasts for the first half of 2009 are relatively positive due to existing infrastructure project commitments, the outlook for 2009-10 is less positive, with the States employment growth predicted to fall to 1 .25% and unemployment expected to rise to 4%41 . Participation rates are expected to remain about the same42 . The finance sector, nationally, has already experienced job cuts in the latter part of 2008 which have continued into 200943, and some resource companies have announced recruitment freezes and layoffs44; however, the full extent of the impact on the Western Australian workforce is not known yet . The scaling-back of mining-related investments may lead to further job cuts in the mining sector and have flow-on effects to related industries45 . Wages growth is expected to slow due to weaker employment demand . Average weekly earnings are expected to slow at a greater rate, largely due to the decrease in employment growth in high paying industries such as mining and construction . There will likely be a greater shift toward casual and part-time work and so a reversal of full-time relative to part-time employment will also affect wages growth46 .

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Technological Factors Affecting the Public Sector Workforce

Technology in Western Australia is among the most advanced in the global economy . Improvements in technology are being made in all industries, resulting in changes and improvements in service delivery . For example, in the past decade, improvements in medical technology within the health sector have resulted in marked improvements in diagnoses, treatments and therapies . Changes in medical technology, coupled with the ageing population, will require a public sector workforce that is adaptable to the use of new technology . Examples of the improved use of technology in other industries are equally apparent, including in education (online tuition, Internet access), law enforcement (speed cameras, video surveillance, DNA testing), and environmental management . Western Australians are computer-literate, with 76% of households having access to a computer (the third highest State/Territory)47 . Western Australia is also among the highest State or Territory in terms of households with access to the Internet (Figure 5), and which are connected to broadband . Figure 5 - Household Use of Information Technology, Australia 2007-0848

Information and communications technologies provide government with new ways to deliver services through electronic channels such as the Internet, mobile telephony and videoconferencing . This can be particularly advantageous for government service delivery in regional and remote areas . There is growing pressure from the community for government to deliver services in more efficient and flexible ways . The Citizen Centric Government49 strategy sets out how the Western Australian Government will harness these opportunities to deliver better services . The use of technology can also enable the public sector workforce to work more efficiently and flexibly . With the growing availability of regional broadband this will become increasingly possible regardless of location . For example, collaboration through virtual work groups can occur utilising facilities such as web-based conferencing, social networks, blogging and document sharing . The same technologies will also facilitate greater across-agency collaboration, and will support more flexible work arrangements, such as home-based work . Technology also allows correspondence to be tracked more efficiently and information to be gathered and used more effectively . Harnessing these opportunities will require a strategic and collaborative approach to rolling out new technologies, upgrading the States information technology infrastructure and ensuring ongoing training for a more technologically literate public sector .

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Environmental Factors Affecting the Public Sector Workforce

Technology can also be used to ensure that environmental factors which are having an effect on the public sector workforce are effectively managed . Some examples where improved technology can make a positive difference include Green IT and carbon friendly work practices such as telecommuting, web conferencing and other information sharing strategies . Some additional investment in infrastructure may need to occur in order to implement these practices and to monitor the governments carbon footprint . The identification of initiatives to continue offsetting environmental pressures is a priority for all governments . Priority areas for the sustainability of Western Australias environment include land and inland water, land degradation, climate change and the development of renewable energy sources50 . The Australian Government has committed to introducing an emissions trading scheme by 201051 . The scheme will be the centrepiece of its greenhouse gas abatement policies and could have significant implications for Western Australias community and economy, particularly as its economy is heavily dependent on energy intensive industries . The rapid growth of the Western Australian economy over the past few years has created an increasing need for environmental sustainability strategies . Land and infrastructure developments have resulted in an increased need to manage a range of environmental issues, including land salinisation, the loss of biodiversity and the salinisation of inland waters . The public sector, in partnership with the private sector, plays a major role in initiating and managing the changes that are required to balance environmental and sustainability issues with economic prosperity . The increasing focus on environmental initiatives will result in a greater need for relevant and contemporary skills and expertise within the public sector .

Other Factors Affecting the Public Sector Workforce

Migration policy has adapted to the long-term slowing of the natural population growth to ensure the ongoing availability of labour in certain industries . During 2007-08, 149,635 people migrated to Australia (settler arrivals) . Skilled migrants made up 65,400 of these new entrants52 . In Western Australia, overseas migration is also a strong contributor to the States population growth (Figure 6) . Alongside the Governments ongoing focus on skills-based migration, the profile identified in Figure 6 is likely to become more diverse in coming years .

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Figure 6 - Western Australia Components of Population Growth 2002-200753

The increasing diversity of the Western Australian population highlights the need for alternative service delivery approaches and workforce policies . As baby-boomers retire, the Western Australian public sector will increasingly rely upon a culturally diverse workforce to fill the baby-boomer retiree gap and will need to create employment conditions that value a range of experiences, opinions and work styles . Clearly such diversity will also bring great benefits to the public sector . The State Government also manages the impact of other policies on the Western Australian public sector workforce . Key areas that have typically had a more profound impact on the ability to attract and retain a public sector workforce include wage policy, health, welfare, environmental and industrial reform policy . These can be affected by issues at a global, national and state level which can subsequently affect the services provided by the public sector . Global economic events, particularly in late 2008, may have a broad range of impacts on the public sector and these should be evaluated by each agency in terms of the workforce impacts, and the services required by the Western Australian community . Some possible impacts that may result from the global credit crisis include: declining job opportunities in Western Australia may lead to increased enrolments in studies and this will increase demand for services and workers involved in the education sector job loss and financial stress may lead to increased health issues in the community and this may increase demand for services and workers in health; mental health; community services; drug and alcohol support; and sexual assault/domestic violence services decreased household wealth, from job loss and decreasing asset values, may increase demand for child welfare and disability support job loss and inability to repay mortgages may increase demand for the States public housing financial and employment uncertainty may increase the communitys need for advice, support, referral and information services in areas such as legal aid, industrial relations and small business additional support may be required in regions affected by the downturn in the mining sector .

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Section 4: Regional Western Australia

Geographical distance creates one of the greatest challenges for the Western Australian public sector . The State-wide economic growth in recent years led to increased demand for additional public services in regional and remote areas to support expanded communities and private investment . In 2007, 27% of Western Australians lived outside of the Perth metropolitan area54 . In 2008, 24% of the States public sector workforce was located in regional or remote areas55 . The factors described in Section 3, including housing affordability and wage competition, are often exacerbated by regional living . Between 2002 and 2007, the Peel, Pilbara and SouthWest regions recorded the largest annual average increases in population in regional Western Australia . Over this same period, the Gascoyne and Wheatbelt regions experienced a decline in population56 . Both population growth and decline create challenges for the public sector . High population growth, while potentially boosting economic well-being, also puts pressure on public services and infrastructure programs to maintain a similar pace . Conversely, negative growth may impact on the sustainability of existing public services and the efficient use of infrastructure . Population growth and decline in regional areas have service delivery implications for the State public sector workforce . Other factors such as harsh climates, housing affordability, wage competition, limited infrastructure and cost of living are also obstacles in attracting and retaining people to work in regional areas . Another challenge is professional isolation that may be experienced by employees . Agencies need to take advantage of communication technologies to support their employees in this regard, for example, through the use of facilities such as videoconferencing and networking applications . Figure 7 - Map of Western Australia - Regions57

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Section 5: Western Australian Workforce Challenges

Workforce Supply
Prior to the global economic crisis, Western Australia was experiencing high employment growth in many industries, particularly the mining and construction sectors . This growth together with low unemployment, high employment participation rates (Figure 8) and reductions in education participation rates (Figure 9) created strong workforce competition with skills and labour shortages . This context is now changing, however, as Western Australia enters a period of slower growth in employment . Figure 8 - Western Australias Participation and Unemployment rate (2004-2008)58

Figure 9 - Education Participation Rates, Persons Aged 15 to 24 years59

Western Australias education participation has historically been below the national average and it fell further since 2000 . This decline is likely to have been a product of the strong demand for low and semi-skilled labour in Western Australia; the favourable wages growth that was being experienced with low levels of unemployment; and labour force shortages that had been generated by the construction and resources boom . With the recent slowing of the economy this trend may change, as some people may choose to return to, or commence, further education .

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Notwithstanding the workforce shortages experienced in the past few years, some segments of the community continued to have relatively low employment participation rates (Figure 10) . Figure 10 - Underutilised Segments of the Western Australian Population60

The participation rate for females aged between 25 and 34 has increased in the past, however, this group is still underutilised.

The male participation rate for mature workers, as well as those for females, presents an opportunity to introduce retention strategies that support these people to remain in employment and for agencies to retain corporate knowledge.

Improvements to labour participation rates for people with disabilities presents an employment opportunity for the Western Australian public sector.

Improvements to Indigenous labour participation rates present an employment opportunity for the Western Australian public sector.

As Figure 10 illustrates, the Western Australian public sector has a unique and positive opportunity to increase employment of underutilised segments of the Western Australian population, including mature people, women, Indigenous Australians and people with disabilities .

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Workforce Demand
Western Australia has witnessed a rapid economic expansion over the past few years . The economy grew by 50% between 2004-05 and 2007-08 . In 2007-08, Western Australias gross state product (GSP) was $145 billion, equal to around 13 .5% of Australian output, relative to the States population share of 10%61 . Western Australias likely growth prospects indicate that the State will see moderate and then negative growth up until 2011-12 (Figure 11) . The State will see renewed growth when the global economy recovers, which is projected to occur towards the end of 2011-12, with a recovery forecast for 2012-13 . Figure 11 - Growth in WA Output: 2004-05 to 2006-07 & forecasts 2008-09 to 2012-1362

As at September 2008, construction activity was still extremely buoyant with $48 .7 billion worth of work Under Construction in Western Australia (Table 2) . This accounted for 29% of all committed or planned construction work in the State - the pipeline of infrastructure spending in the State . The level of current construction activity was 11% higher than work under construction in the same quarter in 200763 . This activity was largely driven by infrastructure spending in the Mining sector, which accounted for almost 60% of total spending (Under Construction) . A considerable proportion of spending in Electricity, Gas & Water (10 .3%) and Transport & Storage (13%) was also attributable to activity in the Mining sector . As can be seen in Table 2, these three sectors have a similar level of dominance in the Committed, Under Construction and Possible categories64 . Recent evidence indicates that large mining projects and associated infrastructure investments are being postponed, so it is likely that projects will remain in the Under Consideration and Possible phases over the course of the next 12 to 18 months as the full extent of the global downturn is felt65 .

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Table 2 - Estimated Activity in the WA Construction Sector by Area and Status (September 2008)66
Sector Agriculture & Forestry Mining Manufacturing Electricity, Gas & Water Trade Accommodation Transport & Storage Communication Finance, Property & Business Services Government Community & Other Services Mixed Use Total Share of Total (per cent) Under Construction ($mil) 29,139 1,863 5,035 273 107 6,332 0 1,448 31 4,110 434 48,772 29 Committed ($mil) 9,900 1,700 1,531 120 180 278 0 40 0 149 400 14,298 8 Under Consideration ($mil) 50,795 4,681 2,805 158 283 5,392 30 1,117 0 2,786 16 68,063 40 Possible ($mil) 655 16,684 7,871 6,603 121 244 3,982 0 2,211 142 760 122 39,385 23 Total ($mil) 655 106,518 16,115 15,974 672 814 15,984 30 4,816 173 7,805 972 170,528 100

The slowing down of the economy will, at least in the medium-term, reduce workforce demand in Western Australia resulting in decreased growth rates in Western Australian employment than seen in previous years (Figure 12) . The States unemployment rate is forecast to rise to 5 .8% by 2011-12, before improving thereafter67 . This change in the labour market may offset the workforce competition and shortages that have been experienced by the Western Australian public sector in the past couple of years, thereby encouraging new job seekers to more actively consider the unique opportunities offered by the public sector . Figure 12 - Growth in WA Employment: 1999-00 to 2006-07 & forecasts for 2008-09 to 2012-1368

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Forecasted growth in Western Australias population is an important consideration, particularly for public sector agencies that provide direct services to the community . In 2004, Western Australias population growth exceeded the Australian Bureau of Statistics (ABS) base year forecast for that year and, since then, the States estimated resident population has grown at a faster rate than that projected under the ABSs most optimistic projection series, the Series A projection (Table 3) . If its current rate of expansion is maintained, it is likely that the Western Australian population will continue to exceed the high-growth forecast from the ABS . For example, in 2007, actual growth in Western Australias population exceeded the Series A projection from the ABS by 16,718 people and the Series B projection by 34,155 people . Table 3 - WA Population: Actual and Forecast Series (June)69
ABS Population Projections Actual 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1,982,006 2,016,395 2,059,045 2,105,783 2,163,247 2,252,467 * 2,355,889 * Series A 1,978,079 2,013,630 2,050,855 2,089,065 2,127,913 2,166,982 2,206,279 2,245,811 2,285,614 2,325,698 2,366,070 Series B 1,978,079 2,008,936 2,040,310 2,071,628 2,102,886 2,134,082 2,165,209 2,196,271 2,227,190 2,257,968 2,288,620 Series C 1,978,079 2,006,142 2,031,554 2,054,935 2,077,244 2,099,160 2,120,692 2,141,843 2,162,532 2,182,760 2,202,541

* Extrapolation only, assuming 2007 as the base year and annual growth of 2.27%. If growth remains at 2007 levels (2 .27% per annum), Western Australias population will reach about 2,252,467 by 2010 . This represents an increase of 146,684 persons over 2007 levels . By 2012, this rises to 2,355,889, an increase of 250,106 persons since 2007 . This ratio of population growth may decrease if the economy weakens . This is a conservative projection in view of Western Australias recent performance, but reflects the possibility of moderating growth as a result of the global financial crisis . To a large extent, the nature of public services that can be provided in the future to meet the projected increases in demand will depend on the ability of the State Government to attract people to work in the State public sector . Strategic Directions offers solutions to maximise public sector employment opportunities . To date, the Western Australian public sector has used a range of successful strategies to address workforce challenges, including an increase in migration of skilled and unskilled workers, improved recruitment strategies, regional initiatives, remuneration increases and improved flexible work practices . Given the increasing impact of current and future external factors, Strategic Directions has been developed to ensure that further targeted and practical initiatives are implemented .

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Section 6: The Next Step - A Call For Action

This publication has outlined some of the current and future workforce influences that the State public sector is facing . While the identification of issues is a crucial step, taking action to address these issues is the critical stage . Strategic Directions has been developed following consultation with representatives across the sector . All agencies are responsible for implementing the solutions identified by Strategic Directions . The nature and complexity of these issues mean that they can only be successfully resolved by the joint collaboration of all agencies across the public sector . While Strategic Directions has identified tangible, innovative and practical initiatives to assist in offsetting workforce pressures, these initiatives are by no means an exhaustive list . The future delivery of services depends on the development and implementation of a wide range of workforce initiatives, some that will be unique to individual agencies, and others that will be applied to the entire State public sector . A failure to adequately attract, develop and retain competent people in public sector employment will adversely affect the sustainability and appeal of Western Australia for current and future generations . The immediate and ongoing collaboration of public sector agencies will ensure that Western Australias reputation as a great place to live will continue for the long-term .

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References
Executive Summary
1 . 2 . Public Sector Commission, State Workforce Profile, (June 2008): pg 7 Compound annual average growth rates calculated using growth levels from Australian Bureau of Statistics (ABS), Australian National Accounts: State Accounts 2007-2008, ABS Cat . No . 5220 .0 (Nov 2008): pg 10

Section 2
3 . Australian Bureau of Statistics (ABS) Labour Force, Australia, Detailed - Electronic Delivery, Nov 2008, ABS Cat no: 6202 .0 .55 .001, (December, 2008): Table 8 Labour Force Status by Sex - Western Australia - Trend; Series ID A184065A . Figure quoted relates to June 2008 Department of the Premier and Cabinet, Human Resource Minimum Obligatory Information Requirements (HRMOIR), June 2008 Ibid . Figure 1 is based on 110,447 full time equivalent (FTE) positions Ibid . Ibid . Figure 2 is based on a headcount of 133,337 employees Public Service Staff Census, 1988 - 1995; Department of the Premier and Cabinet HR MOIR Anonymous Individual Employee Records, 1999 - 2007 (includes full-time permanent employees only) . Department of the Premier and Cabinet, HR MOIR, June 2008 (includes all employees for whom this data is available) Department of the Premier and Cabinet consultation included an online survey, occupational focus groups and the establishment of a State Workforce Plan Reference Group

4 . 5 . 6 . 7 . 8 .

9 .

Section 3
10 . Australian Bureau of Statistics (ABS) Population Projections, Australia, 2004-2101 ABS Cat no 3222 .0, (June, 2006): Table 14- Series B 11 . Australian Bureau of Statistics (ABS) Births, Australia, 2007 ABS Cat no: 3301 .0, (October, 2008) Table 1; Chamber of Commerce and Industry Building Human Capital (November 2007): pg 15 12 . Australian Bureau of Statistics (ABS) Population Distribution, Aboriginal and Torres Strait Islander Australia 2006, ABS Cat no: 4705 .0, (August, 2007): pg 4 13 . Australian Bureau of Statistics (ABS) Labour Force, Australia, Detailed - Electronic Delivery, Nov 2008, ABS Cat no: 6291 .0 .55 .001, (December, 2008): Table 2 14 . Australian Bureau of Statistics . 2006 Census QuickStats: Western Australia, Selected characteristics, People Born Overseas, (2007) . http://www .censusdata .abs .gov .au (Accessed January 15, 2009) . Territories includes Northern Territory and Australian Capital Territory only

22

15 . Australian Bureau of Statistics (ABS) Household Income and Income Distribution, Australia - Detailed tables, 2005-06, ABS Cat no: 6523 .0 .55 .001, (August 2007) 16 . Australian Bureau of Statistics (ABS) Australian Social Trends, 2008, Data Cube - Education and Training Indicators, ABS Cat no: 4102 .0 (July 2008): Table 1 17 . Department of Treasury and Finance Economic Note, Labour Force, February 2009 (March 2009); Unemployment forecast taken from Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 18 . Australian Bureau of Statistics (ABS), Australian Labour Market Statistics, January 2009, ABS Cat no: 6105 .0, (January, 2009): pg 74; DTF, Government Mid-year Financial Projections Statement, 2008-09, Perth: DTF, (December 2008) 19 . Department of Treasury and Finance (DTF), Western Australia - Economic Policy Unit; DTF , WA Economic Summary No .3 (2008) 20 . Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 21 . Australian Bureau of Statistics (ABS), 2006 Census of Population and Housing: Media Releases and Fact Sheets, 2006, ABS Cat no 2914 .0 .55 .002, (June 2007) 22 . Australian Bureau of Statistics (ABS), Australian Historical Population Statistics, 2008, ABS Cat no: 3105 .0 .65 .001, (August, 2008): Table 7 .1 23 . Department of Climate Change, Climate Change - An Australian Guide to Science and Potential Impacts (2003) 24 . Australian Bureau of Statistics (ABS), Regional Population Growth, Australia, 2006-07 Population Change, States and Territories, ABS Cat No 3218 .0 (March 2008); 2006 Census of Population and Housing - Perth A Social Atlas, ABS Cat no 2030 .5 (March 2008) 25 . Department of Immigration and Citizenship, Immigration Update 2007 - 2008 (2008) 26 . Australian Bureau of Statistics (ABS), Australian Demographic Statistics, June 2008, ABS Cat . No .3101 .0, (December 2008): p8 Main Features, State and Territories: Population Growth, Components of Population Change, Net Overseas Migration 27 . Australian Bureau of Statistics (ABS), Average Weekly Earnings, November 2008, ABS Cat . No . 6302 .0, (February 2009): pg 5 and pg 16, Average Weekly Earnings, All Sectors, Persons, Seasonally adjusted, All employees total earnings

23

Section 4
28 . Fertility Rates - Births 2007, ABS Cat . no . 3301 .0 Canberra: ABS, 2008, Data from spreadsheet 33010DO004_2007 Births, Australia, 2007, Table 5, Summary statistics for Western Australia - 1997 to 2007 ABS Cat . no . 3301 .0 Canberra: ABS, 2008; Population Age - Census of Population and Housing, Basic Community Profile, Western Australia, Spreadsheet B03, Age by Sex, All persons, Quickstats 1996, Canberra:ABS, 2000; 2006 Census Quickstats: Western Australia Canberra:ABS, 2006; Population growth and Migration - Australian Demographic Statistics, Table 2 . Population Change, Components - States and Territories A2060804T (Natural Increase, Western Australia), A2060805V (Net Overseas Migration, Western Australia), A2060806W (Net Interstate Migration, Western Australia) ABS Cat . no . 3101 .0 Canberra: ABS, 2008; Flexible/Part-time work - Labour Force, Australia, Detailed - Electronic Delivery, Nov 2008, Table 02ABS Cat . no . 6291 .0 .55 .001 Canberra: ABS, 2008 . Total employed persons, Western Australia = A85573T; Employed Part-Time Persons, Western Australia = A85569A) 29 . Australian Bureau of Statistics (ABS), Australian National Accounts: State Accounts 20072008, ABS Cat . No . 5220 .0 (Nov 2008) 30 . Department of Treasury and Finance (DTF), Government, Mid-year Financial Projections Statement 2006-07, (December 2006): pg 39; DTF, Government, Mid year Financial Projections Statement 2007-08, (December 2007): pg 38 31 . Department of Treasury and Finance (DTF), Government Mid-year Financial Projections Statement, 2008-09, Perth: DTF, (December 2008): pg 36 32 . Department of Treasury and Finance (DTF), Briefing Note - Global Factors Affecting the Western Australian Economy, (2 December 2008) 33 . Department of Treasury and Finance (DTF), Government Mid-year Financial Projections Statement, 2008-09, (December 2008): pg 42 34 . Ibid . pg 35 35 . Ibid . pg 41; IMF (International Monetary Fund), World Economic Outlook Update, January 2009 36 . Access Economics, The impact of the global financial crisis on social services in Australia, (November 2008): pg 15 37 . REIWA, Mortgage Choice, Real Estate Market Facts, September Quarter, (2008): 1; REIWA, REIWA data shows prices down - rents up - for Dec 2008, 14 January 2009 . http://reiwa . com/Art/Art-Public-View .cfm?PageUUID=6030862d6b841ad8cd486f7c56c69622114c21-Jan-2009-06:02:48:703&Id=11583 [Accessed 21 January 2009]; Access Economics, The impact of the global financial crisis on social services in Australia, (November 2008): pg 16 38 . ABS, Labour Force, Australia, Dec 2008, ABS Cat . no . 6202 .0 (January 2009): Table 8, Labour force status by Sex - Western Australia - Trend, Seasonally Adjusted and Original 39 . Department of Treasury and Finance (DTF), Government Mid-year Financial Projections Statement, 2008-09, (December 2008): pg 34

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40 . ABS, Labour Force, Australia, Dec 2008, ABS Cat . no . 6202 .0 (January 2009): pg13, Table 8, Labour force status (aged 15years and over) - Western Australia - Seasonally Adjusted (Participation rate) 41 . Department of Treasury and Finance, Government Mid-year Financial Projections Statement, 2008-09, (December 2008): pg 34 42 . Department of Treasury and Finance, Government Mid-year Financial Projections Statement, 2008-09, (December 2008): pg 44 43 . Danny John, Sydney Morning Herald online delivery, Financial crisis costs 400 more ANZ jobs 6 Dec 2008, http://www .business .smh .com .au/business/financial-crisis-costs-400more-anz-jobs-200812 [Accessed 22 December 2008] 44 . Department of Treasury and Finance, Government Mid-year Financial Projections Statement, 2008-09, (December 2008): pg 44 45 . Access Economics, The impact of the global financial crisis on social services in Australia, (November 2008): pg 6 46 . Department of Treasury and Finance , Government Mid-year Financial Projections Statement, 2008-09, (December 2008): pg 45 47 . Australian Bureau of Statistics (ABS), Household Use of Information Technology, Australia, 2007-08, ABS Cat no 8146 .0, (December 2008) 48 . Australian Bureau of Statistics (ABS), Household Use of Information Technology, Australia, 2007-08, ABS Cat no 8146 .0, (December 2008) 49 . Citizen Centric Government: Electronic Service Delivery Strategy for the Western Australian Public Sector, Government of Western Australia, ISBN 978 0 7307 0246 7 50 . Environmental Protection Agency, 2007; Liberal Plan for Environmental Sustainability and Water Management, (2008), http://www .wa .liberal .org .au/index .php?option=com_ docman&Itemid=141 [Accessed 23 March 2009] 51 . Department of Climate Change, Carbon Pollution Reduction Scheme - Timetable, updated 10 March 2009, http://www .climatechange .gov .au/emissionstrading/timetable .html [Accessed 18 March 2009] 52 . Department for Immigration and Citizenship, Immigration Update 2007/08, (December 2008):3 53 . Australian Bureau of Statistics (ABS) Australian Demographic Statistics, June Quarter 2008, ABS Cat . No .3101 .0, (December 2008): Table 2 . Population Change, Components -States and Territories (Number)

25

Section 5
54 . Department of Local Government and Regional Development, Estimated Resident Population 1997 - 2007, Regional Summary: 6 http://www .dlgrd .wa .gov .au/Publications/ Docs/EstimatedResidentPopulation2007Summary .pdf [Accessed 18 March 2009] 55 . Public Sector Commission, Public Sector Workforce Profile 2008, 2008: pg 14 at http://www .dpc .wa .gov .au/PSMD/WorkforcePlanning/WorkforceInformation/Pages/ PublicSectorWorkforceProfile2008 .aspx [accessed February 2009] . The 24% is based on FTE ie full time equivalents 56 . Department of Local Government and Regional Development, Estimated Resident Population 1997 - 2007, Regional Summary: 6 http://www .dlgrd .wa .gov .au/Publications/ Docs/EstimatedResidentPopulation2007Summary .pdf [Accessed 18 March 2009] 57 . Map from the Department of Local Government and Regional Development - Western Australia, Statistical Information at http://www .dlgrd .wa .gov .au/Publications/Docs/map_ RegionalDevelopBasic .gif [Accessed 18 March 2009]

Section 6
58 . Australian Bureau of Statistics (ABS), Labour Force, Australia, Spreadsheets, Dec 2008, ABS Cat . no . 6202 .0 .55 .001, (January 2009) : Table 8, Labour force status by Sex - Western Australia - Trend, Seasonally adjusted and Original, Series IDs A181779X (Participation rate) and A181780J (Unemployment rate) 59 . Australian Bureau of Statistics (ABS) Australian Social Trends, 2008, Data Cube - Education and Training Indicators, ABS Cat no: 4102 .0 (July 2008): Table 1 60 . InfoHRM Pty Ltd, Report for the Department of Premier and Cabinet,Western Australia Confronting Change in the 21st Century - Challenges and Risks for the Western Australian Public Sector Workforce (2008); ABS, 2006 Census of Population and Housing, Indigenous Community Profile, ABS Cat . No . 2068 .0 Census Tables 2006: Table I16A, Indigenous persons; ABS, 2006 Census of Population and Housing, Core Activity Need for Assistance (a) by Labour Force Status by Sex, ABS Cat . No . 2068 .0: Census Tables 2006 61 . Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 62 . Access Economics, as quoted in Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 63 . Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 64 . Ibid . 65 . Ibid .

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66 . Access Economics, as quoted in Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 67 . Unemployment forecast for 2011/2012 is based on data from Access Economics, as quoted in Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 68 . Access Economics, as quoted in Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 69 . ABS, as quoted in Dockery, M ., Koshy, P ., Phillimore, J . and Seymour, R ., Centre for Labour Market Research, WA Labour Market Forecasting and Data Projections: Briefing Note, April 2008, Updated January 2009 Note: All estimates and forecasts for June of the relevant calendar year . ABS projections for Series A, B and C are dependent upon assumptions regarding migration and fertility rates in WA, as outlined in Population Projections, Australia, 2004 to 2101 . Series A is the most favourable projection for WA . Source: ABS, Population Projections, Australia, 2004 to 2101, Cat . No, 3222 .0; ABS, Australian Demographic Statistics, Cat . No .3101 .0

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