- Info
Findings
Highlights of findings
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Agencies reported spending $6.3 million less. Agencies that experienced the largest cost reductions cited centralisation, shared services arrangements, and process improvements as the key contributing factors.
- While some agencies reported efficiency gains, there are still significant opportunities for greater HR efficiency across government. Since FY 2009/10, the median total cost of HR per employee has increased from $2,306 to $2,503, and there is an opportunity to make $44.5 million in annual gross savings if agencies reduced their total HR cost per employee to the median cost for their cohort.[10]
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Effectiveness indicators show mixed results, both in terms of international comparisons and changes since FY 2009/10. HR management practice scores have increased since 2009/10, and the current mean score of 74 percent is higher than the UK Audit Agency (UKAA) cohort mean score of 67 percent.[11] Similarly, sickness absence has reduced since FY 2009/10 and is comparable to international benchmarks. However, retention of new hires in the same role after 12 months has reduced since FY 2009/10 and is significantly lower than benchmarks.
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There is an opportunity to strengthen the strategic role and capability of the HR function. Only 55 percent of agenciesreported having a statement that anticipates workforce needs for the next three years, and only 35 percent of agencies reported having a comprehensive professional development programme for HR staff with at least five days of professional development per annum per employee.
Notes
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[10]The 31 agencies (full NZ cohort) that participated in this exercise have, for the purposes of comparison, been categorised into three cohorts - 'small agency cohort' refers to agencies with <500 FTEs and/or ORC of <$95 million; 'medium-sized agency cohort' refers to agencies with 500 to 2,500 FTEs and/or ORC of $95 million to $300 million; and 'large agency cohort' refers to agencies with >2,500 FTEs and/or ORC of >$300 million.
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[11]Management Practice Indicators (MPI) are adopted from the UK Audit Agencies A&S service performance measurement methodology. Within that methodology, the MPI score assesses "the extent to which...[a] function achieves a set of key management practices which will provide an indication of whether it is a well-run, modernised and mature function. Details are found in Appendix 4.
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