Are APS incentives delivering unintended consequences in the form of golden handcuffs? Helena Cain explores this phenomenon and suggests how you might reflect on it for your own agency.
I have a few APS friends who complain, in seriously first-world tones, about their golden handcuffs. Not wanting to dob anyone in, I’ll remain vague, but these golden handcuffs seem to be very counter-productive to the objectives of a modern APS.
So what are these golden handcuffs?
As explained to me by those feeling the tightness of the golden handcuffs: these are the conditions that make it far too unattractive to leave their current jobs and departments, despite feeling bored, burned out, or bullied.
Everyone reading this surely knows someone like this? The people I know are really nice people, they’ve built steady careers within the APS, they’ve worked as hard as anyone else, but they are no longer inspired, and don’t feel as if they are doing their best work at this point in their career.
What they feel is a need is to move on, but they can’t, for a few reasons.
1. Salary rate variations
A quick and random look at seven enterprise agreements, considering top of the ranges in 2020/21 (without including Zones of Discretion) shows me that an:
- APS 6 would gain or lose $16,000 in salary in a move between Finance ($110,513) and PMC ($94,000);
- EL1 moving from Treasury ($134,435) to Services Australia ($113,471) would drop $21,000 for the pleasure (and $28,000 if they moved from Finance ($141,641);
- EL2 in Finance earning $166,976 would find it very difficult to take that valuable experience into Services Australia with their top of the range at $140,926. The additional workplace conditions would need to be compelling to take that $27,000 salary hit.
- These variations across departments also show that an APS 6 in one department is paid almost the same as an EL1 in another, and the same relationship applies between the EL2 and EL1.
(The Departments of Health, Foreign Affairs and the Australian Bureau of Statistics sat close together and mid-way between the extremes within my random sample of seven.)
The APS does consider this. When an APS employee transfers to a lower-paying agency, their higher salary can be accommodated, with discretion. However, even if the lower-paying agency matches the higher salary, the employee gets locked in, as they are held at that rate until the variation is absorbed over time. It could take years for a $27,000 gap close.
2. PSS incentives
It’s the older scheme that seems to offer the golden promise. I did the calculations recently with someone I know, and while he hates his job, loathes his team and would far prefer to be playing golf – not quite the right mindset to apply for a different job – we worked out that by staying in his role for three years longer – to reach Canberra’s magical age of 55 – he would make close to a $600,000 difference to his superannuation if he took a pension for 30 years, assuming he lives to 85.
As much as his heart was desperate to just walk away, and he’d convinced himself he could live on that $60,000, his head finally ruled, because it was the difference between living on around $60,000 per year or $80,000 per year… indexed, for the rest of his life.
I think the old PSS scheme is reaching its end-of-life, so this won’t present a golden-handcuff problem for much longer. It’s still here for now, though.
3. The promise of a package
This is surely Canberra’s Holy Grail, the not-so-elusive package that ideally coincides with retirement planning. I’ve lived in Canberra for 30 years and I know too many stories about people pushing boundaries to get their hands on one of these. In some ways it feels un-Australian not to.
In my BBQ-discussion-based experience, there are those who:
- purposefully become so difficult to manage that it’s counter-productive not to get them out of the building;
- master (or madam) the art of presenteeism, delicately dancing along that fine line that separates performance from performance management, until what is hard to prove is easier to pay out;
- have deep expertise, have over-delivered for years, and feel the need for a just reward, if they can just get the timing right.
This final boost to the superannuation coffers brings a lot of people a lot of joy, that supersedes the feeling of being golden-handcuffed pretty quickly.
How might these golden handcuffs impact the APS more broadly?
A couple of possibilities come to mind.
Could the variation in pay rates undermine mobility objectives – by discouraging higher-paid APS employees from leaving their current roles even if they are ready to do so?
The APS Mobility Framework is designed as a strategic workforce, supporting mobility between agencies to address surges or peaks in demand, to bring the best capabilities together to solve complex problems and to professionally develop employees. Great idea, yet over the past 12 months only 22.3% of APS employees have been mobile:
- 18.6% of APS employees were mobile within their own agency;
- 3.8% achieved mobility to another commonwealth government agency; and
- 0.9% took temporary transfers beyond commonwealth government agencies.
- With fewer than 5% of APS employees being mobile beyond their own agency in 2020, it’s a possibility.
Could the old PSS scheme be keeping people in roles beyond their preferred duration?
This could create a bottleneck, a layer of the more senior roles locked in, held by people who no longer really want the jobs but who are unlikely or unable to move without an incentive?
This situation could impact natural cycles of promotion and professional development for lower-ranking employees, as well as lead to questions around talent-management, productivity and satisfaction with leadership.
Could the grand tradition of the ‘package’ be creating similar system blockages as those described above?
How to know if your agency has golden handcuffs – and what to do about it
If you’re a leader and you’re not seeing the results you’d like across productivity, talent-management, or satisfaction with leadership (just as a start), and you’d like answers, then your upcoming APS Employee Census data will be a good place to start.
Here’s how we’d get started, and any census enthusiast within your HR team will be only too keen to help you:
- identify areas of concern (or positive outliers) within your census data
- correlate these with business performance indicators within your HR datasets to drill down into root causes.
Often leaders respond to the high-level census results, but combining it with business-performance indicators will give you a greater level of granularity that will help you to develop a far more targeted APS census response and improvement plan.
My big question about golden handcuffs, really, is: how do I get myself a set?