The Department of Employment has been home to one of the nation’s most mercurial policy domains, and among the most watched, where even the slightest tinkering becomes headline news. But in its latest separation from the Department of Education — in the machinery of government dance they do every couple of years — Employment, and its secretary Renée Leon, together with the Education Department have achieved a quiet innovation that could stand the test of time.
The Shared Services Centre, owned equally by Employment and Education, represents a mature, “seamless” evolution to the disruption that machinery of government changes can bring.
Keeping just a small amount of corporate to service each department’s individual strategic needs, the remainder — responsible for managing properties, paying the bills, maintaining payroll records, IT and provision of desktop — have all been consolidated into the SSC. Leon (pictured) told The Mandarin it represents a significant innovation over past machinery of government separations.
“I don’t want to call it an experiment now. We’re past the experiment and now showing that it works,” she said.
“We think it is a good model for, and we hope will become, the basis for more departments to use our Shared Services Centre for their corporate and for the public service more generally to adopt shared service models. We’ve had that operating now for about a year, and it’s been pretty seamless for us; IT continued, payroll continued, desktop continued.”
The SSC is not yet a separate legal entity. New chief executive Delaine Wilson moved into the position from New Zealand at the end of last year. She currently answers to the governance board including Leon, Education secretary Lisa Paul and representatives of the Department of Finance and the Public Service Commission.
If the centre starts to service six or 10 departments, Leon says it may be appropriate for it to become a separate legal entity. “I think everyone else would say, ‘hmm, how come they own it?’ I just don’t think we’re at that stage yet,” she said.
Other departments are looking to see how it works.“… then machinery of government changes wouldn’t have that horrendous impact of everyone having to separate their IT systems …”
In the past, Employment and other departments experiencing a machinery of government separation have undertaken a transactional memoranda of understanding for others to continue running legacy systems, at least until the agency decides they really need to do their own thing. Leon says an agreement between the two secretaries is currently sufficient.
“I don’t anticipate that there are going to be problems, but the good thing about having a little trial ground for doing this is that we can just go through a budget cycle or two, seeing the things that come up and putting in place mechanisms to resolve them before trying to do it on a big scale,” she said.
The caution is what happens if, for example, one of the departments dramatically increased or decreased in size. Presently the setup is 50-50; incorporating another corporate body into that primary agreement would shift the balance. Rules for how the addition of, or fewer, responsibilities, and how costs would be split are being developed to open up the opportunity for SSC to grow.
Another open question is when priorities about capital spend change. Those questions, Leon says, can be worked out, “hopefully in a sensible and amicable way”. There’s no clear rules, but there are structures as a starting point, such as an IT governance committee. This committee has all the relevant players and can make proposals to the governance board about IT investment, which is the largest capital spend.
“It’s working really well for us at the moment, because we’ve got a common IT system, but you can imagine five years from now, one or other of us gets MoGed into someone else, then we won’t have a common IT system with them and we’ll have to repeat that whole cycle of separation,” she explained.
“This is one of the reasons why if we could move towards a more broadly shared corporate, then machinery of government changes wouldn’t have that horrendous impact of everyone having to separate their IT systems … because you’re still being serviced by the Shared Service Centre even if your policy areas have been MoGed in with someone else.”
Leon proposes that, ideally, there would be a greater degree of shared services in departmental clusters of similar policy. “It’s unlikely that Employment is ever going to be MoGed into Defence, but Employment, Education, Social Services, Human Services; you can mix them up in lots of different ways if those like-departments were all on a common system,” she said.
That would lessen the cost and delays associated with machinery of government changes: “That’s perhaps not going to happen overnight, but we hope that the innovation that we’ve done with this Shared Services Centre both helps us identify and iron out some of the wrinkles in the model overall, but demonstrates that you can do it.”
Competition for employment services
A more day-to-day concern for the department is the current tender of its five-year employment services contracts, worth around $5 billion. The new program to replace Jobs Services Australia comes into effect on July 1 this year. Bidders are competing to assist around 800,000 active job seekers at any one point in time, around 40% of which are the most disadvantaged in the job market, needing more intensive assistance.
Even after the tender is complete, successful bidders will continue competing with each other over the lifecycle of the contract for job seekers to be allocated to them in their service regions, so the department’s role doesn’t end once the contracts are awarded. Measuring success for this work is a complex question, Leon says.
“You can imagine if employment services didn’t exist at all, that eventually vacant jobs would get filled by someone who is looking for them, perhaps less efficiently, and it might take longer, and eventually employers would get someone to get to work for them,” she said.
“But it would mostly be the people who don’t need much help to get one, and then you’d risk creating a whole group of people without assistance [who] might never get a job. That is not good for other broader social and economic reasons, and so the things that are particularly significant for us are trying to ensure that the people who with greater labour market disadvantage might not get into work, are getting more skills training, post-placement mentoring, career advice, partnering with other services to fix up with whatever is going on in their life that means they can get a job.”“… you’d risk creating a whole group of people without assistance [who] might never get a job.”
The 307,318 people that fit the most disadvantaged categories will get the most attention. Almost two-thirds of them have been unemployed for two years or more. Half of them have a disability, and a significant number are homeless or ex-offenders. Other factors that place a jobseeker into the high priority streams are indigenous heritage, non-English speaking background, or not having capability to work more than 30 hours per week.
“Even if one is being entirely hard-nosed about it, there is a lot of economic downside to people being in long-term unemployment as well as being a disadvantage for that person,” Leon said. “If you don’t address that you’re not addressing skills shortages in your own economy.”
The department has an ongoing market analysis function to assess both skills shortages and oversupplied professions. Leon says this information is fed to the employment services providers, Department of Immigration, and other sources of potentially skilled labour.
“I can’t tell all those people to become lawyers or journalists, because some of them won’t have finished school, but to identify qualifications and skills that are going to be in-demand preferably in the area they live and can be trained up for.
“That means you’ve got the opportunity to lift that person out of welfare dependency, as well as potentially their family, their future children — it’s got a ripple effect.”
Jobseekers in Streams 3 and 4 have one or more of the major disadvantaged characteristics:
- 52% have a disability;
- 16% are indigenous;
- 18% are homeless.
- 24% have the capacity to only work 30 hours or less per week;
- 18% are from a cultural and linguistically diverse background; and
- 18% are ex-offenders.
The other side of the department’s policy work is in advising the government on policies for stable and low-dispute productive workplace relations networks. A frequent question asked of Leon is the number of days lost to industrial disputes.
“Of course it is at historically low levels,” she said. “The number of days lost to industrial disputes has, since industrial reforms of the ’90s, been going down all the time, and that’s where we like to keep it.”
There are several factors, most notably legislative changes that now require industrial action to be authorised by the Fair Work Commission, and only when negotiating an enterprise agreement. Once a workplace has signed to an enterprise agreement for one to three years, they can’t get protected action up for new terms and conditions during that agreement period.
The department advises the Public Service Commission, but Leon has no significant role in the current Commonwealth public service pay negotiations, outside her own department. A vote of Employment staff late in 2014 rejected the first offer presented and discussions are underway to determine the way forward.
How she did it her way
The Commonwealth public sector still has some way to go to reflect the real needs of working parents, according to Leon. She was quick to point out that these issues should be as significant for working men as for working women.
“As Band 1 in the Attorney General’s Department after both my children were born, I came back from maternity leave, I worked part-time in both of those roles, and that wasn’t always a well-trodden path,” she explained.
“When people like me ask for that, and find ways to make it work, it makes it easier for people coming afterwards to see that you can do it.”
Workers with a good work-life balance, whether or not their responsibilities include children, make for better employees, she says. If they’re working 15 hours a day, they’re not coming back to work refreshed, not getting different perspectives and not exercising all parts of themselves.
Flexibility must go both ways, she adds. “We all expect our staff to be flexible when there’s a big job on, we might all expect them to be coming in on the weekend or stay late in the evenings, and people give very generously and flexibly of their time,” she said.
“Good managers recognise that flexibility cuts both ways, that if you need to pick your kid up from soccer or go to speech night, because your child is sick and you have to pick them up from childcare, that’s also the kind of flexibility we ought to afford our staff, so they can continue to be valued and contributing members.”
- Australian National University (Arts/Law)
- University of Cambridge (Master of Law)
- Robert Menzies Scholar
- Attorney General’s Department (SES Band 1, 2, deputy secretary)
- ACT Justice and Community Safety Directorate (chief executive)
- Department of Prime Minister and Cabinet (Deputy Secretary, Governance)
- Public Service Medal, June 2013
- Promoted to Secretary, Department of Employment, September 2013