Crunch time for APS plans to flatten hierarchies into broad layers

By Stephen Easton

Friday January 19, 2018

Three quarters of federal agencies took some steps to reduce the number of management layers in the 2016-17 financial year, according to the latest State of the Service report, but it isn’t clear how much has changed.

This year is crunch time for a push to flatten out hierarchies and increase spans of authority in the Australian Public Service that began in 2015, but recent comments from departing secretaries and the public service commissioner suggest there is still some way to go.

In mid-2015, during the short-lived tenure of Michael Thawley as head of the Department of the Prime Minister and Cabinet, the APS Secretaries Board agreed to a framework for optimal management structures developed by a working group of deputy secretaries.

As part of that piece of work, the mandarins agreed that all agencies would come up with a three-year plan to put the framework into action. If they’re on track, the changes should be complete some time this year.

The framework promoted structures with somewhere around five to seven layers of management, each covering several classification grades, decision-making at the lowest practical level, and managers having wider spans of control in the more routine areas of work. Staff at management level with few direct reports was considered appropriate only where valuable specialist skills are being employed.

This, it was hoped, would lead agencies to group staff into broad layers as defined by their roles: strategic leadership; cluster leadership; functional leadership; team leadership; and team membership.

“Initiatives included training managers to recognise, review and implement different ways of working and modify workforce structures to increase efficiency,” the latest report states in a brief update on the ongoing efforts to implement the 2015 framework.

“APS agencies and the work they do can differ substantially. Some employ highly-specialised employees with specific subject matter expertise who perform at EL standard but without management responsibilities.”

“In a significant number of agencies, the vast majority of EL employees had more than three direct reports.”

An accompanying graphic (pictured above) shows that across the whole public service, only 22% of EL1 managers and just under half of EL2s have more than three people reporting directly to them.

Also, 42% of EL1 managers and 15% of EL2s have nobody directly reporting to them at all.

As Verona Burgess reports this week, the APS commissioner John Lloyd was quick to answer the current PM&C secretary Martin Parkinson’s call for big ideas to improve the public service late last year, responding that continuing the reduction in the many layers of APS hierarchy was a particularly worthy cause.

The organisations of the future would be structured more around the concept of teams with diverse skills than top-down “supervisory” authority, he told The Mandarin.

In his final speech last September, former Environment secretary Gordon de Brouwer argued at least one layer of the senior executive should be cut out, and middle managers should be encouraged to do more of the work they are supposed to do, according to the APS work-level standards. In reality, ELs often end up handing their work up to the SES to be completed, he said.

The State of the Service report also notes the ongoing classification creep that has occurred over the past couple of decades. More staff at higher levels obviously makes flatter management structures more difficult to achieve. The proportion of staff at EL level and above grew from 19% of the APS workforce in 2000, to 26.2% in 2017.

“Like any organisation, the APS regularly assesses its workforce structure,” the report says. “The growth of EL employees warrants attention. Efficiency is often enhanced when flatter management structures are deployed.

“The APS is addressing this through span-of-control initiatives to reduce management layers. New forms of work are expected to disrupt management structures.”

Long chains of approval that give senior executives a measure of control over a large amount of the agency’s work remain an ingrained feature of the public sector, something that is apparently less necessary in the private sector.

In de Brouwer’s view, this often represents a kind of micromanagement born of risk aversion. In his parting speech, he said ELs had to be “treated like adults” by the SES so they could “hone their analytical, conceptual and communication skills and judgment” before becoming the next generation of senior leaders.

“My sense is that, over the years, as problems have occurred or mistakes been made, management of issues and briefing responsibilities have been progressively elevated and sometimes centralised,” he said.

Those comments were made just a few months ago, suggesting plenty of work must still be done to realise the vision for “optimal” structures set out three years ago — along with a range of other management reforms and transformation projects that are gradually changing the nature of the federal bureaucracy.

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