Government's Expectations for Pay and Employment Conditions in the State Sector May 2011
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State Services CommissionCrown Copyright
Government's Expectations for Pay and Employment
Conditions in the State SectorMay 2011
SSC Overview - Trends
Settlements:• Most settlements where rem is included are tending to
the 1 – 2% pa range.• Increasing # of settlements with no rem included, - ie CE
discretion.• Claims for remuneration to be included in CA’s being
successfully resisted.
LCI trends
All sectors year to 31 March – 1.9% • Private sector – 2.0%• Total public sector - 1.4%
oCore public service – 0.9%oHealth - 1.8%oEducation - 1.1%
LCI - movement
0%
5%
10%
15%
20%
25%
30%
35%
40%
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 .
Labour Cost Index - Wage and Salary Movement
Public Service
Health
Education
Private Sector
Local Government
Public & private wage rates
Comparative rate movements
Quarterly, six monthly and annual movements in wages and salary
Sector Quarterly Change
Six Monthly Change
Annual Change
All sectors 0.5% 1.0% 1.9%
Private sector 0.4% 1.0% 2.0%
Public sector 0.5% 0.9% 1.4%
Local Government 0.5% 1.5% 2.1%
Central Government (State sector) 0.5% 0.8% 1.3%
Public Service* 0.1% 0.6% 0.9%
Health 1.2% 1.4% 1.8%
Education 0.5% 0.7% 1.1%
Other Central Government* 0.0% 0.1% 0.3% *Non-published information from the SSC’s special cut of the LCI
Government’s Expectations:
Originally agreed by Cabinet in 2009 and refreshed in May 2010
Economy is still in recovery mode Pressures and expectations likely to
increase Review by SSC confirms GE are still valid,
so likely to recommend No fundamental change, but reinforcing ...
Key ER & Rem Messages
ER outcomes must support agency business objectives (medium and longer term)
Chief Executive accountability The critical link between:
• pay and conditions, productivity & fiscal restraint & improved service delivery
Affordability, now and in medium term & sustainability of organisation over time.
Key ER and Rem Messages
Focus on what’s right for organisation rather than “market movement”
Targeting performance and genuine recruitment and retention
Consider all aspects of staff costs, look at total rem & factor indirect staff benefits
Key ER and Rem Messages
Align actions around remuneration strategies with the 4 year Budget capability plans
“Fairness” means fair to taxpayers and employees
Aim is to restrict Public sector LCI to a level below private sector
Application of Expectations
Government’s Expectations:
Public Service, Crown Entities, Non Public Service Departments
RemunerationEmployment conditionsCollective bargaining
SSC Approach
Looking for ways to add value Focus efforts on biggest payback/risks Likely to move to more differentiated
approach using risk/scale/profile to guide effort/engagement
Yet to be finalised & agreed
Information requirements
Most likely call for: Brief rationale % & $’s around total rem broken down;
committed & proposed Staff numbers etc Assurance as to expectations eg flow-on Affirmation from CE around affordability &
sustainability
We’ll issue more detail post-budget
SSC work programme
Update on work programme
Next steps
Finalise approach Agree info requirements Consider Expectations – Cabinet ? Communication
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