Closing the $280 million public sector productivity gap
The EY New Zealand Productivity Pulse™
Results for the New Zealand public sector in our latest Pulse should raise a flag for the New Zealand economy. New Zealand public sector productivity is lagging the private sector costing New Zealand taxpayers $280m. It's time for agencies and managers to improve productivity and close this gap, paying particular attention to management practices and organisational models.
Although personal productivity continues to increase at a national level, a noticeable ‘productivity potential’ exists within the public sector.
Edition 4 of The EY New Zealand Productivity Pulse™ (the Pulse) found 22% of public sector workers believe they are operating at or above their lifetime best, compared with 27% of their private sector counterparts, despite sharing comparable skills, capabilities and remuneration. While 61% of private sector workers sit above New Zealand’s national productivity average (7.5%), 48% of public sector workers do. Closing this gap would result in a $280 million productivity dividend to New Zealand.
Furthermore, nearly half New Zealand’s workers believe improving productivity in the public sector is more important than in the private sector. Clearly there is untapped productivity potential in both sectors but there are stark differences in key domains of the public sector. Given its importance to New Zealand, issues such as the following cannot be ignored.
- Only 25% of public sector workers feel they make a difference, compared with 33% of private sector workers
- Only 17% of public sector workers are ‘very satisfied’ in their workplaces compared with 25% of private sector workers
- Only 21% of public sector workers were satisfied with their manager compared with 29% of private sector workers
If the public sector is not yielding as many workers who consider themselves highly effective or as satisfied, this is not about the quality of people working in the public sector workforce – a quarter of whom rate themselves as Super Achievers according to the Pulse, nor is it about remuneration, which is comparable in the public sector. It can only be concluded that public sector workers are being held back by the government organisations themselves.
- Solid contributors lead the way
- National productivity rises
- Public sector opportunity
- Driving public sector productivity
- Government productivity improvements will come from four areas
1 Source: Human Resource Capability in the New Zealand State Services 2013; https://jobs.govt.nz/; http://www.ssc.govt.nz/state_sector_organisations; http://www.localcouncils.govt.nz/; EY team analysis..