From the Individual to the Structural: How Flexible APS Recruitment Could Reduce Economic Inequality Between Rural and Urban/Canberran Australia

By Bayan Yazdani, Menzies Foundation, IMF, 2023

Executive Summary

Temporary flexible workplace arrangements introduced due to the COVID-19 pandemic demonstrated that many public servants working in policy and program administration roles for the Australian Public Service (APS) can successfully work remotely. However, in today’s ‘post-pandemic reality’, many Federal Government agencies and departments have an ongoing expectation for staff to work in-person, especially in Canberra. Recent reforms in 2023 lobbied by the Community and Public Sector Union (CPSU), and agreed to by the Australian Public Service Commission (APSC), have maximised opportunities for flexibly remote, and – to a lesser extent - location-agnostic work for existing federal public servants. However, these current reforms miss a critical opportunity to attract regionally situated employees by integrating this flexibility into the recruitment process. 

This policy proposal argues that APS employment under these reforms will remain restricted to those who reside in, or are otherwise willing to relocate to, capital cities (particularly Canberra). It describes how this will undermine the ability of the reforms to reduce economic inequality on a societal level, beyond promoting greater accessibility and flexibility for individuals. It recommends the reforms allow full flexibility of APS work (where feasible) across the employee lifecycle, from recruitment to exit, to reduce the ongoing economic inequality between urban and regional areas across Australia.

Problem Identification

Income inequality between urban and rural Australians is concerningly high. Poverty rates are higher in rural/regional areas compared to major cities due to limited employment opportunities and generally lower wages. As of June 2023, the unemployment rate is higher in rural (7.4%) compared to urban (5.8%) areas, and just 3.1% in the Australian Capital Territory (ACT), where it is the equal lowest nationally (ABS, 2023). 

At the same time, the vast majority of roles in the APS require staff to be based in a capital city, most commonly Canberra. Although the Australian Public Service Commission (APSC), in its State of the Service Report 2019-20, identified managerial concerns about supervisee productivity as a major barrier to implementing flexible work arrangements, APS workers in fact reported an increase in productivity during COVID-19. According to Colley and Williamson (2020), almost 90% of APS managers surveyed believed their team’s productivity either increased or remained the same when required to work from home due to the pandemic. In addition, more generally, 70% of Australian workers reported the same or higher levels of productivity when working remotely than in the office during the pandemic’s first year (Hopkins & Bardoel, 2020). 

As such, the APS will be limited in its ability to recruit dedicated public servants from rural areas if it continues to emphasise in-person employment in Canberra or state capitals. This is because many Australians in remote communities are unable or otherwise unwilling to permanently relocate to Canberra or major cities due to carer responsibilities, disability, family obligations, cultural and kinship ties to country and community, and/or vulnerability to cold weather. Moreover, rental and property prices in Canberra remain among the highest nationally, and stubbornly high in other capitals (Conrau & Taulaga, 2023), often making relocation for junior APS positions financially unrealistic. This means theat current reforms proposed by the CPSU and approved by the APSC are missing a vital opportunity to somewhat alleviate socioeconomic disparities between rural and urban populations through the guarantee of fully flexible public sector employment arrangements.

Context

Socioeconomic and political polarisation between urban ‘elites’ and rural residents

As the results of the ‘Voice to Parliament’ referendum recently demonstrated, perspectives about public policies are divided between capital cities, particularly Canberra, and the rest of the country (Mannheim, 2023). Policies that ensure the vast majority of public servants are in the national capital, or otherwise limited to jurisdictional capital cities, can influence other Australians’ views about government officials being ‘out of touch’ from the needs of everyday Australians.  They also may result in expertise and deep knowledge about public policy being seen as the remit only of ‘bureaucrats’ and not ordinary Australians, who are the ultimate beneficiaries of the policies governments set for them. Such sentiments are clear from, for example, reasons why the majority of rural Australians voted ‘no’ to the Voice, including it’s high perceived costs, failure to receive bipartisan support, perceived ‘emotiveness’ rather than ability to implement tangible outcomes, and associated suspicion concerning “giving government extra powers” (Sydney Morning Herald, 2023).

At a time of heightened mistrust in government, large-scale foreign interference, and a breakdown of social cohesion due to international events and ‘unfinished business’, it is imperative for the Australian Government to attract and retain diverse talent to overcome policy challenges. Such talent should hail more broadly from across the nation to ensure class representation, inclusivity of access, and a reduction in socioeconomic inequality between rural and urban areas.

When place determines fate: the structural nature of urban-rural inequality.

Structural socioeconomic disadvantage between urban and rural Australia is well documented by the Australian Bureau of Statistics (ABS). The ABS and other government and non-government organisations have used Census of Population and Housing data of the Socio-Economic Indexes for Areas (SEIFA) to map Indices of Relative Socio-Economic Advantage and Disadvantage (IRSAD). The SEIFA indices summarise diverse population, family and household characteristics related to socio-economic (dis)advantage collected in census data (ABS, 2018). This allows for a methodologically sound comparison of lived experiences of relative advantage using quintiles across and between urban and rural regions. Figure 1 illustrates that, as a general rule, rural regions in Australia are socioeconomically disadvantaged relative to urban ones. While some regional areas with strong industries in manufacturing, mining, or tourism – particularly in Queensland, New South Wales and Western Australia – do not face major socioeconomic disadvantage, white collar public service employment (i.e., public policy and administration as opposed to teaching or health-related professional practice) in regional areas is still mostly negligible and represents an untapped opportunity to reduce economic inequality. 

Figure 1 - Index of relative socio-economic advantage and disadvantage quintiles for local government areas in 2018 

Recent reforms: wins for existing public servants but overlooking emerging talent in the regions, as well as broader opportunities to reduce rural-urban inequality.

In mid-2023, the CPSU successfully lobbied the APSC to allow working from home assurances and no caps on days worked from home (CPSU, 2023). While yet to be fully implemented, these ‘wins’ include strong protections against flexible working arrangements being terminated without genuine negotiation with employees, considerations of connection to country in employment for First Nations employees, and “enterprise agreements [that] will acknowledge the benefits of flexible work to facilitate APS capability and work being performed in a wider range of locations across Australia” (Bajkowski, 2023).

However, the CPSU’s negotiated reforms for the APSC to implement do not consider the entirety of the employee lifecycle – or the reforms’ potential for societal impact in reducing regional-urban inequality. At present, roles for public sector jobs advertised through ‘APSjobs’ and other recruitment channels like LinkedIn, specify Canberra and jurisdictional capital cities as the only possible locations for candidates, with very limited exceptions (i.e., in certain departments such as the Department of Defence or National Indigenous Australians Agency where regional work is or may be required). As such, there is a risk that only current APS public servants will benefit from reforms for flexible employment, and that any prospective rural-based applicant must first commence their career from capital cities. 

This underscores the current agreed reforms’ missed opportunity to truly reduce economic inequality at a structural level. As such, the implementation of the reforms will indeed enhance work flexibility and inclusivity for individual public servants, or, more precisely, the urban, already middle-class ones. However, the elusive public service employment of the ‘elite’ will remain inaccessible for people currently situated in rural regions. This individualistic focus, perhaps indicative of our mainstream culture at large, overlooks the underlying potential for APS employment reform to reduce socioeconomic inequality between urban and rural Australia, and thereby realise latent societal or ‘macro’ benefits of these new policies beyond individual worker benefits. 

Options

A critical measure of success for reducing the aforementioned structural inequality between urban and rural/regional Australia through APS employment would be a tangible increase in the number of full-time APS staff situated in, and recruited from, rural and regional areas across Australia. Some policy options that could foster such an increase include, but are not limited to:

1. The establishment of regional APS hubs The Commonwealth Department of Infrastructure, Transport, Regional Development, Communications and the Arts could assess the feasibility and return on investment in investing $50+ million to establish several shared office spaces/hubs in rural and regional areas across all Australian jurisdictions by 2025, later substantiated with a formal cost-benefit analysis conducted by the Australian Treasury. The benefits of this would include increased physical presence and accessibility of government services in rural and regional areas and an improved understanding of local issues and needs, leading to APS employment opportunities for rural residents. Conversely, disadvantages could be that the establishment of regional offices may be unsuitable for cross-agency work (particularly when different security classifications are involved) and would require significant investment in infrastructure and resources for both establishment and maintenance. These regional hubs could also lead to the duplication of services and administrative complexities.

2. Offer new flexible work arrangements beyond those already guaranteed by the CPSU and APSC Offering flexible work arrangements such as compressed workweeks, telecommuting, and job-sharing can make APS positions more attractive to individuals living in rural areas. This would reduce commuting time and costs, and increase rural workforce participation by accommodating diverse needs and preferences. The cons of this option include the requirement for careful planning and coordination to ensure that flexible arrangements do not compromise productivity or service delivery. There could also be challenges in maintaining cohesion and collaboration among team members who work across different schedules, time zones, and/or locations.

3. Further enhancement of remote work opportunities agnostic to locality By implementing the CPSU’s outlined proposed changes, existing APS staff could flexibly work from rural and regional areas without the need for physical offices. This would reduce overhead costs associated with maintaining physical offices in multiple locations while potentially improving the work-life balance and job satisfaction of employees. Challenges with this approach include the reliance on reliable internet connectivity, which may be lacking in some rural areas; managing remote teams without in-person connection; and maintaining effective communication. Remote workers could come to feel isolated and/or disconnected from their colleagues and wider work purpose. Further, as discussed, the proposed reforms do not target rural recruitment, which would be key to reducing existing inequality.

4. Provision of financial incentives for regional relocation of existing APS staff Financial incentives such as relocation bonuses, housing assistance, and salary supplements could attract existing APS staff to move to rural and regional areas. This would encourage retention of staff in these areas by providing ongoing benefits and would help systemically address disparities in employment opportunities between urban and rural areas. However, these incentives would be costly for the government (and taxpayers), especially if uptake is low or temporary. Furthermore, they would not heighten the social mobility of existing rural prospective employees. Introducing financial incentives for existing APS employees to relocate to regional areas could increase expenditure in those regions, but may have the unintended consequence of entrenching class divides by not creating new employment for established residents. This may create resentment among both rural residents who see richer APS employees moving to their locality and potentially increasing the costs of goods and services, along with urban-based employees who do not receive similar benefits.

5. The training of residents in regional areas, including in partnership with local institutions where necessary or advantageous Collaborating with local universities, colleges, and training institutions to develop tailored programs that equip rural residents with the skills needed for APS roles would be a valuable step in preparing, and attracting, suitable talent. It would increase the potential pool of qualified candidates from rural areas and strengthen ties between government agencies and local communities. A disadvantage is that such training may face budgetary constraints while requiring ongoing investment in training resources. Amid such constraints, it may take longer than expected or desired to see significant improvements as the pipeline of qualified candidates grows. Another challenge would be ensuring the high quality of training programs, and their alignment with evolving APS needs.

6. The extension of locational flexibility to all stages of the employment cycle with a focus on remote and inclusive recruitment

Amid the reforms now being implemented in Australia at the federal level, the focus of this option would be to identify how these policy reforms can be further expanded to identify new, rurally and regionally-based potential public servants, as opposed to solely benefitting existing staff.

The approach would be a regulatory reform and adjustments in APS-wide and agency-specific enterprise agreements, as well as broader human resource functional responsibilities. Implementation will inevitably be met with cultural resistance and challenges in change management, which will identify new ways these policies must take shape in practice.

Policy Recommendation  

Among the options presented, Option 6: The extension of locational flexibility to all stages of the employment cycle with a focus on remote and inclusive recruitment, is recommended to the Federal Government as the most effective way to increase the number of full-time APS staff situated in, and recruited from, rural and regional areas across Australia.

Implementation

The Australian Treasury could utilise existing ABS data on remote work participation, employment rates, and other economic indicators in rural areas to model the impact of remote APS work accessibility on employment levels, standard of living, and inequality reduction. Then, the Department of Finance and the APSC could design and deliver an initial investment of up to $20 million in training and upskilling opportunities for prospective APS employees in rural and regional areas to enhance their digital literacy, remote work capabilities, and familiarity with virtual tools to reduce recruitment inequity and performance barriers. Afterwards, individual agencies and departments – depending on their policy remit and security sensitivities – could update their enterprise agreements and recruitment strategies to allow for, and actually go ahead with, the recruitment and retention of new public servants based in rural and regional Australia.

A long road to implementation with independent oversight to ensure accountability. 

While the APSC is responsible for implementing the already agreed initial APS-wide reforms, the CPSU will play a role in ensuring accountability for implementation. This is particularly true given that one of the reforms includes “Independent umpire oversight — if an agency doesn’t genuinely try to reach agreement and follow the required steps for considering requests, the CPSU can support members to resolve the issue with their agency, and where necessary, the decision can be challenged in the Fair Work Commission” (Bajkowski, 2023). There is no reason to believe such oversight and agreed accountability mechanisms could not be feasibly extended across the employee lifecycle to include recruitment.

Risks

There are several risks associated with the proposed recommendation that must be considered to ensure successful implementation and the generation of public, and APS-wide and cross-agency, buy-in. 

1. Cultural resistance derailing or disrupting implementation plans

There may be cultural resistance within government departments to enact and implement the APSC’s reforms, undermining the feasibility of implementation. This could be due to the disputed appropriateness of targeted recruitment of people in rural areas, as well as both the financial and opportunity costs associated with necessary training and professional development programs. Traditional attitudes around work and concerns about productivity among certain managers should not be underestimated, but also not overexaggerated. 

1. (In)accessibility 

Changes in policy to promote rural recruitment should be grounded in the local realities and lived experiences of rural Australians, including First Nations people and their unique cultural needs and considerations. Literacy and education levels are typically lower in rural areas in Australia compared to cities, particularly capital cities. As such, it may be difficult to identify prospective public servants in rural, regional and remote areas whose skill sets and qualifications match position requirements – hence the dedicated and large upfront investment in training to make sure applicants are suitable, and competitive, for relevant positions. Lastly, the requirement for fast, reliable internet for streaming virtual meetings may make rural engagement and employment inaccessible. Poor internet quality and slow broadband speeds are common in some parts of rural Australia, and administering agencies may need to make additional investments to alleviate such barriers. 

1. Low morale in rural staff and limited buy-in from other stakeholders

Working from home – particularly in an isolated rural area away from the rest of your team – can be disheartening and lonely. The only way to alleviate this would be occasional or semi-regular in-person engagement, or visits from colleagues or supervisors. The costs for this travel could be absorbed by the savings gained by maintaining fewer (or smaller) in-person offices in Canberra. 

Advancements in AI and VR could somewhat, albeit not fully, alleviate the fundamental need for enduring interpersonal connection. However, this too would entail an additional set of risks that must be mitigated and managed carefully and strategically. 

References

Australian Bureau of Statistics (ABS), 2018. ‘SOCIO-ECONOMIC ADVANTAGE AND DISADVANTAGE’. Available: https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/2071.0~2016~Main%20Features~Socio-Economic%20Advantage%20and%20Disadvantage~123

ABS Release, 2023 (June) - Labour Force. Available: https://www.treasury.act.gov.au/__data/assets/pdf_file/0005/399983/LF.pdf/_recache

Australian Public Service Commission, 2019-20. APSC State of the Service Report 2019-20, ‘Flexible’. Available: https://www.apsc.gov.au/state-service/state-service-report-2019-20/chapter-1-commitment-service/flexible 

Australian Public Service Commission, 2023. ‘All Roles Flexible: Principles of flexible work in the APS’. Available: https://www.apsc.gov.au/sites/default/files/2023-04/Secretaries%20Board%20Principles%20of%20Flexible%20Work%20in%20the%20APS.pdf

Bajkowski, J. 2023. ‘Public service chiefs concede to flexible work as a right in wage talks with CPSU’. The Mandarin. Available : https://www.themandarin.com.au/225004-public-service-chiefs-concede-to-flexible-work-as-a-right-in-wage-talks-with-cpsu/

Colley, L., & Williamson, S. (2020). ‘Working during the Pandemic: From resistance to revolution?’ UNSW Canberra Public Service Research Group and CQUniversity. Available:  http://unsworks.unsw.edu.au/fapi/datastream/unsworks:72713/bin8d097b65-72fb-4706-b14e-aae5df57967f?view=true&xy=01 

Community and Public Sector Union (CPSU), (2023). ‘CPSU claims win on flexible work and working from home’. Available: https://www.cpsu.org.au/CPSU/Content/Media_releases/CPSU_claims_win_on_flexible_work and_working_from_home.aspx  

Conrau, O., & Taulaga, J. (2023). ‘Rent Report: Canberra bucks the trends as rents decline’. Allhomes. Available: https://www.allhomes.com.au/news/rent-report-canberra-bucks-the-trends-as-rents-decline-1240115. 

Hopkins, J., & Bardoel, A. (2020). ‘Key working from home trends emerging from COVID-19: A report to the Fair Work Commission.’ Commonwealth of Australia (FairWork Commission). Available: https://researchbank.swinburne.edu.au/items/be3dfbba-fc85-4834-97aa-7a7399a94b17/1/

Mannheim, M. (2023). ‘Socio-economic data suggests the 'Canberra bubble' is real, though it also hides disadvantaged residents.’ ABC News Australia. Available: https://www.abc.net.au/news/2023-05-15/data-and-the-canberra-bubble/102302630 

Sydney Morning Herald, 2023: ‘Did the referendum reveal a cruel nation or one run by out-of-touch elites?’. Available: https://www.smh.com.au/national/nsw/did-the-referendum-reveal-a-cruel-nation-or-one-run-by-out-of-touch-elites-20231015-p5ecbr.html