Current state analysis

Macro influences shaping the operating environment

The Australian Public Service (APS) is experiencing a significant transformation as it grapples with the challenges and opportunities presented by the evolving policy landscape, complex technological transformation and modern ways of working.

Many government services, such as signing up for assistance or checking vaccination status, are now conducted online using digital technology. This enables government agencies to collaborate more effectively, leverage data to enhance services and improve the quality of life for Australians.

The use of digital technology, in turn, generates increasingly large amounts of data that assists in the planning and evaluation of programs. Tools such as automation, artificial intelligence and data analytics are therefore becoming more integrated in public sector operations.

Public debate and media attention in respect to public and commercial cyber threats and high-profile failures in public administration test public trust. Global events, like the COVID-19 pandemic and changes in world politics, have increased the need for governments to be flexible, skilled in using data and ready to handle new challenges. 

The rapid expansion of digital technologies and digital innovation means that competition for specialist capabilities across data, digital and cyber domains has intensified nationally, while opportunities for strategic partnerships are growing. 

We will continue to invest in building world-class data, digital and cyber capabilities in the APS workforce to realise the government’s visions to deliver simple, secure and connected public services for all people and business, and to be a world leader in cyber security by 2030.

Political

Building trust and reinforcing democracy, geopolitical power and shifting security environments.

Economic and climate

Digital economy, unstable global growth, acceleration in business model innovation, green economy, climate change, high costs of living.

Demographic

The changing size, distribution, age profile and needs of the world’s population and workforce.

Technological

Emerging technology, Internet of Things, artificial intelligence (AI), machine learning, quantum computing, robotics, increasing automation, increasing uptake of no-code and low-code systems, digital-enabled delivery, availability, value of data, zero-trust culture.

Continuity

Readiness for the future, stewarding an APS that is trusted and relevant.

Capability

The changing nature of work, emerging roles, broadening of the skills base, competition for specialist capabilities, attracting and retaining a diverse workforce.

Agility

Public-private partnerships, managing uncertainty, complexity and the pace of change.

Digital transformation within the APS

The APS is on an ambitious digital transformation journey. The Data and Digital Government Strategy outlines the five key missions guiding the APS’ digital transformation. Australia’s commitment has been recognised globally, with Australia ranking fifth in the 2023 OECD Digital Government Index.

But there is still so much more to do.

In 2024, the Australian Government released the Digital Experience Policy, which supports a whole-of-government focus on improving the experience for people and business interacting digitally with government information and services. The policy mandates four standards for how government designs and delivers its digital services, meets user expectations and needs, and measures performance for continuous improvement.

The government also released in 2024 the Policy for the responsible use of Artificial Intelligence (AI) in government, designed to complement and strengthen existing APS frameworks.

It includes mandatory actions requiring agencies to:

• identify an accountable official for the policy’s implementation
• publish a transparency statement about how it uses AI.

Agencies are strongly encouraged to implement training on the fundamentals of AI for all employees and additional training where needed for a role. The Digital Transformation Agency developed an AI fundamentals training module for any agency to implement under this recommendation.

The government continues to invest significantly in digital and ICT projects, with a growing number of these projects active and underway. More than 60% of agencies are investigating new technologies as indicated by the digital investment pipeline (DTA 2024a). 

As the government is committed to meeting the needs of the Australian community and looking to the future, the next step in digital transformation will be even more challenging. The availability of the skills needed to bring this digital transformation to life is critical.

The APS data, digital and cyber workforce

Labour market insights

As highlighted in the Data and Digital Government Strategy, the 2023-30 Australian Cyber Security Strategy and the APS Workforce Strategy 2025, the demand for data, digital and cyber talent remains strong.

Agencies continue to report difficulties in attracting experienced and mid-level employees in these domains, citing low labour market supply, broader competition and affordability as key factors inhibiting their success.

Globally, forecasts predict a 30-35% increase in demand for critical roles such as data analysts and scientists, equating to 1.4 million new positions over coming years. Australian employment growth for digital workers is projected to increase up to 13.9% by 2030 (Jobs and Skills Australia 2024).

While there are limitations in current Australian labour market data statistics for cyber security workers, AustCyber has projected an estimated Australian cyber security workforce shortage of 3000 by the year 2026, while the World Economic Forum has highlighted a global skills shortage of nearly 4 million cyber security experts.

Attraction, recruitment and retention

The APS data, digital and cyber workforce has steadily grown over recent years. This is particularly so for the ‘Data and Research’ job family, with new ongoing engagements during 2024 up by over 80% on the previous year.

Despite the growth in ongoing engagements across each domain, many agencies continue to report critical skill shortages, which put digital projects at risk.

APS New Starter Survey data shows lengthy recruitment processes are a critical challenge when attracting and recruiting the APS workforce. Around 70% of respondents who weren't satisfied with their recruitment processes indicated recruitment timeframes could be improved (APSC 2024).

Notwithstanding recruitment challenges, data from the 2024 APS Employee Census shows that employees across all three domains are generally happy with their work and working conditions. There are however differing levels of satisfaction across these groups in respect to salary and the technology in their agencies.

High levels of overall job satisfaction are reflected by these cohort’s intention to stay in the APS, high average length of service and low separation rate of ongoing employees (with each domain showing a resignation rate of under 5% during 2023-24, and an average mobility rate across the APS of around 4%).

While this shows that the APS is successful at keeping these skilled workers, it can be expected that some will leave in the future to advance their careers or learn new skills. Offering programs for career growth, especially in cyber security, could help retain these important workers.

Geographic distribution

The geographic distribution of the APS data, digital and cyber workforce does not reflect the broader national labour market distribution for these professionals, creating significant barriers to accessing diverse and in-demand talent.

Currently, the APS workforce across these three domains is disproportionally concentrated in Canberra, with representation in some professions up to 14 times higher than the national average. Conversely, New South Wales, Victoria and Queensland together account for 80% of the national talent pool in data, digital and cyber.

This imbalance is compounded by a surplus of graduates in some streams (such as data) in regions outside of Canberra, while the demand for talent based in Canberra far exceeds the available supply. 

To bridge this gap, the APS continues to shift its focus beyond Canberra and consider its recruitment strategies to target professionals across the country. This involves upskilling people leaders to effectively manage and support a geographically dispersed workforce and adjusting existing approaches to attract and engage talent in other regions, incorporating flexibility provisions and leveraging location-based strategies such as those outlined in the APS Location Framework. By doing so, the APS can tap into a wider, more diverse talent pool to meet the growing demands of the digital, data and cyber sectors.

Diversity

As highlighted in the Data and Digital Government Strategy, there is significant opportunity to improve the representation of diversity cohorts in the APS data, digital and cyber workforce. 

The APS is performing well in terms of representation of individuals from a culturally and linguistically diverse background and neurodivergent employees in the ‘Data and Research’ and ‘ICT and Digital Solutions’ job families. Representation of ongoing employees who identify as LGBTIQA+ or with disability are on par with the broader APS workforce. 

First Nations and female employees are the two most under-represented groups across all three domains, when compared to APS averages. This is affirmed in the 2023-2030 Australian Cyber Security Strategy, which envisages a future where the Australian cyber workforce is inclusive with strong career opportunities for diverse cohorts and underrepresented groups. This is particularly critical for women, who, according to the report ‘Attracting a diverse cyber security workforce’ (Department of the Prime Minister and Cabinet, 2023), represent only 17% of the national cyber security workforce.

Attracting and retaining diverse talent will have a number of positive impacts on the APS and the community. It will enable the APS to take advantage of a much wider spectrum of data, digital and cyber skillsets, experience, cultural knowledge and capabilities.   

There is considerable work underway across the APS to improve diversity outcomes for a range of cohorts, for example APS Reform, the Commonwealth Aboriginal and Torres Strait Islander Workforce Strategy 2020-2024, the APS Disability Employment Strategy 2020-2025, the APS Gender Equality Strategy 2021-2026, the APS Culturally and Linguistically Diverse (CALD) Employment Strategy and Building the Pathway to Diversity in STEM. This plan will align with these efforts, whilst continuing to prioritise targeted attraction, recruitment and retention of diverse cohorts.

The external workforce

The use of external labour to undertake digital, data and cyber functions across the APS has become increasingly necessary due to the ‘peak and trough’ nature of New Policy Proposals, challenges in attracting and recruiting new employees to these functions, and mobilising sufficient talent internally. 

In some instances, procuring external labour can be more cost-effective on a temporary basis than recruiting and training ongoing employees, and can deliver immediate capability particularly when required for the duration of a specific project. 

However, a dependency on consultants and contractors, while addressing immediate needs for specialised skills, can undermine the development of long-term capability of the APS, particularly where no knowledge capture and transfer provisions are in place. 

The Australian Government’s report on the 2021-22 Audit of Employment, released in May 2023, found that around one in every four dollars spent by APS agencies for departmental purposes was on external labour services, including consultants, contractors, labour hire and outsourced service providers. Of this, the Audit attributed more than 40% of all external labour expenditure to the ‘ICT and Digital Solutions’ job family, equivalent to over 6,000 full time equivalent employees (excluding expenditure data from the Department of Defence). A 2023-24 Audit of Employment is underway, and will provide more recent insights into the use of external labour by job family in the APS.

The APS Strategic Commissioning Framework requires agencies to identify the core work that should not be outsourced and take steps to bring it back in-house. When supported by recruitment, skilling, re-skilling and mobility, the framework’s approach will, over time, deepen system-wide capability and reduce the risks to integrity, expertise and public trust.

Insights from the first round of framework reporting shows appetite among APS agencies to bring key ICT and digital solutions work in-house, but they expect this to be challenging. In 2024, nearly two thirds of agencies identified some work in this job family as core, with more than half outsourcing it.  In addition, APS agencies anticipated difficulty filling in-demand roles and managing peaks and troughs. These difficulties may affect how quickly this work can be brought in-house.

While APS agencies need to work within their Average Staffing Levels (ASL) estimate as they bring core work in-house, requests for additional ASL can be made in line with the Budget Process Operational Rules where required. Broader processes to support agencies to build and deploy capability, both internally and across the system, will further go towards addressing this challenge.

Domain-specific considerations

In addition to general workforce availability, capability and composition, there are a range of specific workforce challenges faced by each professional domain that are important to consider for workforce planning.

Data domain

Data is fundamental to many roles in the APS, not only those who may be considered data professionals or specialists. The need to build data capabilities across the APS is recognised in the APS Data Capability Framework and is a commitment made in the Data and Digital Government Strategy, which requires all government entities to educate their employees on the importance and appropriate use of data. This extends to embedding data capabilities, such as data ethics, in all roles including leadership positions.

Upskilling individuals in non-technical roles or developing their data fluency can be particularly challenging because their interaction with data is often less visible or informal compared to that of dedicated data professionals. This can make it harder to identify skill gaps, provide targeted training, and ensure they have the necessary support to work effectively with data.

A new initiative developed by the Department of Finance under the Data and Digital Government Strategy is the Data Maturity Assessment Tool. The tool provides agencies with a consistent approach to measuring and understanding their organisation’s data maturity. Findings from the 2024 assessments show that 43% of agencies have either nominal investment in data upskilling or no investment at all. From agency comments, competing priorities and resource constraints were highlighted as affecting some agencies' ability to invest in data activities.

The APS Data Profession aims to lift the data capability of the APS workforce through defining data capabilities, increasing diversity and mobility of people in data roles, and creating career pathways and development opportunities. Key initiatives in the Data Professional Stream Strategy include:

• the Data Capability Framework
• the development of Data Job Role Personas
• structured learning opportunities
• collaboration with the education sector to uplift entry level capabilities.

Digital domain

Over the next 10 years, the Commonwealth will need to make substantial investments in digital initiatives. According to the Digital Transformation Agency, significant numbers of existing legacy systems require reinvestment, and numerous major new projects are in the pipeline. Legacy systems alone require over 800 APS ASL to support their operation, and the skills to maintain these outdated systems, such as Common Business Oriented Language (COBOL) programming, are going to be harder to find. 

More than 20% of the ongoing APS ‘ICT and Digital Solutions’ job family is nearing retirement age (55+), and retirement-related separations have been increasing over the past five years. APS agencies highlighted during consultation that age-related retirements pose a significant challenge to delivering digital projects, as many of those retiring are responsible for supporting critical systems. Ensuring appropriate knowledge transfer practices are in place will be important.

Note: Historical and projected retirement figures for the ‘ICT and Digital Solutions’ job family, charted against number of APS systems reaching technical retirement. Age-related retirement forecasts have been calculated using Excel based forecasting formula and previous 2 years of APSED data.

In addition to retirement-related separation, the APS’ ability to attract and retain specialist digital skills is having tangible impacts on its execution of digital projects. Currently agencies are unable to keep up with the demand generated by new and existing digital projects and one quarter of early digital proposals coming forward have listed workforce risk as a major delivery concern.

As APS agencies continue to refresh their APS workforce, there will be a continued need to take into account technical skills in addition to the program and project management skills necessary to oversee and execute digital initiatives.

While competition for talented digital professionals has been a persistent historical challenge, the very nature of rapid technological transformation also presents opportunities for government and for Australia. A key example of this is the Memorandum of Understanding on Cooperation on Artificial Intelligence between the Australian Government and the Government of the Republic of Singapore. 

Among other things, the Memorandum of Understanding recognises opportunities for practical collaboration between the two governments on matters such as AI development and deployment, workforce and talent, ethics and governance, and safety and standards. This collaboration highlights the potential of AI as a powerful tool for government, but realising its full benefits requires targeted investment in AI skills and capability across the APS workforce.

Cyber domain

Cyber security is a critical challenge that demands attention across the APS. As cyber adversaries employ increasingly sophisticated techniques such as phishing, malware and exploitation of software vulnerabilities, the APS must take proactive measures to safeguard its ICT systems. Addressing this evolving threat landscape requires a collective focus on building awareness, strengthening skills and embedding cyber resilience into the fabric of government operations.

The entire APS workforce must not only be aware of, but must understand their responsibilities in relation to cyber security. This will help to mitigate risk and to build future talent pipelines for cyber roles. Comprehensive training programs are key to raising cyber literacy across all roles. Internal awareness campaigns can further promote vigilance and best practices, while initiatives such as setting up Cyber Security Champions in APS departments and agencies can foster a culture of shared responsibility for cyber security.

Like the data and digital domains, cyber security faces a significant skills shortage. The rapid pace of technological advancements has outstripped the current skill sets of the workforce, with traditional recruitment processes struggling to keep up with demand. An aging workforce worsens these challenges, limiting the APS’ ability to adapt to the digital environment. 

The lack of a national standard for cyber skills, coupled with a lack of articulated career paths for digital professionals wishing to move into cyber roles, present strategic opportunities for the APS to take a long-term view to building the future APS cyber workforce. This includes the identification of core skills, adjacent roles and partnerships across sectors, with academia and with industry to foster development pathways that grow the Australian cyber profession across all levels.  

Insights from APS agencies

APS agencies have shared concerns about attraction, retention and a lack of options for rapid capability uplift.

While they noted the strategic benefit of building pipelines of entry-level talent, most reported they needed more mid- to senior-level employees. Additionally, agencies identified opportunities to leverage existing mid-career talent programs. 

Agencies expressed the desire for a digital employee value proposition with supporting resources to help attract specialist talent to the APS. Further, they reported that they reach a greater number of (and more diverse) prospective candidates on paid recruitment platforms and social media channels. This observation is consistent with market research completed by the Australian Public Service Commission during 2023 that confirmed non-APS job seekers knew little about the APS, perceived barriers to entry and looked to other online platforms to discover job opportunities. Encouragingly, these same job seekers showed a strong interest in working in the APS and were likely to apply for APS roles in the future.

Agencies highlighted that ‘headline’ pay disparity between the APS and other sectors is a significant challenge in attracting technical specialists. Within the APS, the application of Individual Flexibility Arrangements is worsening competition and inflating the cost of digital talent across the system. The APS has been on a journey to address pay fragmentation and this will continue to be considered through usual approaches to bargaining.  

The retention of skills and an ageing workforce is of concern to agencies, particularly the cohort of workers who maintain legacy systems. Coupled with a lack of succession planning and pipelines in place, projected retirement of these ‘legacy skills’ presents a great risk to business continuity.

Agencies revealed a gap in rapid upskilling, re-skilling and micro-credentialing opportunities in the APS, which compromises time to competency and presents barriers to those who may wish to transition into these careers. To build the capability of its data, digital and cyber workforce, the APS is expanding upskilling and reskilling pathways and exploring industry-recognised programs that could be rapidly piloted and implemented. 

Systems barriers in relation to financial, contractor and workforce data present difficulties in forming a single view of supply and demand, hampering agencies’ ability to strategically plan their workforce. Barriers include difficulty in creating linkages between data sets and data consistency challenges across the APS particularly in respect to job roles and contractor skills.

Many agencies asked for more data and insights to help them better understand the nuances of their digital, ICT and cyber cohort, and that an ‘ecosystem of tools’ would be valuable in supporting their future workforce planning efforts.