The leadership investment gap: Spotlighting the talent equation in government

This article was originally published by The Mandarin.

In an era of rapid change and rising public expectations, governments face a critical challenge: attracting and retaining the right people for the right roles. This isn’t just about filling vacancies, but building capability, safeguarding integrity and delivering public value.

The stakes are high. From frontline service delivery to policy innovation, the effectiveness of government hinges on its people. The consequences of not hiring or not keeping the right people are real: delayed service delivery, rising costs, and diminished trust.

The retention crisis: What’s going wrong

Recent data paints a sobering picture. In the Australian Public Service (APS), 81 per cent of managers’ report losing candidates due to long, cumbersome recruitment processes. Younger employees are walking away, citing limited career progression, salary constraints, and a lack of purpose-driven work. In Queensland, 16 per cent of government employees intend to leave within 12 months, with 8 per cent ready to exit immediately. The top reasons? Poor senior leadership, lack of career opportunities, and emotional exhaustion.

In Victoria, the public sector is navigating fiscal constraints, rising debt, and a shift away from the ‘job for life’ model. There are challenges in health, transport, and education, with all sectors under pressure from population growth, infrastructure demands, and digital disruption.

NSW’s 2024 People Matter Employee Survey revealed that only 35 per cent of employees believe change is managed well in their organisation, while burnout and mental exhaustion remain high, with only 39 per cent disagreeing that they feel mentally exhausted most days.

Globally, the story is similar. In the UK, high exit rates among nurses, teachers, and police officers have strained public services. In the US, federal agencies struggle to fill critical roles in cyber security and emergency management due to relocation barriers and outdated hiring practices.

These failures aren’t just HR issues and indeed can create significant risk for the whole organisation. The WA Auditor General found that poor exit controls in local government created security vulnerabilities. Every departure chips away at institutional knowledge, inflates recruitment costs, and undermines public trust.

Why it matters: The cost of getting it wrong

Failure to recruit or retain people with the right skills and experience weakens control environments, disrupts compliance, and exposes departments to reputational risk. But beyond logistics, there’s a deeper cost: the erosion of capability and productivity. 

Too often, productivity in the public service is viewed through a narrow, numerical lens. But real productivity is shaped by skills, systems, and suitability. When the wrong person is in the wrong role, or when an unskilled person is tasked with complex work, the strain is enormous. Service delivery suffers, projects stall, rework and workaround culture begins, and public frustration grows.

One thing is clear; we must start seeing productivity through the lens of capability. The ability to do the job well, to understand the rules, and to deliver with integrity is what drives outcomes. When experienced staff leave, institutional memory goes with them. Retaining people who understand the systems and ethical frameworks is essential. It takes years to build this knowledge, and just minutes to lose it.

In short, talent isn’t just a resource, it’s a safeguard.

NSW and VIC: Lessons in renewal

Renewal is essential in any sector, and the public sector is no exception, but it must be strategic and refreshing, without eroding key capability.

This also means rethinking what skills are needed. Emotional intelligence, systems thinking, and digital delivery are emerging as core capabilities. We must listen to the public, the ultimate consumer of public services, to understand what skilling and service models are needed next.

NSW’s Regional Investment Activation Program (RIAP) is investing $500 million to create 15,000 jobs and address infrastructure barriers, workforce development, and regional competitiveness.

In Victoria, departments like the Department of Energy, Environment and Climate Action (DEECA), Department of Justice and Community Safety (DJCS), and Department of Families, Fairness and Housing (DFFH) are investing in advisory services to support transformation. But opportunity conversion remains ‘ordinary,’ suggesting that talent and capability gaps persist. The Victorian government is also recognising the need to refresh without losing capability which is a delicate balance in times of reform.

Turning the tide: Tips for getting it right

The public sector is no longer a job for life but rather a career destination that must compete for talent. That means thinking differently about recruitment, retention, and renewal. We recommend five key strategies for adoption to assist in getting retention right:

1. Streamlining recruitment - Automate workflows and reduce hiring timelines to make the process candidate-friendly. The APS Reform Agenda and Workforce Strategy 2025 are working to reduce delays and improve overall candidate experience by simplifying processes and embracing technology.
2. Flexible work and wellbeing - Expand telework and hybrid models to allow for flexible schedules and invest in mental health and burnout prevention. The National Health Service (NHS) in the UK saw leaver rates drop from 12.5 per cent to 10.1 per cent after introducing flexible retirement options, wellbeing support, and team-based rostering.
3. Career development and mobility - Offer structured pathways, training, mentoring, and skills-based hiring. The US Office of Personnel Management (OPM) Talent Surge Playbook and NAPA strategies emphasise continuous learning and internal mobility. In Australia, succession planning and strategic workforce planning are gaining traction in the education and health sectors.
4. Leadership and culture - Foster inclusion, respect, and purpose to encourage employee voice. Trust, inclusion, and purpose-driven work are central to retention. Capability reviews are helping ministers and secretaries’ future-proof the APS. Emotional intelligence, not just artificial intelligence, is being recognised as a leadership imperative.
5. Data-driven interventions - Use analytics to track turnover trends and engagement. Targeting high-risk roles allows for smarter interventions. Queensland’s Workforce Strategy 2022–2032 includes a $70 million investment in workforce initiatives, from school-to-work transitions to infrastructure support in regional areas.

How BDO can help

We bring years of experience working with government, regulators, and public service organisations to design and deliver strategic culture, leadership, and workforce transformation solutions. Our consulting team delivers people-centred outcomes in complex, service-driven and highly governed environments.