Building a future-ready public sector workforce in Australia

Across Australia, it’s clear to many in the public sector organisations that change is overdue. Leaders are feeling the pressure building with changing workforce demographics, rising citizen expectations, and employees demanding more from their jobs.

But knowing there is a need for change isn’t the problem. The real challenge is how to move past the sticking points that stall transformation: cultural resistance, slow processes, outdated systems, and competing priorities.

In my role at Dayforce, I’ve seen how deeply these challenges are felt. Many public sector agencies recognise the need for change. But they’re often so weighed down by bureaucracy, risk-aversion, and complexity that they don’t know where to start.

In this article, let’s unpack what’s holding agencies back and what leaders can do to build a workforce that’s ready for what’s next.

What’s standing in the way?

Public sector leaders aren’t short on vision, but many are being held back by practical barriers that make change slow and difficult. Here are five common challenges slowing transformation across agencies:

Talent gaps in critical areas

88% of Australian Public Service (APS) agencies report critical skill gaps, particularly in ICT, project management, data, and leadership. But this is more than just a hiring issue. Rigid job classifications and limited pay flexibility make it harder for agencies to compete for high-demand digital skills, putting service delivery and workforce capability at risk.

A workforce with rising expectations

Today’s workforce spans multiple generations, backgrounds, and experiences. Beyond job security, public sector employees now expect hybrid work, ongoing development opportunities, and the ability to work with modern tools that make their jobs easier. People want to spend their time doing meaningful work, not battling systems or duplicating admin. Agencies that offer flexibility and modern work environments are much more attractive to talent in the market.

Cultural resistance to change

Many agencies operate within cultures where risk avoidance is the default. This mindset is often deeply embedded in the system, reinforced by lengthy procurement cycles, hierarchical decision-making, and a general reluctance to take bold action. But it only takes a few courageous change-makers to disrupt that cycle. And when they do, they often discover that introducing new technology can be the catalyst for cultural change - not the other way around.

Siloed systems and missing data

Disconnected legacy systems are another major obstacle. Without reliable data, leaders can’t spot skills gaps, manage compliance, or anticipate retention risks. As a result, they’re often forced to make critical decisions based on instinct rather than evidence, a dangerous position in an environment where accountability, transparency, and trust matter more than ever.

Slow, complex procurement processes

Even when agencies are ready to move forward, complex procurement cycles can slow progress to a crawl. For example, agencies can get stuck in multiple evaluation loops just to get approvals. With change coming so fast, agencies need to reduce friction and make procurement processes more agile so they can become more agile.

Why HR transformation can’t wait

While these barriers are familiar to many, there’s a growing urgency to address them. Citizens expect digital services that are fast, easy to access, and reliable. Employees expect flexibility, development, and purpose. And operational risks - from compliance gaps to data breaches - are becoming harder to manage with outdated tools and fragmented processes.

Agencies need to build a workforce that’s ready to meet these challenges head-on. By making progress today, even if it’s small, you’ll be better positioned to meet tomorrow’s challenges with confidence.

Three priorities to build a workforce that’s ready for what’s next

Based on our experience working alongside government agencies, here are three priorities leaders should consider as they rethink their workforce strategies.

1. Get clearer visibility across your workforce

Lack of real-time workforce data is one of the sector’s biggest challenges. When data sits in silos, leaders are forced to make decisions about workforce planning, compliance, or employee engagement, without access to valuable insights.

Unified workforce management platforms bring HR, payroll, scheduling, and workforce data into one system, providing:  

• A single source of truth for workforce data
• Better compliance through reliable, real-time insights
• A simplified, seamless experience for employees and administrators.

2. Compete for talent by modernising recruitment and retention

Purpose, stability, and community impact have long been recognised as public sector strengths. But today’s talent also expects flexible work, continuous learning, and career opportunities. Job security is no longer enough: people want to know they’ll have the chance to grow, develop new skills, and work in a way that fits in with their life.

Agencies can achieve this by: 

• Offering flexible and hybrid work where possible
• Simplifying recruitment and onboarding processes
• Investing in digital tools that make work easier
• Providing learning and upskilling pathways for all employees

3. Challenge the status quo, starting with your processes

Too often, we see agencies fall into the trap of simply replacing older systems with new ones. But if you don’t address the source of the problem, the frustration persists, especially for people hired to drive change who end up stuck in the same cycles. Genuine transformation requires agencies to challenge old ways of working by stepping back, understanding the root problem, and redesigning the process itself.

Successful transformation requires:

• Process redesign: Forcing old ways of working into new systems rarely solves the problem.
• Strategic investment: Look for platforms that support where your agency is now, and where it’s heading.
• Collaboration: Bring together leaders across HR, IT, Finance, and Procurement to uncover the root cause, not just the symptoms.
• Partnering with experts: Trusted partners can bring fresh perspectives and help guide the transformation journey

What’s the difference between an integrated and a unified solution?

It’s easy to assume that connecting multiple systems together is the same as having a single, unified platform. But the reality is very different. Learn the difference between integrated and unified HCM solutions in our guide.

Download now

Building the public sector workforce of the future

There’s no one-size-fits-all roadmap for public sector transformation. But starting the conversation and focusing on the right priorities can help agencies build momentum.

The future of the public sector starts with its people. That’s why transformation needs to start by building the best possible environment for your people - one that empowers them to adapt, grow, and deliver real value to the communities they serve.