Global MPM Insight

Latest global trends in public personnel administration : a view from the OECD Global MPM Insight Vol.5 Restoring Public Finances There is an urgent need to restore public finances. Many OECD countries are experiencing historically high levels of accumulated debt following years of deficit spending. The necessity of fiscal consolidation in many OECD countries presents a significant workforce challenge for public service leaders. In the UK, for example, government departments have targets to reduce running costs and at least 8,500 civil servants are expected to leave under a variety of exit arrangements planned up to 2027. 2) However, with careful planning, efforts to restore public finances can also underpin efforts to transform the public workforce for the better. Historically, periods of fiscal consolidation have often translated into across-the-board hiring freezes, blunt headcount cuts, and short-term workforce reductions. While these measures can create immediate savings, they often generate long-term capability gaps, reduce morale, and slow innovation. The lesson from previous cycles is clear: consolidation agendas should be strategic, not blunt. This means identifying roles and skills that must be protected, such as digital and data expertise, while phasing out or re-designing functions that no longer align with priorities. For example, the most recent ‘State of the Service’ report from the Public Service Commission in New Zealand points to the need for transforming how the public service functions, breaking down silos, and designing services around what citizens and businesses need. 3) This calls for fewer management layers, and more interoperable systems can deliver sustainable savings while improving service quality, in addition to reducing headcount in some areas. As governments confront tighter fiscal conditions and the demographic pressures of ageing labour markets, public service leadership means using budgetary constraints as a catalyst to redesign roles, redeploy scarce skills, and embed technology where it can relieve pressure on shrinking talent pools. In this context, senior leaders have a role to play in identifying the opportunity tore-engineer how their organisations work, positioning public services to remain effective, resilient, and sustainable in an era of technological change and demographic challenge. The changing leadership context for workforce transformation The convergence of technological disruption, demographic change, and fiscal pressure is making public service transformation an increasingly urgent priority. In this context, the capabilities of senior public servants, and the institutional structures that enable them are central to that transformation. The opportunity lies in framing these shifts not as isolated external pressures, but as catalysts for institutional reform and renewal. For senior public servants, this implies getting the incentives right to move from incremental adjustments to more coherent and system-wide transformation. However, many public servants across the OECD report feeling constrained by rigid processes, outdated systems, and fragmented accountability, limiting their capacity to respond at the speed and scale required. Recent OECD data reinforces the urgency for transformation: drawing on evidence from an employee engagement and motivation survey of nearly 57,000 public servants in European Union countries, data show that while most employees view senior leaders as values-driven and strategic, less than half of all respondents (44%) believe that those leaders are effective at leading change. 1) Employees also report that rules slow down innovation, and coordination challenges limit delivery. This points to an important leadership gap between leadership intent and system-level impact. To turn these converging pressures into opportunities for transformation, senior leaders must do more than acknowledge the need for change. They must actively reshape systems, capabilities, and processes so their organisations can adapt and deliver at the pace required. This requires leadership capable of anticipating the organisational implications of integrating AI responsibly, planning for large-scale workforce renewal, and redesigning management systems to promote coherence, flexibility, and learning rather than fragmentation. Examples from OECD countries illustrate what this shift can look like in practice. For example, Korea’s Ministry of Personnel Management has pursued a comprehensive modernisation agenda anchored in fully digitised HR operations, supported by e-Saram, a unified human resource management system that streamlines processes, reduces administrative burden, and improves data accuracy. And countries like New Zealand and Australia are placing workforce transformation more firmly at the centre of their mandate by building “stewardship indicators” into performance reviews. Instead of just focusing on today’s to-do list, senior leaders are now being held responsible for the long-term health and capability of the entire system. 1) OECD (2025), Workforce Insights from Central Governments: Findings of the 2024 OECD/EU Survey of Public Servants, OECD Publishing, Paris, https://doi.org/10.1787/2f9080b1-en. 2) https://www.nao.org.uk/insights/government-exits-and-redundancies/ 3) https://www.publicservice.govt.nz/assets/State-of-the-Public-Service-Te-Kahu-Tuatini-2025.pdf 20 21