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Department of Defence annual report 2007-08

CHAIR —I formally reopen this public hearing for the subcommittee’s review of the Defence Annual Report 2007-2008. During this session we intend to have a look in particular at recruitment and retention issues. I now invite representatives of the Department of Defence and the ADF, who are involved in giving evidence in relation to this area of the annual report, to come forward.

Mr Minns —I am sorry, Chair. I am just trying to find my colleague.

CHAIR —I received a note about some change because there has been a late call for Mr Prior to be engaged in other activities. I do not know whether that affects you.

Mr Minns —It does not affect recruitment and retention, so no.

CHAIR —Although the committee does not require you to give your evidence on oath, I advise you that these hearings are legal proceedings of the parliament and therefore have the same standing as proceedings in the respective houses. Would you like to make any opening statements for the committee?

Mr Minns —I understand the committee would like to get a bit of a briefing on GORPS, and that is particularly why I am seeking to find Steven Grzeskowiak, who has been overseeing the entire GORPS implementation. He left the office with me, but he is just not here.

Mr BALDWIN —Mr Chair, may I suggest that we defer discussion on this matter until the other person is present, and bring forward another subject?

CHAIR —There are probably other areas of recruitment and retention.

Mr Minns —And we can take those.

CHAIR —If there are no other matters on recruitment and retention, certainly we will do that. But in terms of recruitment and retention, I think there are a couple of areas of interest.

Mr Minns —To the matter of a general statement on recruitment and retention, obviously with the general performance of the economy we have seen a flow-through to increased inquiry rates in the recruitment area, as you would expect. It is a fairly healthy flow-through. We do not attribute all of that to the impact of the state of the economy. We think that efforts we have put in place over a good two-year period to drive increased responses to our advertising campaigns and our on-line strategy, et cetera, have also factored into the increased inquiry rate. We are encouraged by that.

We do not yet see the full conversion of that performance into enlistment rates. That reflects the fact that the gap between inquiry and enlistment for people who persist through the process can be six or nine months. So it is not automatic, once inquiries and enlistments go up, although we are starting improved conversion in the last quarter. That would just be a remark about the status of the economy and how it impacts our recruitment efforts. We still remain an employer with some fairly exacting standards that we test for, and we have to apply those normal screens. While the inquiry rates might be driven up because of the state of the economy, it does not automatically convert to inquiries from the sorts of people who we can expect to enlist.

Having said that at a general level, which is referrable to the macro rates of inquiry and enlistment, we probably have experience from previous recessions that we can highlight through our research efforts that demonstrate that the quality of candidates in certain areas tends to lift in a period of economic downturn because, in a sense, they return to officer careers, in particular, within the services as an option that becomes more appealing since options they might have considered in the finance sector, et cetera, are not available.

We expect that we will see that in our officer performance, which to date is quite solid. It is hard to talk generally and simply say that because there is a recession we will see improved enlistment. It is somewhat more of a colourful and mixed model than that simple framework.

CHAIR —Do you have quarterly separation rates?

Mr Minns —Our separation rate rolling average to the last month was 9.9. It has hovered under 10 for about the last six months. The lowest it has been in the period is 9.7. We think that a leading indicator, such as the revocation of intentions to leave, is probably a more useful indicator of how the state of the economy is impacting upon retention. We know, for example, in the area of submariners in the Navy that we have seen some signs of increased levels of people revoking their intention to leave. That is probably a leading indicator of the effects of the economy on retention.

Mr BALDWIN —Can you advise me of the effect on separation that the Defence Home Ownership Assistance Scheme has had—whether it encourages people, once they have got past 1 July and qualified, or whether there was an exodus after that?

Mr Minns —We had a concern that that might happen and that there might be a blip associated with people holding off their decision to separate until 1 July when they qualified for the scheme. We followed it and we tried to do some analysis of notifications of intention to leave and applications to the Department of Veterans’ Affairs, who are the managing agent for the scheme, and we did not really find any direct correlation. In that last six-month period, we came down to 9.7, we saw it go back up, and we have since seen it come back down. I guess it has stayed pretty broadly under 10 per cent.

I think the other reason why it probably did not occur that way is that people have the opportunity to access the scheme up to two years after they leave service, so it did not operate as a definitive point that would drive increased separation. We were alert to the fact that it might, and we tracked it, but we did not find any significant correlation.

Mr BALDWIN —You raised earlier the issue of submariners. In discussions with submariners both on HMAS Stirling and subsequently, one of the issues was a $60,000 incentive for people to re-sign for an additional 18 months or to stay for 18 months. That brought about a position in which the pay of a chief petty officer was lifted to around $10,000 under that of a commanding officer such that the lowest ranking personnel on the ship, the able seaman or steward with less than three years experience, was actually paid substantially more than a lieutenant navigator with more than three years of seagoing experience. What is being done to address that situation?

Mr Minns —Mr Baldwin, I think that is a question I would ask someone from the Navy address, but I would make a couple of general points. Probably across all the services and within my group, we hold the view that retention bonuses are a somewhat blunt instrument, and in a sense they are an emergency instrument; you use them when you are seeking to get a significant effect on a trend which we do not think can be sustained or is sustainable. They create a range of cultural issues and a range of relativity issues, so I think it would be best if someone from the Navy addressed that because they are much closer to that than I am.

I was with the submariner team in Perth approximately three weeks ago. When we spoke about the sorts of factors and issues that they felt were contributing factors to how they feel about their service in the last six months or a year. It was much more things like changes to the activity schedule and shore leave arrangements and the ability for them to spend more time at home while in port. They were the sorts of issues that the submariner crew were pursuing.

It was the Collins ship and I had seen the same crew members, or some of them, probably 10 months earlier on the east coast. There was a discernible view that some things had improved about the lifestyle of being a submariner in the intervening period. In essence they did not raise with me questions about pay.

Mr BALDWIN —I am amazed that none of the ranked officers raised any of the issues in relation to the $60,000 because I was inundated with calls from all of the crews from all of the ships, including one who was an officer and who is now a state member of parliament in the Western Australian parliament about the issue. I cannot understand why it was not brought in as a $60,000 bonus across all rankings rather than non-officer ranks.

Mr Minns —I think there is history to that which relates to the fact that naval officers had received movements in their pay through the GOPS scheme, the graded officer pay structure. My recollection is that it was the view of the Defence Force Remuneration Tribunal that extending the naval capability generally would amount to a double dip for officers. That is my recollection. I do not know if Steve could add.

Capt. Hill —What Mr Minns is saying is correct. The Navy capability allowance, to which you refer, sir, was the $60,000 bonus to address, as a short-term measure, severe and emerging problems we saw in the submarine workforce. It came in the wake of the graded officer pay scale decision by the DFRT, and the DFRT thought that officers had already been dealt with. What we needed with the Navy capability allowance was a short-term retention measure while longer-term financial and non-financial measures were put in place—the longer-term financial measure being the graded and other ranks pay structure, which the Navy has implemented today, and the non-financial aspects being those aspects to which Mr Minns referred, such as improving conditions for our submariners.

While there was some initial disquiet from officers, that has abated, I have to say, sir. The disquiet from officers about the $60,000 differential between officers and sailors, for want of a better term, has diminished to the extent that I have not heard a complaint about it for some time. That is largely because the GOPS decision, which is the officers pay scale decision, has been well received by submariners and the broader non-financial conditions of service improved. The improvements were specifically directed at the submarine arm and that they had taken effect.

Mr BALDWIN —I guess we sit and wait to see how the massive enlistment into the submarine corps occurs. If all the pay and conditions are now fixed, there should be people lining up at the door to join the submarine corps.

Mr Minns —We still consider recruitment of submariners to be a challenge, and I think the Navy still does. The Chief of Navy in the last fortnight has discussed the Navy’s response to the Moffatt review as a holistic and integrated approach to addressing factors that impact upon submariners. While we will always be looking at the reward framework, the remuneration framework for submariners and indeed the other critical trades that we have within the three services, the overwhelming theme that comes through the Moffatt review is the issue about the lifestyle of submariners and the way that their crewing arrangements operate, such as the issues dealing with shore leave postings and so on.

I think it is one of the areas in which it might be too early to say that the remuneration is totally fixed, but it is a broader range of measures that the Chief of Navy is pursuing that will have an impact. In a sense it goes to the theme of what we are saying to people who are contemplating a career as a submariner and what is the promise of employment that they can expect if they join the submariner FEG in the Navy. That is the point.

Mr BALDWIN —Right. Let me reflect on a lieutenant navigator with more than three years seagoing service and the steward on board is paid $30,000 more over an 18-month period than they are. What does that say to junior officer ranks?

Mr Minns —One of the points that I have raised with the three services within the last year is that we have to start focusing on what I would call the critical talent categories of our organisation. There will be occasions when reward outcomes do not follow a traditional pattern because of the nature of the shortage we face in particular parts of our workforce. To get on top of the issues we face, we have to run a differentiation strategy around reward. I say that in the context of already making the point that retention bonuses are somewhat of a blunt instrument. Over time, what we have to do is see if we can create that kind of working environment that is more attractive, rather than off-putting for people to contemplate a career as submariners, and then ensure that we keep adjusting their remuneration framework for both other ranks and officers so that we sustain the required number and that we grow the number.

Mr BALDWIN —Why would the $60,000 have not been brought to every position on board the submarine to remain so that there were levels, according to skill and requirement? It was not just non-officers who were looking at getting out and going off to the mining industry. I think it was across the whole of the ranks.

Mr Minns —I am sure it is a question that would have been asked within the Navy at the time. It is not one that I can shed any light on.

Capt. Hill —I just reiterate that it was a DFRT decision. The DFRT decided, because of the pay decision with respect to officers, officers would not be eligible. There may be a capability allowance as a short-term measure to address shortfalls.

Mr BALDWIN —But the remuneration tribunal is not the oracle of all knowledge. We have seen that with the recent pay debacle that came down in March last year. Some of their decisions are so flawed that it is not funny.

Mr Minns —But they do make determinations that we are bound to follow.

CHAIR —Mr Thompson?

Mr KELVIN THOMSON —Mr Minns, from the overall situation, people would have gained the impression that the defence forces were short of personnel and wanted more people. Would you say that is still the case? What is the overall situation?

Mr Minns —We have grown in the last year in all three services, and that follows the previous year when we grew as well. We are managing to recruit increased numbers to the requirement that we have. We are not yet achieving all of our recruitment targets. However, our targets move up each year, so our recruiting performance is improving year on year. It is just not getting to the 95 per cent of achievement level. Our biggest challenge remains what we call critical trades. There are some 29 categories of employment that we consider to be at critical levels or at perilous levels. Those are mostly shared between the Navy and the Army. There is one critical category within the Air Force.

A lot of our recruiting effort now and a lot of the efforts of the services internally are focused on how we attract people into the particular trade categories in which we need a workforce. In essence, it is a whole-of-economy issue, and it is a global or whole-of-defence-organisation issue. When I spoke with colleagues from the UK, Canada and the US in February, they typically had the same issue around trade categories which were in high demand in their own economies. Their service organisations were struggling to attract their required share.

We have gone back to a very focused individual services brand based attraction strategy. If you have been watching the advertisements that we have been running in the last year, they go directly at these trade categories and they go after them in respect of each service. We have seen in the Navy things like the new initiative, named Plan Train, which is about making sure that they can get more sea time and training on a ship for particular categories, particularly marine technician. We have also seen within the recruitment area a specialised almost job search kind of contract being let to try to focus on finding these sorts of particular trades and occupations.

The three services have been very active in recent weeks and months in reapproaching people with those trade categories qualifications who had left the service—and gone perhaps to the mining sector or perhaps to the construction section—to see if those people have an interest in returning. I guess the last point to note is that, at the direction of the CDF, we have formed a joint working group on critical trades to make sure that we are taking a three services or a joint perspective wherever we can. That has started to produce results with aircraft-related technicians.

We work in this space regularly. We are not happy with our performance and we are constantly trying to find different ways to get better results to both attract people ab initio into those trade groups and to see how we can transfer them within the services and in some cases, as I have mentioned, across the services.

Mr KELVIN THOMSON —In which skills is the shortage most severe? You said there was one in the Air Force.

Mr Minns —If I can just find the right brief, I will give you that answer. We try not to go into naming them specifically for reasons of some sense of security about the information, but we have 22 categories that we are focused on in the Navy, 13 in the Army, and one in the Air Force, as I have mentioned. The most prominent examples relate to engineering skills, submarine service, aviation, technical and medical. We track all of the critical trades pretty much all the time, but each six months we do a full reassessment of their status and their likely remediation over the next two to three years out to a decade.

Because they are specialised categories of work, just the way that occupation is designed and the way that it operates within the service can present part of the problem. To some extent, while we struggle to recruit people into some of these trade groups, we also have a problem around the throughput of the training system within the service in respect of that, and that is why things like the Plan Train initiative in the Navy are having a direct impact. We are trying to increase the capacity of the training pipeline to remediate particular trade groups. That sort of thinking is occurring across all the services. If you could give me a couple of minutes while you have the GORPS report, I could tell you how many improved in the last six months period, how many stayed stable and how many in our view worsened. I will just add that up.

Mr KELVIN THOMSON —That would be interesting. Finally, I come back to the question of separations which others have raised. You gave that figure of 10 per cent or 9.9 per cent for the last six months. How does that compare with what was going on previously?

Mr Minns —This sustained period under 10 per cent is probably our best performance for four or five years.

Air Cdre Needham —Yes.

Mr Minns —Tony would have the history on that. We expect, if we get to a rate of around eight or eight and a half per cent, that this is probably about as good as we could expect or hope to achieve. In fact, if we have separation rates lower than that, we will start to generate some issues about the structure of the service workforce and the ability of people to work through that career structure in their time with the service. Below 10 is an improvement on where we have been in the last decade. We were this low a decade ago, from memory. We would like to see if we could knock another per cent off it, but we have some categories—I think officers is a good illustration—that are below six per cent.

Air Cdre Needham —No, seven and a half.

Mr KELVIN THOMSON —But how high did it get if it is higher than it is now.

Mr Minns —I would defer to Tony.

Air Cdre Needham —I would have to do some research on that and get back to you. I will take it on notice. But it did peak just after the defence reform program in the early 2000s. I cannot say exactly what it is. It was far larger than it is now. I will just make a point on separation rates. A certain level of separation rate is healthy for the organisation to allow that turnover to happen. About 10 per cent is a good figure as a rule of thumb. The figure is influenced by the skills that a person needs. Generally speaking, the higher the skill, the lower will be the retention because obviously there is a training lead time to replace people. But with lower skilled people, a greater separation rate is probably healthier for us.

CHAIR —It might be opportune to go back to where we were going to start and get a rundown on this new officer structure or pay structure.

Mr Grzeskowiak —I will just give a brief introduction to the graded other ranks pay structure, which, as you have just heard, has just been implemented today for the Navy and will follow for the Air Force and the Army in the next two months. What are we trying to achieve with the graded other ranks pay structure? Essentially it is to put in place a simplified pay structure that will endure for a number of years, that will facilitate increased differentials for people in terms of pay on promotion and that will increase differentials for people who up-skill within their trade or category. Compared to the previous pay structures, there is now a greater reward for up-skilling and promotion.

Also, to enable the roll-in of some of the bigger allowances that we used to call environmental allowances, which are the flying allowance, the submarine service allowance, the special action forces allowance and the special operations allowance. The previous pay structure could not really accommodate the rolling in of those allowances. To roll them in, what we had to do was add a whole bunch of extra pay grades onto the old pay structure, and it ended up with 16 pay grades. It was not very coherent, so we have taken the opportunity to restructure around the new rates of pay, which are in effect, with the allowances being rolled in.

The third thing is to enable us to use the pay structure in a flexible way through the Defence Force Remuneration Tribunal as we look at the various trades and categories within the ADF in terms of being able to match market forces in the pay that we offer to our ADF people. Our previous structures were a bit limiting in that regard, and that is why we are doing this. What do we hope to achieve? The impetus for implementation of GORPS came from two things. Fundamentally, it is the last part of the remuneration reform project which flowed from the Nunn review of 2001, which was a review into the pay and conditions of the ADF.

The Remuneration Reform Project was pursued in four stages over a number of years. It went to the part of the Nunn review that said that we should seek to simplify our pay structures and we should seek to roll allowances into pay when that is sensible. So GORPS is the culmination of that four-phase project. I could go into some detail about those four phases, if you like. The other impetus came from the DFRT itself around the end of 2006 or early 2007.

The DFRT ran what it called the base pay inquiry. That was a piece of work that was done jointly between the Department of Defence, the now Department of Education, Employment and Workplace Relations and the tribunal to look at the relative pay of our ADF people compared to the broader Australian market. While the DFRT did not make any specific decisions on the outcome of that base pay review, that information in terms of relativities of ADF pay compared to the broader Australian market was used as primary information in terms of where we placed people in the GORPS pay structure, which we are now seeing rolling out at the moment. So that is where it came from.

One of other thing is that in December 2006 the then government agreed to a range of recruiting and retention measures, some of which we have just talked about, a range of bonuses that were seen as short-term bonuses necessary to encourage certain people to stay with the ADF in what was a time of high separation, and recognised the need to at least go some way to matching pay to those bonuses, which also drove the need for a reformed pay structure.

Progress so far is that the DFRT agreed to the graded other ranks pay structure placements formally on 24 December last year with a date of effect backdated to 4 September 2008. A piece of work started way back in April last year to plan the implementation of the new structures. That involves the replacement of approximately 37,000 regular members of the other ranks and a significant number of Reservists in due course into the new structure. Each of the services, the Army, the Navy and the Air Force, was responsible for deciding which category each of the people needed to be placed in, in line with the decisions of the DFRT, and that work has been done by the service implementation teams.

The chief information officer group was responsible for adjusting our pay computer systems to be able to accommodate the new pay structure, and that work has been completed. The Defence Support Group were responsible for managing the implementation and rollout of the new placements into the computer systems and into effect in terms of pay. The personnel strategies and policy group was responsible for the DFRT case and any issues that emerged from that in terms of policy. We have reached the situation at which today roughly 9,000 Naval other ranks members have been paid, they are into their new placements, and they have been paid their back pay to 4 September. I guess the next key milestone is for the Air Force. Their pay for GORPS is due to be effected in the middle of May. I think it will be paid on the payday for 14 May. The work to implement that is going well.

All of the Air Force other ranks have been mapped into the new structure and the data starts to be loaded into the HR and pay computers next week. There is a structured process that sees the data being put into the computers, checked, fixed where necessary and then the pay calculations run. Members of the Air Force will be able to look at their salary variation advice—payslips essentially—on a Monday about 10 days before 14 May. I think it is around 6 May. From then on they will be able to ring up the implementation team in the Air Force if there are any queries.

We have had a look at how the Navy has gone. It has gone very smoothly, we think. We have had only a very small number of phone calls today to the Navy’s implementation team. When I checked at 12 o’clock, it was three and they were all questions that were easily answered. Part of the reason for that is that we have had an extensive communications running within the ADF. In fact, in the Navy News, which I have some copies of if anyone is interested and which hit the streets this week, there is a centre page spread explaining what GORPS is and it has a brochure explaining where people are placed. This is probably the second or third article in that Navy newspaper. The Air Force News and the Army News are similarly running articles that are timed to coincide with the implementation for their services.

There were only three or a few more phone calls today to the Navy implementation team because last week we actually encouraged the Navy people to have a look at their salary advices. They were available last Monday automatically through the PMKeyS computer system. We had about 600 inquiries last week from the Navy—about half from the phone and about half by email—just asking a range of questions of the Navy team about what GORPS meant for them. I am advised by the Navy that all of those inquiries were able to be answered. None of them have pointed to any systemic errors or problems in terms of where people are placed or how the calculations through computer systems have worked.

As I said, at the moment I am fairly confident that GORPS has gone well for the Navy. It is looking to be on track for the Air Force. The Army is due for a payday in the middle of June and then we will do the Reservists. That is currently planned for August. Clearly we are learning lessons that we find from the Navy implementation and we are feeding those into the subsequent Air Force and Army implementations. That is not to say that there will not be the odd error in there somewhere. We are adjusting the pay of 37,000 people, so it will be pretty unlikely that no errors will occur. But if they do, there are people who are skilled and available to get the errors fixed up quickly.

CHAIR —Thank you for that, and thank you for supplying the circular or pamphlet that has been published in the Navy News. Just quickly looking at it, it appears to have the pay rates under the new structure. Is there a table that shows us the before and after?

Mr Grzeskowiak —There is not in that publication, but I could provide to the committee a copy of the previous pay rates. However, I do not have that with me today.

CHAIR —If you could provide a table showing before and after and which tabulates them, we will be able to quickly identify what it actually means in terms of pay packets. I am sure that is the news people are interested in, although they would have a pretty good idea of what the ‘before’ was, whereas we would not. I guess they know what they are getting.

Mr Grzeskowiak —We will take that on notice. One of the key fundamentals of the whole GORPS is that nobody goes backwards in pay. There are a number of categories of people who are placed under GORPS on a lower pay point, but anybody who is already in that category will have their pay preserved. Therefore there will not be any reductions in pay. Probably about half of the other ranks will receive a pay increase as a result of this process. The cost of implementing GORPS in terms of increased salary and the flow-on to superannuation is of the order of $2.4 billion over the decade.

I have just been given some figures that show 3.4 per cent of sailors gained more than $7,000 per annum; 15 per cent of sailors gained between $4,000 and $7,000 per annum; 25 per cent of sailors gained between $2,000 and $4,000 per annum; 55 per cent of sailors gained more than $2,000 per annum; and 0.7 per cent of sailors will require non-reduction provisions to ensure they do not go backwards. It is generally a good news story for people out there. There will be similar figures as we roll through the other services as well.

Mr HALE —Are we still on GORPS, are we?

CHAIR —Yes. Does anybody have anything else on GORPS? Since the answer is no, it is over to you.

Mr HALE —Recently I met with some of the spouses of ADF members in my electorate. Generally you get a raft of different issues to do with health, education and housing, but one of the ones that was very interesting to me was that they believed it would help spouses and families with morale and retention—and probably 90 per cent of them were women whose partners mostly were deployed in the moment either in Afghanistan, Iraq or Timor—if there were more training opportunities for spouses of personnel in the ADF and if the services could actively encourage or help to train them in a field where there may be a shortage.

Some of them were talking about allied health types of services. A lot of them have health issues with their children as well. ADHD was quite common among the group. They were saying that they would like to have more encouragement from the ADF for spouses in regards to training. Are there any initiatives that possibly the ADF could take up with government to address this issue?

Mr Minns —Mr Hale, there is an existing scheme about spouse employment and providing assistance, particularly in the case of postings and relocations. I do not have details to hand on it. We could provide you with some details about that scheme. It does go to providing assistance in finding employment in a new location. I suspect it does not go to the question of formal training opportunities and facilitating those. But I can certainly find out what is currently covered by that policy.

We know from the Defence Attitudes Survey and also from the ADF Families Survey that we did in the last quarter of last year, and the results of which we are still cleansing, that we got consistent feedback relating to the impacts on partner careers being a source of dissatisfaction. One of the interesting things that comes through the families survey is that it is a number above 75 per cent of partners who say they have not sought to influence the decision of their partner to stay or leave the service. The reason we did the families survey is that we are aware of the relationship between the pressure on the family and the cumulative effect of having a partner in the service. At some point you reach a tipping point when, even if the member wishes to stay, they make an assessment that maybe it is not in their family’s interest.

We would be looking to finalise the review of the families research and review it in the context of what we will have available as funding under the new white paper arrangement. By working with the services, we will seek to prioritise what we do. It is probably a bit hard to be more definitive than that at the moment, but certainly I will get details on the existing support framework that is in place and I will get them to the whole committee.

Mr HALE —No worries. Thank you.

CHAIR —Mr Robert?

Mr ROBERT —Mr Minns, can I direct your attention to the Australian Defence Force Academy? What is our current separation rate at the academy?

Mr Minns —That is not a question on which I have data with me here. I would probably be able to get it before the end of the day.

Mr ROBERT —Great. The next question is: If cadets, for example, an Air Force or an Air Force pilot, fails a subject and is scrubbed out, are they offered another opportunity within the Air Force or into a non-flying area of the Air Force?

Mr Minns —It is a question I will defer to my service colleagues.

Air Cdre Needham —I guess we have to have an answer from Air Force personnel on that and how they would treat that. Having worked in Air Force personnel before, but not currently, I am able to say that it would largely be dependent on the circumstances of the situation. I expect that they would normally look to offer another opportunity, but the reason that the person failed initially would influence the opportunities that could be offered subsequently. That is my perception from previous experience. I could not give you the exact up-to-date policy now.

Mr ROBERT —All things being equal, if the cadet were to fail a subject and there were no other outstanding issues, we would expect to offer them something else, considering that the Commonwealth has just spent a fair bit of money over a couple of years on educating and training them?

Air Cdre Needham —That would be a large factor involved but it would also be the choice of the student and what they wanted to do. For example, if they were an engineering student and failed some subjects that were important to following that career path, changing to other opportunities within the officers corps might be difficult. There might be non-commissioned opportunities. It would be a combination of a discussion between the individual, their aspirations and the availability of opportunities at the time.

Mr ROBERT —So you would expect a discussion to occur in such a circumstance?

Air Cdre Needham —Yes.

Mr ROBERT —Captain, how does the Navy deal with things like that the academy?

Capt. Hill —We would deal with each case on its merits in much the same way as in the Air Force procedures that have just been outlined. It would be difficult for me to say now that we would deal with each case the same way. I think each case would be dealt with on its merits.

CHAIR —I want to quickly ask a question about the gap year. There is some comment on it in the annual report and reference to the success of getting people into it. I want to know what sort of qualitative research we do in respect of those participating in the gap year. Do we know when they join the gap year and why they are joining? Do we know whether they have an interest at that point in perhaps taking on defence as a career? Do we know what their attitude is at the conclusion of the gap year?

Mr Minns —Chair, we have a longitudinal study of retention. I am pretty sure the gap year population is in it. It is designed to answer all those questions.

CHAIR —It is not just quantitative. It is not just going to tell us that 80 per cent of people who went through the gap year applied for full-time service, or whatever it might be. It will tell us that before they commenced the gap year, this was their attitude. When they left the gap year, something else may have been their attitude.

Mr Minns —It certainly will have that information, but we have not conducted it yet. I think gap year is due for that formal assessment in 2010-11.

Capt. Hill —Certainly from a Navy perspective, Mr Chairman, we are closely monitoring gap year. Those people who are charged with supervising gap year participants speak with them frequently. They are spoken to when they arrive at Recruit School in the case of the Navy and undergo a qualitative information-gathering process as to why they joined. Their progress is monitored through the 11 weeks of Recruit School, and when they go into the fleet and other establishments they are assigned a supervisor who similarly monitors their progress.

They are interviewed at the end of the program, so in tandem with the qualitative data that we can tell you from the Navy’s perspective, 30 per cent or thereabouts of the first 100 participants subsequently transferred to the regular Navy. I am confident that the internal study we have commissioned at the end of the first year, which will be in May this year, will also contain a good deal of qualitative data as to the attitudes of those people when they joined, their attitudes throughout their training and, importantly, their attitudes when they left.

CHAIR —I would be interested to have that information when it becomes available. Thank you.

Mr BALDWIN —I have a question on the gap year.

CHAIR —Mr Baldwin?

Mr BALDWIN —What is the take-up of gap year people in the Army, Air Force and Navy this year?

Mr Minns —The ‘this year’ part of the question can make that a bit difficult. If we talk about the 2008 cohort and the 2009 cohort, although the principal design of the program is not to achieve people joining at the end, it is certainly an option. As at 1 April 2009, 221 of the 2008 cohort had transferred to the permanent forces.

Mr BALDWIN —No, that is not the question.

Mr Minns —No?

Mr BALDWIN —How many young people went into the gap year program to start with?

Mr Minns —In 2008, it was 700—500 in the Army and 100 in the Navy and Air Force. In 2009, the numbers are 267 in the Navy, 321 in the Army and 112 in the Air Force.

Mr BALDWIN —It was 321 in the Army, and how many in the Air Force?

Mr Minns —It is 112.

Mr BALDWIN —Was there not supposed to be 1,000 in the gap year in 2009—500, 250 and 250?

Mr Minns —We had an intent of looking at moving it from 700 to 1,000. When we looked more carefully, I guess, at the capacity of the training systems of the services to integrate those numbers, particularly led by a concern that it was going to play a role in perhaps cannibalising normal officer intake in the Air Force, we went back and revisited how we would remix the numbers. We took to government a view could we not grow to 1,000 at this stage? When we did that, we also worked with the three services to remix the numbers.

The Navy’s decision to move to 267 was illustrative of the fact that they have a sort of gap compared to their trained force versus their demand. The view was that they would take up more—and significantly more than 100 in the first year—as a way of trying to give people exposure to a Navy career. They felt they had the capacity in their training pipeline system and they stepped up to that number. The Air Force grew modestly and the Army came down, reflecting what was thought to be a more sustainable level, just based on all of the training requirements of the three services.

Mr BALDWIN —I remember reading a press release from the minister that they would pursue the 1,000 places for this year.

Mr Minns —The context surrounding that was that the minister had been advised by us that we felt that we would grow from the original 700 to 1,000. It was the result of internal Defence review and consideration that we sought—because it is a retention initiative under the R2 package—the agreement of the Prime Minister to come back to this level that Defence felt was more sustainable.

Mr BALDWIN —So what was the reason for the reduction in round figures of 180 in the Army—accommodation, training capability? Why was there a reduction of 180 in the Army?

Mr Minns —I think it is all of those things. I do not know off hand.

Mr Grzeskowiak —All of those.

Mr Minns —Yes.


CHAIR —We will have a last question on this from Mr Hale and then we will move on to the services pay.

Mr HALE —Just in relation to the gender imbalances that are a feature of the ADF and even more marked in the officers ranks of the ADF. Can you tell the committee why this is a concern to Defence, and what consequences it has for Defence’s efforts in recruitment and retention? What targets does Defence envisage in respect to the gender balance in its workforce?

Mr Minns —Mr Hale, I guess the Defence view is that, where possible, we would like to reflect the community that the organisation serves in terms of its composition. That is a grand aspirational goal. We are some significant distance from it in respect to women in the ADF. The gap will not be closed instantly or quickly. Essentially for reasons that are structural in nature, not all of the occupations within the services are open to women, for example. It is quite a lot—it is 92 per cent of the positions—but significant and large components of the Army, for example, are not areas that women enlist in. Indeed they are the areas in which we have seen growth in the last three or four years.

Our view would be that we are making progress; that the three services are seriously looking at options to make their service more attractive to women entering and to make the experience of women within the service consistently improve so that retention goes up. With the CDF, the Chief of the Defence Force, and the minister and with the support of the service chiefs and me, we talked about the idea of having a women’s reference group. It was established in the middle of last year with the aim of getting some external perspectives and views about what might be the reasons why the ADF is not making the progress that would be considered more helpful than it is currently seeing.

One of the most important points to come from that reference group were the observations of senior women in large organisations that there is critical mass point and there is an area of breakthrough performance. It is around about 20 per cent and above of our workforce being women. One of the reference group members is from the mining sector. Some parts of the mining sector have a lower representation rate of women in their workforce than we do. The clear observation of all members of the reference group was that we are sitting at about 13.6 per cent and getting critical mass and getting a shift in culture that then becomes self-supporting and reinforcing from that point. It will not happen until you get above 20 or 25 per cent.

The three services are currently working with my group on an integrated view of all the initiatives that already are in train, and some new ones that are being considered, to take forward to the CDF and the chief of service committee—in July, I think it is now. On its way it will go through the women’s reference group for their comment and review. It will represent the critical things that we think we need to really concentrate on because again one of the observations of the reference group was that to get to that breakthrough point, it is perhaps better to concentrate on five or six critical issues rather than 56 worthy initiatives.

At the moment we are trying to clarify with the three services what would be those breakthrough initiatives that we think will have the most impact. But to give you a couple of examples of the things we are considering, I mention that we have women who served in the Middle East area of operations and have performed to exceptional levels of performance. We are not currently telling a lot of people about it. So that idea of role modelling and making it more evident to the community is known within the service, but perhaps it is not known well outside the service and outside the Defence organisation. That is an example of looking at some of the people who have been successful and have achievement in their career and being more deliberate about telling that story as a way of getting the message out.

I have said in the past before this committee and in the Senate estimates committee that the gap year is a good opportunity for us to give people up close and personal experience of what it means to be a woman in the ADF. We are quite pleased with the results and quite pleased with the number of women who have decided to transfer as a result of that gap year experience. I think that the Navy particularly has that view.

Capt. Hill —Nearly 50 per cent.

Mr BALDWIN —I ask you to take on notice and provide to the committee across the three services how many females are in each of the ranked positions and non-ranked positions.

Mr Minns —Yes. We should be able to do that.

Mr ROBERT —Could I just add to that a breakdown of females in the three services who are currently deployed overseas?

Mr Minns —I cannot hear you, Stuart.

Mr ROBERT —Of the number deployed overseas—1,096, or whatever, in Afghanistan—how many of those per service are women?

Mr BALDWIN —Could you also include in that the females in the highest rankings and the breakdown of the rankings in the civilian Defence employment or the public service?

Mr Minns —Within the civilian workforce?


Mr Minns —Okay.

Mr ROBERT —What percentage of our allies defence forces are women—the US, the UK, Canada?

Mr Minns —I do not think our numbers are vastly different, but again I take it on notice and I will come back with detail for you.

Mr ROBERT —That would be great. Let us just take it as read that our numbers are not vastly different, which means that every single one of our allies is facing the same issue. Why are we busting our guts to try to move from 13 to 25 per cent when every other country is finding that difficult to achieve?

Mr Minns —Perhaps I should just make the point that we have not set a target of 25 per cent. That was an observation of the reference group members that it is at that point that you achieve critical mass.

Mr ROBERT —You then went on to say that you were combining all of the current initiatives, bringing up things to the chiefs group in July, and run it by the reference group again. It was certainly implied that that is where you were heading.

Mr Minns —In setting targets, we have to make them mathematically achievable. The Army case is illustrative of why it is a challenge. As the Army grows through the ELF program, it is essentially growing its infantry ranks. I am sure I will be corrected if I get this wrong, but that is an area of employment and classification that women cannot enlist in. So the Army is actually growing that part of its workforce from which women are excluded while it is trying to grow women in its workforce. You could set an aspirational target for the Army, but it would be mathematically unachievable.

We have a target of trying to improve our enlistment performance of women through the recruitment activity and that is around the 20 per cent level, but we are currently reviewing it see again if it is a realistic and valid target to put effort and resources into. The simple reason why we are interested in seeing more women in the ADF and more people from a non-English speaking background within the ADF is the notion of talent in the economy. If we have classes of the external labour market and if you think they do not belong, we reduce the pool that we are recruiting from. Recruitment is hard enough as it is without crossing people off the list.

In essence, we are trying to make sure that people who could be successful in the organisation know that we want them and know that we have a culture that is welcoming to them and so that we do not have any classes of that external labour market population writing us off.

Mr ROBERT —I noted with interest, Mr Minns, that in the session before lunch with all of the DMO and all the generals in the room and everyone else, there was one female in the room out of about 50.

Mr Minns —Yes. Look, I have made the observation that this is the first senior executive team I have worked on that does not have woman on it. That is the fact of Defence at present. Partly what we are trying to do is see if we can put in place the right sort of initiatives that, over time, will shift that.

CHAIR —I welcome to the table the Chief of Army. It might facilitate broader discussion if the next session, which will deal with human resources and pay systems and has a fair degree of overlap with recruitment and retention anyway, if we deal with those together.

Lt Gen. Gillespie —If I might I would like to answer that last question.

CHAIR —Please do.

Lt Gen. Gillespie —It is pretty clear to me, as chief of the service, that with the social issues in our country—the ageing population and all of those factors including that women are 51 per cent of the population—we struggle to get manpower in a man’s environment in the issue, so we would be absolutely bonkers to persist in not trying to get women into our organisation. We have got over the hump of the man’s club issue in the Army and I think in the Defence Force.

The women we have in our force are absolutely outstanding. There is a bow wave of women who have come through under the equal charter of men, doing all the same courses and career progressions at the lieutenant colonel or early colonel level in our system. In six or seven years time when we are sitting here you will find a whole bunch of very senior women sitting here and doing this sort of thing. The talent coming through is absolutely extraordinary, and there is no reason to think that it would not be.

I am going to pursue as many women into the Army as I can find. The thing that I have to do is make it attractive for women. There is a whole bunch of issues there that we have to do a lot more work on. I cop a lot of abuse at the present time because the participation rate of women has actually decreased. But it has decreased because they are only entitled to fill 67 per cent of the employment categories in the Army, and we have had a big focus on increasing those employment categories that they are not entitled to join—the Enhanced Land Force and the HNA sort of approaches.

Actually, if you look at the 67 per cent that we have, the participation rate of women in the Army has increased from about 11 per cent to 13 per cent. If I can keep that slowly creeping up each year, I will not reach 25 per cent for quite a while. But if the Navy and the Air Force are doing pretty well at it at the present time and can reach that sort of mass, then it gives a brand to the ADF that will help us along the path as well. Your question was: Why are we beating our heads about it? It just makes absolute sense that we have to keep after women and get them interested in our service.

Mr ROBERT —I agree. General, what are our allies doing—the American, the Brits and the Canadians—if Mr Minns’ point, albeit without the numbers in front of him, holds that we are not vastly different?

Mr Minns —I have them now, if that would help. Canada is 13.3 per cent; New Zealand is 17 per cent; the United Kingdom is 9.4 per cent; and the US is 14.4 per cent. We are currently at 13.6 per cent.

Mr ROBERT —What are our allies doing with respect to making the services more encouraging and welcome for female soldiers, sailors and airmen?

Lt Gen. Gillespie —I think the biggest thing that all of them have been focused on is removing the policy that was discriminatory to women in that whole process. I think I would go on record—and I think the women’s focus group has said it—to say that the policies in our defence organisation for equal opportunity in our Defence environment are among the best in the country. We have cracked that part of it. One of the questions that I found really interesting when you were talking about the gap year earlier, and one that I want to find answers to, is that we had an amazing number of young women apply for the gap year at percentages far in excess of what we could expect annually to ask at the recruiting desk to come in. Why is that? What is the factor behind it?

We have been debating whether or not it is the mum factor: you know, that mothers are not prepared really to support and sponsor their daughters to go into the Army for four years, but they will give them a crack at it for 12 months with a free exit card if they do not like what they are doing. Maybe that is why there has been such heavy participation rate of young women, and it is nice to see in the Navy, the Air Force and in the Army the number of gap year women who are staying on and doing the business.

Mr ROBERT —What percentage of the 500 who came into the Army last year are women? Captain, I believe you said that the complement in the Navy was about 50 per cent.

Capt. Hill —Yes.

Lt Gen. Gillespie —I will just get my director general of personnel to come to the table so I am not misquoting. He has the facts and figures.

Mr ROBERT —Captain, of the 30-odd who stayed on, what percentage of those are female?

Capt. Hill —I could not actually answer that from memory.

Mr Minns —I could. It is in the order of half of the Navy people who transferred to permanent.

Mr ROBERT —So the 50 per cent has flowed right the way through?

Capt. Hill —Following what the Chief of Army said, it would be fair to say that from an allied perspective, our allied navies are facing the same challenges as we are. Our allied navies and we are fairly popular in the recruiting sense. The Navy’s participation rate for females is currently 18.3 per cent. Nearly one in four of our people undergoing training are female. The challenge for our Navy and for our allied navies is keeping those people. It goes to what the general said. We are an attractive organisation, but it is remaining attractive and making a service lifestyle—in our case particularly a Navy lifestyle—conducive to doing all those other things that people want to do with regard to family and so forth.

Mr BALDWIN —What is the separation rate for women across the three services? Is it higher than it is for males? Are females doing one term of engagement and then pulling out?

Mr Minns —This is detail that I can get to you accurately.


Mr Minns —But something like 52 per cent of males will leave the ADF inside 10 years, and the number is either 72 or 78 per cent of females. We have seen some narrowing of that gap. It does point though to a sense that women are seeing a career as something that is a within-10-year stint, but a good half of men who join the ADF see it that way as well.

Mr BALDWIN —When you are doing that statistical analysis, can you also provide information on whether there is a correlation between people exiting Defence and going across to Defence public service?

Mr Minns —I suspect we could. It might take us a while.

Mr Grzeskowiak —It could be difficult to get that.

Mr Minns —Yes. It will go to the integrated or non-integrated nature of our HR systems, which I think the committee is aware of.

CHAIR —We now will pick up from where the Chief of the Army left off.

Brig. Fogarty —You have heard the chief say that currently about 10 per cent of the Army is made up of women and approaching 13 per cent of positions that are available to them. In the gap year, we had 20 per cent of the intake in the first year who were women, which was a very pleasing result. We did a lot of research with Phil Minns’ organisation to track the reasons why it was so attractive. We know that out of the first year of the gap year about 30 per cent of the applicants said they would never have considered joining the Army if the gap year program was not available to them. So we knew immediately that we were tapping into a new segment of the population. As described by the chief, their principal reasons were that a one-year program with no risk and the option to leave at the end was very attractive.

We had several focus groups, with 20 per cent who were women, ask why particularly they were interested and again it was because it was a one-year program with no risk. They could try it, and if they liked it they would stay. On the back of that, the Army has been considering spreading out into a number of our categories a reduced initial minimum period of service. Currently our initial minimum periods of service range from four to six years, depending on the trades—the more technical trades are six years so that we get a greater return on our investment—but there is an opportunity to have a reduced initial minimum period of service in some categories of perhaps two years to leverage off some of the success that we have had in the gap year and to try to target a broader segment of the community.

Lt Gen. Gillespie —I might add there that that will be non-gender specific. It will just focus on some areas and trial a two-year minimum period. In some of those areas where we hope to attract women, yes; but it will be open to both genders.

Mr BALDWIN —You have done these studies and tracked generation Y and their expectations and generation X and their expectations. What will be the expectations of generation Z in trying to get them to come on board into the military?

Brig. Fogarty —There is a lot of research about the different generational groups. My personal view on this is that the Army in particular generally attracts a certain type of individual, which we see as consistent across all these generation groups. It is only in the margins where the attitudinal change is making an impact. I think, as I have described, the ADF gap year has picked up a new segment that we were not tapping into before. We are trying to learn from that and adjust and change our approach. You have heard some of the recruiting approach change from Mr Minns.

Mr Minns —I would add that there is a bit of a debate within the HR community about whether or not the research observations about different age cohorts are accurate in respect of that workforce for its whole life or whether it is just the stage of their career. One of the characteristics of generation Y is meant to be that they are interested in portfolio careers and expect to have 16 or 17 different forms of employment and they are not interested in security. I expect from before joining Defence and working with a lot of generation Y people in the consulting sector and hearing them contact me about their current employment scenarios, that is probably being challenged a bit for that generation at present.

How much is it a characteristic of the generational cohort? How much of it is a factor of the time of their life and the state of the economy? We do know that a large number of the people who join the ADF are predisposed to being a joiner of the ADF and they will make that decision based on what happens in the recruitment process and the sense they get as to whether or not what they felt they were going to experience is likely to occur. What we are trying to do in recruitment is work on the people who are neutral towards the ADF; they do not really have a view one way or the other, but perhaps they are influence-able to consider it. That is why gap year represents such a learning opportunity for us.

I think there is a try before you buy component going on. I think we are probably picking up some people who always wanted to join us anyway, but at least we are not only picking up that cohort. We are extending into that neutral part of the external labour market that has not really had a contact or experience with the ADF. The suggestions that Gerard has mentioned the Army is considering about minimum enlistment periods is a good application of that experience from gap year.

Brig. Fogarty —I will make one more comment about the gap year. Measuring from the Army’s perspective the success of the gap year is a very difficult prospect. Transferring into the regular Army is not necessarily our measure of success. Because we are tapping into this different segment, we want this group to have a successful one year and then go back in and talk among their social network about what a great experience they had. That gets to what Mr Minns is talking about—changing the propensity of the join discussion that occurs in this new segment in the market place.

Mr ROBERT —Brigadier Fogarty, are you able to cast some light on what Canada, New Zealand, the US and the UK are doing with respect to attracting more females into their respective militaries?

Brig. Fogarty —No, I am sorry. I cannot.

Mr ROBERT —Have we done any work on analysing what they have found is effective or not effective, or what they are using?

Mr Minns —We have done that, Mr Robert. The report that I read to you earlier is a paper in 2008 dealing with comparisons with other services. Having spoken with some of the other services earlier in the year, I find that they likewise are using strategies to try to raise the profile of women within their service to talk more about the success stories that the Chief of Army has mentioned.

Essentially, we all confront the issue that it is a matter concerning culture and perceptions of culture. That is why that critical mass argument carries some weight. It is about the internal dialogue within Defence and it is about how people with experience communicate with other people in the community to tell them about their experience, their time within the service and their contact with it. If the broad message is positive and there are enough people carrying that message, then you start to shift away totally from the idea that it is not an organisation that is a suitable place for a young woman to go or to join.

The point that I have been making since I have been in Defence and looking at this is that Defence has dealt with what you would call the deliberate or specific discrimination. It is not there. It is an organisation that has zero tolerance for people who practise that form of overt discrimination, but it is an organisation that, for a significant part of its history, did not have women in it. So it has many cultural traditions and many policies that were framed in that time frame. You have to make sure that you are working through and addressing those areas. They are kind of like systemic bias: They are not intentional, they are not deliberate, and they are not overt, but they are perhaps still lurking within the organisation historically.

Lt Gen. Gillespie —I can give an example of that. Until last year, the retirement age in the Defence Force was 55, and then we made it 60. The men structure for command going through to becoming a unit commander and to general and all the rest of it was based on people going through gates that got them there, and they started to pay off between 52 and 55. One of the common criticisms that we had of that sort of process is that that was unfriendly to women, particularly if they wanted to be women who had a career and a family because the gates were so close together that to get through them you really had to forgo the family to be successful, or you had the family and then you could not go through the gates. That was one of the issues.

We have this wonderful situation at the present time whereby extension of the retiring age by five years, if nothing else, gives us five years we can insert in between the gates. That is a great policy and not necessarily just for women because it does say that over a career there is room for you to have five kids, if you want to, in that sort of process. But it also says to men whom we might want to send off to Harvard or to go out into industry for 12 months to gain some skills that they bring back to refresh out profession as we go through that we are going to do that. If you like, we have good policy. We have a happy circumstance of five years up our sleeve now so that we keep people in the system longer to 60. That allows us not to give up any standards at all on our gate. We can do that, but we can introduce gaps where people can take time off for all sorts of reasons.

We are hoping that those sorts of initiatives and the fact that we are doing it not specifically for women but for the workforce in general will work. There is an increasing number of single parents who are men in our organisation involved in this sort of process. Our women are telling us, ‘Don’t get into positive discrimination to support us. We don’t need that. We’re doing quite well in our right.’ But there are little things. For example, I wonder how many women will front up to give the address in all the little RSLs on Anzac Day wearing their medals as veterans. We are looking at that right now. That is the sort of message that Australia needs to hear. We actually have a lot of women.

In fact, I think you asked the wrong question of us earlier about the number of women serving overseas because that is a given point in time. The questions to ask would be: How many women have served overseas and the total number of people in Afghanistan or Iraq? The answer is that the numbers are getting up. If you ask us at a point in time, it might be one of those cycles where the female numbers are very low but there are other cycles where they are quite high.

Mr ROBERT —Well, take some liberty with the question, General, to provide a more holistic answer.

Lt Gen. Gillespie —Thank you. We see the Chinook organisation that is in Afghanistan at the present time. It is a really professional, strong, dangerous environment in which they are operating, and it is commanded by a young woman who is doing it magnificently. They are the stories that people need to hear. If we can cash in on those, if we can get you, the press and ourselves and public engagements to show women in that light, then hopefully it will start to feed that we are not a man’s club and that actually we have some really clever young women who are trail blazers and who are doing a great job.

Mr ROBERT —What are the next few initiatives up your sleeve, General? You spoke about the retirement age extending from 55 to 60, which sounds great. What do you see as being next?

Lt Gen. Gillespie —One of the things that the services have to start doing is that we have slipped into a service provider relationship where we have a contractor who recruits for us. We have been waiting for the product to come to us. We do not sell ourselves well enough. We have to get back out there and do it. We have to ask ourselves why, if we have a young woman who is doing really well in aviation in a war zone at the present time in the most challenging environment, we do not have a lot more women flying or applying to become pilots or technicians in the aviation field? It is our job as the services to go and do some work on that and potentially rattle the cages of a lot of girls’ schools around the country, and fly in helicopters and teams to interest these young women in what it is their compatriots are doing in the Defence Force, unheralded.

Mr ROBERT —Do we still send teams to schools as part of our Defence recruitment?

Mr Minns —Yes, we do. What we have done with the structure of recruitment in the last 18 months is see if we can focus the uniform members of the recruitment organisation on time in the market—visiting schools, visiting events, et cetera—and we have tried to make use of non-uniform people in the back office who are doing the tasks that do not necessarily a member of the military. There is a schedule of events, and Defence Force Recruiting works on that with the three services.

Mr ROBERT —Does every one of those teams have a female services person with them?

Mr Minns —I am not sure that every one of the teams would have one. Not every visiting team would have one, but certainly if you go to the major recruitment centres where we have those externally focused groups, I would be surprised if there is not a woman in each case.

Mr Gillis —And there are other initiatives, such as putting our best people into the recruiting centres so that we have the right people attracting young Australians and who can answer the questions, not people who have been sidelined and it is a place for them. We should put our best people there, and a lot of conscious and focused effort. It hurts us in some areas but we realise that recruitment is really important. It is not the more important of the two things that we talk about. In my opinion, retention is much more important than recruiting although they go hand in hand. For every person you retain, the business case for those is just overwhelming. It is saying that retention is what there is interest in.

One of the great initiatives that we have had, which is helping recruiting at the present time, is that we have a program in the Army called Stay Army. People say, ‘Look, I have been at this for 10 years as an infantryman and I’ve done enough overseas and all the rest of it, and my family and I want something different.’ We are saying to them: ‘Well, why don’t you do something different in the Army? You don’t have to get out to do something different. There are other trades.’ We are finding a really strong response to this. What we have is a lot of internal movement now. We are able to coax some of these people who have a proven track record, who are well trained, who have supervisory and leadership skills, et cetera, to transfer to some of those critical trades and to undertake training and then give us another 10 years in that sort of area. There is a basket of those sorts of initiatives, and the two-year enlistment is another one of the things we are looking at in that regard.

CHAIR —Are there any other questions on personnel, human relations or management issues?


Mr Minns —Chair, I have some answers to some questions that were asked.

CHAIR —Please go ahead.

Mr Minns —I think Mr Robert asked for ADFA separation rates. From a total undergraduate population of 1,017—I presume these are year to date numbers—we have seen 10 exists this year. Seven of those were in first year, four in the Army and three in the Air Force; three were in second year, one in the Army, two in the Air Force; and there were none in the third-year students.

Mr ROBERT —Probably last year is the best record date. In 2008, after a full 12 months and if it is still three years, out of a class of 200 who go through, three years later how many are still left?

Mr Minns —Okay. We will work with the ADFA team and get you statistics on that.

Mr ROBERT —It is just to get a view. We know what the separation rates are for the three services in general terms. This is now just focusing on one particular area where we grow the majority of our officers.

Mr Minns —Okay.

Mr Gillis —Again you should understand that the separation rate is not necessarily a true account because you will see that the Army started with so many and ended with some. You need not make the assumption that they have all failed. A lot of them transfer to the other services while they are in there, and vice versa. The starting and finishing numbers need to be about people who have actually left the organisation, and not transferred between the services.

Mr Minns —Just another answer to a question, Chair. I have been advised that the highest level of separation rate in the last decade is 13.98 per cent in June 2001. I mentioned to you that I would be able to talk to you about movements around the critical trades areas. If we take the Army, essentially the view would be that in the last six months 12 of their critical trades have remained stable: they have neither improved nor worsened. One has worsened, which is dental care officers. If we talk about the Air Force, it only had the one, which was a medical trade. It stayed stable.

If we talk about the Navy, it has seen 10 trades improved in the last six-month period. Seven remained stable and five worsened. That is taking a view of what the trained force requirement is or the establishment number, what the trained force supply is at present, what the gap is and what has happened in terms of recruitment ab initio, transfers within the service and rates of discharge. It is quite a holistic assessment of the health of the trades group.

It remains the case that people in the Navy, the Army and the recruitment organisations are very focused on these matters. The joint working group is trying to understand if in part some of the problems we face are about the design of the work, the design of the trade, or the design of the training solution that we currently have in place.

CHAIR —Thank you for that advice. I thank all who have appeared before the committee this afternoon. There will be a transcript of the proceedings made available to you. You should peruse that to make any necessary adjustments of spelling, grammar and other minor issues that may need to be addressed. The committee will be conducting a further hearing although I suspect that it will not be on the matters that we have dealt with this afternoon. There were some issues from this morning’s session of the review that we did not get to deal with and a number of senior officers were unable to be here for understandable reasons, such as that they had other requirements on their time. I think there are also a couple of other outstanding matters that have not yet been answered, so if could you take them on notice and provide the secretariat with that information, that would be appreciated.

Resolved (on motion by Mr Baldwin):

That this subcommittee authorises publication, including publication on the parliamentary database, of the transcript of the evidence given before it at public hearing this day.

Subcommittee adjourned at 4.00 pm