Large differences in government employment among countries reflect choices regarding the scope, level and delivery method of public services. In terms of delivery methods, some countries prefer the work of government employees, while others choose to contract with the private sector. As a result, government employment should be interpreted in the perspective of the costs of goods and services funded by government but produced by the private sector, a topic discussed in Chapter IV.

The proportion of government staff employed at subcentral levels is a potential indicator of the level of decentralisation of public administration and the level of responsibility accorded to state and/or local governments. In general, the larger the staff at subcentral levels, the more responsibilities these governments would be expected to have for providing public services. While decentralisation is generally thought to improve government response to local needs and priorities, it can lead to differences between central and sub-central government interests and human resource management practices, as well as variations in service delivery within countries.

Many OECD member countries have established policies aimed at increasing female participation in the government workforce, especially at managerial levels, to increase equity, diversity and the size of the labour pool.

While the government must respond to the changing demands made by an ageing society (such as declining demand for primary education and increasing demand for health and elderly care services), government workers are themselves ageing. A very large proportion of the central government workforce will be retiring over a relatively short period of time. Maintaining the government’s capacity to deliver the same level and quality of services remains a complex issue. Significant staff departures create an opportunity to bring staff with new skills into government, downsize the workforce where needed, decrease staff costs (as entry-level salaries are lower) and re-allocate human resources across sectors. However, this can lead to loss of capacity and the need to postpone the retirement of some key staff. In addition, given the large share of government employment in many OECD member countries, these high replacement needs could risk pre-empting the private sector’s access to new labour market entrants.