Part 1: About our audit

1.1
In this Part, we discuss:

• the purpose of our audit;
• our audit expectations;
• how we carried out the audit; and
• what we did not audit.

The purpose of our audit

1.2
Crown Research Institutes (CRIs) are the largest providers of science research in New Zealand and play an important role in enhancing economic growth and environmental well-being. As at 30 June 2008, CRIs were responsible for $669.2 million of assets and generated $642.7 million in revenue annually. Collectively, CRIs employed more than 4000 staff. About 3500 of these staff were employed in science or research roles.

1.3
The ability to attract and retain staff − especially researchers, scientists, and technicians − is critically important for CRIs. Changing staff demographics, shortages of skilled workers, and increased globalisation in the labour market are creating a tight labour market. Given this environment, CRIs are facing staffing challenges that could affect the sustainability of their work.¹

1.4
We carried out a performance audit to examine how the CRIs were planning their workforces to manage their capability. The CRIs are listed in Figure 2 at the end of this Part.

Our audit expectations

1.5
We expected the CRIs to:

• have identified their workforce needs, given their strategic goals;
• be establishing workforce initiatives to train, recruit, or retain employees, to ensure that the CRIs have staff with the required skills and knowledge; and
• monitor and evaluate workforce planning activities to ensure that they were effective in supporting the CRI’s purpose and goals.

1.6
We based our audit expectations on the main elements of an effective workforce planning process − identifying workforce needs, taking steps to train, recruit, or retain staff with the necessary skills and knowledge, and monitoring and evaluating the effectiveness of those training, recruitment, or retention activities. Figure 1 shows the relationship between our audit expectations and the elements of a workforce planning process.

Figure 1
A workforce planning process

1.7
Workforce planning is a continuous process of shaping the workforce to ensure that it is capable of reaching organisational goals now and in the future.² It involves identifying the type of workforce needed and considering how this might alter as organisational priorities change or external factors affect the supply of workers. It includes establishing short- and long-term recruitment and retention strategies to get the desired workforce in place. The workforce planning process should include periodic evaluation to ensure that planning activities are effective and can be modified as needs change. Appendix 1 has more general information on workforce planning.

How we carried out the audit

1.8
In preparing our audit expectations, we considered the following audit reports and good practice guides:

• Workforce planning (2005), and Planning for the workforce of the future: a better practice guide for managers (2001), both from the Australian National Audit Office; and
• Human capital: a self-assessment checklist for agency leaders (2000), from the United States of America’s Government Accountability Office (formerly the General Accounting Office).

1.9
These publications note that the systems and strategies an organisation uses to plan its workforce depend on the context in which it operates. Because of this, there is no workforce planning "best practice". Rather, there is a range of "better practices" that organisations can consider and adapt to suit their environment and their own needs.³ Workforce planning is not an exact science – it is a continuous process requiring long-term effort and several attempts to establish effective planning processes and strategies.⁴

1.10
We considered this when we applied our audit expectations. We looked for evidence that CRIs were addressing the main elements of workforce planning. We did not have a set view on the systems or strategies that CRIs should use to plan their workforce.

1.11
We examined documentation on CRIs' workforce planning activities. We also interviewed staff at each of the nine CRIs. Figure 2 outlines the science focus and number of staff within each CRI. Appendix 2 provides more information on the CRIs and their operating environment.

1.12
Two CRIs merged during our audit, reducing the number of CRIs from nine to eight. The merger took place on 1 December 2008. Because our audit uses information collected before the merger, this report refers to nine CRIs.

1.13
Our report sometimes refers to the numbers of CRIs that were using particular workforce initiatives. These numbers can add up to more than nine, because the CRIs were often using more than one method or approach as part of a particular initiative. It is also important to note that the numbers mentioned for any individual initiative cannot be directly related to our overall assessment of CRIs’ workforce planning maturity (see Figure 3). Our maturity assessment was based on the combined effect of the initiatives and the extent to which it enabled the CRIs to comprehensively and effectively plan their workforce.

What we did not audit

1.14
Our audit did not include:

• an assessment of the CRIs’ overall organisational performance or viability; or
• forming an opinion on the adequacy of funding arrangements for CRIs.

Figure 2:
Crown Research Institutes’ science focus and number of full-time equivalent staff, as at 30 June 2008

* The Horticulture and Food Research Institute of New Zealand Limited and New Zealand Institute for Crop and Food Research Limited merged on 1 December 2008 to form The New Zealand Institute for Plant and Food Research Limited.

1: Workforce challenges are not unique to CRIs. In 2008, the Ministry of Science, Research and Technology published An advanced skills action plan for Research, Science and Technology. The plan outlines a series of actions and initiatives for attracting, developing and retaining staff in the research, science, and technology sector.

2: Australian National Audit Office (2001), Planning for the workforce of the future: a better practice guide for managers.

3: Australian National Audit Office (2001), Planning for the workforce of the future: a better practice guide for managers.

4: Australian National Audit Office (2001), Planning for the workforce of the future: a better practice guide for managers. United States General Accounting Office (2000), GAO/OCG-00-14G Human capital: a self-assessment checklist for agency leaders.