The first benchmarking of contractor pay in the public service has found rates ranging from close to the minimum wage on helpdesks to as high as $185 an hour in IT - or almost $1500 a day, before tax.
The 10 IT jobs measured in the benchmarking of contractors paid significantly better on average than the 10 admin and corporate jobs. (File image) Photo: 123RF
The new way of keeping tabs on an army of contractors is aimed at stopping the taxpayer paying over the odds.
The benchmarking is being introduced four years after the government vowed to rein in escalating spending on contractors and consultants.
Signs are that the billion-dollar spending is dipping, helped by a massive $70 million cut at Inland Revenue, more than making up for rises at health and education.
Overall, the core public service spend is down 3 percent last financial year (the ups and downs of contractor spending are listed below) and even non-core agencies like police, Transport Agency and Defence Force are reining it in, despite the pandemic.
Yet until now, contractor and consultant rates have not been tracked, so it has been hard to tell how fast they are rising compared to employees' pay.
The benchmarking by the Ministry of Business, Innovation and Employment (MBIE), delayed by several months, sets out the range of what is paid for 20 of the most commonly contracted jobs.
It covers almost 22,000 contracts over 18 months up to last December.
Unsurprisingly, the 10 IT jobs measured pay significantly better on average than the 10 admin and corporate jobs. Highly specialist jobs, such as hardware engineers, are not covered.
The large number of relatively lowly paid administrators - 3400 - skews the results.
In IT, though, nine out of 10 jobs usually pay more than $100 an hour, and half the admin/corporate ones do, too.
Project management and policy research and evaluation jobs generated more than 1000 contracts each at solid rates.
In the middle of the pack, a marketing and communications contractor's take-home is similar to a business analyst at a median of $112 an hour.
Hourly rates paid, from highest to lowest
In IT jobs
- Programme directors - Median hourly rate $140, top rate $180
- Security and risk - $140, $165
- IT architect - $135, $160
- IT management - $131, $185
- Projects management - $122, $145
- Software or database developer - $120, $150
- Business intelligence analysis - $120, $140
- Business analyst - $112, $130
- Testing - $105, $120
- Helpdesk IT support - $22, $40
In admin and corporate jobs
- Policy research and evaluation - Median hourly rate $125, top rate $150
- Project management (non-IT) - $115, $145
- Marketing and communications - $112, $135
- Human resources - $110, $135
- Procurement and contract management - $100, $145
- Accounts - $85, $130
- Project administrators - $40, $135
- Executive assistants - $37, $50
- Administrator - $25, $40
- Contact centre and customer services - $24, $35
MBIE said the data would help agencies "in making future hiring decisions".
"By making this data public, we are helping agencies to conduct better analysis of labour contract rates and make better informed procurement choices."
It also boosted transparency, the ministry said.
The scores of non-core public agencies are generally less transparent than the core ones. For instance, the Defence Force would not release its hourly rates, citing commercial sensitivity.
Contractor - and communications - spending
The Defence Force is among the big spenders on contractors and consultants, but it and several others are reining it in, to $54m in the 2020-21 financial year, from $59m the year before.
Waka Kotahi (NZTA) cut its spending on contractors by 30 percent, from $107m down to $75m, but warned this might not last.
Staff turnover was expected to rise this year, "which will cause a higher demand for specialist skills and capabilities" from contractors, its annual review said.
NZTA spent way more on communications and public relations staff salaries, up almost a quarter at close to $10m, as its team expanded from 72 to 88 staff. It had a lot going on, it said.
Police are another with a growing outlay on comms, spending a quarter more at almost $6m, despite issuing only half as many media releases as two years ago.
In the core public service, the Ministry for Primary Industries chopped its contractor spend from $53m to just $31m, but the real boon was from Inland Revenue, at $111m, easily the lowest in five years, from a peak of $200m-plus two years back.
For years, a big restructuring at Inland Revenue meant it favoured contractors. But now "there is more certainty around the longer-term workforce requirements, further enabling Inland Revenue to reduce reliance on fixed-term employees and contractors", it said.
MBIE dropped under the $100m mark, after relentless rises in contractor spend in recent years.
Separately, the ministry's communications salaries spend went from $3.7m to $8.3m but that was in part due to counting internal comms staff.
The Ministry of Education is still on the up, outlaying a hefty $176m on contractors. Six years ago, it was at $30m - though the record-keeping was not as good back then.
The Ministry of Health's spend spend is up largely due to "unique" Covid-19 spending, the ministry's annual review said.
The Public Service Association said the transparency in the benchmarking was good, and should be extended to employees too.
"Why is there still a lack of transparency for all the other permanent occupational groups that operate within the public service," national secretary Erin Polaczuk saind.
"We would like to see a clear and transparent banding for each occupational group with information about how workers move through those bands, so there's no secrecy and so there's no inequality associated with pay movement."
The public sector was fractured into 34 collective employment agreements, so essentially the same job was often paid differently between agencies.
"There are ... agencies who see themselves as winners and those who are losers", with workers then stuck in the same boat, she said.
The PSA wanted fewer pay agreements, or a unified pay scale across the whole public service that spelt out the range of pay in a band for each job type, Polaczuk said.
