EY report insight: Governments need new ways of working to seize digital opportunities

• Just 7% of government leaders feel their organization has met its digital transformation goals
• Digitalization is being held back by a lack of capabilities and outmoded ways of working
• Struggle to retain existing digital talent is among the top three barriers to delivering better public services
• Challenges to the government’s digital transformation include internal bureaucracy, culture, and skill sets

JAKARTA, 5 JANUARY 2023. Governments around the world are at risk of failing citizens through lack of digitalization, according to EY research presented in a new report: “How can government workers and technology align to serve future citizens?”. Less than one in ten (7%) government leader respondents believe that their organization has achieved their digital transformation goals; and the momentum for digitalization that built up during the pandemic is in danger of being lost.

The new report indicates that responding government workforces are ill-prepared to capitalize on the enormous potential benefits of digitalization. This includes improving access to digital services; using data analytics to predict when vulnerable people will need more assistance; and increasing efficiency across the board.

Many respondents find themselves constrained by a combination of issues including a lack of digitally aware leaders; a lack of digital and data skills and the training to access them; and an organizational culture that is reactive and uninspiring, hampering the efforts to attract the best digital talent. Coupled with the fact that 38% of Gen Z government worker respondents say they plan to leave their jobs in the next 12 months, governments must also meet the challenge of retaining the digitally literate talent they already possess, as an aging public sector workforce nears retirement.

The report also highlights how government agencies around the world are taking a longer-term view of capacity and capability needs and identifying gaps and creating strategies to access the required skills. For example, in Singapore, the Government Technology Agency of Singapore (GovTech) plays a key role in materializing the country’s smart nation vision. The agency aims to digitally transform the public sector and make a difference in citizens’ everyday lives and worked toward identifying digital skills to be developed within government institutions and building technical competency and assessment frameworks. In Thailand, a dedicated futures unit, the Digital Economy Promotion Agency was set up to take stock of the latest technology advancements, anticipate emerging jobs and identifying digital skills that do not exist yet.

Benjamin Chiang, EY Asean Government & Public Sector Leader says:

“Public sector employees are driven by purpose and the voice of the employee is now a lot louder and clearer. Government leaders need to articulate the organization’s value preposition, so it is compelling vis-à-vis the private sector. Beyond the talent pipeline for the public sector, government leaders must be digitally aware and create an inspiring vision of its transformation agenda, as well as put in place programs and initiatives to attract global talents. Building up the relevant talent pool will help governments to seize opportunities to attract innovation and business investments.”

While several global trends are converging to disrupt governments, these present challenges and also significant opportunities for the digital transformation of the public sector. In order to tackle these issues, the report recommends a framework of four key actions for governments to follow when looking to create a workforce equipped for the future:

1. Adopt dynamic workforce planning. Take a longer-term view of capacity and capability needs and creating strategies to access skills.
2. Scale digital capabilities. Upskilling or reskill existing employees, sourcing fresh talent and emphasize purposeful careers to rebrand the public sector to make it more attractive.
3. Foster digital leadership and culture. Managing digital transformation requires leaders who can challenge the status quo, articulating a compelling vision for change while reassuring and educating employees on a digital mindset.
4. Reimagine the employee experience. Create tailored employee experience that treats every worker as a unique individual, offering structured career paths to help workers progress and fulfil their career ambitions.

Arnauld Bertrand, EY Global Government Consulting Leader, says:

“During the pandemic we were offered a glimpse of the potential of the digital state and how it could deliver for citizens. Working from home became the norm and more services were moved online. In a post-pandemic world, we must not allow this momentum to be lost. The data shows that governments understand there is more to be done, but there remain many barriers to success.

“To truly embrace a digital government and deliver for citizens we collectively must continue to help build future-fit public sector organizations with digitally aware leaders and a plan for building the right capacity, skills, culture, and employee experience. These will need to be encouraged and developed across the public services with new ways of working and new systems. If they don’t, opportunities to improve services through harnessing data and technology will be lost. The chance to individualize and target services will be squandered – and with it the ability to better allocate taxpayer resources and deliver maximum benefits as and where needed. Most concerningly, society’s most vulnerable people will suffer if public services deteriorate due to inadequate capacity or skill levels. It all hinges on getting in the right people with the right skills.”

EY analysis shows that citizens now expect levels of quality, speed and convenience on a par with the private sector, with immediate, seamless access to services through a variety of channels. Citizens expect digital to improve the way they conduct many aspects of their lives – and they expect governments to keep up.

Governments are responding by trying to become more focused on the needs of citizens. According to EY research, 43% of government respondents rank a focus on the customer/citizen experience as one of the top three factors driving successful transformation. This calls for better use of technology and data to understand people’s needs and circumstances, as well as new skills such as user experience research and design.

The report also highlighted that commitment from the highest level is needed to ensure success. For example, Singapore has been extremely successful in transformation as the country’s Prime Minister has taken a personal interest and is accountable for success of the initiative. The Singapore government has drawn up a new competency framework that reflects the more diverse capabilities that public sector leaders need at different levels, including the ability to influence a wider range of stakeholders, to effectively operationalize policies and to exemplify the “One Public Service” mindset, as well as red flag behaviors and actions. In Malaysia, the chief information officers in ministries and agencies have assumed the role of chief digital officer and report directly to the chief secretary to the government.

Chiang says:

“Given the way that governments are traditionally structured, with separate ministries responsible for specific areas of public policy and administration, it is essential that these initiatives are centrally coordinated and with commitment from the highest level to provide seamless citizen-centric solutions. Otherwise, we will continue to see a plethora of siloed applications from different agencies that not only provide a confusing and fragmented user experience for citizens, but also result in duplication of effort and inefficient allocation of budgets for governments.

“Importantly, as governments work on delivering citizen-centric solutions, they will also need to focus on measuring the right key performance indicators and metrics, so that the goals between government stakeholders are aligned. Such measurement will also be an impetus for cross-agency collaboration to enable a seamless experience for citizens.”  

Employees also want a digital workplace that keeps pace with their personal experience and feels that governments are not doing enough. The 2022 EY Work Reimagined Survey shows 63% of respondents believe extensive or moderate changes are needed to enhance their workplace digital tools and technologies.

Millennials and Gen Z are more likely to favor shorter job tenures and to seek greater purpose and fulfillment, with 63% of Gen Z public sector employee respondents saying they value a clear connection between their job and the overall purpose of the organization above monetary compensation. Meanwhile, people of all ages want a healthier work/life balance. Attracting and retaining younger workers is especially important given that many public workers are approaching retirement (nearly one-third of central government workers in the OECD are over 55) and the 2022 EY Work Reimagined Survey shows that 29% of government worker respondents will likely leave their job in the next 12 months, rising to 38% for those in Gen Z.

Bertrand says: “When it comes to offering a job with purpose, governments are at a distinct advantage; and it is an opportunity they can seize. The job of the public sector is to provide better lives for citizens. In the ongoing quest for talent across all sectors, this is a unique element to civil servant roles, which governments should be putting front and center when it comes to recruitment. However, without using technology to offer a strong work/life balance, a compelling career path and clear pathways to train their workforce to become more technologically literate, they run the risk of failing to retain recruits who want to deliver the best for citizens.”

Indonesia’s challenges and opportunities towards the digitally transformed government

As an attempt to motivate the digital transformation of provincial and local government, Indonesia’s Ministry of Communication and Informatics initiated Smart City Movement to guide cities and municipalities in implementing the digital platform on their public services. This movement is also part of Indonesia’s main agenda to have nationwide digital transformation.

Bangkit Kuncoro, EY Indonesia Government & Public Sector Leader says:

“The national Smart City plan will surely embrace digital government and assist the creation of future-fit public sector organizations, as the initiative will be led by the local government. With this, we will be expected to see a more laser target transformation that suits the situation and problems in each city.”

As Southeast Asia's largest economy, the Indonesian government has stepped up its efforts to accelerate digital and technology in public services. Some examples of public services that have been digitized by the Indonesian government namely passport application and renewal, taxes payment, and social security system application. Indonesian can also file their complaints to public services through a government-backed platform.

Recently, the Indonesian government through the Ministry of State Apparatus Utilization and Bureaucratic Reform is currently developing a digital public service platform with the main goal to give easier access to various public services in one single platform. This plan can be a breakthrough for the Indonesian public services system as it would lower the risk of maladministration.

Moeldoko, the President's Chief of Staff, during the “Build The Strong Character of Indonesia Digital Talent” seminar, emphasized the critical role of digital transformation in public services, as it will undoubtedly impact national economic growth for years ahead. As a result, the country requires 9 million digitally talented people to assist the government in meeting that long-term goal. Indonesia, however, still needs to work on building a relevant talent pool within the public services field to support the government’s digital transformation effort. Referring to INSEAD’s Global Talent Competitiveness Index 2022, Indonesia still sits on rank 72, lower than its peer countries namely Singapore (2nd), Malaysia (32nd), Philippines (62nd), and Thailand (67th). Still from the same report, Indonesia’s digital skills are considered very low, scoring only 15.70 out of 100. It shows there is still plenty of homework to be done to push digital skills as the basis of public services transformation.

Kuncoro concludes:

“In this era of fast-moving and unpredictable changes, innovative digital transformation in public services is gaining momentum to meet new demands, revolutionize services, to meet the citizens' expectations. Some challenges are unavoidable and must be solved by the government sooner or later, they include internal bureaucracy, cultures, and skill sets of government officers. In the end, these kinds of transformations will bring so many positive improvements and efficiency to our public services.”

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