Reaching for change: Is our public service obsessed with restructuring?

Saturday, 2 August 2025

Restructuring is a first stop shop in New Zealand’s public service. It’s an approach used largely as the only option when implementing change, with post-restructure reviews a rarity, a researcher says.

While The Post found that more than a third of the entire public service was in some stage of a restructure currently, the approach is far from new.

Annika Naschitzki is in the final stages of completing her PhD in public service restructures at Victoria University. While collecting public service data began as a pet project during the first Covid-19 lockdown, it developed into an obsession to find out the drivers and impacts of internal restructuring.

Naschitzki went to all public services to release restructure documents during the growth-spurt period between 2018-2021 and collected survey data from 14,000 unionised public service workers in 2024.

The timing coincided with the 2018 removal of the hiring cap which had limited the number of “core” public servants, the Labour-led Government blaming the blowout on consultant costs on the cap. The headcount at the end of Naschitzki’s data period in 2021 was about 61,000.

“Restructuring is one of those dynamics that seems to happen almost independent of political influence,” Naschitzki said. “It just seems to be part of organisational life that can really have a massive impact, and we don't even seem to question whether it works or whether it actually has the effect you want it to have.

“We seem to be reaching for the restructure as the only method of change that we know. We seem to have no other ideas of how we can change our organisations.”

Naschitzki found there was 484 restructures across the public service between 2018-2021, with at least 32,395 roles being affected in some way during those restructures.

“In one extreme case, the Earthquake Commission restructured its finance team three times in 13 months,” Naschitzki said.

“Particularly New Zealand seems to have this intense pace of change,“ she said, adding three-year terms and fast-paced policy also contributed to that.

Naschitzki said there was always a story behind the restructure and the formal documentation. Often people would tell her the restructure was “about something completely different … because there's someone in the team who is either too difficult to performance manage or they’re just not quite a good fit, but they're not doing anything wrong”.

Managers also may “have some kind of strategic demand, so they make use of both, and say, ‘we're going to do a restructure’”.

Naschitzki said about two thirds of the restructures had “broad, ambiguous” intent, such as being more agile or customer centred. That left questions why restructuring was the method chosen.

“Why did you not use other methods? [Such as] reviews of operating processes and practices and procedures and tools. Why is it the capabilities and roles that get changed? That's often quite unclear.””

Restructures were also used by leadership to implementnew policies, refresh organisational culture or bring in new operating models, and at the same time, to clean up some things”.

The reasons for recent restructures were clearer, focusing on budget reductions and efficiencies, she said, adding that some restructure documents were quite honest around being asked to find reductions.

But what was consistent with earlier restructuring was the positive spin from agencies to “use this opportunity to set ourselves up for the future … and come out of the stronger”.

The positive sentiment did not, however, seem to filter through to the staff involved.

Restructuring in the public sector has always been frequent and problematic, she said, “which is why a lot of people are quite jaded when it comes to this idea of working in the public service, this idea of stewardship and long-term vision.

“People assume that public sector employees are really against change. And in my survey, I had 40% of people saying, ‘no, we need change in our team … there is a lot that needs to be changed, but we don't want it to be always a restructure, we want to look at our processes and practices and our governance and our decision making, and we want to look at that together with our managers’.”

New Zealand’s public service is often criticised as being too risk averse and too slow, bogged down with old ways of working.

“We always have the same issues, but we keep trying to fix the same problem with the same hammer we've been using for decades,” Naschitzki said. “It's a terribly blunt tool, but we keep using it.”

Naschitzki said what wasn’t being used was more comprehensive packages of change that usually required directly working with the people on the coalface to come up with plans to achieve the strategic goals.

“There's so much else - training, resourcing, tools, practices.

“Managers are expected to be these visionaries and guide their teams in a certain way, and all they have at their disposal is restructuring, which they do in a boardroom away from staff, with consultants,” she said.

Naschitzki said it meant fully formed plans were going straight to staff. They often reacted critically to that, because they weren't part of trying to find the solution to the problem or goal.

“This continuously breaks down trust between managers and staff.”

Naschitzki went back to organisations that carried out the 484 restructures during 2018-2021 and asked them how they assessed the after effects to find out if they had achieved the goal of the restructure. There were just Out of 484 restructures, there were seven formal post-restructure reviews.

“We need to measure what we do. It's so shocking in a world where public sector, transparency, accountability, fiscal responsibility should be so important that restructuring can happen at the pace it does without anyone really looking at what's happened.”

Organisations would often say, “‘we do it informally, it's up to the individual managers, we trust the individual teams’,” Naschitzki said.

“Sometimes they'll say, ‘we look at staff surveys and engagement surveys and management always looks at operational, organisational performance metrics’ - but they often can't name them.”

Kalyn Ponti chief executive of Humankind, a Wellington-based employee HR organisation, said restructures weren’t always bad, “but they need to be done really well”.

“Organisational design is a really critical lever to deliver on an organisation's statutory purpose or mission in a private company, but it has to really be aligned to strategy, not just a shortcut to cut costs.”

In the last couple of years in both the private and public sector, everybody had faced a huge amount of change. But if organisations weren’t adapting, then there were risks with that as well”, Ponti said.

“Often, when people think of restructure, they think of reductions, but it's about making sure that your teams are really set up and formed to be operating most optimally.

“That might be reshaping some roles, giving someone a new opportunity, adjusting how teams are formed and who's leading those teams, even like the rhythms and the ways that they work, the technology that they use and so forth.

“We were helping clients, particularly in the private sector, adjust all the time without making actual reductions.”

Public Service Minister Judith Collins said while post-restructure reviews were a matter for chief executives, she expected “many will be reviewing and assessing the effect of changes and making necessary adjustments”.

Collins said restructuring could help when dealing with a particular issue, “but it's not the be all and end all”.

“It's important to look at what it needs to look like at the end, what the staffing is going to be like, but also what the job is, and is it going to be helped by it - restructure isn't always the answer to everything.”

Labour leader Chris Hipkins, who was Public Service Minister from 2017 to early 2023, said, “we rely too much, and we have done in New Zealand for the last 20 or so years… on structural reform”.

“All governments, our government, the Key government before that, Clark government before that, I think have done too much structural reform, and I think the current government is doing too much as well.

“We've got to focus on empowering the people and resourcing the people that we have to do what we need them to do. Structural reform, sadly, actually consumes a lot of resources and often doesn't change much.”

Asked if he received advice from his ministers or the Public Service Commission on what restructures had achieved during his time as minister, Hipkins said: “You're always looking at how you can get better results and what government departments are achieving, but my experience as a minister in that area is that often underestimates the transaction cost of structural change and overstates the benefits”.

“Overall, restructuring is just done too frequently, and we need to break out of that cycle. We need a period of consolidation, and we need a period of focusing on letting people achieve the things that we're asking them to achieve.”