The Australian Public Service contractor-to-ongoing conversion programme has been running long enough now that the results can be assessed against the original targets. The picture is more nuanced than the political rhetoric on either side would suggest.

What the original targets said

The conversion targets set in the early stages of the programme implied reducing dependence on labour hire and consulting arrangements substantially across the APS, with corresponding increases in ongoing public service employment. The headline target framing was a meaningful reduction in external workforce reliance.

What has happened

Aggregate external workforce reliance across the APS has fallen. The reduction is real but smaller than the original framing suggested. Some agencies have made substantial progress. Others have made marginal progress. A few have not moved meaningfully.

The agencies that have converted contractors to ongoing roles at scale have done so primarily in functions where the underlying work is stable, the skills are reasonably common, and the policy or operational risk of using contractors had become elevated. IT operations, data analysis, certain corporate services functions.

The agencies that have made marginal progress are those with workloads that fluctuate, skills that are scarce, or programme-funded staffing arrangements that complicate the conversion mechanics.

The skills market dynamics

A specific challenge has been competing with the private sector for skills that are in genuine shortage. The conversion target requires hiring ongoing staff in skill categories where the APS wage offer is materially below private sector levels. Agencies have managed this by accepting longer time-to-fill, by hiring at junior levels and developing internally, and by some adjustment of the wage offer at the senior end.

The mid-career hiring market remains difficult. Data engineers, cyber security specialists, and certain machine learning roles continue to flow to the private sector. The conversion programme has not changed this dynamic in any substantial way.

What the workforce mix looks like now

The APS workforce in mid-2026 has a different shape than it did in 2022. The proportion of ongoing staff has increased. The proportion of labour hire arrangements has decreased. The proportion of management consulting engagements has decreased more sharply, particularly in policy advisory functions. The proportion of specialist contractors in deep technical roles has decreased less.

The mix change is consistent with the policy intent but the pace has been slower than the original framing implied.

What this means for service delivery

The agencies that have made the conversion successfully are reporting more stable service delivery in the relevant functions. Knowledge retention has improved. Onboarding overhead has decreased over a multi-year horizon. The case for the conversion is being supported by the operational data.

The agencies where the conversion has stalled are showing the patterns the conversion was designed to address. Knowledge fragmentation, dependency on small numbers of external specialists, and operational fragility when those specialists are unavailable.

The next phase

The next phase of the conversion conversation is whether to push for tighter targets, whether to accept the current rate of change, or whether to recognise that some categories of work are genuinely better delivered through external arrangements. The political pressure is for tighter targets. The operational reality suggests a more selective approach.

The APS workforce of 2030 will be shaped by the decisions made in this phase. The current trajectory is reasonable. The temptation to push it harder than is operationally workable should be resisted.