7 May 2020

MBIE branch turnover high, but industry happy with performance

9:48 am on 7 May 2020

Rapid turnover of staff has been hampering a government agency that's crucial to the pandemic recovery.

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Photo: RNZ / Claire Eastham-Farrelly

Almost half the permanent staff at the Ministry of Business, Innovation and Employment's (MBIE) Building System Performance (BSP) branch quit during the course of last year.

The construction industry said the churn had until recently put the brakes on improving some key building rules, but that under Covid-19, it was actually getting better.

MBIE said all the branch's management positions were now filled, and denied it was in disarray, saying the branch had an "incredibly productive" year and was now doing "outstanding" work responding to the pandemic.

New figures released to RNZ show the unplanned turnover rate among permanent BSP staff was 45.9 percent last year, four times the public sector average.

The rates for the two years previous were also high at 28 percent in 2018 and 34 percent in 2017.

Twice as many senior staff - 27 of them - left last year compared with 2018.

The branch's reliance on new recruits increased twofold, with 52 new starts at the 120-person unit, and 26 jobs remained vacant.

BSP deputy chief executive Chris Bunny in a statement listed a dozen projects as evidence it was not in disarray.

He declined an interview.

"While turnover is often positive in terms of bringing new ideas and skills into the organisation, I acknowledge it can be disruptive and recruitment can be time-consuming and costly," Bunny said.

"While I am pleased that every quarter since March 2019 more staff have joined BSP than have departed, I do want the turnover rate in the branch to decrease to comparable levels within MBIE."

MBIE's turnover rate was 15 percent, one third of BSP's.

The BSP branch has a long history of under-performance stretching back to the establishment of MBIE in 2012, and troubles have persisted.

That triggered a mass restructure and expansion of the branch in 2017.

However, since then the rate of staff turnover has doubled, this year including the general manager, Anna Butler.

She had been helicoptered in from the Ministry of Social Development to do the restructure but left for a job at the Ministry for Culture and Heritage.

Industry concerns

The head of the Civil Contractors industry group, Peter Silcock, said key regulatory work had been passed from hand to hand.

"We've definitely seen that some of the [staff] turnover has slowed things down," Silcock said.

"Things like further changes to the retention system, also voidable transactions. They're probably the big things for us in getting some progress and getting some consistent input into those."

Relationships between industry and officials got cut short.

"People get to a point and if they don't stay, then that creates a little bit of problem in terms of getting the issues progressed and the understanding of those issues."

Rick Herd is the head of big builder Naylor Love, and is the commercial building representative on the Covid-19 response group set up between the ministry and the industry, under the Construction Sector Accord signed a year ago to try to transform the troubled industry.

"It would certainly concern, should concern MBIE, and it certainly concerns me," Herd said of the turnover rate.

"If it was my business, with those sort of levels of turnover, I'd be very, very concerned.

"I would suspect they need to look pretty closely at the leadership to make sure they've got some cohesion."

Architect Graeme North has spent years wrangling with the ministry over revision of the country's standards for earth buildings.

"The churn of BSP staff appears huge," North said.

"This helps explain, but not excuse, the inexplicable obstruction and difficulties put in our way by BSP during the recent revision of the ... standards."

The problems had persisted till now, said North, of the Earth Building Association.

Response after Covid-19

The stakes for the construction industry, post Covid-19, are higher, and the demand for good, fast decisions based on sound technical knowledge and policy informed by institutional memory much greater.

Despite misgivings about BSP's past, the industry heads are confident that its parent ministry has got a grip on the situation.

"MBIE are at the centre of the ... government's response to the Covid and the construction industry. So they're absolutely vital and playing a very, very key role," Herd said.

"What I'm seeing at the accord level is very highly functional. They've got some good people there, a high level of engagement."

Silcock said even last year there were signs the accord with the ministry was improving.

"There's some very good people there now. What we see is they've really stepped up around some of the accord stuff and the Covid response group."

Paul Blair of the Infrastructure Council said he had no visibility of what went on at the BSP branch, but had seen no dysfunction at the ministry.

"They've really bent over backwards to work with industry and come up with solutions through Covid-19," Blair said.

"MBIE has really moved mountains to address unprecedented concerns."

MBIE's Chris Bunny said the BSP branch had been undergoing change but doing well.

"Our people are leading meaningful and transformative programmes that benefit all parts of the sector."

He cited a recent report of the Building Advisory Panel that said BSP had put in "considerable effort" to address priority areas for improvement in building system regulation.

Meetings now focused on improvements, not problems as they had the previous year, and the panel was getting a "significantly improved quality of support" from the BSP branch, the panel report said.

Bunny said he was particularly impressed with the Covid-19 response, as the branch developed alert level guidance for builders, councils, retailers and others, covering site safety, durability and condition of materials, working in occupied buildings or homes, and how to maintain buildings up to standard.

Building and Construction Minister Jenny Salesa said the government's overhaul of the construction industry continued despite the pandemic, though there might be delays to the legislative reform programme.

"The challenge of Covid-19 has shown what an effective team government has in this area, and our ability to set up industry-wide responses has shown the wisdom of establishing the accord with industry."

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