Adrian Orr at the helm of the Reserve Bank, as the tight labour market and a restructure see staff leave. Photo / Mark Mitchell
Adrian Orr at the helm of the Reserve Bank, as the tight labour market and a restructure see staff leave. Photo / Mark Mitchell
Staff turnover at the Reserve Bank hit a record high of 21.7 per cent in the year to June, as the organisation faced its toughest battle with inflation in three decades.
More than one in five staff left the bank in the financial year – the highest portion since atleast 1993 when online records began.
The Reserve Bank, in its just-published annual report, explained, "As Covid-19 restrictions relaxed, turnover has increased.
"This increase is attributed to low unemployment and competition for talent across Aotearoa New Zealand and is consistent with the experience of other organisations.
"We monitor reasons for our people leaving through our exit interview process. In 2021/22, the main reason provided was for development opportunities followed by remuneration."
Staff turnover was below the bank's 10-year average of 15 per cent in the years to June 2020 (11.4 per cent) and 2021 (13.5 per cent).
It was higher, at 19.3 per cent, in 2018, when Adrian Orr became governor, and the new Labour-led Government put monetary policy decision-making in the hands of a committee (instead of just the governor) and required the committee to target employment as well as inflation.
Other financial regulators, including the Financial Markets Authority, Treasury, Commerce Commission, and Ministry of Business Innovation and Employment, are yet to release their 2022 annual reports, making it difficult to contextualise staff turnover at the Reserve Bank.
The Public Service Commission is also yet to release data on turnover across the public sector in 2021/22. In the year to June 2021, the turnover rate was 15.4 per cent.
The commission said feedback it received from government agencies in February, was that "unplanned turnover" was up, as people who hunkered down during the peak of the pandemic moved on, and the tight labour market created career progression and development opportunities.
It said both the public and private sectors were grappling with the same issues.
The calibre of departees from the Reserve Bank is the other issue that's made headlines.
In December 2021, the Reserve Bank revealed that in the prior six months, 10 of its 26 most senior staff (other than the governor) had decided to resign.
At the time, the bank put the departures down to "a mixture of retirements, moving for family reasons, expiration of a fixed term contract, and departures as a result of phase two of the reorganisation of the Reserve Bank leadership team".
Those who handed in their resignations included deputy governor and general manager of financial stability Geoff Bascand, chief economist Yuong Ha, head of supervision Andy Wood, and head of financial system policy and analysis Toby Fiennes.
Bascand and Ha sat on the powerful Monetary Policy Committee, responsible for setting the Official Cash Rate. Neither had other jobs lined up to move on to.
The Reserve Bank board adopted a new governance role in July. Photo / Mark Mitchell
The Reserve Bank said Wood and Fiennes, who together had around 30 years' experience at the bank, chose not to pursue new roles created in a restructure.
The restructure saw the Reserve Bank recruit to fill new roles in its expanded leadership team, and change lines of reporting within the organisation.
The restructure coincided with the Government making a raft of long-signalled changes to the Reserve Bank Act 1989.
This saw the Reserve Bank board adopt a new governance role in July.
The Reserve Bank will in coming years also start administering a new deposit insurance scheme that will compensate depositors in the event of their bank or other deposit taker collapsing.
The Reserve Bank is paying more attention to how climate change is affecting the banks and insurers it regulates. It is looking into whether it should issue a digital currency and is exploring ways to improve Māori businesses' access to capital.
IT issues are another focus of the bank, which runs the country's payments and settlements system.
In its annual report, the Reserve Bank said the leadership review was about ensuring it had a "fit-for-purpose organisational structure for a modern central bank".
Its expanded mandate saw its staffing numbers rise from 255 fulltime equivalents in the year to June 2018, to 249 in 2020 and 454 in 2022.
This rapid rise meant the average staff member's years of service fell from 8.2 years in 2018 to 4.6 years in 2022.
The Reserve Bank reported improved gender diversity, with a 50-50 male/female split in its leadership team.
As for the gender pay gap, the median man only received 1.6 per cent more pay than the median woman in the same remuneration band.
