It’s true that the government fell behind on the complicated project of digital transformation—until it leapt forward five to ten years in 18 months. If there’s one thing the past few years have made clear, it’s how imperative it is for organizations across the public sector to invest in technological and operational transformation. That investment will make the difference in recruiting, supporting, and retaining the workforce of the future.

We’ve been following the changes and challenges that government organizations are facing as they strive to adapt to the new world of work.

How can organizations embrace the future of work?

On the one hand, what goes into fostering a culture of excellence and cultivating happy, fulfilled and engaged employees? On the other hand, what does it take to make the most of financial and operational changes related to an organization’s real estate footprint, digital transformation and talent costs? For leaders, managers and employees across the public service, these questions are top of mind at this critical moment. These cultural and financial concerns are deeply interconnected, now more than ever. And both can be addressed by making the right investments in empowering people, right now.

On the same team: employees and leaders both want what’s best 

Across all sectors, public and private, the problems of diminishing employee confidence and engagement predate the pandemic. As noted in the Canadian outlook of our 2021 Global Culture Survey, turnover due to workplace culture cost organizations more than $223bn between 2014 and 2019.

In the public sector, employees, managers, and senior leaders appear to share many of the same top concerns. Everyone wants to see a shift in mindset across the administrative and executive branches of government at the provincial and federal level; they want to be able to move faster to adopt new skills, tools, and methods of collaboration. They see the progress that’s been made and the potential for a more agile, flexible, and forward-thinking culture. Going back to the way things were pre-pandemic is no longer an option—doing so will only drive talent away. 

Look to culture to lead the way

Cultural transformation and evolution tend to start at the top. Yet one of the greatest challenges an organization can face is disconnection between the values and priorities of its senior leaders versus those of employees. We’ve observed this in government, but our research shows it’s a problem for all sectors across Canada.

Only 61% of employees surveyed believe that their work culture is conducive to successful change initiatives, and fewer than half—46%—think these efforts will take their incentives, compensation, and benefits into account in practical, impactful ways.

A diverse workforce entails diverse motivations, values and work styles that challenge the workplace conventions familiar to many government institutions. But diversity isn’t the problem—it’s the solution.

By doubling down on diversity, equity, inclusion and belonging, organizations cultivate more welcoming workplaces that invite great talent and a wide spectrum of voices and views. Innovation, efficiency, and effectiveness are characteristics of diverse organizations.

So where can public-sector leaders start? It begins with genuinely listening to employees—not just gathering their input but acting on it in meaningful ways. That’s what closes the trust gap. Senior leaders can also make the most of their management teams to bridge the divide across their dozens, hundreds or even thousands of employees. At large organizations, employees experience culture in a bubble, and the leaders of small teams have the most powerful influence on that experience. Establishing stronger and clearer communication with the middle level of the organization, and training leaders at all levels in culture building, is a strategic investment that can help amplify messages across the board.

41% of employees believe their work culture positively differentiates their organization, a relatively low number when compared to the 63% of senior leaders who feel the same way.

The rise of hybrid workspaces has fractured the sense of community that traditional organizational culture was built on. As a result, the workforce feels increasingly fragmented. Leaders have to reshape, redesign, and redefine what culture looks like for the workforce of the future—and therein lies an incredible opportunity.

In the past, organizations could allow workplace culture to develop passively, through simply being together in the same space. But what happens to a culture when it’s left unmanaged? Though requiring action and intention, it’s ultimately much more productive to find real alignment around a common purpose. 

56% of employees think their senior leaders act as role models for their organization’s purpose, values, and culture, leaving significant room for growth at many organizations

The move to hybrid work gives organizations a unique opportunity to build a culture that incorporates flexibility and new thinking around the skills, leadership traits and talent that help teams thrive. As employees adapt to new ways of working, we’ve seen how investing in upskilling pays off through enhanced productivity and greater confidence that they can access the right tools for the job. But to fully realize these benefits, leaders must also model a culture that encourages remote employees to contribute, collaborate and freely share ideas in new ways. 

To feel like they belong, employees need the culture to resonate with their values. And that’s what leaders must respond to. But there is no one size that fits all. Culture needs to be examined and audited at the macro and micro level. We’ve been waiting for this moment: many government organizations are having conversations around building a culture that reflects the whole team, and that’s a sign of meaningful change to come.

The great resignation meets the great transformation

For Canada’s public sector, embracing digitized and distributed work is also a chance to save on costs. From a financial perspective, the transformations taking place today can lead to a 40% reduction in real estate footprint and a 30% reduction in locations, while also cutting operating expenses by a quarter and travel expenses by half.

These are significant savings. But reimagining the government workplace of the future isn’t just about reducing real estate costs. Creating a more flexible office environment that supports new ways of working can generate significant value for employers and employees alike. We’re seeing organizations reconfigure existing spaces to include more collaborative and interactive environments that reflect today’s values, cultural norms and trends that lean on inclusivity and belonging. Aligning your real estate, workforce and technology investments can enhance the overall employee experience, which in turn helps your organization access new sources of talent while becoming more agile and productive.

Whether or not they retain their current offices, public-sector organizations would be wise to capitalize on the talent opportunities in front of them. Many already are. A virtual workforce means there’s a wider talent pool to hire from, and this brings substantial benefits:

  • organizations can attract niche specialists to contribute the specific skill sets they need
  • employers can enhance diversity by broadening their recruitment efforts
  • workplaces can gain a competitive advantage by offering the flexibility employees want

These trends favour both the public sector and its potential workforce. Today, being located outside of Ottawa, whether that’s Charlottetown, Brandon, or Yellowknife, no longer needs to exclude people from having fulfilling careers with the federal government. That’s a great advantage for them, but it’s also significant for the public sector in general.

Having an engaged workforce is everything, especially for the government. So much good work can be done when people are passionate about making a difference—but when they’re languishing in mundane work that doesn’t seem to matter to them or anyone else, it furthers the digital divide and is costly for employers, for Canadians and for their own sense of achievement.

The emerging priorities of many employees are clear. They want community, not commutes, and they want to have time for what matters most—friends, family and most of all a work-life balance—while also being exceptional in their roles because they genuinely care about the work they’re doing. By committing to both a flexible, hybrid work model and a more positive, equitable culture, public-sector employers can create an environment that attracts and retains the talent they need. 

Now, and in the future, employees hold the power—and really, people remain the most important asset of an organization.

Treat the workforce as an investment, and see the dividends grow

For the workplace of the future, cultural transformation is as important as technological transformation: both are long-term investments for a new way forward. But to realize returns on these investments, leaders need to be open, flexible and know how to listen.

That’s because the future of work is all about being deliberate, and not leaving organizational change to chance. These aren’t temporary adjustments, nor are they one-off initiatives that can be completed within a year or a two. It’s a permanent commitment. Collectively, we need to forge a path forward that fulfills and engages employees for the long term, not only because it’s financially responsible, but because our people are worth it.


Kathy Parker, Partner, National Workforce of the Future Consulting leader, PwC Canada
Laura Wood, Partner, Government and Public Sector ERP transformation, PwC Canada
Stefanie Couture, Director, People and Organization, PwC Canada