Job security is now the abiding concern of workers as the global financial crisis causes an economic slowdown of unpredictable severity and duration. The end of the good times has curbed expectations of pay rises and job hopping.
Civil servants are an exception, insofar as they enjoy security of tenure. That, however, is not the only reason. Advisers to the government on civil service pay have suggested an adjustment of salaries that would add HK$725.6 million to the annual wage bill, mainly for the disciplined services but also for senior officials. That is a drop in the bucket of the total cost of their pay and perks, and a case can be made for the changes. But this is not the time for the government to be introducing them, when those in the private sector are facing economic uncertainty. Secretary for the Civil Service Denise Yue Chung-yee also sees it that way. She has sensibly recommended that the government put off the revisions until the economy rebounds.
The government's advisers found that senior officials of directorate grade five upwards receive much less than their counterparts in the private sector and suggested a new pay scale that closes the gap a little. But the findings were based on a study conducted earlier this year, well before the financial meltdown began. The speed with which the economic situation has changed in recent months means that the findings are now out of date. It is likely that the gap between public and private sector pay will narrow as the downturn bites. The adjustment exercise should not, therefore, be not be considered a foregone conclusion.
The gap should certainly be kept under review in the interests of good public administration. It should also be weighed against civil-service perks and security of tenure.
Like salaries in the private sector, it should be possible for civil service pay to go down as well as up. When cuts were made during the last economic downturn legislation was needed to give them force. The government must now make good on its promise to come up with a pay adjustment mechanism that has the flexibility to provide for both the raising and reducing of salaries. The efficiency of the civil service and whether it is structured to deliver the best value for money is also an ongoing concern. The civil service remains wedded to an outdated hierarchical structure through executive levels that is a wasteful use of human resources and lacks flexibility.
But reform of the civil service has a chequered history. Proposals before the handover met with strong opposition and were shelved amid the downturn following the Asian economic crisis. Civil servants later shared the pain of pay cuts during the bad times before a pay rise last year. Reforms fell victim to political considerations, such as civil-service morale and support for the government. To be sure, the government has pared the bloated civil service payroll from nearly 200,000 to nearer 150,000, using outsourcing and technology, although there has been a recent tendency to create new posts to meet public demand for services. But there remains a need for structural reform. The hierarchical structure needs to be flattened. It inhibits multi-tasking and skills development that would produce a leaner, more efficient bureaucracy better able to adapt to changing circumstances.
Civil servants are entitled to have their rewards reviewed by reference to what they might command in the private sector. But in return they must accept the need for reforms to meet the needs of a rapidly changing society.