Public sector skills crisis

The government plans to offer voluntary early retirement to civil servants and replace them with younger employees, however, this would lead to a brain drain in the public service sector.

This was explained by Cosatu’s parliamentary co-ordinator, Matthew Parks, on Newzroom Afrika.

Recently, Finance Minister Enoch Godongwana announced the government plans to reduce the public sector wage bill over two years by targeting 30,000 workers.

However, this suggestion has been met with pushback.

According to Parks, this isn’t the first initiative of this kind the government has tried.

During the Mandela administration, voluntary severance packages were offered to teachers and other public servants. 

However, the government later regretted this decision, since many skilled workers left for private sector jobs or returned as consultants, which ultimately cost the government more in lost expertise.

In recent years, Pravin Gordhan, the former Minister of Public Enterprises, dedicated significant effort to bring back skilled workers who had left Eskom, Transnet, and Denel for jobs abroad or in the private sector. 

Similarly, the Police Service, which currently has a shortage of about 9,000 detectives, recently announced an initiative to rehire former officers.

A couple of years ago, the government made a similar early retirement offer to about 30,000 public servants, but only about 2,000 took it up, Parks said.

This is because most workers are highly indebted, and even with the government’s offer of no penalties or disadvantages of taking early retirement, these workers would still only get a percentage of their salary once they retire. 

Most workers still have bills to pay, home and car loans to settle, and dependents to take care of – which makes it very difficult to accept early retirement. 

“So that’s the one issue,” Parks said. ”We are doubtful that this will achieve what government hopes to achieve.”

While the government’s fiscus is under pressure from many different, equally legitimate demands, this likely isn’t going to help resolve this problem. 

“We’re not sure if this really is the right medicine for the crisis facing government, facing the economy at large.”

Parks explained that in 1994, South Africa had 34 million citizens and about 1 million public servants.

In the 30 years since, the country’s population has doubled to 64 million people. However, the number of public servants have only grown marginally to 1.2 million. 

In many departments like Home Affairs, there are huge amounts of vacancies, and as a result, its service delivery has suffered, with many people being faced with long queues and wait times.  

Schools and hospitals are also feeling the pressure, with the ratio of teachers to students and nurses to patients rising at very high rates. 

Over the last decade, the police service headcount has also declined by 15%.

Parks explained that although some people might blame the wage bill for these problems, since 2008 it has remained stable at 35% of the budget – which is in line with international standards. 

However, in the last two years, it has been slashed by 10%, decreasing from 35 to 31%.

“So the crisis is not about a ballooning wage bill. In fact, the crisis is now the reverse. It’s about a shrinking wage bill, about a public service wage bill that’s under severe pressure.”

He explained that while it is easy for the government to cut the wage bill, and not pay workers more, “the consequence of that is that you spark a brain drain of skilled professionals from the state.”

In order to deliver the quality of public services that workers, and society, the economy and businesses require – these skilled workers cannot be pushed out of the industry. 

At the moment though, the skilled professionals who make up the bulk of the public service industry are being squeezed out.

Consequently, they are opting for higher-paying, less stressful jobs in the private sector or even relocating abroad.

Not only does this further decapacitate high-quality public services, but it also means that the government loses the huge investment that it has spent on training and educating these public servants.

This makes it even more difficult to turn this brain drain trend around. 

Instead of looking for easy shortcuts and squeezing the public service sector even further, Parks said that South Africa needs to focus on growing the economy and removing any obstacles to that growth. 

“There’s no amount of cutting the wage bill or cutting the public service that is going to resolve those fundamental issues. We don’t have a crisis of debt or of expenditure, we have a crisis of growth and revenue.”

Apart from trying to cut down on the wage bill, the government is also offering this early retirement option to introduce younger workers into the system.

Government plans to enhance critical systems for better service delivery in areas like:

• Digitising and simplifying the application and distribution of social grants
• Expanding access to employment opportunities
• Rolling out digital ID documents, among other initiatives

The idea is that by reducing the number of employees, the government can make room for younger workers and streamline processes through digitisation.

However, Parks pushed back against this idea, saying that no workers need to be removed in order to digitise the public service sector.

In fact, workers have long been asking for the IT systems to be modernised and overhauled, especially at Home Affairs, where system failures area common occurrence. 

Parks added that he is concerned that the government may be repeating past mistakes by overlooking the importance of these experienced workers. 

A better solution, Parks said, would be follow to successful examples like the South African Revenue Service (SARS), which has shown how to strengthen public institutions:

• Appoint competent management
• Remove corrupt and criminal elements
• Fill critical frontline vacancies with staff who deliver essential services, rather than expanding management positions
• Invest in building capacity, whether through infrastructure improvements or training for staff

Over the past two years, the South African Revenue Service (SARS) has achieved a remarkable turnaround. 

Once impacted by state capture, SARS has improved tax compliance from 61% to 64%, generating an additional R60 billion in revenue – far outweighing the relatively small amount spent on filling some critical vacancies. 

This model could be applied to other public services, like Home Affairs. By reducing long queues for ID documents, where citizens sometimes lose wages waiting for days, we can improve both productivity and service quality. 

Digitising processes is important, but filling vacancies and removing corrupt elements is also essential, Parks explained.

The same approach could benefit the police, clinics, hospitals, and other public services. 

Enhancing these institutions would have a positive economic impact, boosting tax revenues as a result of a more productive workforce and profitable businesses – well worth the cost of investing in state improvements.