Civil service
Cutting the fat
A strong British legacy, refined by high education, surprisingly comes under the axe.. Here's why. By Seah Chiang Nee.
Sep 5, 2004

NOWADAYS the advice "if it ain't broke, don't fix it" is frequently ignored in Singapore as it ploughs ahead with its restructuring.

The latest involves the civil service which remains, generally speaking, in tip-top shape.

But this 90,000-strong machinery is facing the axe to chop off excessive fat and inefficient elements.

The reason for doing this is that during record unemployment, it had been expanding recruitment partly to help mitigate job losses in the private sector.

While others were reducing staff in recent years, the civil service had been employing more people - for a good reason.

(Salaries were lowered in line with the private sector by as much as 25% in the past five years.)

Now with the economy picking up, new Prime Minister Lee Hsien Loong clearly thinks it is time to engage the reverse gear.

Lee, who is also Finance Minister, wants to reduce public expenditure.

In February, he cut budgets for all departments (except defence) by 2% a year. The staff shrinkage this time will work in this way.

During each of the next three years, government agencies (except for teachers and the Defence Ministry) will reduce manpower by 3%. By 2006, a total of 8,100 jobs or some 9% will have disappeared.

Failure will entail a "headcount surcharge" of S$10,000 a year for each officer above the 3% limit, the Finance Ministry said in reply to queries from The Business Times.

Four days before it broke the news, online forums were already abuzz with the details, indicating the growing influence of the Internet. It is becoming hard to keep official decisions secret for too long.

The actual impact, however, may be less than it appears. Much of the reduction may be by way of attrition.

For one thing, the 3% is less than the annual average attrition rate of ministries and statutory boards, which run ports, airports and utilities. This includes resignations and retirements.

Secondly, the reduction can be by way of productivity improvement, job redesign, reprioritisation of functions, streamlining of services and so on, it said.

It looks like an attempt to draw the line at the lowest possible staff numbers rather than a drastic retrenchment.

The Finance Ministry says it is not an "exercise in blindly reducing headcount" and agencies should not aim to cut their staff strength "just for the sake of the reduction".

Nor should they simply remove officers and require the remaining to work harder.

Any ministry that does not cut back at all from their current headcount will face a total surcharge amounting to about 2% of its manpower expenditure after three years.

Fear spreads

The report has caused some fear and panic among civil servants, especially the older, lower-level ones.

Public reaction has been mixed, mostly favourable.

On one side are critics who say it will worsen a still-weak job market. While the number of jobs are picking up, their quality and wages are relatively low, they say.

Until now, the civil service has provided job security - not exactly an iron rice-bowl but close to it.

Most anxious of public employees, who have just been given the good news of a shorter five-day work-week, are those above 40 years old. They will find it hardest to get another job.

Next are lower-rung workers who fear they will face the brunt of the action.

This staff pruning is, in fact, the first such systematic exercise here. Some workers are worried that it may signal a new round of retrenchment, especially when the economy weakens next year.

The pillar of Singapore's middle-class is built on the proliferation of two-income families with secure, meaningful jobs. High unemployment can undermine it.

Not mentioned officially or by the newspapers is another plausible reason: cutting off deadwood. The online community has widely discussed the matter and even favours it.

The idea of getting rid of inefficient bureaucrats appears appealing to many people.

According to one professional, the measure is adopted from a suggestion by former CEO of General Electric Jack Welsh.

An organisation, he had said, could get stronger if it cropped off the worst performing 10% of employees every year and replaced them with new blood. "I can't fault the logic," he added.

"It's about time they did something about all the deadwood floating about in the civil service," wrote one letter writer.

"It's a welcome change. Why let the deadwood rot within and infect those who are working?" exclaimed another.

One cynic, however, doubts if it can be fairly implemented.

"In the civil service, Stat Boards and government-linked companies, it's very unlikely that a person who has moved up the ladder will be fired, unless he does a major screw-up," he said.

For many years, the civil service has been contracting out some of its work to private companies.

"If they can do it better than us, why not let them do it?" Lee had said.

It cuts costs and allows greater flexibility.

Another trend is the employment of temporary workers on two-year or three-year contracts, rather than permanent staff, which is more widely practised in the private sector.

"Business in the 21st century can no longer afford to be saddled with large fixed overheads. This explains why employers opt for short-to-medium term employment rather than permanent positions," a businessman explained.

"I keep my staff levels as lean as possible."

Globally the employment situation is changing, and Singapore is also affected.

It has created concern among developed, highly paid workforces which are already struggling with the threat of job outsourcing to lower-pay countries.

Whether it's a question of temporary contract or outsourcing, it hits at the core of job security.

In the coming years, Singapore's own multinational corporations will probably outsource more and more of their operations to countries like China, India or even Malaysia.

It is likely the civil service will, one day, follow suit.

(This article was first published in The Sunday Star, Sep 5, 2004)