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     FrontPage Edition: Mon 9 April 2007

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Pay rise for ministers and civil servants



An Excerpt

Paying competitive salaries
For the Public Service to remain an attractive employer, our terms must keep pace with the private sector.
That is why our policy is to pay public officers competitive salaries, salaries that are commensurate with private sector earnings. We do not seek to lead the market, but to keep pace with it.
Salaries in the private sector have been moving rapidly, especially in the last two years.
In February this year, the two healthcare clusters adjusted nurses¡¯ salaries upwards by 3-7 percent[2].
On 31 Jan 07, a Business Times report[3] cited that some law firms have raised salaries amid the growing demand for legal work and a shortage of lawyers. Reports from HR consultancies point to more firms hiring executives, and offering attractive salary packages to attract them.
The financial and banking sector is growing rapidly and many potential job seekers are attracted to it.
According to a 12 Feb Wall Street Journal report, there is a shortage of talent in the private banking sector. The earnings of some of the relationship managers in Singapore surpass the pay levels in Switzerland. Singaporeans are being attracted to these jobs including one young ex-SAF officer who was featured in the report.
As I informed the House in March, the Civil Service is experiencing the effects of the tightening labour market.
Our overall resignation rate has increased from 4.8% in 2005 to 5.7% in 2006. We are losing our lawyers, accountants and management executives.
The resignation rate of the Management Executive Scheme (which employs graduate officers across the ministries) was 10.6%, up from 7.4% in 2005. At some of our entry grades, the situation is quite serious, with resignation rates as high as 25%.
Members of the House would also have read from the newspapers[4] that for our Home Team, there has been a 40% increase in the resignation of junior officers in January and February this year, compared to the same period last year.
We need to act before the situation becomes more serious. The Government, as an employer, has to respond quickly and decisively to stay competitive and close the wage gaps. Otherwise, we will deplete the Service of the able people we need, and the service level to the public will be affected.
Civil Service Salary Adjustments
The last major salary revision for the Civil Service was in 2000, seven years ago. During the recession years, civil service salaries were cut, and restored recently in 2005. In recent years, we have made adjustments to specific schemes that have fallen behind their benchmarks.
For this review, we have taken a comprehensive look at all the schemes, assessed the attrition rates and wage levels relative to their respective market comparisons, and identified the underlying issues affecting the schemes.
Let me explain the approach we have taken and the principles behind this round of revision.
First, we are not making a uniform across-the-board revision, where everyone receives a standard ¡®x%¡¯ increase. Adjustments are made according to individual scheme¡¯s needs. Where the salaries are severely lagging the market, and there are high attrition rates, we will make larger adjustments. Where the lag is smaller, we will make smaller adjustments. Some schemes have been reviewed recently, and are already being paid close to market salaries.
Second, we will bring our salary structures more in line with our philosophy of linking pay to performance. Many of the adjustments will not be in the monthly salaries but in the form of a performance-related payment.
Only those civil servants who have performed beyond the satisfactory level will receive this performance-based payment, with those performing very well receiving a higher amount.
These payments allow us to close wage gaps quickly this year. For subsequent years, these payments are likely to be incorporated into the performance bonus structure of the officers, if the market salary levels are sustained, so that those who are consistently good performers will continue to enjoy the higher salaries.
For schemes which are lagging severely behind the market, we would have to adjust both monthly salaries and annual components in order to close the gap.
Third, we recognize that salaries alone are not the panacea to our problems. We need to look at the whole career proposition, such as sense of purpose, job scope, interesting assignments, exciting career prospects, and developmental opportunities. These issues have to be addressed so that a career in the Civil Service will remain attractive not just to young people fresh out of school, but also to serving officers.
That is why, in conjunction with the pay increases, we will continue with our reviews to address the fundamental issues for specific services. Let me give a recent example.
The Education Service was reviewed in August last year. We raised the starting salaries and increased the retention bonuses for the teachers.
But the review went beyond pay. MOE solicited feedback from teachers and made changes beyond salaries: the study leave scheme was enhanced to allow teachers to take longer periods of study leave, a special fund was set up for teachers to use for learning and developmental needs, and promotional grades were added for classroom teachers.
This year, some 10,000 teachers have been promoted, many of whom to the new promotional grades introduced in the restructured scheme of service.
I will now brief the House on the pay revisions for the different groups of civil servants. The revisions will apply to the Civil Service.
Statutory Boards will review their salaries concurrently and make adjustments, where appropriate. A number of Statutory Boards (EDB, MAS) have already adjusted their salaries earlier this year.

Source: Media Release 9 Apr 2007

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