© OECD

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CIVIL SERVICE PROFESSIONALISATION IN THE

EUROPEAN EASTERN NEIGHBOURHOOD

Public Administration Reforms in the EU and OECD In the context of financial constraints

Christoph Demmke, Advisor to the OECD

Tbilisi, 4-5 November 2014

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Introduction

• Report on Studies for the EU Presidency in 2011 – 2013 in the framework of the EUPAN network (n = 25 EU countries)

• OECD Survey on the Impact of Budgetary Constraints on HRM (2014) Discussed and adopted in OECD PEM network 32 countries Survey in early stage, finalisation in 2015

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Is the Public Service reform resistant – a myth !

• Reform of Organisational structures• Debureaucratisation• Abolishment of careers, • Mobility policies• Towards new Work systems

• Reform of Public Employment • Reform of Working Conditions • Changes as to the division of public and private tasks

(Outsourcing, Shared Services)• Leadership reforms • Value Changes

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Many changes but uncertainty about reform outcoumes

• Many prevailing perceptions – not innovative, private sector is better

• Reform fashions and broad concepts: Sustainable PA, Agility, Resilient, Engagement etc.

• Many hasty and ad-hoc approaches • More reforms than evidence about outcomes• People not assets but cost factors• Increasing expectations, less capacities

4

EL CY FR DE ES IT AT PLMT

Mean LV SK UK CZ0

10

20

30

40

50

60

70

80

90

100

Debureaucratisation but no new universal model, no convergence

0% = Bureaucracy, 100% = Post-Bureaucracy, Source: Demmke/Moilanen 2010)

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Variations of (perceived) reform pressures in the EU (2007)

Considerable variations between public administration traditions Little relevance of country size and HR system

technological developmentscitizen demands

p.a. top executives

p.a. employees

staff representatives / unions

political parties

public in general /media

private sector

other interest groups

supranational organisations

very low1 2 3 4very strong

economic situation / budgetEU legislation / integration

national parliament / legislation

socio-demogr. developments

Scand.

Scand. Transition

Continental

Transition

Contin./Transition

Mediterr.Mediterr.

Scand.

Anglo.

Anglo.

Anglo.

Mediterr.

Mediterr.Contin.

Transition

Mediterr.

technological developmentscitizen demands

p.a. top executives

p.a. employees

staff representatives / unions

political parties

public in general /media

private sector

other interest groups

supranational organisations

very low1 2 3 4very strong

economic situation / budgetEU legislation / integration

national parliament / legislation

socio-demogr. developments

Scand.

Scand. Transition

Continental

Transition

Contin./Transition

Mediterr.Mediterr.Mediterr.Mediterr.

Scand.

Anglo.

Anglo.

Anglo.

Mediterr.Mediterr.

Mediterr.Mediterr.Contin.

Transition

Mediterr.

EC

EC

administrative decentralisation

political decentralisation

strengthening accountabilitystrengthening policy coherence

quality management

aligning public-private employm.

HR decentralisation

budget decentralisation

performance management

open government

customer orientationethics / codes of conduct

e-governmentpublic-public partnerships

private sector involvement

relativelylow influence1 2 3 4

very high influence

new public management

good governanceuse of market-type mechanisms

austerity/saving programmesAnglo./Scand.

Scand./Anglo.

Continental/Transition

Anglo. small

Scand. small

Continental small

Anglo.

Scand. Continental

Scand. small/Anglo.

Scand. small/Mediterr.

Scand. Continental

Continental

Scand.Anglo.

Scand.

Anglo. Continental

Mediterr./Continental

Anglo.Mediterr.

Transition

administrative decentralisation

political decentralisation

strengthening accountabilitystrengthening policy coherence

quality management

aligning public-private employm.

HR decentralisation

budget decentralisation

performance management

open government

customer orientationethics / codes of conduct

e-governmentpublic-public partnerships

private sector involvement

relativelylow influence1 2 3 4

very high influence

new public management

good governanceuse of market-type mechanisms

austerity/saving programmesAnglo./Scand.

Scand./Anglo.

Continental/Transition

Anglo. small

Scand. small

Continental small

Anglo.

Scand. Continental

Scand. small/Anglo.

Scand. small/Mediterr.

Scand. Continental

Continental

Scand.Anglo.

Scand.

Anglo. Continental

Mediterr./Continental

Anglo.Mediterr.

Transition

Context, fashions and pressures determine reform priorities?

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Since 2008 budgetary constraints as No 1 reform pressure but situation of countries differ

….a widening gap as regards the implementation of reform measures (Germany, Sweden, Luxemburg vs. Portugal, Greece, Spain, Japan etc)

Evidence on impact of budgetary constraints on HRM policies „thin“

Framework for recessionary bundles and reform trajectories in the field of managing

budgetary constraints and impact on HRM Source: Paul Teague et al. (adapted)

Soft employee focused reform path

Responsible restructuring

Tough efficiency focused restructuring/

downsizing path No compulsory lay

offs Voluntary lay-offs High use of

communication/leadership to explain rational for HR bundles

Focus on efficiency, productivity, innovation and learning, skill training, reallocation and value management

Retention of staff Abolishing seniority Employees involved

in developing options for responding to the recession

Further investments in skill, learning and innovation policies

Focus on Leadership Introduced short-time

working while maintaining pay

Improved workforce planning

Relaxing Job Security Reform of Civil

Service Status Flexibilisation of

Working Time Longer Working hours Reform of Pension

systems Introduction of

voluntary departures Furloughs Reform of holiday

system Active new health

policies in order to reduce sickness rates

Reform of bonus system (cuts)

Dismissal for poor performance

Replacement of civil servants by more fixed-term employees

Increasing training efficiency

Reform of promotions Professionalization of

recruitment system, mobility policies

Maintenance of skill, learning and innovation and leadership policies

Introduced outsourcing after careful evaluation of added value

Set up new shared services after careful evaluation of added value

Downsizing personal Cut wages, reform

pension system Enhanced job

security abolished Working longer,

reform of holiday system

Tightened discipline, time keeping and attendance requirements

Promotions and recruitments frozen

Reduction of civil servants

Abolishment of civil servant status

Enhanced outsourcing and introduction of new shared services

Staff performance managed more rigorously

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No 2 Reform pressure Demographic challenges/ Age management

Measures in order to boost public employment participation

• Increase participation rates of older employees • female participation

Enhancing greater immigration Attempts to increase fertility rates Increasing labor productivity and efficiency

Efficiency Fighting discrimination, enhancing inter-

generational fairness

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Still, all EU/OECD countries face a common challenge

• Is it possible a) to do more with a smaller workforce, enhance productivity while increasing efficiency, b) remain an attractive employer who can retain and attract employees in a more competitive context?

• More uncertainties than evidence

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Some Trends

• EU

• OECD

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Current employment trends

• Public employment• Composition of workforce• Alignment of working conditions between

public and private sector• Changes in employment conditions such as

pay, training, job security etc• Reform outcomes: Impact of the crisis on

workplace behavior, trust, stress, positive outcomes

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Size: General public employment trend in the EU

• Trend is very clear: there is a strong decrease in employment in central administrations of the EU Member States (26 responses, overall score 4.241)

• Trend is very strong in those countries which are subject to austerity measures (11 countries, score 4.45) but almost equally strong among non-austerity countries (15 countries, score 4.07)

1 1=increase in employment, 5=decrease in employment

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EU: Public employment trends and impact on employment groups

• Some countries cut employment as regards different employment categories due to financial constraints (e.g. ES, IT, PT, BG, EL etc) Overall, biggest reductions in civil service

employment (exceptions in DE, IT, PL, BG) Slight decrease in fixed-term employment but

also increase in some cases (DE, NL, EC)• In some countries, fixed-term employees

almost do not exist (MT, PL*) on central governmental level, in others strong group (Sweden 18%, Portugal 16%)

Public law employees

Labour law employees

Fixed-term employment (*)

No austerity measures

Mean 3,36 3,15 2,92N 14 13 12

Std. Dev. 1,008 ,987 1,165

Austerity countries

Mean 3,91 3,64 3,11N 11 11 9

Std. Dev. ,944 1,120 ,928

TotalMean 3,60 3,38 3,00N 25 24 21Std. Dev. 1,000 1,056 1,049

General public employment trend on central level by austerity and non-austerity

countries in EU-27(1=increase in employment, 5=decrease in employment)

(*) flexible, limited and/or short-term contracts

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OECD: Overall trend in central public employment

since 2008High decrease: 17.9%

Moderate decrease: 46.4%

No relevant change: 10.7%

Moderate increase: 21.4%

High increase: 3.6%

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OECD: Use of instruments in reducing employment levels

since 2008

18

Non or partial replacement of retiring staff

Recruitment freezes

Annual productivity targets (eg: 0.5% personnel reductions)

Outsourcing

Dismissals

Decentralisation of employment to lower government level agencies

Privatisation

0% 20% 40% 60% 80% 100%

Frequent use Moderate use No use

Percentage of responding countries

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A changing workforce

• The changing composition of Public Employment

• Towards a core civil service

• Changing Status and alignment

• Changing Working Conditions19

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Government in the 21st century

20

• Composition• Status, Working Conditions

• Size• Structure

From unified to fragmented,

decentralisation of HR, agencification, shared services, outsourcing etc.

Leaner, smaller but shortages in some

sectors

Diversity (women, ageing,

representativeness, international)

"Hollowing out" of status , reform of

WC (pay, allowances etc.)

Composition. Towards a new public workforce

• Status exercised by nationals

• Discrimination

• Young age structure, early retirement

• Dominance of male employment

• Dominance of public law status• Dominance of experts, recruited on

the basis of qualification and expertise

• “Stagnant”workforce

• Status exercised also by non-nationals

• Principle of non-discrimination, Diversity, Representative Government

• Ageing of workforce, increase of employment rates of older employees

• Increase in female employment

• Dominance of labour law status • Continuous adaptation of skills,

competency management • Mobile workforce, restructuring,

shifting

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Hospitals

University

Education

Military

Police

Judiciary

Diplomatic service

Government agencies

Central government

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Central civil service

Specific civil service

Not part of civil service

Towards a core central civil service? (EU 25)

• Differences in working/employment conditions decreasing amongst civil servants and public/private sector employees

• Differences remain as regards pay, recruitment, job security, career development

• However, also pay, job security, recruitment policies etc. are being reformed and further flexibilised etc.

Alignment trends amongst public employees and private sector employees

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Differences between civil servant employment and contract employment by issues (average)

(1=very much, 2=somewhat, 3=fairly little, 4=not at all)

health insurance

working time arrangements

holiday arrangements

ethical obligations

pension system

right to strike

pay systems

career development procedures

job security

recruitment procedures

1.0 1.5 2.0 2.5 3.0 3.5 4.0

3.4

3.2

3.1

2.8

2.7

2.6

2.5

2.4

2.2

2.0

dif

fere

nt

sim

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Reforms of employment conditions

• EXAMPLES: Job Security Pay Training

25

The end of life-time tenure? Termination of civil-servant employment by EU Member State (1=Yes, 2=No)

A B C D E F G H Germany 1 0 0 0 0 0 0 1 Greece 1 0 0 0 0 0 0 1 Luxembourg 1 0 0 0 0 0 0 1 Belgium 1 1 0 0 0 0 0 2 Cyprus 1 0 0 0 0 0 1 2 Ireland 1 1 0 0 0 0 0 2 Italy 1 1 0 0 0 0 0 2 Portugal 1 1 0 0 0 0 0 2 Spain 1 1 0 0 0 0 0 2 Austria 1 1 0 0 0 0 1 3 Malta 1 0 1 1 0 0 0 3 Sweden 1 0 1 1 0 0 0 3 Czech Republic 1 0 1 1 1 0 0 4 Estonia 1 1 1 1 1 0 0 5 France 1 1 1 1 1 0 0 5 Hungary 1 0 1 1 1 1 0 5 Lithuania 1 1 1 1 1 0 0 5 United Kingdom 1 1 1 1 1 0 0 5 Bulgaria 1 1 1 1 1 0 1 6 Denmark 1 1 1 1 1 1 0 6 Finland 1 1 1 1 1 1 0 6 Latvia 1 1 1 1 1 1 0 6 Netherlands 1 1 1 1 1 1 0 6 Poland 1 1 1 1 1 1 0 6 Slovakia 1 1 1 1 1 0 1 6 Slovenia 1 1 1 1 1 1 0 6 Romania 1 1 1 1 1 1 1 7 Mean 1.00 0.71 0.61 0.61 0.54 0.29 0.18 3.93

A = Disciplinary reasonsB = Poor performanceC = Restructuring D = Downsizing E = Re-organisation F = Economic difficulties G = Other

H = Sum

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But limited changes in employment protection since

2008

It has become easier to dismiss public employees

It has become easier to dismiss civil servants

Notice periods have been shortened

Other

0% 20% 40% 60% 80% 100%

Yes No Cannot say

Percentage of respondent countries

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Focus is on remuneration reforms in central public administration since 2008

75% of surveyed countries implemented remuneration reforms since 2008

Pay freeze

Reduction or abolishment of allowances (e.g., Christmas allowance, 13th salary)

Reduction of performance-related-pay/bonuses

Reduction of remuneration for all staff

Reduction of remuneration specifically for top-level

0% 20% 40% 60% 80%

Outcome of Remuneration Reforms

Percentage of responding countries

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and on….Training policies in central public administration since 2008

Training budgets

Training days

0% 20% 40% 60% 80% 100%

Implementation of reforms in training policies: Percentage of responding countries

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Reform outcomes

• Workplace behaviour• Trust• Stress, Job Intensity• Attractiveness of Public Sector Employment

30

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Critical challenges

• And in your country? Do you agree…..

31

Impact of austerity measures on workplace level (N=25) (Demmke/Moilanen, 2013)

inappropriate use of resources

higher stress levels and job intensity

greater tendency towards corruption

decline of ethical values

perceived unfairness (private sector)

decrease in loyalty

perceived unfairness (colleagues)

decrease of trust in the organisation

increase in anger

decrease in workplace commitment

decrease of trust in leadership

lowering of job satisfaction

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

EffectNo effectHard to sayMissing

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Effects of reforms on workplace behaviour (OECD)

Decrease of trust in leadership

Lowering of job satisfaction

Decrease in workplace commitment

Perception of unfairness compared to how colleagues are dealt with

Increase in anger

Decline of ethical values

Decrease in loyalty

Perception of unfairness compared to how private sector employees are dealt with

Unethical behaviour arising from higher stress levels and higher job intensity

Increase in inappropriate use of resources, e.g., theft and fraud

Greater tendency towards corruption

0% 20% 40% 60% 80% 100%

Effect No effect Cannot say

Percentage of responding countries

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Impact of current reform trends on work intensity and stress in central public administration

Work/job intensity

Work related stress

0% 20% 40% 60% 80% 100%

High increase Moderate increase No changeModerate decrease High decrease Cannot say

Percentage of responding countries

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Attractiveness of Public Service Employment

• Decreasing

• Challenge in times of demographic pressures and more competitiveness in the „war for talent“

35

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Positive challenges

• And in your country? Do you agree…..

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Relation better Workplace Quality/Work Organisation

37

Strongly deteriorated

Not available

Strongly improved

Moderately deteriorated

No change

Moderately improved

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Change in overall organisation of work and workplace quality since 2008

Percentage of respondent countries

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Other positive challenges

• Trend also brings many opportunities Reform of civil services, increase efficiency Placing emphasis on Innovative HRM policies Discussion on need for specific civil services and as

relationship between civil servants and private sector employees

Age management and anti-discrimination Bringing generations together

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Positive challenges

The current situation will force public administrations to improve and professionalise workforce planning and improve data management because of the need to reallocate HR resources across sectors resulting from additional demands for staff in other sector

The need to downsize public employment makes it easier to anticipate future demographic changes and pressures and forces to think more strategically on the structure, composition and size of the future workforce

The current situation opens the possibility to rethink the need for having differences (or not) in employment and working conditions between civil servants, other public employees and private sector employees

The current situation opens the possibility to rethink the division of labour between the public and the private sector

0% 20% 40% 60% 80% 100%

Totally agree Rather agree Rather not agree Does not agree

Percentage of responding countries

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Future HRM challenges

• Organisational Fairness and Trust

• Towards a more refined Leadership theory (transformational, transactional, ethical leadership etc.)