Study reveals that total ‘cost’ of a Grade 21 Civil Servant Officer is higher than a United Nation’s (UN) National Officer
Here's what do these costs entail.
A study carried out on “Civil Service Compensation: Incentives, Dissatisfaction, and Costs” by the Pakistan Institute of Development Economics (PIDE) revealed that the total cost of a Grade 21 civil servant officer is estimated to be 12 percent higher than that of a United Nation’s (UN) national officer. The study was authored by Vice-Chancellor of PIDE, Dr. Nadeemul Haque, Omar Siddique, and Naseem Faraz.
What do these costs entail?
According to the study, here are some of the things that the Grade 21 civil servant costs include:
- Direct monetary remunerations
- In-kind benefits worth billions of rupees, including housing, vehicles, job security, and medical allowances.
- Public-owned houses that have a minimum market value of Rs. 1.45 trillion and can generate an annual rental income of Rs. 10.75 billion
- An official car that exceeds the basic salary of employees in BPS 20-22
- Medical allowance and additional Rs. 2.3 billion monthly for medical bills
It should be noted that all these perks are not linked to the performance and efficiency of the civil servant.
The World Bureaucracy Indicators of the World Bank stated:
The public sector wages in Pakistan are 53 percent higher compared to the private-sector wages.
Critical Issues within the Civil Services
The study by PIDE looked into some critical issues within the civil services. These issues comprise:
- Cash payments
- Non-cash rewards
- Inequality in the distribution of perks
- Waste of precious land for housing
- Pay and performance disconnect
- A bias between cadre and non-cadre officials
- Marginalized specialized groups
According to the research, the non-monetary benefits for civil servants are higher than their private-sector counterparts, with 80 percent of the private sector workers having no non-monetary benefits. The study further detailed that almost 80 percent of public sector employees had more than three non-salary benefits.
The report by PIDE read:
The public sector pension systems are also rather generous. The pension is calculated as 70 percent of the last drawn basic salary at the time of retirement. In the private sector, only those employees receive after-retirement benefits who work in the formal sector. The informal sector employees do not have any such system for their security in old age.
Solution: Monetization of all perks and Reduction of civil workers
The authors of the study suggest that the monetization of all the civil service perks could reduce the disparities within the structure. Exemplifying this factor, the report recommends that the government housing must be monetized as the government housing assets have a market value of approximately Rs. 1.45 trillion.
According to the study, the government can receive the house value after releasing the government housing assets in Islamabad to the private sector boosting the construction industry.
Moreover, public-private partnerships can be sought for commercial activities, social infrastructure (libraries, recreation, community spaces), and low-cost housing. The reform can increase the accommodation capacity of the land by more than ten times.
Alongside all this, the report also said that there is a need to reduce the number of employees working in lower grades, who account for 85 percent of civil servants’ total wage bill. Furthermore, the existing posts that are not occupied should also be abolished.
This employee deduction will not cause any harm to the civil service as most of these jobs have become redundant. In fact, this downsizing will release more sources to finance any revisions in the salaries as well.
Proof that the Solution will Work
The reliable data of the New Public Management (NPM) literature and international practices can be referred here to prove that the monetization of benefits and perks involved in the civil service can make the system transparent.
The study concluded by stating that as Pakistan progresses towards NPM, implementing similar practices in the country can help the government save Rs. 2.3 billion per month.
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