MINISTERIAL STATEMENT BY MR TEO CHEE HEAN, MINISTER-IN-CHARGE OF THE CIVIL SERVICE, ON CIVIL SERVICE SALARY REVISIONS, AT PARLIAMENT 9 APRIL 2007

April 9, 2007

BACKGROUND

Role of the Public Service

1. Modern Singapore is a testimony to the perseverance, ingenuity and hard work of our people. In a short span of 40 years, we have transformed our island state into a developed nation. Singaporeans enjoy peace, stability, economic progress, good housing, healthcare, education, and a clean and safe environment.

2. The mission of the Public Service is to work with the elected Government to ensure Singapore’s continued survival, security and success. Public officers work with the political leadership as stewards of Singapore’s present and future. The work of the Public Service is closely linked to the lives of Singaporeans. Through the work it does, the Public Service provides infrastructure, homes, education, and law and order. It creates a conducive environment for Singaporeans to create wealth, earn a living, raise a family and lead a fulfilling life. We have a diverse group of officers, with different aptitudes and capabilities. There are policy developers, policemen, teachers, social workers, economists, statisticians, engineers, clerical and administrative staff. We need a whole host of officers with different backgrounds and talents in the Service – to think, plan, and do. Together they make the Service tick.

3. Richard Vietor, a Harvard Business School professor who specialises in teaching and research on business and government policy, recently published a book titled “How Countries Compete.” He devoted one chapter to Singapore and described us as “the best example of government that works.”[1] Ours is a government that works - for Singapore.

4. Eight or nine years ago, when I was Minister for Education, I briefed the EDB's International Advisory Council on our new initiatives in education. These were a group of top CEOs - experienced industrialists and businessmen from the US, Europe and Japan, several of whom had sat on or given advice to their governments' education review panels. They said: "We've heard all that before in our own countries. What makes you believe you can succeed in doing that when we have difficulties putting through similar reforms in our countries?" That question gave me pause. Then I replied that it is because Singaporeans place great importance on education. And in the ministry we have the people, and a system in place that will see this through. We also have a teachers' union that understands what we are doing. Instead of resisting change, they are supporting it – for example, organising courses in IT for the teachers to keep up to date. I am glad that my confidence in our parents and students, teachers, our educational administrators and our institutions has been proven right. Today, they have brought our system forward to new heights.

5. As Minister-in-charge of Civil Service matters, I often hear from my counterparts from other countries that Singapore is a place where things happen. We don't just envision and talk, we act. Each time they re-visit us, what we talked about doing the last time would already be happening. This is possible because we have strong institutions, and a team of dedicated officers at all levels who will work through the details and carry out the plans – biopolis, marina bay, upgrading of our housing estates, skills redevelopment, workfare, preparing for an ageing society.

6. Going forward, the opportunities and challenges confronting Singapore are increasingly complex. There are no “ten-year series” or ‘model answers’. The Public Service has to break new ground and draw upon the ideas and energies of the private and people sectors to address these challenges together - to develop our own solutions, challenge old paradigms, experiment with untested approaches and learn from our mistakes along the way.

7. Singaporeans have a Public Service they can be proud of. The Political and Economic Risk Consultancy (PERC) 2007 Report, and the World Economic Forum’s 2006 Global Competitiveness Report ranked Singapore first in the quality and competence of its Public Service.

8. Here, I would like to take the opportunity to acknowledge and thank every public officer for his or her contribution to Singapore. It does not matter which service or agency you work in. Every officer can and should be proud of being part of the Singapore Public Service, a highly respected and well regarded organisation.

9. We don’t have to just rely on comparisons by think tanks. Every Singaporean who travels abroad will, in his heart, be grateful for the quiet efficiency, courtesy and impartiality of our public officers when they cross the immigration and customs counters at their various ports of entry and exit.

10. But the Service can and must do better. Singaporeans are more informed, and vocal. The standards expected of the public service today are higher. And public officers can expect more to be asked of them. Demanding customers spur improvements. Public officers do not have all the answers. We have to do more to cultivate a serious listening ear, to better understand the needs of the public and to consider ideas and suggestions to improve the way we work and serve the public. There is a need to constantly improve.

Good People are Key

11. How do we do this? The key is to have good people in the Service, enough of them, with the right values and passion for Public Service - well led, well trained and well motivated. We need good people and leaders to helm our various services – principals for our schools, commanders of our police divisions, managers of our various line departments and customer touch points. We also need the support of our rank and file officers who quietly do good work behind the scenes, or courteously at the counters, helping to implement and execute policies well.

12. To bring it all together, to provide vision and coherence, and set the tone and direction, we also need exceptional public service leadership. This means having strong and capable leaders who can anticipate challenges and change, take a long term strategic view, tackle the complex issues, and yet at the same time come up with workable solutions that are needed now. We need leaders who can energize, organize and galvanize the Public Service to move the agenda forward and ensure that implementation accords with intent.

Sense of Meaning and Mission

13. As a progressive employer, the Public Service’s human resource management practices must keep pace. We must commit to pay competitive wages for our officers and provide them with the development and training to improve and stretch themselves so that they can better contribute to their agencies. We must make the Public Service an organisation that provides our officers with a sense of meaning and mission, that ultimately it exists to serve the people of Singapore.

14. We see such examples everyday in the work of our public officers. Many go the extra mile to work for the good of Singaporeans, not just at the policy level, but also at the individual level, helping to deal with and solve the problems of individual Singaporeans. We recognise the most outstanding of such efforts every year with the PS21 Star Service Awards. I hope to see more of such examples. Officers who work in our ministries and statutory boards must feel a sense of challenge and must believe that individually and collectively, they make a real difference in the lives of Singaporeans. We need to tap on their passion, energy and mobilise them to do their best, and achieve their best – for Singaporeans and for themselves.

Making sure we can get and keep good people

15. Attracting and retaining able people to build a team, especially those who have the potential to take up top leadership positions in the Public Service is however becoming more difficult. Final year students in our local universities are invited to many tea sessions and career talks, and many are now offered jobs 3-6 months before graduation.

16. The competition for talent is not just within Singapore. Our people are being talent-hunted to work in Hong Kong, China or Vietnam and the Middle East. In February this year, a group of public officers attending one of the Civil Service College’s leadership training programmes, made a study trip to Dubai. At a networking dinner, they met a fellow Singaporean who had been headhunted to take up a very senior position in a Dubai company. He told our officials that his Chairman is very impressed with Singapore and the ability of Singaporeans. So, he promised his Chairman that every time he is back in Singapore, he will speak with 2-3 Singaporeans to interest them in working for his company. I do not know how often he comes home, but we should be worried.

Paying competitive salaries

17. 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.

18. 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.

19. 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.

20. 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.

21. 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.

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