Cutting bureaucrats is easier for bosses than for politicians

Now that the government has admitted its 2 million employees are soaking up vast amounts of cash in salaries and various benefits, there will be much head scratching about what to do about it. Reducing the number of civil servants anywhere is no easy thing.

It is far simpler to increase the number of state employees, as our politicians have spent 20 years proving. In the last decade alone, the number of fortunates with government jobs that have been immune to market forces has reached some 2 million. Compared with Thabo Mbeki’s 28-strong cabinet, President Zuma has 35 ministers and 37 deputies (somebody got two to share the burden). The civil service salary bill (excluding other state employees such as teachers, police officers, the army, navy and air force), more than doubled in seven glorious years.

A major difficulty in slimming desk wallahs is that once in the bureaucratic system with all its perquisites, they tend to hang on for dear life. It is a phenomenon everywhere, especially when times are tough. Counter intuitively, in South Africa, civil servants are resigning in droves – more than 2 000 a month on average and in November the numbers hit 4 000.

They are leaving ironclad job security to grab their pension contributions and their resignation bonuses before, as they suspect, the state does. Right or wrong, the perception is driving a rush to exit.

For the National Treasury it should be an answered prayer, an opportunity to save money, to take a short-term hit against the long-term cash leakage in salaries every month, a Godsend to accountants in these straitened times.

But alas, it is not the way the Treasury sees it. It insists the number of resignations is normal. The implementation of the new rules that have spooked so many have nothing to do with it, an allegation at odds with the decision to put off applying them for two years or more.

So, instead of encouraging a flight of the drones, we have veered away from the opportunity to clean the hive.

Ballooning staff

If it is true that 23 000 state employees leave the service every year, but it is a small fraction of 2 million posts. Even if many civil service slots are vacant, it still means whenever a future need or patronage requires it they can be filled.

When faced with ballooning staff costs the private sector has developed various ways of shedding bodies that could be used to reduce civil service numbers, but with difficulty, it has to be said.

Private sector job cuts go by carefully crafted and often ingenious names – downsizing, rightsizing, re-engineering, concentrating on core business, mergers, value improvement projects, and value-added schemes, and so on. All are part of the management consultant’s dictionary of euphemisms – nothing as crude as words like sacked or fired, which have been replaced by “let go”, “early retirement”, and “voluntary retrenchment”.

The private sector recognises that the instinct to build empires is buried deep in the human psyche and that a bureaucracy (especially a back office or head office one) provides it the perfect environment.

Managers know that the importance of their job is measured (and paid) according to their departments’ numbers. Some say this is a hangover from World War I (WWI) when rank rose with the number under an officer’s command.

One neat way of discovering who should be offered “early retirement” or some other euphemism is to hire a management consultancy to survey all staff, find out what they produce (usually documents) and where this production is sent or who asked for it. Using consultants keeps the executive chairperson or managing director out of the process. Less troubling to the conscience is another bonus.

To make the survey painless, the process begins by recruiting a team from within the company (these days, diverse as to sex, age, colour, of course) to do the questioning. Being asked questions by chaps you have a drink with after work is more likely to produce the truth.

Having discovered what each jobholder produces, the next step is for the team to visit all the recipients to find out what happens to it.

In a large percentage of cases, the report so arduously written and sent out, winds up on a dusty shelf, in a shredder. In this way, unnecessary staff is discovered. All that is left is the size of early retirement packages. And adding up the amount of money saved every month.

This could be one way, and a decent one, of reducing the size of our overblown civil service. The textbook exists. What it advocates, works. But then government employees are voters, so it is very difficult to implement.

The trouble with relying on natural wastage, that is resignations, by staff wanting to get hold of their provident funds or, in the case of our civil servants the various perks they get when they resign (yes they do), is that the good ones can leave, and the not-so-good ones remain.

Downsizing the private sector way may work, but applying it to a privileged civil service is difficult where state jobs have become sinecures in the gift of one or other politician or political party, and salaries are paid with other peoples’ (taxpayers’) money. This being South Africa, there are other problems too.

Our bureaucrats tend to react to retrenchment in ways unusual to their privately employed cousins. They often take the package and blow it on their debts or their mortgages. They then, without a regular income, presumably sponge off their relatives, although the thought is probably without foundation and may not apply. There are even reports of those who have resigned throwing monster parties and blowing the lot. They could wind up a burden on the state, swelling the 16-plus million who receive social grants. Logic says it must be a minority who do this, but it is a worry.

What teachers, police officers, or bureaucrats will do when they have used their pension/provident fund savings will be interesting. Poorly qualified teachers have few skills needed in the private sector, and the private security industry is already over full with ex-police officers.

When in bad times the private sector sheds jobs to save costs, those made redundant have a good idea of how wealth is created. Many go into business on their own. But business acumen (tenderpreneurship does not count) is as scarce as hen’s teeth among the majority of our civil servants. For them, prospects of another job are bleak. It can mean a steady slide away from middle class plenty, and a loss of social status – often the unkindest cut of all.

Political risks

When a government like ours relies on trade union support, shrinking union dues can sour the process with more attendant political risks.

All this means is that when politicians promise to improve the efficiency of the civil service it seldom results in job cuts. The political risks are too great. Civil servants vote. And they have a lot of them. Many owe their jobs to the very politicians who make the promises of greater efficiency. Fire too many and lose their votes. It is as simple as that.

It gets even more politically dangerous when a top politician has used patronage to pad particular departments with his or her followers or relatives.

It is so much easier to downsize a large corporation. In fact culling staff is one reason the biggest multinationals have survived – some of them for a century or more. BP, for example, has survived into its second century by regularly taking an axe to its bureaucratic tree to remove any dead wood.

Sure, it was not that simple. What made it easier was that BP was born in wartime and for a long time afterwards had an internal corporate structure from the one used by the British Army in WWI. It was like many large companies, a many layered pyramid.

The analogy is not far-fetched. Just as in the World Wars, swathes of officers were scythed down every time the whistle blew for an attack on the enemy lines, so the BP junior officers were periodically “lost”.

In both wars, orders were addressed to SL/S3/WF/HR (meaning the second lieutenant in Section 3 on the western front serving in the Highland regiment).

In BP for almost 80 years, internal memos were sent to the job title, not to the jobholder by name.

This system ensured that whoever was in the job got the message. It was in wartime a way of de-humanising the poor bloke. His life expectancy at the front was about two weeks. In times of tree shaking in BP, it made the casualties numbers and letters, not people. BP today is long past using this technique. It is more open shirts and first names.

Some large companies think the same way even today. Why else are their personnel departments called “Human Resources”? It conjures up images of the muddy fields of Flanders.

But calling everyone by their first names does not quite change the essential and necessary distance between the cullers and the culled. For our civil service, with so many friends and relations around, the distance may prove too close for any culling at all.