A person completing a retirement plan form with a calculator. File Picture: The South African government’s plan to offer voluntary early retirement to public sector employees has elicited mixed reactions from unions and experts concerned about the potential loss of critical skills.
Mixed reaction has greeted the government’s proposal to implement a voluntary early retirement programme over the next two fiscal years targeting an estimated 30 000 public sector employees.
The plan was mentioned in the National Treasury's 2024 Medium-Term Budget Policy Statement (MTBPS).
This was tabled in Parliament last week by Finance Minister Enoch Godongwana. The objective is to bring younger talent into the public service while attempting to contain the escalating wage bill.
Cosatu’s Matthew Parks said the government's announcement of its intention to offer early retirement to 30 000 public servants must be engaged upon at the Public Service Co-ordinating Bargaining Council.
Parks expressed concern that the move may see a loss of critical skills that are needed by the state to deliver quality public services.
He said the Mandela administration offered voluntary severance packages to teachers and later regretted the impact this had on schools.
He added that the government had been asking former employees of Eskom, Transnet, Metro Rail, and Denel to return, while the SAPS placed an advert two weeks ago, asking former employees to return to work.
“We are worried government is not taking into account lessons from past mistakes.
“The public sector is not bloated. In 1994 we had 1 million public servants for 34 million citizens. Today it is 1.2 million for 64 million citizens,” he said.
According to Parks, the continued squeezing of public servants with below-inflation increases was sparking a brain drain of skilled public servants.
This included nurses, doctors, teachers, and police officers who
had gone to better-paying and less stressful jobs in the private sector and overseas.
He noted that Home Affairs has a 60% vacancy rate, and SAPS has lost 15% of its staff over the past decade.
“The wage bill has been shrinking rather than growing, from 35% to 31% of the budget”.
Theuns du Buisson, economic researcher at the Solidarity Research Institute, said while the wage bill had to be reduced, it needed to be done in a way in which “expertise and experience is not sacrificed”.
Du Buisson suggested that the state should conduct an audit to ensure it does not sacrifice essential talent and experience.
Claude Naiker, acting deputy general manager of the Public Servants Association (PSA), said the initiative was not new.
It had been introduced a few years ago but it did not yield the savings that were envisaged.
He further stated that the loss of skilled staff would pose a problem, especially in the introduction of National Health Insurance (NHI).
According to Du Buisson, another aspect that should be considered is the amount that would actually be
saved compared to the R11 billion that they plan to pay out as part of the process.
Professor Irrshad Kaseeram from the University of Zululand's Economics Department noted that it would be argued that experienced staff must not leave as institutional knowledge would be lost.
However, he said that it was likely that such favoured staff members would be offered incentives to stay on.
Kaseeram said the vast majority of workers who would typically
want to leave and take early retirement are those who are burnt out, suffer from ill health, and have limited skill sets.
“Hence, by their early retirement, they clear the path for young talented individuals to take up middle and senior management positions that will improve the functioning of government departments.”
Economist Dawie Roodt said this is a bad idea because the government will be getting rid of experienced people to get more young people in.
Roodt said while he understands that the total wage bill of the civil servants needs to be reduced, service delivery is going to suffer as a result.
“The reality is that the civil servants in South Africa are highly unproductive and they are hopelessly over paid and that’s what we need to fix. So although this move could result in a slightly lower wage bill for the civil servants, it’s probably going to erode more service delivery than what we are going to save in terms of the wage bill,” he said.
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