Parliament in March waved through an agreement struck between the government and public sector unions last year, which will cost the state €45m this year and an extra €74m from next year.
“Expenses cannot only rise all the time,” said Jean-Paul Olinger, director of the UEL. In a context of rising public debt and tighter budgets prompted by the pandemic and energy crisis, efficiency, digitalisation and simplifying administrative procedures should be in the spotlight. “All of that is important and should be a priority before directly looking at hiring additional people.”
For 2023, the state budget foresees the creation of 1,393 new posts in different branches of the civil service, with a focus on education, the police force, tax administration and digitalisation departments. Around 500 civil service posts out of more than 2,300 jobs created last year remained unfilled in January.
It’s very important for the private sector to have reliable institutions and a good public service.
Finance minister Yuriko Backes (DP) in March had warned that the tax administration must modernise workflows to cope with surging demand. Workload exceeds staff, the minister told members of parliament, saying that around 8,000 files were still waiting to be processed.
“We need a strong administration,” Olinger said, adding that the public sector provides citizen services but also carries out important work in support of businesses and ensures that the country works. “It’s very important for the private sector to have reliable institutions and a good public service.”
But salaries that the private sector struggles to match are a sticking point.
Above average earnings
Typical earnings for senior civil servants are 33% above national average at a monthly gross salary of €8,688, data released by the government last year shows. State employees earned an average €6,742 a month before tax.
Salaries are calculated on a points-based system, with different levels of seniority receiving a different number of points. Under the new rules, salaries for the first 100 points will rise 5% this year. In 2024, there will be a point increase of 1.95%. This on top of indexation.
The CGFP public sector union, following the release of the study on civil service wages, had criticised the government, saying the information risked sparking a “jealousy debate”. But for Olinger, “the world would be upside down” if it was up to the CGFP to decide whether or not there should be a debate on “public salaries that are paid by the taxpayer.” The unionists, he said, “defend the interests of their members, including rising salaries that lead to the unfortunate widening of the salary gap. No one can be both judge and defendant.”
For many of these taxpayers, access to the civil service is barred, either because they are not Luxembourg nationals or because even for the posts open to EU applicants, the requirement to master Luxembourg’s three administrative languages--Luxembourgish, French and German--proves a hurdle.
For a handful of jobs these language criteria are being waived, as long as applicants speak one of the country’s official languages. A vacancy for an IT architect open at the time of writing, for example, required French and English only.
The CGFP already five years ago lobbied against opening more of the civil service to non-nationals. But Olinger warned that given the pace of growth, this might not be sustainable much longer.
Competing for staff
Already, the public and private sectors compete for the same talents. “A lot of companies, of our members, complain,” the UEL director said. Talent attraction and retention is consistently listed as one of the major challenges for businesses in the country.
A 2021 campaign to attract people in vocational jobs to work at the grand duchy’s municipalities drew criticism from the Chamber of Skilled Trades and Crafts--the Chambre des Métiers--which said communes should consider working together with local businesses instead of poaching their talents.
Labour minister Georges Engel (LSAP) in an interview with Delano in May last year said he “can understand that employers in the private sector aren’t happy. They have someone, train them and when they’re done that person goes to the state. That’s not great.”
And yet, the government in its 2018 coalition agreement had said it would assess how to facilitate the transfer of people from the private to the public sector.
To widen the pool of candidates, the interior ministry in a 5 May press release said it wants to make it easier for staff to join the public service at municipal level.
Under current rules, a general aptitude test is required to become a civil servant at both commune and state level. But the ministry wants to scrap this pre-requisite for municipalities.
The agreement brokered between the DP and the CGFP at the end of last year, however, wasn’t just about salaries. It also scrapped staff evaluations introduced in 2015 that the union had been pushing for years to be abolished.
“Contrary to the private sector, it is more difficult to evaluate employee achievements in the public service,” Gusty Graas, a DP member of parliament, said in a statement at the time. “There still needs to be a conversation about the annual objectives between the employees and the respective managers each year.”
An annual review with trainees and senior servants in their introductory period will remain.
Olinger, however, wants a benchmark for the services offered. “We all benefit from good service,” he said. “How do we measure the quality and timely delivery of the work that is performed?”
A survey commissioned by the government and published in April showed that nearly three-quarters (72%) of respondents said the quality of the service was good. But only 55% said it is easy to identify the right office to contact for help and 54% said agreed it’s easy to reach a contact person.
We need to make the system fit for purpose, for future.
Public administrations enjoy a high level of trust, with 75% of respondents saying they trust the information they receive and 81% saying they trust the person on the other end of the line having the skills and knowledge to help them.
Graas in his statement said the time was right for a new salary agreement despite rising public expenditure, calling the deal “realistic” and “proof that both parties are willing and able to guarantee social peace.”
But social peace is relative when many taxpayers--and three quarters of private sector workers--do not have a say in the national elections, public sector policy or negotiations.
“In broader terms, the private sector and all the people that work in the private sector finance the state. It’s important to keep a balance,” said Olinger. “We need to make the system fit for purpose, for future… all together. Considering rising costs and lack of manpower, we have to look for efficiency gains, we have to address the structural challenges.”