Three-year contracts for civil servants from July 1

The government has announced a freeze on permanent employment of civil servants from July 1 in a radical policy to reform the public service.

The Public Service Commission - the statutory body that employs civil servants -yesterday said it would from the next financial year start hiring staff on contract.

Under the far-reaching policy that will be unveiled next month, the PSC will phase out the permanent and pensionable terms of employment at entry cadres and instead introduce a three-year contract for all staff joining the service.

This is apart of the government's sweeping changes to reform the public service through performance contracting, a human resource recruitment tool largely hailed for instilling efficiency in the private sector.

Under the policy shift, new employees will be put on the three-year contract with clearly defined performance targets that must be met before such a contract is renewed.

"This will ensure that people are retained in the public service based on their performance," said PSC chairman Stephen Kirogo.

Kirogo said: "This is a major policy shift in human resource that will reward hard work and sanction poor work."

According to the PSC chairman, the decision to embrace the far-reaching changes in the public service is informed by thorough studies which have revealed that lazy staff are baggage.

"We have done research and know that people need a job for about two or three years after that they move to other places. Our new policy will address turnover and retain competent skills," he said.

He spoke yesterday during the launch of the Salaries and Remuneration Commission's Public Sector Wage Bill study at a Nairobi hotel.

Employees joining the service fresh from colleges and universities will be issued with performance targets forms which they will sign before they are offered employment letters.

In what could set the stage for gruelling court battles with the unions, the government is also set to scrap the current scheme of service and introduce the career progression guidelines that will see some job groups scrapped.

This will be akin to the one introduced by the Teachers Service Commission, which is now a bone of contention with the teachers' unions.

Unlike the performance contracting, the new guidelines will affect the more than 600,000 civil servants already in employment at various cadres to align them to competence-driven performance. 

Career Progression Guidelines are usually basic career management tools developed to accommodate all the cadres in a job family to ensure consistency in the way careers are managed.

Under the proposed guidelines, the promotion of civil servants will be based on the existence of vacancies, minimum qualifications per grade and professional development.

Emphasis will shift from just experience as it is the norm to satisfactory performance for staff hoping to climb the career ladder.

The new guidelines will introduce a new grading structure that will have the highest grade - 1 - to the lowest grade - 17 -  to replace the current 23 cadres.

"We shall definitely scrap some job groups to align them with the new grading structure which will give more emphasis on performance and efficiency," Kirogo said.

"We at PSC will be more brutal to address the wage bill." 

The government's decision to reform the public service has been informed by the need to tame the ballooning public sector wage bill which now stands at Sh733 billion annually.

A blanket ban on permanent employment of the staff is also part of the government's long term strategy to cut down on pension budget which has recorded a threefold increase in the last decade.

Treasury Cabinet Secretary Henry Rotich indicated in his budget statement that the government had embarked on a process of revalidating some 270,000 pensioners whose monthly dues will cost the exchequer Sh86 billion in the current financial year up from Sh25 billion in the 2008/09 fiscal year.

“The increase in the pension budget over the years is unsustainable. Between February and May we conducted a payroll cleansing exercise for pensioners to authenticate recipients of monthly pension payments,” Rotich outlined during the budget presentation in Parliament on June 13.

The CS had also said the government will be restricting the hiring of public servants.  The PSC is seen to be responding to these reforms to tame the public wage bill. 

Part of the pension time bomb build-up has been attributed to the government’s failure to push through necessary reforms including kick-starting the compulsory pension scheme.

 However, from next month civil servants will lose 7.5 per cent of their salaries for their pension contribution.

The government will then match the contributions with an amount equivalent to 15 per cent of every worker’s monthly pay.

The pension problem has continued to grow despite the decision 10 years ago to raise the retirement age from 55 to 60 years.

The move was meant to slow down the number of retirees entering the pension pool and offer the government some headroom to set up the contributory scheme. However, the latest budget estimates show the move has not reduced the taxpayers’ burden.

Kenya’s civil service is ageing and 37 per cent of workers is expected to retire in the next decade.

Data shows that the number of civil servants above the age of 50 increased from 35 per cent in the year to June 2016, to 40 per cent this year.

Data from the National Treasury shows that 59,400 of the 500,000 public servants will retire by June 2020.

A large number of those who will retire are senior bureaucrats, management and technical cadres, amid reports of lack of a clear succession plan in the public service.

This means that the government may be forced to retain some staff beyond retirement age because of their unique expertise.

Already the PSC is grappling with a funding crisis in its bid to hire 33,792 employees to bridge the shortfall being experienced in the public service.

About Sh12.1 billion is required to hire 26,792 employees at entry grades of civil service with some 22,981 workers due for promotion at Sh3.7 billion.

A further Sh3.5 billion is required to hire 7,000 to join the Prisons Service.

Already there are 17,214 vacant slots in the civil service and 4,080 in the Prisons Service. 

The margin factors the outcome of the second job evaluation, staff transfers to other departments, retirement, and desertions.