If we want a lean and more efficient public sector, why are the jobs pages littered with civil service positions?
Have you noticed the language used by employment agencies these days? Every dream job is exciting, attractive and offers a ‘‘once in a lifetime’’ opportunity to change your life. Every ideal candidate needs to be bright, creative and energetic.
Sometimes, you’d be forgiven for thinking you’re reading a lonely hearts column. Effusiveness aside, the jobs’ pages do offer a snapshot of the economy.
As this column is based on the most rigorous and up-to-date economic measurement techniques, let’s look at one of the country’s most prominent jobs’ supplements this week, to read a few economic tea leaves. Every Friday, the Irish Times jobs’ section purports to host the best jobs in the land, and as it claims to be read by nine out of ten senior business people, this section offers us a glimpse of what is available at the top of the tree.
If the Economic and Social Research Institute’s (ESRI) latest prognosis is to be believed, and Ireland is set to become a lean, fit machine with a pared down, stream-lined public sector and a dynamic service exporting sector, we would hope to see some indication of this in the jobs’ pages. An economy that is on the cusp of an exporting boom, in the creative services sector, must surely be looking for senior managers to execute this.
So, I counted all the big headline ads in the jobs section on Friday, expecting to see evidence of dynamism. The good news is that there were plenty of jobs – twelve pages in all. The bad news is that 85 per cent of them were for public sector positions. Admittedly, I only counted the larger, expensive looking ads, as they are obviously designed to catch the eye.
In all, there were a respectable 77 ads for senior positions. Astonishingly, 66 of these were in the public sector. Apart from an isolated Ryanair ad, one for Pfizer and a couple from financial institutions, practically every position was either for the civil service, one of the universities, public bodies or a variety of different state ‘agencies’ that have been set up in the past few years.
Who is going to pay for these people? Think about the figure again – 85 per cent of the jobs advertised this week are in the very sector that we are supposed to be cutting back on. In fact, in the first eight pages of the jobs’ supplement, there were only five private sector jobs. This is a joke.
For an economy that is trying to avoid being completely dragged down by the most wasteful property boom the western world has seen in years, the last thing we need is for the public sector to be expanding.
This article is not a rant against the public sector; countries need strong public sectors, staffed by talented people. The issue at stake here, is to understand what is happening in our country – and our labour market.
‘The Irish Times Job Ratio’ — to give my ramblings a grandiose title – suggests that there are eight times more senior jobs being sought by the public sector than the private sector. So, we are having a recession in one part of the economy – the part that earns money – and a boom in the other part of the economy – the part that spends money.
This is a recipe for bankruptcy. To achieve the economy which the ESRI wrote about the other day, it seems logical to suggest that the Irish Times Jobs Ratio (‘ITJR’) should be going the other way.
If this continues, Ireland will be faced with a serious twin deficit, as the current account deficit balloons further and the budget deficit explodes. Just a word of warning from the past: in the early 1990s, when Finland experienced a property market collapse, its budget deficit went from a surplus of 2 per cent of GDP (the value of all final goods and services produced in a nation in a given year) during its boom, to a deficit of 11 per cent of GDP when the economy slowed.
The reason for this was that the entire budget strategy was geared to the property market, and the resulting surge in consumer spending, which itself was driven by enormous personal borrowing.
A figure published by the Central Statistics Office this week reveals that we are in a very similar position. According to the statisticians, total personal indebtedness in Ireland is now running at €194 billion.
About €140 billion of this is in mortgages, leaving an outstanding €50 billion odd in debts built up to buy cars, holidays and Jimmy Choos. If we add the indebtedness of Irish firms to this figure, we get a total private sector debt figure, at the end of March, of €384 billion (published by the Central Bank).This is well over twice our GDP figure.
When people are borrowing so much money, it is easy to run a budget surplus, simply because so much of this borrowed cash finds its way back into the government’s coffers in taxation. The corollary is also true. When the borrowing stops, tax dries up and the budget plummets into deficit.
Therefore, the Irish government’s budget – the figure so many commentators get worked up about – is only a residual in the equation. When the people are borrowing, the surplus is huge; and when people are not borrowing, the deficit is huge. So, we should expect the mother of all deficits in the years ahead, as the main engines for revenue, house price taxation and consumer spending, fall away.
Last week, we saw further evidence from both of these crucial areas. Retail sales fell by 2 per cent in March, while the first-time buyers market has ground to a halt. This situation is likely to get worse. Who would buy a house now?
Another interesting figure that came out recently, is equally worrying. In the first quarter, the buy-to-let mortgage market grew by €1.1 billion. Now, who is taking out these mortgages? In the past, the buy-to-let market was driven by small-time, amateur investors, who bought on the expectation of ever-increasing house prices. As this chimera evaporated, so too has this type of investor – who, during the boom, accounted for over 27 per cent of the total mortgage market. So, who is buying now?
Worryingly, the only buyers in town are those who have to buy. It is, therefore, not inconceivable that the people who are buying to let are the very people who own these apartments in the first place – the developers. This is a hunch, but if it turns out to be true, we are in for an awful ride in the next two years, because this is not borrowing from Peter to pay Paul, it is borrowing from Paul to pay Paul.
All the while, the ITJR points to recession and a bloated apparatchik class who spend, rather than earn. If you want a quick snapshot of the economy and to see beyond all the blather, all you have to do is scan the ITJR every Friday. At the moment, the ratio is 8:1 for the public sector.
No economy ever got rich by expanding the government’s payroll, so now, the ITJR is saying that we will fall off a cliff. Let’s watch the ITJR every week from here on, to see where the economy is actually headed, rather than where some people would like to see it go.
One of your finest articles David.
David, I think you need to refine your Irish Times Job Ratio (ITJR). It is too simplistic. It is obligatory to advertise many public sector jobs. This is not so in the private sector. I have heard it said that only 40 per cent of prrivate sector jobs are advertised externally. Internal promotions (also done in the public sector), head-hunt agencies, personal knowledge and incentives to employees are used much more frequently than in the public sector. In refining your Job Ratio, check the announcements of new people to positions in private companies (eg.Financial controllers, sales and marketing managers, partners… Read more »
Donal, I think David is a spot on. I have fairly extensive knowledge of the public sector and know that there are many over-glorified senior positions carrying big salaries and big titles within the public service where people don’t do a whole lot. Think about it, it is now being mooted that the HSE can cut 1000 jobs and still presumably function!! It is reported that there are far too many senior managers in the HSE and I suspect throughout the entire public service. The fact is that many of these senior people have angled themselves for a promotion for… Read more »
Donal, I agree that the ITJR is a neat idea that’s perhaps misleading because of HR policies in state versus private organisations. Also, it’s difficult to create a general rule from such a small sample (1 day) but it does give cause for alarm that there are so many senior civil service positions advertised on a single day in a small country, regardless of the ratio to private sector jobs. Are they an acummulation of unfilled positions over a number of months? If so this points towards a difficulty in filling these positions with satisfactory candidates and a lack of… Read more »
I have a friend who was interviewed NINE times by separate arms of the HSE for the same job in different regions. Each time by a minimum of three people. Including the people that send the letters and service the administration of the HR “function” of the HSE this is minimum 40 people. This does not include the year long illogical and wasteful process of getting her credentials validated. Illogical in the way the do it not for doing it.
Farcical. The HSE is an insult to each and every one of us.
Excellent piece of original thinking David. Donal, you raise some valid points. But there is stuff to ponder, even if private companies have long given up on newspapers for all but the most senior positions, so why should the public sector also not get with the 21’st century? A simple wiki would allow each department to enter their positions and update them… it would become a goto site for anyone looking for a job …. Lets pretend that the public service was ran on a commercial footing…. The fact is revenues are well down this year, the reflex reaction from… Read more »
Shane’s point is excellent. Ireland’s public/civil service has reached a stage where it is geared up for operating in surplus cash-rolling times. Now we a have monster that has to be fed and in the meantime cash revenues are drying up. I am all for a lean efficient well-paid public sector but in my view the situation we have created is unsustainable. We have a swollen public service, that isn’t terribly inefficient, (too many layers of management, all the time spent in meetings etc, nothing actually done!) and is costly. Practices that i know occur in the public/civil service would… Read more »
that should have read ‘isn’t terribly efficient’…..
Garry,
You could be onto something. Newstalk (Brenda Power) really gave to the HSE recently. Kept hounding Brendan Drumm for a response on a specific case of incompetence (we don’t have space to list all of them).
The upshot was that the HSE threatened to pull all advertising from Newstalk as a result (I don’t know if they’re still black listed?)
Sub
David — given the ‘bloated’ public sector and the ‘debt mountain’ the ESRI are betting the future of the economy on the growth of ‘internationally traded services’ which is not a high employment sector like the domestically traded services. There has not been significant numbers of senior management positions in internationally traded service companies since the ‘dot com boom’, the reason is we don’t have many indigenous companies growing fast as most are in survival mode. We have very few internationally traded services companies of scale (with revenue greater than €10 million) and many of those that have grown are… Read more »
Interesting Paul, I knew Brenda Power/Newstalk were ringing various bureaucrats/press officers live on the air on behalf of people who couldn’t get answers themselves…. I was wondering how that would end up as I couldn’t see government departments and their staff putting up with that for very long. (to be fair it is open to abuse and would probably mean that priority would be given to the case on the radio… but it’s no harm for a government department to be publicly accountable) Do you know if the HSE actually threatened to stop advertising or carried out the threat? I… Read more »
Good one.
But, given that the ad’s are there, then the jobs are currently empty, as in not filled from inside the CS. A good thing surely, one would think. I do not blame the CS one little bit for being a bit of a stone, when there are any number of conflicting ideologies and no clear vision. one would think that with a population this small that getting all the horses pulling in the one direction would be easy. But it’s like getting a family on holiday all smiling at the same time.
Hi again David, Your analysis is correct BUT the data you use is not correct, as was pointed out, as the Irish Times jobs ads cannot be used as a definitive barometer of job vacancies across the public sector and the private sector. A wholly unscientific tow in the water I’m afraid. One thing you say is true: “This article is not a rant against the public sector”. It should be. The public sector has been and remains a growing problem for Ireland – it has dragged the county back in the past when the private sector hasnt been able… Read more »
Rob. Agree with you. In many cases the bloated number of public sector employees is more problematic than their level of pay. The public sector paradox is the number of administrative staff required to dot i’s and cross t’s of procedures which are put in place supposedly so they can ensure the public are getting value for money. It’s a typical “apparatchik” tragicomedy, to use David’s word. Now the government has to react and the only option is layoffs and pay freezes with the inevitable union faceoffs. Johnny Dunne raises an interesting point about the kinds of businesses we can… Read more »
To David, excellent article and you are stating the simple truth. If someone like you was listened to the problems which may well arise could be managed better. Prevention is better than cure regarding our health and the health of the economy. How will ireland boom in the future? here is my thoughts. A vision in place followed by action. 1) Energy needs. Solar, wind and sea power i believe is the future. A country which secures its energy needs will prosper. of course this takes vision and action. the techology would then be sold to China and India to… Read more »
As ITJR is so easily questioned, how useful a metric is it? Will it actually help us focus on how cost-effective the public service is? Will it help us, citizens in a republic, assess the recent OECD Public Management Review of Ireland Towards an Integrated Public Service? I suggest that ITJR will deflect us from checking on how that report will lead to a lean and more efficient public service. Nor do I think that the ITJR metric will in any way dent the evasion of responsibility best summarized as “When you talk to politicians, they blame the public servants… Read more »
The Revenue Commissioners are coming down hard again on small businesses with tax and vat audits to maximise tax income as the deficit grows. Given that non-payment of taxes is rightly a criminal offence, the corollary should also be true – wasteful expenditure of tax-payers money. The public service is the only body I know where computerisation has led to an increase rather than a decrease in staff ; This is aided by the very structure of the public service. For example, what exactly is a clerical officer anyway?? how many clerical officers will you find in a private sector… Read more »
Hi David,
Nice article. I haven´t read the Irish times, but it seems to me I was reading the newspaper in Uruguay. Should I understand Ireland has choosen the uruguayan model instead of the swiss model ? . When once you asked what happened in Uruguay, it was what you described in your article. Basically, loads of civil servants. Since then, 60 years ago, we are in the “third world”, and still there.
Best , from the south
Guillermo
Lets hope Leeds lose their play off final, best of luck to the real United, Manchester, a real club.
Was looking at the Indo today. Rent down 2% and no one buying property? Hmmmm…anyone decide to check with Aerlingus/RyanAir to see the number of one-ways being purchased. I can tell you one thing for sure, none of them are from the public service. I figure a lot of the buy to let were purchased by wannabe landlords from the p’service. So they’ll need a wage hike to cater for lost revenue. And fair doos I say – if they can get away with it. What I find very telling about the ITJR is the extravagance of the ads and… Read more »
As Shane Dempsey said, “The “soft landing” message isn’t believed”. Not even by Jean Claude Trichet, the president of the European Central Bank, who has warned that the worst of the credit crunch has not passed and the economy was still heading for a “very significant market correction”. If things get really bad, there is no mechanism in place to bail out the ECB. Richard Baldwin, professor of International Economics in Geneva says that under current Eurozone rules, each national fiscal authority stands behind its own central bank, but no fiscal authority stands directly behind the ECB. The lender of… Read more »
Why do we need “lots and lots of civil servants” to work it out? Are they not the leeches causing the problem?
The public “service” is too large in middle to “senior” people and lacking in frontline people.
The impression they give is scruffy, gruff and impenetrable. Like they are doing you a favour by talking you.
It’s very difficult for a Public Service to be efficient, mainly, I think, because they don’t have goals which are aligned with our interests, and when you try to create aligned goals, you siimply end up with a ludicrous, unforseen, farce. The UK had a beautiful example: The Unemployment service, about 8 or 9 years ago, was incentivised to get people off the unemployment register, i.e. the official unemployment figure. Of course the idea was to get them employed. What happened was that over a 4 or 5 year period, all the public servants hit their targets, bonuses all round,… Read more »
When private companies go belly-up, senior management is fired. Interim management takes control. Interim management’s main tasks are twofold:
a) find and hire new management, who shall then
b) implement a successful turnaround
Headhunters advertise for new management. This process may well describe David’s ITJR phenomenon, which would imply that the public service sector is on the cusp of turning around the Irish economy. Then again, it may be pure fantasy.
If so, Ryanair might not be a bad buy.
While I agree that the public service is a big problem I think we might be losing the run of things a bit here. The present global financial crisis was created by the private sector which had browbeaten the rest of the world and its elected representatives (and an obliging press and academic establishment) into swallowing a highly dodgy belief system as justification for self-enrichment on an eye-boggling scale. Let’s take Northern Crock for example. Was senior management fired? I haven’t followed this since, but I doubt it. One of its central beliefs (even the events of Great Depression couldn’t… Read more »
Why are there so few jobs for school leavers’ and college grads advertised in the papers’?.55,000 school leavers’ will be leaving the education sector within the month, but why are employers’ not falling over each other to hire them?.Easier to get ready made immigrant staff with lots of experience perhaps?.
David Sometimes you just dont want to do the hard work of research so instead you come out with simplistic analysis like this piece. We dont have a huge public sector compared to other OECD nations-go look it up David. The Public sector must advertise everything and they also create panels where successful applicants can wait months to be called up. Then sometimes bodies like the HSE dont go ahead with jobs. I think you spread yourself too thin David. I know you are on big bucks now but you must do some genuine research. Its not all about being… Read more »
Hi Barry, Maybe you didn’t realise that the line at the top of the piece “As this column is based on the most rigorous and up-to-date economic measurement techniques” was meant to be a bit of a piss take at myself. Of course these ideas are simply constructs (in a 1000 word article) aimed at shedding light on what is going on in the society not as academic paper for the Econometric Society! Equally, the piece made the point that this was not a “rant against the public sector” however, the two fastest growing employers in the State in the… Read more »
David is right but he forget to mention that people working for the Govt earn 50% more than staff in the private sector.France has a higher proportion of total employent acccounted for by the Govt but earn 10% less than their private secor colleagues.Staff in the Irish health service are the highest paid in the world and make on average 70k per annum!.A cop in New york starts on 32,000($) p.a..Ireland is one of the few places on the planet that does not have to import teachers, the starting salary of $55,000 p.a explains why.Cest la vie.
David is right but he forget to mention that people working for the Govt earn 50% more than staff in the private sector.France has a higher proportion of total employent acccounted for by the Govt but earn 10% less than their private secor colleagues.Staff in the Irish health service are the highest paid in the world and make on average 70k per annum!.A cop in New york starts on 32,000($) p.a..Ireland is one of the few places on the planet that does not have to import teachers, the starting salary of $55,000 p.a explains why.Cest la vie.
“If we want a lean and more efficient public sector”, would we pick the 9 person taskforce that has now been appointed? The only possible merit is the group size and perhaps, the timescale. Of the 9 people, 5 are currently senior civil servants, 1 (an “academic”) is a former Secretary of a Government Department and 3 are currently in the private sector. I have not checked out the CVs. But I would not be surprised to find that of the senior civil servants, most have Dept. of Finance backgrounds. This certainly lacks balance and experience, whatever about the intelligence… Read more »
“We dont have a huge public sector compared to other OECD nations” We have been taking research from the likes of the OECD at face value and not interpreting relativities… We may have a low public sector spend as a % of GDP (‘uniquely’ inflated by transfer pricing multinational exports and private sector and personal debt fuelled spend). I hope this is not interpreted by ‘decision makers’ that we should spend more in the public sector as a % GDP like Sweden and Finland who have significant indigenous industry and companies such as Ericson and Nokia. If we were to… Read more »
One of the problems with OECD figures on public spending (I’ve cheated, I’ve looked at their site) is what, exactly, constitutes public spending: Do you include local government spending? How about things like telecoms? Pensions? Postal services? Care of the elderly? In some countries things are done through insurance & savings, while others go the general taxation route i.e. public spending; Railways? How do you account or the sale and lease back deals that some governments love so dearly? Using job ads is a pretty well established approach, it’s certainly used by financial analysts trying to see through the fog… Read more »
The Health bureaucracy and the Civil Service are un-reformable. No political party would have the balls to seriously attempt it. The power of the unions is absolute. Political suicide is not a game that any of the politians will play. Ronald Reagan sacked the air traffic controllers en masse because he had the military to keep the service going.(The CIE train drivers merit the same fate otherwise the blackmail of public services will continue.) Margareth Thatcher once defeated the miners because she had nuclear power to maintain service. The ESB unions rule absolute. The CIE unions rule absolute.we dont have… Read more »
Last time I checked we were a small country with a low population density and most services centralised around one large urban area. I wish this wasn’t the case but as it stands our public service needs are not directly comparable with a large country like France with much greater population distribution, industry and infrastructure. Also our infrastructure, such as it is, was not developed by years as a colonial power. I don’t want to oversimplify things but it would seem that we’ve been operating as a country with abundant national resources and global industries which would prop it up… Read more »
Shane,
I think if you check more train line was installed and operated by
the Brits in Ireland than we in fact did. There would have been more
track operated in Ireland in 1908 than 2008. The people of Mayo, Galway
Sligo, Limerick are still waiting for the track there to be opened. It won’t
happen now as there is no money in the kitty. The biggest innovation
in ireland, well one of them was the Luas line in Dundrum, yet this was in
reality the re-opening of the Harcourt Street line closed in the fifties!
David, your article has a kind of “John the Baptist” ring to it.
It may be spot on, but thank God the Fianna Fail high priest-politicians, dont have the power to behead you.!!
The end is nigh.(they will probably still be re-elected.Look at President Mugabe.enough jobs for the boys-enough votes for the party!)
Rob: We have a similar situation in Waterford where there’s talk of a railway lie running from Waterford to Tramore (population nearly 10,000). I’m not sure it’s serious, just discussions about light rail as a way to ease traffic congestion. There was a line in place for around a hundred years, originally operating as a commercial rail system and paid for by Waterford business people (see http://en.wikipedia.org/wiki/Waterford_and_Tramore_Railway). It’s arguable that the richest were merchants and their wealth came from the colonial power that was the British Empire. Closing it was another CIE master stroke. Without wanting to sound overly paranoid,… Read more »
You don’t point out that a lot of these “jobs” are only open to existing civil servants or very specialised roles with particular qualifications. I do agree, however, that a lot of private sector jobs don’t get advertised, or, as was the case a few years ago when companies dealt with multiple agencies, the same job can be advertised dozens of times by different employment agencies as well as the employer themselves!