Chapter 10 Personnel

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Chapter 10 Personnel
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Personnel overview

• Personnel management is critical to improving
  service delivery at all levels of Government
• At provincial level
• Good progress in establishing a framework for
  personnel management
• Personnel costs are being managed
• At local government level
• Management framework still weak
• Personnel costs still crowding out spending on
  goods and services and capex

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Provincial personnel trends

• Real decline in personnel costs from 1996/97 to
  2001/02
• Decline in personnel numbers over the same period
• Moderate increase in unit labour costs over the
  period
• Moderate real growth in personnel spending going
  forward aimed at
• Increasing employment in health
• Provision for pay progression and
  performance-related pay

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Provincial personnel policy issues

• Poor provinces still spending a lot on surplus
  staff
• Resulting in lower capex and poor staffing in
  education and health
• Need to increase employment in health and welfare
  services
• Especially medical professionals, social workers
• Revised pay system required
• Need appropriate performance-related pay systems
• Need to decentralise personnel management lower
  down the chain
• Giving hospital managers real powers
• Increasing powers of school governing boards

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Municipal personnel trends

• Local government employs 210 000 people
• 50 are found in the 6 metropolitan councils
• 7 are employed by district councils
• 43 are employed by local municipalities
• 30 of staff are found in trading services such
  as electricity, water, sewerage and sanitation
  and refuse collection
• Remainder are employed in parks, culture and
  recreation, emergency services, transport,
  corporate services and planning
• Personnel costs rising as percentage of operating
  budgets
• Generally, municipalities have higher unit labour
  costs than provinces

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Trends in employment costs

• Personnel costs have risen significantly both in
  real terms and as a percentage of total spending
• Personnel costs are 30 of expenditure
• This percentage is higher if bulk purchases and
  intra-municipal transfers are excluded
• Two main factors driving personnel costs
• Amalgamation of smaller municipalities into
  larger ones and the resultant pressure to
  equalise salaries
• Generous leave pay-outs, retirement provisions
  and medical aid benefits - account for up to 40
  of personnel costs
• Pre-1994 agreements mainly responsible for
  extremely generous benefits
• Senior management costs in metros generally high

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Municipal personnel policy issues

• Rising personnel costs
• Costs of merging previously separate
  municipalities with different pay systems and
  scales
• High cost structure of employee benefits
• Employer contributions for medical aid and
  pension are high in relation to provinces,
  private sector
• Contingent liability with respect to accrued
  leave
• SALGA is proposing norms to bring benefits in
  line with national and provincial government

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Municipal personnel policy issues

• Need to increase skill level of staff in smaller
  municipalities
• Need to factor in personnel implications of
• Creating municipal entities
• Electricity distribution industry restructuring
• Water industry restructuring
• Changes in powers and functions of district and
  primary municipalities