STATEMENT BY PREMIER AND MINISTER OF FINANCE HONOURABLE ANDREW A. FAHIE
DURING THE EIGHT SITTING OF THE THIRD SESSION OF THE FOURTH HOUSE OF ASSEMBLY
THURSDAY, 29TH APRIL, 2021
COMPENSATION REVIEW FOR PUBLIC SERVICE / HOUSE OF ASSEMBLY MEMBERS
Mister Speaker, I wish to speak about the decision by this Government to start the process of reviewing the salaries of public officers.
For a long time, I have been stating that we must pay persons their true worth, while reorganising the Public Service to meet the demands of the current services provided and that are in demand.
Hence, this is why your Government approved funding to carry out this exercise which can take between 6 months to a year to complete.
This exercise will be piloted by the Deputy Governor’s Office seeing that certain aspects of the Public Services are the direct responsibility of the Governor assisted by the Deputy Governor in line with section 38 and 60 of the Virgin Islands Constitution Order, 2007.
Let me provide some context to this.
At the meeting held 19th July, 2000, the Executive Council by way of Memo No. 37 of 2000 approved a comprehensive Public Service Job Evaluation Exercise and Salaries Review of all jobs within the Establishment, including Police and Teachers.
The company engaged for this project was KPMG (Jamaica). The company was scheduled to commence the exercise in 2001, but began in early 2002.
The Job Evaluation and Salaries Project report was later expanded to include the scale alignment of Non-Established workers with Established Officers.
Recommendations were approved by the then Executive Council in September 2005.
The service-wide results of the Job Evaluation and Salaries Project resulted in the following:
- an interim salary adjustment increase of 7.5 percent across the board (established and non-established roles) retroactive to 1st January, 2003 which was communicated by Human Resources Circular No. 13 of 2003;
- revised Salary Structure Scales from thirty-one (31) to twenty-one (21) grades with effect on 1st January, 2006;
- annual increments for all posts was increased from 2.5 percent to 3.0 percent annually;
- an additional across the board salary increase of three (3) percent was applied to grades 1-4 and grades 16-21, and six (6) percent increase was applied to grades 5 -15;
- the application of an additional one (1) to two (2) increments for long-serving officers of five (5) to ten (10) years respectively; and
- transfer of eligible non-established officers to establishment after ten (10) years of service.
Since 2002, there has not been a comprehensive salary review, neither has there been a service-wide increase to the salary scale, notwithstanding previous recommendations and requests for such reviews to be undertaken.
From 2002 to 2019, some 17 years later, the workforce of the Public Service has experienced colossal shifts in industries, the complexity of work, internal systems, globalisation, technological evolution and the reform of legislative, financial and good governance frameworks, to name a few.
The populace of the workforce has changed as the retirement numbers increase each fiscal year.
The average rate of retirement is at 2.5 percent of the workforce, which averages to 67 employees annually.
As this occurs, the workforce is comprised with younger skilled professionals who are more likely to exit the organisation when the pay factor is not competitive.
There is a growing trend of requests for in-grade salary adjustments, secondments and leave of absence for the purpose of achieving upward mobility or lateral appointment in higher paying agencies.
Only 17 percent of respondents to the 2018 Engagement Survey expressed satisfaction with their pay and benefits in the Public Service, with the highest areas of negative scoring being from 62 percent of officers who expressed that they do not consider their salaries to be reasonable or reflective of their performance.
Although the overall response to the survey was only 28 percent of the Public Service, there is significance in the statistical data and how it impacts employee morale and engagement in the Public Service. These elements are further compounded by the rise in the cost of living especially following the 2017 natural disasters (i.e. flood and hurricanes).
There are recommended complementary activities that an organisation should have in place when considering undertaking a compensation review.
Mister Speaker, I am going to list the measures that gave this Government a clear indication of the Public Service of the Virgin Islands’ readiness for a compensation review:
One, within the Public Service, salary review period should be done every three (3) to five (5) years or eighteen (18) to twenty-four (24) months. Last salary review conducted in 2002. Industry standard has not been achieved.
Two, the Performance Management Programme has been established and in use within the Public Service. The Performance Management provides for organisational and budgetary alignment. Programme will be modified with greater focus on results and increasing management accountability and compliance.
Three, Reform Programmes - support organisational change, efficiency and modernisation. Public Service Transformation agenda was approved by Cabinet. The Cabinet is now awaiting the transformation plans to be presented to Cabinet.
Four, Job Catalogue and Descriptions are supporting activities for salary revision. Every position in the Public Service is registered in the budget and categorised. Each officer has a Role Profile and where applicable roles are modified annually during the budgetary process.
And five, the work data is available. The JD Edwards system has the essential workforce data (populace, gender, and position classification etc.)
Mister Speaker, the Minister of Finance brought this paper to Cabinet where it was approved for the process to begin to conduct a service-wide compensation review.
Already, the Deputy Governor has consulted with the Senior Management Team who concurs that the Public Service is long overdue for a salary revision exercise.
There are no adverse financial implications being incurred when Members are being asked to consider and decide the need for a service-wide review exercise of the current Public Service compensation packages.
However, there will be a cost to the public purse during the review and implementation phases, but this is an opportunity to be proactive and improve the human resource pool proficiency and service delivery to the internal and external clients/customers with the expectations to reduce waste and expenditure, and increase revenues.
Of course, the assessment must include the customer/client needs, all job profiles and the compensation, current holder abilities and experiences, to arrive at a sustainable compensation package that is commensurate with market conditions over the period and up to the next review.
Minister Speaker, the review must accommodate the changes (of remote working, flexible schedules, greater monitoring of performance, reduced usage of certain physical resources, and more technological usage) that the COVID-19 pandemic protocols (of social distancing, sanitisation and mask wearing) have brought to the forefront inclusive of costs.
The latter, the protocols, have tested the resolve of the Public Service and have shown that more can be done to serve our clients/customers with less human resources due to re-tooling, training, and/or reassignments; and greater usage of technology.
I am pleased to say that the Attorney General’s Chambers has advised that no legal implications are foreseen at this time.
Mister Speaker, Public Officers are expected to become ever more agile and innovative in the delivery of services at a global standard, to ensure efficiency and effectiveness of public services.
The work of Public Officers will contribute to the Virgin Islands being a financially and economically sustainable Territory that is resilient and competitive. Therefore, it is of equal importance to consider the improvement of compensation in the public service to attract, retain and engage talented officers.
In considering the importance of our Public Service to the continued development of the Virgin Islands, as a Cabinet, that is the four Ministers and I voted that Cabinet agree on conducting a service-wide compensation review to advise on the most relatively competitive compensation for the Public Service, to address remuneration disparity to further support the retention, engagement and motivation of skilled and competent officers, to effectively deliver public services;
We decided that tenders be invited from local companies with expertise in conducting salary reviews to undertake the exercise and that the terms of reference include the following:
- assess as part of a global review the current role profiles in the context of organisational structures against industry/region classifications to advise on proposed regrading or alternate grading;
- recommend the total compensatory (salary and allowances) terms in review of industry benchmarks locally and regionally (public and private sectors)— for alignment of salaries assigned to roles with similar job weight and structures, especially addressing technical and highly competitive market roles (e.g. Digital, Legal, Financial);
- assess the equity of pay across like roles;
- advise on the maintenance of a reclassification evaluation process, inclusive of a pay structure and revised grade scale. This would take into account the total net remuneration comprehensively assessing the impact of taxation and other statutory deductions, and address anomalies where applicable;
- advise on a pay progression system and recommend an inflation target for personal emoluments;
- design methodology and a guide for scheduled interim committee reviews of selected post/industries to promote consistency, equity and careful scrutiny of proposals for salary increases; and
- report reflected differences in the terms and conditions of employment between the public and private sector and between related groups in the Service, taking account for job security and the overall value of benefits.
Mister Speaker, note we said: tenders from local companies with expertise.
I have all confidence in the people of the Virgin Islands and that I believe in their capacities and capabilities. I am pleased that our local companies will be given an opportunity to bid on this project.
This Government is committed to ensuring that our private sector organisation has access to jobs and to earn an income. One of the mantras is that the people of the BVI must benefit from the economic activity that takes place in the Virgin Islands.
This Government looks forward to the triple effect where people get to truly participate and benefit from the economic activity that is taking place on our shores especially in the New Regular of living and working in COVID-19 where we are using what we have in our hands to push our economy forward as we all work together to create jobs and benefit from domino opportunities.
A few persons have asked, “Why now?”
Why during this economic challenging period of COVID-19?
This salary review of the Public Service is long overdue.
The best time to move forward is now. As a people we have always used our challenges to propel us into our future.
I want to say here that this review is not about status quo. It is not about who is currently in a post. It is about us getting it right. Too often the compensation of persons seems to be dictated by who you are, who you know and who you are affiliated with versus your skills, experience and requirements of the post.
We have to treat our people fairly and pay them their worth. This exercise is now ongoing, in conjunction with the revision of only the retirement package of Elected Officials. Please note this is not about a salary increase for Elected Officials, it only addresses the retirement package, in conjunction why this exercise is taking place with our Public Service.
Hence, it’s fair to say the Public Service and Legislature of the Virgin Islands must be regularised, once and for all.
I am mindful that for decades previous administrations attempted to address these concerns, but out of fear of doing what is right they kicked the can down the road. Mister Speaker, the can is too flat and cannot be kicked down the road any further and longer.
Mister Speaker, the future is for the prepared and as we embark on the journey of transforming the Virgin Islands into a leading regional economy and as we march towards becoming more self-reliant, self-determined and less dependent on others, we must be prepared.