Our Ref. : CSBCR/PG/4-085-001/37
31 October 2014
2013 Pay Level Survey
You may have learnt that the Standing Commission on Civil Service Salaries and Conditions of Service (Standing Commission) submitted its report on the 2013 Pay Level Survey (PLS) Report (the Report) to the Chief Executive (CE) yesterday. I understand that the 2013 PLS findings and the recommendations of the Standing Commission on how the survey findings should be applied to the civil service are topics of concerns of many civil servants, and am therefore writing to provide you with information about the Report and the way forward.
The Government’s civil service pay policy is to offer sufficient remuneration to attract, retain and motivate staff of suitable calibre to provide the public with an effective and efficient service; and such remuneration is to be regarded as fair by both civil servants and the public we serve by maintaining broad comparability between civil service and private sector pay. In order to implement this policy, the Government has introduced the Improved Civil Service Pay Adjustment Mechanism (the Mechanism). Under the Mechanism, there are three regular pay surveys, namely the annual Pay Trend Survey which aims to ascertain the year-on-year pay adjustment in the private sector; the three-yearly Starting Salaries Survey which aims to compare the starting salaries of civil service civilian grades with the entry pay of jobs in the private sector requiring similar qualifications; and the six-yearly PLS which aims to ascertain whether civil service pay and private sector pay are broadly comparable.
The 2013 PLS is the second PLS conducted under the Mechanism. In order to enhance the credibility of the PLS and having regard to the Standing Commission’s rich experience in conducting surveys on pay-related matters, its profound knowledge about the civil service as well as its impartiality and professionalism, with the support of the staff sides of the four central consultative councils and the four major service-wide staff unions, we have invited the Standing Commission to conduct the 2013 PLS and to advise the Administration on how the survey findings should be applied to the non-directorate civilian grades of the civil service in December 2011. In inviting the Standing Commission to conduct the 2013 PLS, we have informed it of the general framework for the conduct of PLS and the general principles for applying PLS findings to non-directorate civilian grades of the civil service which were drawn up after the completion of the first PLS conducted under the Mechanism in 2006. This notwithstanding, we have also made it clear that, in order not to undermine the independence of the Standing Commission, it may modify the general framework and the general application principles as it sees fit. In addition, we have also invited the Standing Commission to closely engage and consult staff representatives during the preparation and throughout the conduct of the PLS. The Standing Commission replied the Administration that it agreed to conduct the 2013 PLS in January 2012.
Methodology of the 2013 PLS
In conducting the 2013 PLS, the Standing Commission has closely engaged staff representatives (Note) at various key stages of the survey. Having consulted staff representatives, the Standing Commission decided that the methodology of the 2013 PLS should be largely the same as that of the 2006 PLS and the survey reference date should be 1 October 2013. Simply put, under the methodology of the 2013 PLS –
(a) “civil service benchmark jobs” which are representative and have reasonable private sector matches are identified for inclusion in the survey. They are categorised into five job levels (JLs) based on their pay scales (JL 1 being the lowest and JL 5 being the highest) and five job families based on their job natures;
(b) an intensive job inspection process which serves to ascertain details of the job characteristics of civil service benchmark jobs is carried out to facilitate identification of private sector job matches;
(c) based on the findings of the job inspection process, private sector jobs which are comparable with the civil service benchmark jobs in terms of job content, work nature, level of responsibility and typical requirements on qualification and experience are identified;
(d) the pay information of each of the matched private sector jobs are collected. The information are aggregated and consolidated by JLs, such that each JL will have a “private sector pay indicator”; and
(e) a civil service pay indicator is computed for each JL for comparison with the private sector pay indicator of the same JL.
Concerning the pay comparison, it should be noted that –
(a) the total cash compensation (but not only basic salary) of the civil service and private sector benchmark jobs are taken as the basis of comparison. The private sector pay indicator for each JL includes base salary, variable pay and fringe benefits paid in cash. Similarly, the civil service pay indicators also include both salary (notional mid-point salary of the JL as at the reference date (1 October 2013)) and the actual average expenditure on fringe benefits paid in cash (i.e. housing, education and passage allowances) over the 12 months prior to 1 October 2013; and
(b) in accordance with the general objective that the Government should be a good employer and, hence, civil service pay should be measured against that of the better paying private sector jobs, the upper quartile (P75) level of private sector pay indicators was used for the comparison with the civil service pay indicators.
More details about the methodology of the 2013 PLS, the selection of the civil service benchmark jobs and the private sector benchmark jobs as well as the job matching and collection of pay information can be found in Chapters 2 to 5 of the Report at Annex to this letter.
Findings and recommendations of the 2013 PLS
The Standing Commission has completed the 2013 PLS and submitted the Report at Annex to the CE yesterday. The Report is also available at the homepage of the Joint Secretariat for the Advisory Bodies on Civil Service and Judicial Salaries and Conditions of Service (http://www.jsscs.gov.hk). In gist, the 2013 PLS has successfully collected pay data from 128 private sector organisations and matched private sector counterparts for 162 civil service benchmark jobs. The survey finds that the pay level of civil servants in all but one JL (JL 5) remained broadly comparable with the upper third quartile (i.e. P75) level of private sector pay for jobs with comparable nature and similar level of responsibilities on the survey reference date (i.e. 1 October 2013). The pay for civil servants in JL 5, on the other hand, is found to be around 8% lower than the P75 level of private sector pay. Findings of the 2013 PLS are summarised in the following table –
The Standing Commission recommends adopting a holistic approach on applications of survey findings to the non-directorate civilian civil servants, taking into account a host of factors as follows –
- “Broad comparability” with the private sector;
- nature of the PLS;
- attractiveness and stability of civil service pay;
- inherent differences between the civil service and private sector and their uniqueness;
- inherent discrepancies in statistical surveys and elements of chance; and
- overall interest.
Having considered all the above factors, the Standing Commission recommends no change to the salary of officers of JLs 1 to 4 and an upward adjustment of 3% to the salary of officers of JL 5 with effect from 1 October 2014 (i.e. the beginning of the month in which the Standing Commission submits the 2013 PLS report to the CE). You may wish to refer to Chapters 6 and 7 for details about the survey findings and the principles and considerations adopted by the Standing Commission.
The next step
As the PLS does not cover the disciplined services and directorate grades, we are seeking the advice of the Standing Committee on Disciplined Services Salaries and Conditions of Service (Standing Committee) and the Standing Committee on Directorate Salaries and Conditions of Service (Directorate Committee) on whether and how the 2013 PLS findings should be applied to the disciplined services and directorate grades respectively. We are also consulting the staff sides of the four central consultative councils and the four major-service wide staff unions on the findings and recommendations of the 2013 PLS in parallel. Upon receiving the views from the concerned civil service organisations and advice of the Standing Committee and the Directorate Committee, we will seek the CE-in-Council’s decision on how to take forward the 2013 PLS Report.
May I take this opportunity to thank colleagues who have participated in the 2013 PLS, in particular during the job inspection process. Your invaluable support has contributed tremendously to the smooth conduct of the 2013 PLS.
Note:The Standing Commission has engaged the staff sides of the four central consultative councils and the representatives of the four major service-wide staff unions throughout the 2013 PLS.
Secretary for the Civil Service