Pointing 20,000 nearly retired civil servants toward the exit

(The Croatian version of this ran today in the Croatian daily, Jutarnji List.)

An Expat in Zagreb

By Roger Malone

My mother worked well into her 70s before illness handed her a pink slip. She was a middle manager at a large hotel in Texas, and every day she'd show up and keep her crew in line, much as she tried to keep her five children in line earlier in life. By the time she retired, I suspect she was more of an icon at the hotel than a top performer, but you can allow that in the private sector.

The public sector is much different, and here and now in Croatia the stakes are much higher.

As Croatia’s leaders work to find a path toward economic growth, about 20,000 civil servants across a wide spectrum of professions are clinging to their jobs beyond their eligible retirement age. That’s a little less than 10 percent of the state payroll. JutarnjiList calculated that urging these workers out of their jobs could save the government 400 million kuna a year, even if the state hired 10,000 younger workers to fill some of the positions.

I try to imagine myself as one of these civil servants. Although I’m sure there are exceptions, I’m guessing my children would have started their own lives already, my home is likely my own and I’m pretty set in my routine of family and friends. I’ve been at my job for decades, so there are few surprises or challenges there and little stress. I’ve also done my part—in some big or small way—to help build a new country.  Should I try to glide through my final few years in the workforce or take a pay cut to sit at home watching subtitled American sitcoms? No question: I’d stay at the job.

The calculation changes if the job is stressful or carries significant responsibilities. I’d be sorely tempted to pack up my desk, say goodbye to ungrateful citizens and spend more time fishing, especially if my ongoing expenses were manageable. (My mother would have made a different decision.)

In prosperous times, there would be no reason to question these individual decisions. But Croatia is far from prosperous at the moment. Losing 10 percent or even 5 percent of the public workforce through natural attrition would advance the government toward its stated goal of cutting civil service by 30 percent. Further, saving 400 million kuna would be a significant step toward cutting the deficit. Hiring some new workers to replace some of the retirees could put a dent in a youth unemployment rate that is higher than 50 percent, more than twice the overall rate. And then there are the benefits of bringing fresh blood to government service.  

Most of the public workers ripe for retirement are older than 60 years. In the late-1960s, when this cadre was wrapping up its formal education and joining the work force, Leonid Brezhnev was leading the Soviet Union, Josip Broz Tito was building the Non-Aligned Movement and Czechoslovakia had gambled and lost on the Prague Spring. The Beatles were at the top of their game, with John Lennon remarking infamously that they were more popular than Jesus. Touch-Tone telephones and 8-track tape players were among the hottest home gadgets, and the first handheld calculators, which could double as paperweights in a hurricane, were just being developed.

A lot of water has passed under the bridge since then. The Soviet Union, Yugoslavia, Czechoslovakia, the Beatles, Touch-Tone phones and 8-track tapes have all moved on. And it might be time for most of the 20,000 at the edge of retirement to move on as well. There are times when national interests should come before those the individual, and this might be one of those times in Croatia. It’s a hard story for the government to sell, especially to a generation that has gone through so much already.

Leaders should find ways to encourage and ease this transition, which could be very difficult for many. My mother worked into her 70s because she had been at one job or another since she was a teenager in Germany. She knew no other life and was lost when she finally had to put away working shoes. Often, less money is not the only obstacle to retirement; a loss of purpose can be just as difficult to endure.

One option could be programs like SCORE in the United States. Originally known as the Service Corps of Retired Executives, SCORE puts retired business people together with owners of small and mid-sized enterprises. Counseling and mentoring are provided free by these executive volunteers to help a new generation of business leaders build the economy. Since its inception in 1964, the program has expanded to include active executives who also volunteer their time.

Senior public servants have a wealth of knowledge and experience in a variety of fields that could be harnessed after retirement with a similar association. Some skills from the public sector like leadership, planning and organization would be extremely valuable if passed on to young entrepreneurs. Specialists, such as engineers and scientists, could guide young minds either in innovative private businesses, advanced research programs or their own positions in the relevant ministries. Some could even be helped to start their own small companies.

Outside business, similar associations of retired civil servants could also be imagined that would, for example, provide free tutoring for struggling pupils and students based on need or offer home visits to the infirm or others challenged by physical or mental illness. Paid or unpaid directorships at private companies could also be an option for some.

No one should be forced into retirement as long as performance isn’t an issue, but officials should seek ways to encourage these 20,000 to step down. Incentives to make the financial impact easier would be helpful, but the government isn’t in a strong position to sweeten the pot. Instead, it should create opportunities for them to continue their useful contributions to society. Senior civil servants would benefit from such programs, and, more importantly, Croatia would as well.

 [Follow Roger Malone on twitter at @ExpatinZagreb or at http://expatinzagreb.blogspot.com/]