Employment Trends in the Greek Public Sector

29 March 2015 | Philip Ammerman

Between 2009 and 2013, employment in the Greek public sector fell from 942,625 people to 667,410, a reduction of 29.2%. Few European governments have reduced total headcount by such a magnitude. As has been recently admitted, however, the majority in reductions are due to staff entering retirement or early retirement, and the reduction of temporary staff contracts.

The Greek Ministry of Interior implemented an inventory of public sector employment in the central government and wider public sector. This is based on payroll statistics, with the results reported as of 31 December of each calendar year between 2009 and 2013. Data for 2014 are available up until October 2014, but are in a different format.

According to the Hellenic Ministry of Administrative Reform, overall employment has fallen by 29.2%, from 942,625 staff on 31 December 2009 to 667,410 staff on 31 December 2013.

Table 1: Greek Public Sector Employment, 2009-2013

Staff on regular contracts fell by 13.5%. Temporary staff showed a decrease of 92%: from 148,634 in 2009 to 12,196 in 2013. The growth in temporary staff occurred at a significant rate under the Karamanlis government, and is significant because the recruitment of temporary staff is typically at the discretion of department heads and occurs outside the normal staff recruitment process. Other public sector employment, typically among municipalities and public sector organisations, fell by 48%.

According to statements made by the new Deputy Minister of Interior in January, the main decrease in public sector employment outside of ending temporary staff contracts occurred via early retirement.

In October 2014, central government staff on regular contracts had fallen to 580,000. No information is available after that time.

Public sector employment also exists on projects funded by European Union funds, offsets and other forms of employment. According to the Ministry of Interior, these increased from 83,809 positions in 2009 to 95,685 positions in 2013. The increase in central government employment under this category is illustrative.

Table 2: Public Sector Employees Financed by Projects, Grants and Other Income

As seen here, central government employment has increased by 466% between 2009 and 2013. It is impossible to ascertain why, but part of this employment increase is almost certainly a transfer of staff from the regular payroll to the project-funded payroll.

In October 2014, the Ministry of National Education and Religion is the largest employer in the Greek government, followed by the Ministry of National Defence and Local Administration entities.

Table 3: Greek Government Employment by Ministry, October 2014

This data is presented here as a means of reflection on the following points:

There are few European governments that have reduced their overall permanent staff by 29% in 5 years. This is a reduction of significant magnitude.
Unfortunately, in most cases this headcount reduction has been done at the initiative of the staff themselves (who have chosen early retirement), not as part of a wider strategic restructuring of specific government ministries or agencies.
Although the central government’s temporary staff were reduced from 148,634 to 12,196 (a reduction of 136,438), the staff employed on central government project contracts increased from 7,894 to 44,659. It is highly likely that a lateral staff transfer occurred for some individuals.
Neither the Troika nor the Greek government/s have questioned or taken measures to redress the overall impact of a largely ungoverned reduction programme on the quality of public services offered. At least not publically.
There have been very few effective e-government initiatives implemented over the past 5 years which could have alleviated or streamlined government operations and the impact of the staff reduction.
Transferring staff from the payroll account to the state pension fund account is hardly a full saving. Although pensions are lower than salaries, every retiring staff member receives lump-sum bonuses or supplemental pensions installments which raise the baseline pension number. As a result, the “saving” in wage costs will not be as high as expected, particularly since many of the public sector staff retiring were below 60 years of age.

Total Greek employment has now reached approximately 3.5 million workers employed (across all sectors) out of a population of 10.7 million. This is one of the lowest employment rates in the European Union. Absent measures to promote employment through “real economy” projects, and in particular foreign and domestic investment, no amount of “restructuring” will enable Greece to survive as an economic entity.

Philip Ammerman