What do Singaporeans mean by the private sector being better

My colleague, Kway Teow Man wrote an article to explain the rationale behind the Civil Service Appraisal System. The article prodded me to think about why a lot of people out there are always making this assertion that “the private sector is better than the civil service”.

On a skeptical note, a few questions emerge, “What do you mean by the private sector? Are you referring to just the multi-national companies (MNCs) or do you include small medium enterprises (SMEs)? What do you mean by better?” I doubt that most people are referring to the SMEs when they mention the private sector. In fact, the local SMEs are facing the same kind of problem as the civil service in attracting and retaining talent even though their presence are equally important to the growth of our economy. It is likely that they are talking about the MNCs where their destinations are the investment banks (Goldman Sachs), the management consultancies (McKinsey), the law firms (Clifford Chance), the high technology companies (Microsoft) and the traditional industries (Toyota).

Now we establish that the private sector which people are talking about are the MNCs. The next question is to ask what people do mean by better. In my humble opinion, it is virtually impossible for our Civil Service in Singapore to completely emulate the private sector. One obvious difference is the company culture. For example, Google has an interesting policy that their staff can spend 20% of their working time to work on a problem which they are interested. To compare apples to apples, we can ask whether such a policy can be implemented in our public research institutes (for example, Defence Science Organization). From a friend’s anecdote, HSBC has done so well in the previous year that the lowest level of their staff (including janitors) are also invited to the company dinner and dance in one of our five star hotels.

The next obvious difference is growth opportunity. It is possible for someone to climb from the low ranks to the highest rank of the company. Some CEOs started off from ground zero in sales or marketing and they moved up the corporate ladder quickly by the sheer volumes they produce. Can we demand the same with the civil servants? Let’s try asking EDB to implement a policy where their officers are graded by the number of foreign investments they bring in. While we acknowledge the point that the CEP system originated from the private sector, the implementation is extremely difficult in the Civil Service.

That comes to the final difference is what I call the risk factor. A study done by Booz Allen Hamilton few years back that the average tenure of a top CEO is about 1.5 years. If we look around at our top civil servants, their average tenure in a top position is about 3 years and they get rotated to other ministries, statutory boards or government linked companies. The volatility for a job in the private sector is extremely high as compared to the civil service.

That comes to my final point. Other than pay, other factors come in play to support the image that the private sector is better. It comes to this final point. Despite the risk where your job survival is dependent on purely performance and network, it nevertheless promote a more meritocratic image than the civil service where the scholars are destined for high places if they don’t screw up. That I believe, is really why most people think that it is better to work in the private sector than in civil service.