SRC Launches the Third Public Sector Remuneration Cycle

Lyn Mengich, Chairperson SRC

The Salaries and Remuneration Commission (SRC) has today launched the third public sector remuneration cycle for the financial year 2021/22 – 2024/25.

The new formula, which will be used beginning the next financial year, will be used to remunerate state and public workers for the next four years.
“The process to survey salaries and remunerations of public servants, has just begun and will run for the next 10 months, “said Lynn Mengich, chairperson SRC.

According to Mengich, the review of salaries will be determined by the evaluation of the work done by the officers.

“We might not be able to know how much anyone will be getting in terms of a pay-cut or a pay rise, until then,” she added.

The event comes, as the country continues to grapple with a hefty wage bill that takes a big chunk of the national budget.

Notably, SRC is mandated to set a four-year review cycle for remuneration and benefits in the public sector, based on the skills and competencies of the workers.

The first cycle ran for the financial year 2013/14 – 2017/18, the second was for the financial year 2017/18 – 2021/22, while the third, and current cycle, will run for the financial year 2021/22 – 2024/25.

According to the SRC boss, the remuneration cycle shall be anchored on the principles of pay determination as set out in Article 230(4) of the Constitution of Kenya, 2010, and the SRC Act, 2011.

These constitutional principles are; the need to ensure that total public sector compensation is fiscally sustainable, the need to ensure that the public service can attract and retain the skills required to execute their respective functions, the need to recognize performance and productivity, the need to ensure transparency and fairness, and equal pay to persons performing work of equal value.

The commission, says it addresses these principles, noting that the remuneration cycle shall be informed by job evaluation, salary survey, streamlining the management of allowances, and the public sector wage bill in general.

The SRC Act, 2011, mandates the Commission to establish mechanisms to ensure equal pay for work of equal value. The Commission uses job evaluation as the basis for determining the remuneration of public servants in an objective, transparent, and equitable manner.

Job evaluation seeks to achieve internal equity when it compares jobs within the same organization, and external equity when jobs are compared with those of other public sector organizations.

The results of job evaluation, therefore, determine the relative worth of jobs in the public sector and inform the assignment of rationalized and equitable job grading and pay structures.

Salary Survey Section 11(d) of the SRC Act, 2011, mandates the Commission to conduct comparative surveys on labor market trends in remuneration to determine the monetary worth of the jobs in the public sector.

“The Commission will conduct three distinct salary surveys namely; salary survey of all public sector institutions; salary survey to benchmark jobs in selected private sector institutions; and international survey of anchor State Offices’ jobs, ” said Mengich.

“The salary surveys will provide information on current compensation levels and trends, including policies and practices to inform salary structures that enable the public sector to attract and retain requisite skills for delivery of its mandates,” she explains.

SRC reports that, while the current public sector wage bill has shown a positive trend as a percentage of ordinary revenue and as a ratio to Gross Domestic Product (GDP), there is room for improvement.

According to SRC, the wage bill, as a percentage of revenue, dropped from 57.33 per cent in 2013/2014 to 48.1 per cent in 2018/19, while the percentage of the wage bill to GDP dropped from 10.43 per cent in 2013/2014 to 7.9 per cent in financial year 2018/2019.

The positive trend is large as a result of both revenue growth and initiatives by SRC, in collaboration with key stakeholders and players in government.

However, the current wage bill does not match the national economic and revenue growth patterns, thus putting pressure on development and investment share of the budget.

 Further, the wage bill, at 48.1 per cent of revenue, is above the Public Finance Management Act target of not more than 35 per cent of revenue, thus crowding out resources that could be used for development priorities and enhanced social services.