Pay Hike: College graduates find civil service attractive again but private sector frets about retaining employees

The 50% hike for public servants for this pay revision is meant to retain civil servants inside the country.

However, there are concerns from the private sector about retaining their staff and increases in rent and prices in the market.

Many employees from private sector agree that the 50% pay hike is a very good prospect, with many wanting to try out the civil service exam this year especially with no limit to the number of attempts.

Namgay, an employee in the private sector said that the 50% hike is a pull factor for him. “Before, we never had much difference in the pay between private sector and civil service, and private sector was more flexible for us. That is why, my friends and I did not opt for civil service. Now, with the pay hike, it has drastically increased the gap, and I’m thinking to opt for civil service this year.”

Similar sentiments were shared by many others, with a few graduates wanting to go to Australia after a few years also thinking of forgoing this option.

The pay hike has become quite attractive to people, as graduates are now going to opt for civil service which will impact the private sector.

Different sentiments are shared by those college students who will be graduating this July. Dawa, a student from Sherubtse who will be graduating this July shares excitement about the civil service exam. “Due to the newly pay revision, many Sherubtse students are going to opt for the civil service exam. Unlike past years, everyone sees a new scope and career in Bhutan. They now see abroad as a second option and even some youth opting for it are for reasons for experiencing different lifestyle while others are going because they have family settled outside.”

With the pay revision, it seems like the retention will be possible with many fresh graduates opting for the civil service.

The Chair of the Hotel and Restaurant Association of Bhutan Jigme Tshering shared that it will be hard to retain employees in the private sector. “I am happy for those who are going to get an increase in their salary package. While this might put some pressure on the private sector to retain human resources, I believe it is also private sector’s responsibility to do what is necessary to retain talent in their organization.”

“The issues in the hospitality sector in terms of retaining or hiring talent is because of Bhutanese taking their talent abroad,” he added.

With the downtrodden economy and the private sector not doing well, it might feel like the pay revision is a welcomed change, however, it is not.

The Chair of Karaoke Association of Bhutan Gyem Dorji said, their main issue is lack of customers. “I don’t think there will be much changes due to the pay revision. If the number of customers increases, it will be good but our main concern right now is the hike in the prices in the market. As pay revision hikes the salary, and there are chances that the market will hike their prices also. As we run the business, we also depend on sales of alcohol to get by, but if the market price increases, we will also have to increase our prices which might impact the already low number of customers.”

The Chair of the Business Development Committee (BDC) of Bhutan Chamber of Commerce and Industry (BCCI), Kesang shares that the impact felt by the private sector will be huge. “Now, what will happen is that people will try to compete. When private sector was doing well, providing good incentives, people wanted to join the private sector whereas, now the story will be different. As civil servants get good increments and salary, those working in the private sector will expect the same. However, none of the private sector is doing well right now, so I don’t think we are in the position to provide increments at the moment, unless there is some mechanism to uplift the private sector.”

He also added that staff retention will be hard as people will always look for greener pasture and private sector will crumble unless there is some intervention. “Private sector is the backbone of the economy of the country, and until the government allows private sector with access to loans and regulation, it will make things worse. Ease of doing business should be there, and there should be financial support to ease business, otherwise the industry will crumble.”

Similar to the private sector officials’ opinions, employees of the private sector are also worried about the pay revision which might bring in eventual increases in the price.

Dema, working for the private sector shares that gap between rich and poor will widen. “Although there is a circular warning about rental increases, it is bound to happen, even the price of essentials will go up with the pay revision. Although there are chances of getting the increments, it won’t be like that of civil service. Eventually it will be the private sector employees who will suffer and crumble. The gap between rich and poor will widen.”

BCCI’s president, Mr. Tandy Wangchuk said “For the civil service, it has worked out well. For the last two years, private sector has not been doing well with the downtrodden economy. We are planning to submit a proposal to the government on incentives and tax exemptions. We will work on salary revisions for the employees as we will have a hard time retaining them otherwise, provided that the government will give us incentives and tax exemptions.” 

He said though private sector may not be able to give an extreme hike but they will revise the pay to retain staff.

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