21 May 2010
Brazil has recently delivered remarkable performance in economic, social and financial terms. However, Brazil still needs to address longer-term challenges to continue to bolster the economy’s growth potential and close the gap in living standards in relation to the OECD area at a faster pace. One of those challenges is to make government operations more cost-effective.
Although the Brazilian public sector has played a crucial role in promoting stability and setting up the conditions for economic and social development, there is still ample scope for efficiency gains in government operations. Total government employment in Brazil (federal, state and municipality) is rather limited in terms of size, but is expanding and increasingly costly.
As in all OECD countries, in the Brazilian federal government the management of the public workforce is a reflection of national political and economic priorities, and administrative culture.
However, a series of disconnected, fragmented and incomplete reforms with little overall strategic direction have deterred the transition to a modern and dynamic HRM system. Hence, a priority for Brazil is to define an HRM strategy based on a long-term vision integrated into overall public management reforms.
Total public sector employment (including state-owned enterprises) increased by more than 15% between 2003 and 2007. Government employment has accelerated at the federal and municipal level by 10% between 2005 and 2008.
Brazil’s expenditure in government workforce represents 12% of GDP (excluding state-owned enterprises), just above the OECD average, and 28% of all compensation costs of employees in the Brazilian economy.
14% of GDP represents government resources that goes to private sector organizations that supply goods and services to the government and citizens, whereas the OECD average is less than 10% of GDP.
27% of GDP is dedicated to producing public services and goods that are government funded, placing Brazil fifth when compared to OECD member countries.
Key policy issues
Managing the federal government workforce effectively is crucial due to increasing demands for public services for the further development of the economy.
Workforce management needs to focus less on input and process controls but more on the strategic needs of government.
Decisions on staff compensation are not based on a strategic view of salaries and benefits.
The Brazilian job category system is rather rigid and requires high transaction costs, and still subject to corporatist pressures.
There is no a clear professional cadre of non-political managers that co-exists with politically appointed staff.
Strategic workforce planning should be a priority in reforming the HRM system Chapter 1.
Staff compensation should be rationalised Chapter 1.
Emphasis should be given to the management of competencies, particularly in recruitment Chapter 2.
Senior managers should be managed as a group with defined competences Chapter 3.
Capacities in HRM need to be strengthened through the establishment of a modern HRM accountability framework Chapter 4.
Core values need to evolve to underpin changes in staff management Chapter 4.
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