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Rightsizing of the Public Administration in Macedonia  
-A reform postponed to an uncertain time- 
Analytica  | April 2009 www.analyticamk.org 
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Table of Contents 
Introduction………………………………………………………………….3 
 
Macedonia’s Case……………………………………………………………..3 
 
What gets in the way of  rightsizing in Macedonia’s PA? ……………………...6 
 
Risks of  rightsizing…………………………………………………………...6 
 
Benefits of  rightsizing………………………………………………………...7  
 
Model rightsizing strategy…………………………………………………….7 
 
Concluding Remarks………………………………………………………….8 
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Rightsizing of the Public Administration in Macedonia 
Introduction 
 
The rightsizing process has been initiated as a result of the inefficiency of pubic organizations in fulfilling their 
responsibilities effectively. Organizations across the world including public ones, perceive rightsizing as a catalyst 
of organizational reforms. In addition, due to government’s employments of large numbers of population, the 
human resources dimension of any public sector restructuring has become a very important national activity and 
a difficult and complex task to be fulfilled. This automatically derives the fact that rightsizing has become a major 
reform endeavor in all countries pretending to be in service of citizens.  
 
Organizational structure represents a vital component of the public administration system. Giving an exact defini-
tion related to organizational structure of the public administration, is not as simple as it looks, this mainly is be-
cause it does not include only the number of the people employed but also the number of positions and jobs. 
Starting from this point, the main idea for tackling rightsizing issues, has been to develop a study over the em-
ployed staff’s structure, jobs and positions and thus to define the points where layoff or recruitment actions 
should be taken.  
 
Many countries across the world, have applied serious efforts in removing the chaotic view that was present in 
their public sectors. Moreover, leaders or managers have been involved in this area and have reached to find out 
the factors that have made the public sector non-responsive to the needs of the clients. Doubtlessly, irrationalized 
organizational structure has been seen as one of the main factors that produce negative effects in the functioning 
of the public administration. In such irrationality conditions, there are areas where overstaffing occurs and in oth-
ers evident hiring is needed.  
 
Rightsizing mainly involves workforce reductions i.e. downsizing as well as elimination of functions, expenses 
reductions, and systems and policies redesigning (e.g., to reduce costs or reduce organizational size). In certain 
cases, it does not exclude upsizing (increasing the workforce). Rightsizing also distinguishes between necessary 
and unnecessary work and improves and prioritizes the most important work. It’s a kind of a complex attempt to 
redesign and restructure the overall public sector. 
 
Public sector rightsizing has its strong rationale. It consists mainly in the reduction or increase of its size (work-
force), thus intending to improve its efficiency rate, increase economic growth and cut fiscal deficits. It also con-
sists of efforts that lead to a market-oriented economy.  
 
Macedonia’s case 
 
The1999 Strategy for PAR in Macedonia, the key document which is the basis for the entire PAR process in Ma-
cedonia, does not provide a clear definition of what public administration is. It only distinguishes between the 
public administration and the civil service (state administration), the narrower concept with which public admini-
stration is often confused. Thus, functionally, all those who perform duties related to the executive, legislative and 
judiciary branches of government belong to the civil service, while those working in other public sectors, such as 
culture, health, education etc. are members of the public administration. 1 
 
Macedonia’s authorities are also faced with difficult tasks of reducing the size and improving the efficiency of its 
overstaffed public sector. Moreover, these attempts are considered part of a general endeavor to increase eco-
nomic growth and cut fiscal deficits. 
1 http://analyticamk.org/files/ReportNo5.pdf  retrieved on April 10, 2009.  
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The practice until now has shown that rightsizing in Macedonia, as elsewhere in the world, is a process that can 
not be dealt in a simple way. However, except declarative efforts to find proper solution that could forwardly 
move this process, until now any Macedonian government couldn’t demonstrate political will for such an initia-
tive. Thus, it can be easily concluded that regarding rightsizing, there aren’t any significant achievements re-
corded.   
Having in consideration rightsizing’s crucial importance in setting functional public administration system, the 
international factor in every occasion announces that Macedonia should immediately start the rightsizing process 
in the public administration. 2 
 
With this report Analytica aims at continuing the practice of giving recommendations and solutions for the prob-
lems perceived as critical factors in delaying crucial reforms in Macedonia’s PA toward effective, efficient and 
professional public administration system. This report will treat issues such as; achievements concerning rightsiz-
ing, the positive impact rightsizing would have in enabling functional and efficient system of the PA in Mace-
donia, definitions of the importance of rightsizing, risks of rightsizing, and recommendations for efficient right-
sizing of the PA system.  
 
Like in most developing countries, Macedonia’s public sector is also characterized with an inappropriately-staffed 
public sector (certain institutions face with staff sufficiency while some others with deficiency) causing irrational 
rate of public expenses; few staff with appropriate skills, training and competencies; and an inefficient public ser-
vice.   
  
Notably, one of the main obstacles for setting an efficient and fully functional public administration system in 
Macedonia is exactly the inappropriate staffing. This phenomenon includes staff deficiency in certain institutions. 
Our field research resulted in the following findings: the Veterinary Department under the Ministry of Agricul-
ture, Forestry and Water Economy, due to staff deficiency faces with enormous problems in covering the whole 
territory with veterinary inspections. The same problem in certain municipalities goes also for the State Labor In-
spection, namely, the number of inspectors in some regions of the country, must be significantly increased in or-
der to have full territory coverage of labor inspections).  
 
Widely known cases for staff sufficiency in Macedonia’s PA are the health and education sector. These two sec-
tors constitute a significant percentage of the overall number of currently employed people in the public sector. 
These examples approve the fact that except urgent and particular need for downsizing, Macedonia’s PA in ar-
eas like the ones mentioned above needs a more complex rightsizing process. Doubtlessly, it has a long and diffi-
cult way to go through until this process is initiated. 
 
At present there are approximately 110.000 employees in the public administration (excluding public enterprises 
employees), out of which around 42.699 work in the state administration; 33.645 work in education and science 
and 33.011 in the health system.3  The fact that the employment in the public sector represents about 12% of the 
active population which is similar to the other CEE countries and 6% of the budget goes for the public admini-
stration salaries is not that positive having in mind the present economic situation which does not allow this level 
of employment and public expenditure in the public sector.4 
 
In Slovenia, rightsizing is explicitly included in the program of the Ministry of Public Administration. It is stated 
that the ministry will prepare a strategy for reduction of the total number of employees for 1 % each year. The 
announced 1% annual reduction of the number of employees in the civil part of the public administration will be 
achieved through a normal outflow, meaning that after the withdrawal from the post, or after retirement of em-
ployees, there will be no new employments.5 
 
3 Labor Market - State Statistical Office, Skopje, No. 2.1.8.32, 2008.  
4  Budget of the Republic of Macedonia for 2009 – Ministry of Finances, 2008.  
5  http://www.mju.gov.si/en/frequently_asked_questions/  retrieved on March 29, 2009.  
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Unlike Slovenia, rightsizing process is only roughly integrated in Macedonia’s current Government’s Program. In 
fact, it has to do more with fiscal rightsizing rather than with workforce rightsizing. However, it is emphasized 
that Macedonia’s system fits with a small but efficient public administration system that is completely devoted to 
fulfilling citizens’ needs. Measures that are foreseen as adequate for implementing fiscal rightsizing are as follows: 
 
-Reduction of public administration expenses in the GDP for 2 %, until 2010.  
-Zero unproductive budgetary expenses (cars and furniture). The government will abstain from procuring 
new cars and furniture for offices. The saved amount will be oriented towards investments that are more 
productive.  
 -Preparation of strategic documents for efficient systematization of ministries. 
      -Realigned public expenditures with increased capital investments for larger support of overall investments.6 
 
The government of the period 2002 – 2006, seemed more determined to take over this process. At that time, the 
ex minister of finances Petar Goshev had clearly declared that “although the reform on public administration is 
one of the most difficult and sensitive issues all over the world, the government is strongly determined to take 
over this process”.7 
 
Yet there wasn’t any concrete strategy or plan prepared, neither deadlines set for starting the process.  
 
The arguments given above, accompanied by the lack of clear plan on how all this process could be initiated, are 
the reasons why the deadlines for starting the process have always been postponed to an uncertain time.    
 
What gets in the way of rightsizing in Macedonia’s PA? 
 
The revealing of the facts that the rightsizing process has many times been postponed to an uncertain time raises 
many questions that would give answers to the occurring situation. With no doubt, two main considerations have 
got in the way of rightsizing. Each consideration will be briefly elaborated below.  
 
 
- The politicization factor: Macedonia’s PA is counted as highly politicized administration. This was con-
cluded in Analytica’s previous report on “Lessons Learned on Effective PA in Macedonia”.8 Politiciza-
tion’s aspect consists in the massive politically based employment in the PA, thus completely undermining 
the principle of rationalized and merit-based employment. This politically motivated hiring has one main 
intention: political parties aim at attracting as much as possible voters considering employment in PA as 
ideal instrument for achieving this goal.  
      In such circumstances where upsizing occurs, it is illogical to think that there might    remain room for 
rightsizing debates.  
 
- The socio-economic factor: Given the current negative economic indicators like: high unemployment rate, 
low rate of new foreign investments and low social welfare standards, it becomes very clear that every 
Government percepts employments in PA as the easiest and only way to reduce or neutralize the negative 
effects that arise from this awkward economic situation and that directly affect citizens’ living standards. 
Correspondingly, Macedonia’s citizens also view the PA as a unique and highly-desirable opportunity for 
employment. This correspondence between citizens and government hinders completely all modest right-
sizing efforts or ideas. 
 
6 Macedonia’s Government program for the period 2006 – 2010, Skopje, 2006.  
7  http://www.kapital.com.mk/DesktopDefault.aspx?tabindex=0&tabid=65&EditionID=330&ArticleID=5649.  retrieved on 
April 20, 2009.  
8  http://analyticamk.org/files/ReportNo19.pdf  retrieved on April 15, 2009.  
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Risks of  rightsizing 
 
It is clearly out of the question that rightsizing involves many risks towards PA system in Macedonia. This be-
comes even more evident when taking into consideration the status of the Human Resources Departments in the 
PA in Macedonia, namely, most of them are not consolidated yet, while in certain institutions they seem to be still 
inexistent.9 Having this in regard, certainly there wouldn’t be an objective evaluation of the employees in the areas 
like: knowledge, experience, skills, abilities, behaviors and characteristics. Yet, it might cause determination of un-
realistic needs for institutions, namely, proposing upsizing instead of downsizing or letting go skillful and experi-
enced employees, on the other hand, keeping indolent ones.  
 
In order to prevent such risks, there should be an urgent and imperative introduction and consolidation of the 
HR Departments in the overall PA, this due to its vital role in defining organizations’ needs in employees’ struc-
ture’s aspect.             
 
Benefits of  rightsizing             
 
Rightsizing produces significant positive impacts in the functioning of the PA. It is considered a disciplined proc-
ess that will improve an organization's efficiency and productivity, which among this includes: reduced cost of 
operations because the lesser the numbers, the less will be the amount of resources used for performing the same 
tasks and duties; improvement of services delivered to the citizens; more pleasant working environment for em-
ployees i.e. improved communications at all levels, strictly defined jobs and responsibilities, less chance of con-
flicts and ego issues since the small size will prevent the formation of sub-groups within organizations.  
 
Model rightsizing strategy 
 
Rightsizing strategy has always been the missing element in the overall modest efforts for PA rightsizing in Mace-
donia. This fact implies an urgent preparation of a model strategy that would be feasible and sustainable for Ma-
cedonia’s system. 
 
Many countries have set best practices for successful dealing with rightsizing process due to their consistent and 
country-specific strategies. This implicates that Macedonia can count on such model practices when getting ready 
to pursue with this process. 
 
According to Analytica, a model rightsizing process for Macedonia would include these strategies: 
 
-Workforce reductions strategy is primarily focused on reducing headcount and usually implemented in a top-
down way. Most preferred practices for implementing this strategy are: transfers and outplacement, buy-out pack-
ages, not filling vacant positions, offering incentives for early retirement and reductions by force (layoffs and fir-
ings) as a more extreme practice.  
 
All these measures are partly or fully adoptable in Macedonia’s case. Offering incentives for early retirement and 
not filling vacant positions are in particular the most suitable practices for Macedonia, mainly because of the cur-
rent large number of PA employees that are on eve of retirement.10 
 
9 The efforts to find adequate HR representatives in Ministries for interviews, led to the conclusion that although formally in-
cluded in institutions’ organigrams, HR departments are either inexistent or still in the introduction process.  
10  http://ads.gov.mk/WBStorage/Files/GI_RDS_2008.pdf  retrieved on April 13, 2009. 
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-Work redesign strategy focuses on reducing work instead of reducing headcounts. It includes: elimination of 
functions and redundant departments, redesigning of tasks, merging units or departments etc.  
 
This strategy is also feasible in Macedonia, because evidently, for Macedonia’s standards the number of ministries, 
functions, sectors or departments is still very high. While Slovenia has a total number of 15 Ministries, the num-
ber of ministries in Macedonia goes up to 18 (3 of which without portfolio).  
 
In this area, rightsizing can be implemented either by cutting the 3 functions of Ministers without portfolio or by 
merging ministries that execute similar functions (ex. Ministry of finance with the ministry of economy). A room 
for rightsizing exists also in cutting the 3 positions of Deputy Prime Minister, perceived as serious burdens for 
the state budget.      
 
-Systematic strategy differs completely from the previous mentioned strategies. It is perceived as a subjective 
method for effecting employees’ culture, attitudes and values instead of concentrating strictly on work or work-
force reduction. Additionally, this strategy is not considered only as a program or target to be achieved, in fact, it 
has to do with something more important i.e. permanent process that involves continuous improvement.  
 
Among other issues, this strategy tackles the efficiency aspect of the PA as well, mainly by charging all employees 
with accountability for working rationally and for finding improvements.  
 
This kind of strategy in Macedonia’s PA can also play a serious role in granting the employees with the missing 
attitudes and culture in working and performing tasks in an effective and rational manner.  
 
Concluding Remarks 
 
The process of PA rightsizing doubtlessly needs large commitment and serious efforts to be applied by all in-
volved political factors. The occurring paradox of declaring the need for PA rightsizing by all involved factors 
and on the other hand massive hiring of employees is a serious issue that clearly reflects the nonexistence of the 
political will for introducing rightsizing process.  
 
Having in consideration the large and serious commitment this process asks for, as well its complexity, rightsizing 
operations in Macedonia should therefore be integrated in a concise and specifically prepared rightsizing strategy, 
thus making it part of a broader effort for reforming and modernizing the public sector.  
 
However, it is evident that although painful and hard to be achieved, Macedonia’s PA must undergo rightsizing as 
soon as possible in order to approximate its PA with the following EU standards: low public expenditures, appro-
priately-staffed, citizens-oriented and depoliticized public sector.   
 



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