Implementation of the Public Sector Remuneration Reform

Remuneration is one of the most problematic aspects of civil service. Unsatisfactory salary levels and a non-transparent mechanism for incentive payments are among the key demotivating factors for civil servants, which not only reduce their interest in delivering results but also call into question the rationale for continuing a career in civil service.

According to data from the National Agency of Ukraine on Civil Service (NAUCS), the outdated and inefficient remuneration system had 11 components, with base salaries accounting for only 39–49% of total pay. About 50% of payments were variable: bonuses, allowances, and incentive payments, the amount of which was typically determined by managers, often based not on performance but on subjective judgement and personal attitudes towards employees.

NAUCS surveys conducted between 2019 and 2023 to determine the level of organisational culture in civil service recorded a low level of satisfaction among civil servants with their salaries (21–22%). Only about 60% of civil servants agreed that bonuses depend on the quality of their work, while roughly half believed that performance evaluation is based on Analytical paper based on the results of interviews with civil servants on organisational culture, 2019–2021, National Agency of Ukraine on Civil Service; and Analytical paper on the study of organisational culture, ‘Public Service in Ukraine: Your Point of View’, National Agency of Ukraine on Civil Service, 2023. actual results.

Internal tension was further exacerbated by the remuneration of civil servants in positions of Reform Support Specialists (RSS) According to the Concept for the Introduction of Positions for Reform Specialists, positions for reform specialists are civil service positions in categories ‘A’, ‘B’ and ‘C’ with job responsibilities that include preparing and implementing reforms in relevant areas (identifying problems, preparing proposals and action plans to address them, preparing draft legislation, organising and participating in the implementation of these action plans, evaluating the results of their implementation, performing other analytical functions), as well as performing the main tasks related to strategic planning of the activities of a state authority, ensuring the formation and/or implementation of state policy in the relevant areas, to which special conditions of remuneration apply within the general system of remuneration of civil servants. , whose special working conditions entitled them to a monthly allowance for high-priority tasks. 

Until 2022, this allowance was funded by donor programmes without burdening the government payroll budget. Starting from 1 January 2022, funds for RSS salaries were included in the payroll budgets, intensifying tension and ultimately leading to the liquidation of directorates in most ministries. 

Thus, a comprehensive strategic solution was needed to address the duality of remuneration (RSSs vs. other civil servants) and to introduce a transparent, easy-to-administer remuneration model that would ensure:

• a fair distribution of remuneration under the principle of ‘equal pay for equal work’ (both within a single government body and between other bodies for similar positions);
• the competitiveness of the public sector compared to the private sector.

The remuneration system reform is one of the key initiatives to reboot public administration and is being implemented under the Strategy for Public Administration Reform in Ukraine for 2022–2025, specifically under the pillar ‘Professional Public Service and Personnel Management’.

The Strategy outlines the following tasks regarding motivation and remuneration:

• introduction of a civil service position classification system;
• implementation of a comprehensive reform of the remuneration system, including increasing the fixed component while limiting the variable one, reducing the number of salary elements, eliminating pay gaps, and bringing salaries closer to the levels available in the private sector;
• prevention of salary reductions for civil servants, in particular, for specialists involved in implementing the public administration reform (RSSs).

A key indicator for tracking progress in implementing this part of the Strategy is the share of civil service positions covered by the new classification-based remuneration system: 1% in 2022–2023, 75% in 2024, and 90% in 2025.

The communication measures of the Strategy include an information campaign to raise awareness of civil servants of the remuneration system reform and its position classification approach.

The reform aims to optimise state budget expenditures during wartime and fulfil the EU integration commitments of Ukraine. Its implementation aligns with the European Principles for Public Administration developed by OECD/SIGMA and is a requirement of the Ukraine Facility programme, under which Ukraine receives up to €50 billion from the EU by 2027. 

State of Play and Progress in Implementing the Reform

As of year-end 2024 and mid-2025, the reform has shown some positive progress.

In March 2025, the Parliament adopted the long-awaited Law of Ukraine ‘On Amendments to Certain Laws of Ukraine Regarding the Introduction of Unified Approaches to the Remuneration of Civil Servants Based on Position Classification’ (Law No. 4282). 

At the time Law No. 4282 took effect, an interim reform had already introduced remuneration adjustments based on position classification under the State Budget Laws for 2024 and 2025. The classification of positions was conducted according to the Catalogue of Standard Positions and Qualification Criteria, approved by the Parliament in October 2023.

The Parliament and NAUCS ensured the timely preparation of regulatory acts necessary to implement Law No. 4282, which entered into force together with the Law:

• Resolution of the Cabinet of Ministers of Ukraine No. 369 of 1 April 2025 ‘Certain Issues of Civil Service Position Classification’, which: 1) updates approaches to defining role functions, agreeing on classification results, and interacting with NAUCS; 2) approves an updated Catalogue of Civil Service Positions with clarified and supplemented standard role descriptions; 3) introduces a procedure for reclassification; 4) provides for the decentralisation of the position classification approval in local state administrations. 

This government decision is expected to ensure greater consistency and transparency in assessing the functional workload of each position. 

• NAUCS Order No. 45–25 of 7 April 2025, which: 1) transfers the authority to approve the results of position classification in local state administrations to the NAUCS territorial bodies; 2) introduces an important restriction: an NAUCS territorial body is not allowed to process documents from the territory within which it operates to ensure objectivity and avoid potential conflicts of interest. 

Since April 2025, the NAUCS has actively worked to clarify On 11 April 2025, a seminar entitled ‘Classification of civil service positions: novelties in legislation in 2025’ was held; an online course entitled ‘Classification of civil service positions’ is now available on the StudyiЯ High School of Public Governance platform for training, in particular, individuals involved in organising and conducting the classification of civil service positions in state authorities. Source: Classification of Civil Service Positions 2024: Current Status, Challenges and Prospects, National Agency of Ukraine on Civil Service. May 2025. P. 45. the new legislative provisions. In 2022–2024 and the first quarter of 2025, the classification of civil service positions was conducted by government bodies in accordance with the Algorithm for Classifying Civil Service Positions Under Martial Law and the Catalogue of Standard Civil Service Positions, approved by the Parliament in 2023. By mid-2024, 146,333 positions across over 4,000 government bodies were classified (74% of the 198,638 total positions according to staffing tables). 

The comprehensive reform of the remuneration system has been implemented in most government bodies, ensuring predictability and transparency of the remuneration system and simplifying the process of payroll budget planning. Key changes include a reduced number of salary components and limited discretionary powers of managers in establishing allowances, particularly for work intensity and high-priority tasks. As a result, the salary structure has been balanced, with a target ratio of 70% of fixed pay and 30% of variable pay.

In 2024, the average salary of civil servants showed an upward trend compared to 2023. The salary for category ‘B’ positions in district state (military) administrations amounted to UAH 22,210 in 2024, compared to UAH 13,781.2 in 2023. For similar positions in first-tier government bodies On 11 April 2025, a seminar entitled ‘Classification of civil service positions: novelties in legislation in 2025’ was held; an online course entitled ‘Classification of civil service positions’ is now available on the StudyiЯ High School of Public Governance platform for training, in particular, individuals involved in organising and conducting the classification of civil service positions in state authorities. Source: Classification of Civil Service Positions 2024: Current Status, Challenges and Prospects, National Agency of Ukraine on Civil Service. May 2025. P. 16.  of the first jurisdiction (e.g., the Secretariat of the Cabinet of Ministers of Ukraine, the Secretariat of the Ukrainian Parliament Commissioner for Human Rights, the Ministry of Economy of Ukraine), the average salary in 2024 was UAH 49,955 (compared to Summarised statistical report on the results of monitoring the remuneration of civil servants in 2023, National Agency of Ukraine on Civil Service, 2024. P. 22. UAH 35,698.47 in 2023).

In January 2025, the Accounting Chamber of Ukraine launched an important compliance audit for further reform monitoring, titled ‘Reforming the Remuneration System in Public Administration’, covering the period from 2023 through the first half of 2025 and lasting until August 2025 Work plan of the Accounting Chamber of Ukraine for 2025, approved by the decision of the Accounting Chamber dated 19 December 2024, No. 58–5 (as amended). Clause 1.26. . Auditors are examining the implementation of measures aimed at increasing the competitiveness of salaries of civil servants, eliminating pay disparities in state authorities, and strengthening the role of the fixed component while limiting the variable one. In particular, they are conducting a comparative analysis of the salaries paid to civil servants for two periods: 2023 (before the reform) and 2024 (the first year of its implementation).

Challenges in Reform Implementation

Most planned measures remain at the previous implementation stage, with only minor improvements. Overall, the objectives set out in the Strategy have so far been only partially achieved, in particular:

The process of classifying civil service positions was hindered by an actual ‘refusal’ to carry it out in some government bodies Administration of the State Special Transport Service, Antimonopoly Committee of Ukraine, Secretariat of the Verkhovna Rada of Ukraine, Economic Security Bureau of Ukraine, State Customs Service of Ukraine, State Tax Service of Ukraine, Ministry of Internal Affairs of Ukraine, Ministry of Defence of Ukraine, National Securities and Stock Market Commission, National Energy and Utilities Regulatory Commission, National Agency on Corruption Prevention, National Anti-Corruption Bureau of Ukraine, Specialised Anti-Corruption Prosecutor's Office. . The reasons for this include both the prolonged process of adopting and signing Law No. 4282 and potential losses in salary levels after the classification of positions. Specifically, the average salary in government bodies that carried out the classification of positions in 2024 was UAH 37,249, compared to Statistical report on the results of monitoring the remuneration of civil servants in 2024. May 2025. pp. 16, 20. the average salary under the old system — UAH 59,078. This is due to structural differences and varying approaches to bonuses and incentive payments, as defined by special legislation regulating salaries in the respective government bodies.  

As of early 2025, the number of Some state authorities did not provide the NAUCS with information on the results of position classification as of December 2024. The State Treasury Service refused to provide information, the Chernihiv Regional State Administration did not provide data in the prescribed manner, and the State Bureau of Investigations, the Foreign Intelligence Service of Ukraine, and the Intelligence Department of the State Border Guard Service of Ukraine provided confidential information. Source: Classification of civil service positions 2024: current status, challenges and prospects. National Agency of Ukraine on Civil Service, May 2025. P. 6. classified positions (over 146,000 civil service positions across more than 3,000 government bodies) remained unchanged from the level recorded in the first half of 2024. 

A significant number of reclassifications of civil service positions were recorded — 1,640. Most often, this was due to changes in the structure, staffing schedule, and functions of the government body (91%), employee requests or other reasons related to appointments/transfers to positions (5%), changes in the payroll fund (3%), or all of these factors Classification of civil service positions 2024: current status, challenges and prospects, National Agency of Ukraine on Civil Service, May 2025. P. 49.  combined (1%). Not all decisions were properly formalised — specifically, 20 reclassifications were conducted in violation of the Algorithm, without a corresponding decision from the authorised body. This practice has led to the lack of up-to-date statistics and the risk of losing control over classification outcomes.

Processing the results of position classification is still carried out manually, slowing down the process and explaining the absence of up-to-date statistics. NAUCS has prepared proposals for the draft terms of reference for developing an information system, ‘Classification of Civil Service Positions’. However, further development and implementation of such a system will require time and financial resources, which are currently limited.

Despite the established formula for distributing salary portions between fixed and variable components at a 70/30 ratio, the actual distribution for classified civil service positions is 85% fixed and 15% variable.

The highest variable salary portion Statistical report on the results of monitoring the remuneration of civil servants in 2024. May 2025. P. 8. is observed in Type 1.3 jurisdiction government bodies (17%), while the lowest is in Type 1.1 jurisdiction bodies (13%).

Along with the overall increase in salaries of civil servants, significant disparities persist within the same category of positions across bodies of different jurisdiction types, as well as between different categories of positions within the same body.

For example:

• for category ‘B’ positions, the gap in the average salary level between national-level bodies (jurisdiction 1.3) and regional-level bodies (jurisdiction type 2) in 2024 amounted to 27% (compared to 24% in 2023);
• for category ‘C’ positions, this gap reached 32% in 2024 (compared to 33% in 2023).

Significant pay disparities also exist between categories of positions within the same jurisdiction. In particular, the difference between average salaries for category ‘B’ and ‘C’ positions was:

• 73% in ministries (jurisdiction 1.2) in 2024 (compared to 33% in 2023);
• 58% in regional state (military) administrations (jurisdiction 2) in 2024 (compared to 45% in 2023).

The largest gaps were recorded at the central level (jurisdiction 1.1):

• the difference in salaries between categories ‘A’ and ‘B’ in 2024 amounted to 88% (compared to 112.5% in 2023);
• between ‘B’ and ‘C’ — 72% (compared to Statistical report on the results of monitoring the remuneration of civil servants in 2024. May 2025. P. 18. Summarised statistical report on the results of monitoring the remuneration of civil servants in 2023, National Agency of Ukraine on Civil Service, 2024. P. 22. 71.7% in 2023).

Such salary disparities complicate the recruitment of highly qualified personnel to the civil service and may also indicate the lack of a comparable level of salaries between the public and private sectors.

The provision of Law No. 4282 regarding the alignment of salary levels in typical civil service positions with salary levels in the private sector in Ukraine will only enter into force on 1 January 2027. As a result, salary planning for civil service positions in 2026 will not account for the principle of The principle of competitiveness implies that government agencies offer competitive remuneration to attract highly qualified specialists to the labour market.  competitiveness.

Comparing salary levels in the public and private sectors is complex, particularly due to the lack of reliable sources of information on pay levels:

• official statistics collect data on average salaries by types of economic activity, but do not provide a detailed breakdown by profession or position;
• commercial job platforms (such as Work.ua, grc.ua, and Jooble) do have some data, but it is not always representative, as it is based on job postings rather than actual payroll records.

Accurate salary comparisons are also hindered by structural differences in remuneration between the public and private sectors, as well as variability in salary levels: in the public sector, they depend on the body and type of jurisdiction, and in the private sector, on the region and type of economic activity.

There is currently no methodology for comparing similar positions in the public and private sectors in terms of functions, responsibilities, and salary levels. Law No. 4282 also does not include provisions for approving such a methodology, which casts doubt on the fairness of civil service salaries and could undermine the future success of the reform.

Following position classification, 88% of government bodies still report a need for additional training for responsible staff. This includes Classification of civil service positions 2024: current status, challenges and prospects, National Agency of Ukraine on Civil Service, May 2025. pp. 45, 52. the need for clarifications regarding legislative changes, practical aspects of reviewing classification results, conducting reclassification, and addressing common mistakes made during this process.

The significant number of reclassifications, combined with legislative changes, underlines the need for better outreach activities regarding the classification of positions. This applies to both HR departments and civil servants whose positions are subject to classification or reclassification.

The lack of complete and reliable information about the composition of the civil service in the Human Resource Management Information System (HRMIS) in government bodies is a major obstacle to implementing the remuneration reform.

Recommendations

The state should become a competitive employer, attracting top talent and motivating employees to achieve results. Successful implementation of the reform requires the following key measures:

1. Automation of the position classification process remains a priority task. It will ensure transparency of the procedure and enable up-to-date information on its status. This requires assessing the resources needed for software development and launch, training responsible staff to work with the system, and determining sources of project funding.
2. Improve the classification procedure based on analysis of best practice and international experience, particularly regarding: 1) grouping similar positions into job families with shared tasks and main responsibilities For example, the families of positions ‘information security and cyber defence (12)’, ‘management of information and communication systems (23)’, ‘management of informatisation projects (25)’, whose main functionality involves working with information and communication technologies. , while identifying sub-families For example, the family of positions ‘public policy analysis and rule-making (3)’ includes functions that can be divided into a sub-family of positions, in particular, regarding the formation of public policy/strategic planning/conducting legal, scientific and/or professional expertise and preparing conclusions on draft legislation, expertise on adopted legislation. with narrower specialisation; 2) standardising approaches to determining job families for positions with typical functions that belong to the same jurisdiction and type of government bodies, including local-level bodies.
3. Enhance outreach efforts regarding the procedures for organising and conducting classification and reclassification of civil service positions, as well as implementing and executing measures of the civil service remuneration reform.
4. Continue addressing significant disparities in salary (grades) between individual positions, job families, and types of government jurisdictions, taking into account state budget constraints.
5. Ensure a justified and transparent comparison of salary levels for typical civil service positions with salary levels in the private sector in Ukraine by: 1) conducting a pilot comparison of salary levels during the preparation of the draft salary scale for civil service positions for 2026. Independent labour market experts should be involved to ensure impartiality, and the pilot comparison findings should inform the development of the methodology for comparing salary levels for typical civil service positions with those in the private sector; 2) introducing amendments to Part Three of Article 51 of the Law of Ukraine ‘On Civil Service’ regarding the powers of the relevant legislative body to approve such a methodology; 3) approving the methodology under which such a comparison of salary levels will be conducted, starting 1 January 2027 Date of entry into force of paragraph six of subparagraph 4 of paragraph 2 of Section I of Law No. 4282. . This approach will facilitate the timely adoption of well-grounded decisions on remuneration, more efficient use of budget funds, and increased trust in the state as a competitive employer.
6. It is essential to ensure that the future HRMIS information system is capable of administering the modified remuneration system.

This publication has been prepared within the framework of the ‘Improvement of Governance in Ukraine: Enhancing Policy Making for Social Progress’ Project with the support of Switzerland. The content of this publication is the sole responsibility of the NGO ‘Agency for Legislative Initiatives’. The opinion of the authors does not necessarily reflect the views of the donor.