He said this difficulty could be addressed by having a career ladder for undersecretaries to be promoted to secretaries to retain talent.
Chan's remarks yesterday came one day after Lam, the next chief executive, said "the high level of public scrutiny sometimes makes those potential candidates worry about whether their privacy could be respected in discharging their duties as a principal official."
Chan said Lam's campaign team had internal discussions about possible choices for secretaries during the election, which some team members had laughed off as they lacked the qualifications.
But Chan found the remarks unfair, saying: "The fact that their names are not frequently heard doesn't mean that they lack the caliber."
He added: "The more famous the person is, the more complicated their social network is. But then, they will be said to be helping somebody else, giving rise to criticisms like collusion and benefit transfers."
Society discourages anyone from stepping forward to become officials, he said, comparing it to "begging people to jump into this sea of flames."
In the long run, Chan said, there should be a promotion mechanism whereby, for example, undersecretaries can become secretaries.
"But it depends on whether they would like to be promoted, and whether they coordinate well with Mrs Lam," he said.
Chan believed Lam would consider talents from both ends of the political spectrum, and she would persuade Beijing to accept these choices.
"Secretary [for Transport and Housing] Anthony Cheung Bing-leung was a Democratic Party member, and it didn't affect him becoming a secretary," said Chan, adding he has not discussed with Lam whether he would become Executive Council convener.
But Lam did ask Chan if he would like to become a principal official, and he firmly refused.
Recalling the 2-month campaign, Chan said it was more difficult than expected, and he noticed the change in Lam during the election.
Several incidents caused Lam to be mocked publicly - for example, her failure to buy toilet paper in a convenience store, and inability to pass through the MTR gate with an Octopus card until her assistant showed her how.
"She admitted that she was clumsy in some instances. She used to think she knew many things, as she worked in the government for three decades in different departments, and she thought nothing could baffle her," Chan said.
But after she met all 38 subsectors, Lam understood that she has yet to improve in many aspects.
Meanwhile, Lam said yesterday her priority was to heal the executive- legislative relationship.
"Exhaustion is in the air in society, and people would like more communication and practical moves, instead of seeing conflict every time they switch on the TV," she said.
Lam also said her housing policy would be aimed at allowing people to buy their own flats.
The next chief secretary could either be incumbent Matthew Cheung Kin- chung, or Secretary for the Civil Service Clement Cheung Wan-ching.
Matthew Cheung, who might be demoted to become a secretary, said: "I made it quite clear before about my heart for the Hong Kong community, my heart with the people of Hong Kong, I stand ready to serve, if given the opportunity to do so."
Democratic Party member Law Chi- kwong, a member of the Commission on Poverty and former lawmaker, said it was "inconvenient" for him to comment on whether Lam wanted him to be a secretary.
Democratic Party chairman Wu Chi- wai said he had no information on any party member being invited to join Lam's administration, or asked to withdraw from the party.
Secretary for Labour and Welfare Stephen Sui Wai-keung said he would be willing to contribute to Hong Kong regardless of the post.