Why do the Public Sector struggle to secure top talent?
Posted by Matt Davidson
With Brexit and another National Election looming in the UK, it would seem perhaps that there has never been a more exciting time to work in the Public Sector. However, year after year organisations continue to feedback that they struggle to attract and retain the right people, leading to real concern across the sector. An experienced Finance Director flippantly made a valid point to me recently in that the Public sector collectively "rarely listens to itself" - decisions are made by high-level ministers who rarely weigh up all the variables before making important decisions, leaving its most important asset (its people) to pick up the pieces. Having spent the last six years recruiting for support staff across every area of the Public Sector, I have seen a number of changes – some positive, and some arguably negative. However, with more jobs than candidates out there, why are employers and recruiters still struggling to find real talent and what are the issues? Poor salary packages One of the biggest challenges the sector has had for years is that as far as remuneration goes, working in the Public Sector at mid-level has never quite managed to truly compete with Private organisations in terms of attracting top talent. Conversely, where some larger Government bodies have been able to offer more attractive salaries, there is an absence of additional incentives such as Car/Travel Allowances, Private Healthcare, and most importantly, bonuses. Interestingly, this is not helped by Public Sector employees continuing to be taxed in the same way a Private employee would be. Could tax-free salaries be a way to make opportunities more attractive? Conversely, CIPD figures have demonstrated that some organisations have spent more annually on contractors, that securing permanent staff which has curtailed their staffing budgets. This suggests processes are more challenging for Public Sector organisations, where there seems to be less of a culture for change, and ‘too many hoops to jump through’, and slow processes in order to achieve it. Short-term and limited budgets Sadly, with so much uncertainty in the sector, this has largely led to organisations struggling to make long-term financial commitments. In turn, this has led to either reliance on contractors (which offers little long-term stability) or a reliance on fixed-term contracts limiting the talent pool. If you are already a permanent employee or an interim contractor on double the daily remuneration, why would you consider a fixed-term-contract? More worryingly, however, history has created a culture of staff cuts, which will always create a negative perception on the sector in general, particularly when organisations are struggling financially. According to the CIPD, pay freezes coupled with a perceived reduction in benefits as a consequence of pension reforms may be responsible for the public sector’s challenge in attracting candidates, with 43% of public-sector respondents citing pay as one of the reasons for their difficulties. Over-reliance on agency staff The over-reliance on interims has, in turn, led to a market where thousands of permanent employees have turned to an interim career to ‘feed the need’. This has clearly had a ‘knock-on effect’ in removing some of the stellar talents from the permanent market, and a cycle where the culture is too regularly on looking at the ‘short-term solution’. Small training budgets Limited budgets available within organisations have prompted a risk-adverse culture where organisations are less likely to invest in commercial talent that can deliver more long-term value, opting for the candidates that have experience of Public Sector processes, procedures and compliance. Bigger training budgets would surely allow organisations to take risks on those talented, well-educated candidates who need training and upskilling, funding and offering candidates the chance to complete professional qualifications as part of their role. Small recruitment budgets & expertise This would seem one of the most underrated areas for organisations to invest in. Most Public Sector organisations do not invest in experienced recruiters internally, opting for advertising because they feel it is the least costly and the easiest solution. However, what price will it pay to an organisation in the long-run to recruit the wrong candidate into a role? In my experience, advertising is in itself one of the most limited methods of recruiting for a role. Only an estimated third of the candidate market actively ‘job hunt’, where another third are passive candidates (who are always open to new opportunities), and the other third will not be on the market at all. Therefore advertising will only ever gain a ‘snapshot’ of the candidate market over a relatively short period of time, where even the active candidates will only see the opportunity if they are subscribed to that particular job board! What is the most effective? To headhunt people in similar organisations and roles. The advantage of using an agency is that whilst there is a fee involved, is that they will give you access to their database that has often been compiled over a number of years and using a number of methods. Additionally, it is risk-free in that they will often charge you nothing to view CVs or interview candidates, but only if you want to appoint one of their candidates? Additionally, you have more security on finding the ‘right person’, which in the long-run will deliver far more return on investment to the organisation which dramatically overpasses the recruitment fee. The added issue is organisations lack expertise in marketing their brand as a ‘great place to work’, which recruitment agencies are masters at. Staff retention & collaboration Away from recruiting staff, organisations are repeatedly reporting back that following investing in bright, up and coming talent, they struggle to keep them. This feeds back to not enough investment, opportunities and incentives to existing staff to distract them away from other opportunities, and the commercial sector. It also suggests that a culture of budget-cuts and uncertainty are leading people to make decisions about their future, and ultimately move on. Sub-sectors such as Local Authorities and Education should also be working harder to work collaboratively and keep staff within their given sector. Conversely, the NHS ‘Bank’ system is certainly a step in the right direction. Compliance Unfortunately, we are in an age where compliance is the ultimate force driving decisions, rather than organisations being given the autonomy to make commercial decisions. This has, in turn, led to less partnership with SMEs and allowing for real competition between recruitment suppliers in the sector. Instead, organisations are favouring recruitment suppliers on government frameworks, often leading to longer-term staffing problems. Conclusion It would seem that the pre-election pledge by the government to inject the huge £13bn membership fee back into our Public Services is not so simple. Our lack of financial stability in stepping away from the single market and the uncertainty associated with it are already leading organisations to make shorter-term solutions, which in turn means shorter-term results. With the added impact of IR35 compliance and budgets, organisations more than ever are struggling to bring in the right people on either an interim or permanent basis. It would, therefore, seem that the only real solution is to widen the resources they use to find the right candidates, which in turn widens the candidate pool. When you take everything else out of the equation, doesn’t it ultimately come down to securing and retaining the right people?