There was a time after the financial crash of 2008 when public sector workers typically found themselves better paid than many of their counterparts in the private sector. As the economy has recovered, private sector wages are now rising ahead of inflation at a time when public sector wages are seeing modest increases that could be argued are largely wiped out by increased costs of living. As we move into the second half of this ‘decade of austerity’ and see further restraint on public sector expenditure, we may well see a period where public sector pay is below the level it was in 2008 relative to the private sector. There is a risk that this will result in significant difficulties in attracting and retaining talent.
There has always been of course an argument that pay is not the main motivation for choosing a career in public service in the first place; and once you were in post, generous pensions provision encouraged you to stay. But is this still the case? We only need to look at the issues the NHS has in finding doctors and nurses, the teaching profession in attracting the brightest graduates or local government in landing good quality social workers, to see that terms and conditions are an important factor in recruitment. And with further cuts to come how will the sector hang on to high quality staff with potentially less pension provision?
The 1990s saw an administration tuned into the idea that if public sector pay fell too far behind that of the private sector it could pose a real threat to attracting and retaining the talent needed to deliver the public services the country wanted. The current government is looking to reduce the size of the public sector workforce to a level not seen for half a century and to encourage those left to think and act differently in order to deliver devolved, citizen-driven services. If the sector is to continue to reform over the next five years it needs the very best people with the entrepreneurial flair and attitude needed to make this happen. There is an argument that these types of skills and experiences are more likely found in an Amazon or a Tesco than the NHS or Whitehall where pay rates are higher.
To attract and retain the public sector leaders of the future, the sector must develop a new voice and a compelling case for public service again. Yes salaries and terms must be competitive to attract and retain the best and the brightest, but more important is the need to articulate how future-proofing the sector and the services we all rely on has benefits to a workers’ soul as much as their wallet.
Nick Cole is a Consultant within the Public Sector Practice at Berwick Partners specialising in senior appointments within Local Government.