Does a public sector move pay off?

As the recession takes its grip on Britain’s economy and recruiters are forced to tighten their belts, Julian May and Sarah Coles look into whether the public sector is still a safe haven for recruiters

Adapting in a downturn: Som recruiters are redeploying consultants from other parts of the business

Adapting in a downturn: Som recruiters are redeploying consultants from other parts of the business

As the private sector has been cutting staff vigorously, the relative security of a job in the public sector has taken on new appeal for many candidates.

According to a survey by Hays, nearly three out of every four private sector workers polled (72%) said they are more likely to consider a public sector job now than a year ago.

Certainly so far, many parts of public sector recruitment have remained buoyant. Simon George, public sector director for the Synergy Group, told Recruiter: “I touch wood on almost an hourly basis, because I haven’t seen much negative impact from the recession. Two of our teams actually benefit from the economic situation because they recruit into revenue and benefits, and social housing.”

Hays, meanwhile, despite announcing revenue falling 10% in its last quarter of 2008, and cutting 500 jobs globally, says its public sector business, which now represents about 30% of revenue in the UK, is performing strongly.

Some parts of the sector tend to maintain a constant demand because councils have a legal commitment to minimum standards, including health and safety. In addition, George points out: “The case of baby P means councils have made funds available for social care, so we don’t see demand dropping off in that area either.”

Other strong areas include those bringing in money for local authorities. George says: “Parking services remain the second biggest area of revenue generation for councils, so there is still demand there.” Likewise the recession brought an increase in demand for staff to recover unpaid rental income — the lifeblood of housing associations.

This strength has led some recruiters to focus more resources in the public sector. Alistair Cox, chief executive of Hays, told reporters: “About a year ago we took a conscious decision to put a lot more resources into the public sector. For instance, we’re the largest recruiter of teachers in the UK.”

Matt Lewis, business director at Hays Social Housing, told Recruiter he had seen demand rise for virtually all disciplines in his division. “We have been redeploying people from other areas of the business — for example, consultants have been redeployed from the private sector house building.”

Hays is not alone. David Kemsley, managing director of Capita Resourcing, says: “It’s very evident that a lot more players are dedicating more resources to the public sector It happened in the last recession, and it’s happening again. It makes life tougher. Whereas before a client might have been talking to two companies about a role, now they may be talking to nine.”

And while the sector may be buoyant enough to handle more players at the moment, it isn’t guaranteed to remain so. A Times newspaper survey of 40 local authorities, published last week, found they were planning 7,000 redundancies this year as they struggle to cope with the impact of the recession. With 442 councils in the UK, that figure could escalate dramatically. Already recruiters have seen a fall in demand within housing development, and Kemsley says: “We know there are cuts going on, because clients are talking about them.”

Lewis is confident there is plenty of growth left in the sector. He said: “We are beginning to see [government] money cascade down into real projects. The government wants 2m social housing homes built by 2016 and 3m by 2020. Although there has been a suspension of the Section 106 agreements [proportion of new private development allocated for affordable housing], housing associations have been purchasing private sector properties that developers and owners can’t shift on the open market.”

Lewis anticipates increasing demand for staff to build homes and then manage moving people into them. He added: “Demand for housing management will also increase, with the deadline for completion of the Decent Homes initiative being 2010.” Meanwhile, ministers are looking at plans for a multi-billion pound infrastructure fund to inject equity into social housing developments, which would be a boost to the sector.

However, not all recruiters share his confidence. George says: “I would like to think the government has a commitment to long-term policies, but despite affordable housing promises, housing associations can’t afford to buy land or do development, so there are no guarantees.” And while spending plans from central government sound promising Kemley points out: “It’s not necessarily going to filter down to people like us.”

In addition, George is uncertain about the cash position within local authorities: “There are bigger questions, such as whether they had money in Icelandic banks. We will see how much impact this kind of thing has with the new budgets in March and April.”

Daniel Flynn, a senior consultant with corporate governance recruiter Barclay Simpson, agrees the new financial year will be a turning point: “We recruit internal audit staff for central government. At the moment, even though there are vacancies, they aren’t filing them; they are carrying them over to the new financial year in the expectation of reduced recruitment. We expect them to outsource the work to private
sector firms because they don’t want the headcount.”

George adds: “We are gearing up for a tough 2009, because we can’t assume the public sector will be solid.” The key, he says, is to be
flexible: “If we see an opportunity in a certain area there isn’t time to mess around, we need to allocate resources to take advantage of the
opportunity. If we see a dip in a certain area we have to stop pouring resources into it.”

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