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Why spending differently could revolutionise public services
10 min read | Matt Lewis | Article | | Change and business transformation
Public services organisations are facing a perfect storm of financial pressure, transformational change, rising demand and acute workforce shortages. Spending is projected to reach £1,370 billion in 2025–26, while inflation continues to push up the cost of delivery. This is amid pressure to deliver services to an increasing number of users across all areas, with a changing and ageing population causing the number of people with multiple or complex needs to grow significantly as the size of the working population diminishes.
Meanwhile, most public services employers expect shortages of suitable applicants and rising competition – challenges that have already contributed to widespread skills gaps and an increasing reliance on temporary workers. Against this backdrop, spending differently – particularly on recruitment and workforce strategy – offers one of the most powerful levers for improving outcomes while reducing long-term cost.
Public services are facing a tightening labour market that is reshaping how organisations attract and retain talent. According to our 2026 Salary & Recruiting Trends guide, 67% of public sector employers expect a shortage of suitable candidates in the year ahead, 53% anticipate increased competition from other employers, and 46% cite rising salary expectations as a challenge.
Externally, organisations identify recruiting the right talent (59%) as their biggest challenge for the coming year, followed by the economic environment (44%), and rising costs (42%). Internally, the focus is on talent retention (57%), managing change (49%), and addressing skills shortages within current teams (46%). Together, these factors underline the need for a more strategic, long-term approach to workforce planning.
It's clear that a revision of current spending plans is needed if service levels are to continue to meet demand within current budgets, and a rethink of recruitment and resourcing approaches is critical to this. Having historically encountered challenges with attracting the skills it needs, the public sector is now in a position where continual workforce shortages, rising employee expectations, and the impact of employment reforms make a longer‑term recruitment strategy imperative to reduce costs and attract and retain the skilled people required to successfully meet this challenge.
In response, employers are widening talent pools, hiring for potential, and investing in upskilling. Employees, meanwhile, are prioritising clarity on career progression, fair pay, and flexible working that supports balance. Organisations that align these levers will gain a competitive edge in a tight skills market.
Challenging yourselves and your partners to think differently about your workforce strategy will fundamentally impact the long-term stability and performance of your organisation. This is part of an approach – spending less by spending differently – designed to both make savings and improve the outcomes of your recruitment and resourcing spend. Improving your insight into the labour market, tackling the root causes of growing temporary worker costs, reviewing your employee value proposition (EVP) and how you present opportunities to target markets, refining your recruitment process, opening doors to a wider and more diverse audience, and developing talent creation initiatives are all tactics that can be deployed to meet this challenge. Indeed, the right recruitment and resourcing partner – expert in the unique challenges you face in public services – should be engaged at a strategic workforce level to help you achieve this.
Permanent recruitment – against a skills-scarce landscape – has historically been a challenge in public services, with rigid salary bandings and lengthy assessment processes making it more difficult to attract and engage skilled and experienced professionals, particularly in specialist and senior areas. This has led to a surge in temporary and interim hiring, as organisations seek to secure the expertise they need – often at significant cost – to deliver on vital projects and services. As employers contend with skills shortages, increased competition for talent and the changing shape of the workforce skills profile required for the future, temporary recruitment pressures will only intensify unless addressed strategically.
Understanding your target candidates and the market you are recruiting in, thinking carefully about how you convey your EVP – or what you’re offering to people in exchange for the skills and experience they bring – and evaluating the ease and length of your application processes are crucial steps towards engaging and retaining the right people on a long-term basis. Working with a strategic partner that offers an in-depth understanding of these issues alongside their immersion in local specialist recruiting markets – thereby offering access to the widest possible networks of candidates – will catalyse action to quickly reduce the costs associated with temporary and interim hiring.
A challenge to the successful delivery of public services over many decades has been the difficulty of acquiring in-demand, niche skillsets with challenging location requirements. This challenge is being compounded by the widening gap between traditional educational pathways and the skills public service employers increasingly require, exacerbated by the accelerated pace of change in the skills essential to the workplace of both today and the future.
Upskilling existing employees in areas such as digital, data and AI, and/or recruiting for potential and creating your own talent pipelines through levy-funded Apprenticeship programmes (soon to be the Growth and Skills Levy) – such as via our upskilling and Emerging Talent Solutions – can equip your workforce with the skills required for the future. It can also help you build a much-needed talent pipeline in areas where expertise has been notoriously difficult to source. In turn, this can improve productivity and outcomes, reduce reliance on external consultants, and lower costs associated with expensive temporary resources.
Securing new staff is just half the challenge. One of the biggest pain points for public services is not only attracting the people who can make a positive impact from the start, but retaining their value on a long-term basis. Employees who feel that the nature of their role has been mis-sold, find the culture of the organisation is not as expected, or can see no pathway for internal progression, are unlikely to stay with you for long.
Ensuring that your roles and opportunities are articulated and positioned clearly throughout the application process – from the initial job advert right through to interview, offer and onboarding – is critical to combatting employee attrition. This, along with establishing a strong learning culture, offering flexibility where possible, and putting diversity, equity and inclusion (DE&I) front and centre, are all key employee retention strategies that can be achieved with the right workforce solutions partner.
If your organisation is to evolve to keep pace with the changing demographics and demand for services, then it’s important to consider what talent you’ll need to deliver this change, both in the short- and long-term. Strategically, what are the skills, insights and experiences that you need in your team to deliver these plans? And which are likely to be difficult to find?
Laying the foundations for a sustainable and future-proof workforce now will put your organisation in the best possible position to weather any storms that lie ahead. This is where engaging a long-term, strategic partner, rather than allocating costs towards transactional, short-term recruitment services, can create cost savings in the long run, enabling you to identify where and how you can build the right skills into your pipeline of up-and-coming talent at the best value for money.
Looking beyond the immediate needs of today, and taking a more strategic view of the recruitment and resourcing landscape, will bring the clarity you need to overcome the root causes of significant cost. Targeted investment in these critical areas will drive savings and ultimately enhance the performance of your organisation in the long-term.
Strengthen your workforce planning with the latest insights from our UK NFP Labour Market Trends report, produced in partnership with VacancySoft. Explore how shifting skills demand, digital transformation and labour market pressures are reshaping recruitment across public services.
Need support with your recruitment strategy in public services? Submit an enquiry with us today.
Matt Lewis, Director of Hays Public Services
Matt Lewis, Director Hays Public Services, has worked in specialist recruitment since 1994, the last 10+ years of which have been spent working specifically with the public sector. Matt’s role has developed into leading MSP and RPO recruitment solutions to best position organisations to attract and retain high quality talent.
