Public services salary gaps remain – but is purpose the real prize?

The salary divide between the public and private sectors is widely acknowledged, yet an ongoing cost-of-living crisis has driven home the pay disparity for many public service workers. And while progress has been made to bridge the gap, it can’t be relied on to secure sought-after candidates in a tight hiring market.

Our Hays UK Salary & Recruitment Trends 2024 guide revealed that 92% of public services employers have experienced skills shortages, but without the financial pulling-power of private sector companies, what can public organisations do to attract and retain the talent they need in the year ahead?

Public sector salaries still can’t compete with private companies

The public sector had seen some headway in addressing the earnings gap this year, with the government offering increases to more than a million workers. Moreover, our latest salary guide data reveals that 85% of public services employers increased their employees’ rates of pay during the past 12 months, in comparison with 77% the year before.
 

However, a noticeable pay wage gap persists. Despite public sector wage growth reaching 6.8%  between June to August – the highest since pre-pandemic levels – the private sector benefited from a significantly sharper increase of 8% during this same period. While this lag doesn’t account for the more desirable pension provisions afforded to public sector workers, amid a cost-of-living crisis, professionals may prefer higher take-home pay that improves their welfare today. Correspondingly, our research shows that 40% of public services employees are not satisfied with their salary, rising to 56% for those working within both the housing and education/further education sectors.

But with limited funding, public services employers can’t afford to simply throw money at recruitment efforts. Understanding both employee and candidate pain points – plus the sector’s unique levers – is crucial when tempting talent away from the private sphere.

Purpose may overcome pay concerns

With most public sector organisations subject to pay scales and review bodies, there’s less freedom to secure talent through competitive salaries – but this may not be the crux of what candidates are looking for.

Nine in ten (90%) of the public service professionals we surveyed claim purpose is an important element of a prospective role – an increase from last year (86%). Conversations around pay are unlikely to disappear soon, but an organisation’s purpose may be the key differentiator when attracting and retaining public service professionals in a challenging labour market. 

However, over a third (34%) don’t believe their organisation’s employee value proposition (EVP) – a concept closely linked to organisational purpose – aligns with their day-to-day work, suggesting that employers have some ground to cover when it comes to embedding their values and unique growth opportunities. 

In response, public services hiring managers should showcase the strong sense of worth people can gain by serving communities and creating positive outcomes, along with leveraging the clear progression pathways and job security the sector can offer. Capitalising on these unique selling points could persuade ambitious professionals to look beyond private sector payslips and join your organisation’s cause.

Public services recruitment requires a revamp

Working in the public sector can be incredibly fulfilling, but poor first impressions and onerous recruitment processes could be undermining hiring plans and aggravating skills shortages. Our latest data revealed that 60% of public services professionals have been deterred from continuing with a job application process due to a poor first impression of an organisation, while over half (54%) have left a job because it didn’t match the expectations they formed during the application and interview process. 

While not all public-facing organisations can expect their recruitment methods to be analogous with private sector companies, more streamlined and transparent hiring processes will be needed to attract professionals in a fast-moving job market. Additionally, creating more accessible career entry points – such as through potential-led hiring – will help you engage unrepresented talent and diversify your workforce.

The public services pay gap saga might go on, but employers who are able to align their purpose with the sector’s unique benefits, plus improve the candidate journey, can still shape a successful hiring story in the months ahead.

Get a copy of our UK Salary & Recruitment Trends Guide 2024 now for more insights and expert recommendations.