Public Sector
After a difficult 2023 which saw leaders tightening budgets and stalling decision making, will the potential of a general election in 2024 lead to a change of direction in public sector recruitment? Michael Thornton, director, Investigo public sector, highlights the trends to look out for in 2024.
Here are the key areas leaders need to prepare for in 2024:
Public sector bodies retaining talent – why leaders are recognising the value of existing talent.
An innovative approach to hiring – how surge contracting is leading the way in public sector recruitment.
A clearer outlook? – will a potential change of government impact the market in 2024?
Political instability during the winter of 2022/2023 brought a feeling of unease. The cost-of-living crisis was a barrage of bad news telling us to save money, spend less and cut our bills. There were two changes of prime minister and a cascade of disrupted decision making.
A dramatic increase in public spending during the pandemic and Whitehall activity during the period exiting the European Union caused a public sector hiring frenzy in 2022, with an increase in salaries and contractor day rates. But in early 2023, we began to see a reverse. Leaders tightened their belts whilst budgets weren’t getting signed off and hiring was taking a lot longer.
Fewer projects and programmes were kicking off and there was a general lack of budget clarity and long-term thinking. All in all, a negative spiral meant leaders hiring less. Less hiring then meant fewer people leaving jobs and less natural attrition. In October 2023, PwC reported they were making redundant a significantly sized group of employees that would have usually left of their own accord.
Leaders chose not to bring in new talent and generally held on to what they had during 2023, and most contractors and consultants remained engaged on their current projects. This was good news for us in the long run as the work was still there; prisons, schools, hospitals, roads, rivers, ships and security will always need to work properly.
Surge capacity – pliable and quality prearranged benched teams of independent contractors who can be called upon quickly – have become increasingly important for reactive work or natural fluctuations in project demand.
Public sector bodies understand they must be innovative to attract the skills they need. Large, centralised hiring frameworks don’t allow them to deliver at the quality or speed needed, so being able to properly vet and deploy talent to programmes with sometimes hours’ notice is critical for project leaders.
Many of these surge contracts are effectively exclusive supply contracts which give the supplier the power to prioritise, pipeline and deploy the best people available. They allow good suppliers and good customers to work together, understand the nuances of a body or project and secure talent that is properly skilled and culturally fit for the organisation.
Most importantly, they offer a managed and quality service without the massive price tags of traditional consultancy models. But when the supplier can call the shots, customers need to be extra careful they don’t end up paying over the odds.
Buyer confidence seemed to pick up again in Q2, with public sector bodies starting to move faster to hire, although permanent hiring still appeared lower nationally. Q4 is traditionally a busy period in the UK, when emails are answered, and decisions are made, more quickly. With the tax year coming to an end, the Budget coming up and further insight into the forming tactics of the impending General Election, Q4 2023 was no different.
2024 will bring a potential change of government and this is usually a good thing for talent firms. With some projects cancelled and other projects pushed forward, public sector professionals find themselves playing a game of musical chairs. Will this mean a clear direction and agenda, after several years of decisions swivelling? We’ll have to wait and see.
What is clear is that we’re now starting to see post-EU exit work in the form of new policies and the related work. Now it remains to be seen whether the pendulum will swing back and trigger another hiring frenzy. While hiring is unlikely to reach 2022 levels as the country still hovers around a possible recession, the ‘happiness’ index seems to be holding out for the time being. A positive market is a buying market, where projects and people can move forward.
The challenges faced in 2023 meant the public sector had to look at cost effective ways to recruit and retain talent. Innovative hiring strategies and the implementation of surge contracting helped leaders provide flexible, skilled teams precisely when and where they were needed. With political change possible in 2024, leaders need to be ready to meet demands set by the potential of new policies and priorities.
Looking ahead to 2024, leaders are optimistic and are already proactively anticipating the new opportunities it may bring.
