Tag Archives: public sector

Public Sector Pay – Time to redress the balance.

For too long we have been operating in the UK a publicly funded job creation scheme, which in itself would not be such a bad thing were it not for the fact that those taking from and taking out of the public sector would appear to be entirely motivated by money.  That, in public service, is fundamentally wrong.

The median average hourly rate of pay in the public sector is 30% higher than the private sector.

http://www.bbc.co.uk/news/magazine-12549785

We had last weekend the well publicised story of the former leader of South Somerset District Council leaving his post and accepting a pay off in salary, redundancy payments and pension contributions of £569,000 after 6 years service.

Yes, that’s right, you read it correctly, FIVE – HUNDRED & SIXTY NINE THOUSAND POUNDS!

http://www.telegraph.co.uk/news/newstopics/politics/8342025/Council-boss-who-got-record-pay-off-in-line-for-another-lucrative-position.html

My issue is that none or certainly nowhere near enough of the money that is spent on wages in the public sector goes to those that deserve it most.  Nurses, Teachers, Police Officers, Fire Fighters.  There are countless others I can add to that list.  These are the people that should be reaping the benefit of the increase in standards that we have seen in the last 10 years in public sector pay and conditions.  So why aren’t they?

The problem is that those that enter public service in these posts do so generally out of a sense of vocation, purpose and to serve others.  They don’t do it first and foremost for the money, they do it for a whole host of other reasons.  Therefore they tend to be at the back of the queue when it comes to being rewarded for the great work that they do.  They deserve a great wage for doing great work.  They don’t get it.  That sucks.

I don’t buy the argument that Public Sector bodies need to pay great salaries to attract great talent at the top.  If you are motivated by money ( and there is nothing wrong in that ) then by all means stay in the private sector, take your risks, take your chances and fill your boots.

If you are motivated by a desire to serve the greater good and public service ticks that box for you then by all means go run a hospital, a local council, but why on earth should you even think you should be paid more than the Prime Minister for doing so?  Who is running the remuneration committees in these organisation?

Certainly don’t walk away with in excess of 1/2 million quid for voluntary redundancy when the vast majority of those in your employ are earning less than 25 times that number!  That disgusts me.   It smacks of greed, lining of one’s own pocket from the public purse.  I know it happens, it is just not right and something needs to be done to stop it.

I would be delighted were I to be evidencing the average median hourly rate in the public sector was 30% higher than the private sector because nurses were paid so much more.  That figure is so high because those at the top have their noses in the trough, and its our trough.

If the CEO of a FTSE 100 company is being paid millions that is an issue for his or hers shareholders.  It is their money, not mine ( unless of course they are a bank! )  Time to redress the balance.  Give the money to those that deserve it most.  That is the basis of great public service.

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Filed under Careers, Remuneration

On the road to recovery – the outlook for the jobs market.

A number of good signs for job seekers and recruiters alike this week.  On Monday Michael Page, the UK’s second largest recruiter, announced gross profit for the fourth quarter of 2010 of £119.8 million, up 32% on 2009.  When you dig in to the numbers, there is yet more encouragement to be found.  Permanent job vacancies were up 40%, with temporary vacancies up 10% in the same period.

Further investigation suggests confidence slowly returning to the jobs market.  Interesting to note comments from Steve Ingham, CEO at Michael Page, talk of the increase in permanent job vacancies being driven by “churn” in the employment market place, that is employees moving jobs, as opposed to new jobs being created.

Why should this be cause for optimism?  This points to people being less concerned about moving jobs.  Taking the leap to a new employer and the “last in first out” fear that can engender in tough times appears to be on the wane.  That’s a good sign.  Confidence has a huge part to play in the employment market just as it does in all areas of the economy.

This morning we had the results of the KPMG and Recruitment and Employment Confederation Jobs Market Survey for December.  Demand for permanent staff rose at the fastest rate for four months.  Demand for temporary staff rose at its fastest rate for six months.

The greatest demand for permanent staffing was in IT, professional services, engineering and accounting.  One of the areas to evidence skills shortages, sales, offers yet further encouragement.  Demand for Executive Talent amongst Transcend customers has been greatest for Sales and Marketing Directors.  Typically these have been newly created appointments in circumstances where employers, having cut back on sales and marketing during the recession, now feel they have opportunities to grow but realise they lack the talent to fulfil them.

Other areas where talent is in increasing demand but skills are short include project management and engineering.   Both evidence good signs.  So many projects over the last 3 years, unless under the auspices of “business critical”, have been shelved.  Companies are starting to re – invest, slowly but surely, to spend money again, having horded cash in tough times.  Projects are being kicked off and once again talent is needed to fulfil requirements.  An increased demand for Engineering talent endorses the positive results being enjoyed by the manufacturing sector.  Long may it continue.

We have yet to understand the full impact of the austerity measures on the employment market.  Public Sector job losses we know are inevitable.  More needs to be done in to encourage jobs creation in the private sector if the impact on overall unemployment is to be minimised.  At least the rhetoric from government supports this, we now need to see the evidence.  More needs to be done from a legislative viewpoint to encourage employers to hire staff, indeed to make it easier and cheaper to hire staff.  A reduction in the rate of Employers NI would be a good start.

I am encouraged by what I see, what I read, what I hear from customers.  There is real cause for optimism, cautious optimism maybe, but optimism nonetheless.

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Filed under Hiring, Job Creation, Recruitment

Job creation or devastation?

Governments can create jobs in the public sector.  However unless they are balanced by jobs growth in the private sector, the public sector will not sustain employment and wealth creation.  Private sector prosperity creates the wealth required to sustain great public services.  It is the responsibility of government to create the conditions in which private sector businesses can flourish.

This means lower taxation to encourage re – investment.  The more you can encourage businesses to re – invest, the more jobs they will create, the more they will grow, the more sustainable they will be, the more profitable they will become.  The more people employed, the greater the revenues, the greater the profits, the more goes back in to the public purse via taxation.  It’s a simple model.  The more you tax business, the more ways business will spend money trying to find (legitimate) ways to avoid paying those taxes.

Across much of the developed world at the moment the argument is that we cannot afford to reduce taxation.  I understand why, but we are trapped in a vicious downward spiral.  Businesses are hoarding cash.  The survival mode of the last few years has meant strengthening balance sheets has been order of the day.  Having done that, confidence and the conditions required to re – invest still do not exist.

If you have cash right now then arguably you will emerge from this period much stronger.  Valuations are low, assets are distressed.  If you are in a position to acquire then the opportunity to strengthen your business is too good to miss.  So why are we missing it?

Its going to take a brave leader to create the conditions to encourage business to start spending again.  However do it we must.  Public spending must be cut, that much is clear.  Unless governments create the right conditions to encourage private sector investment and spending,  the private sector will not be able to pick up the “slack” created by public sector cuts, particularly in employment.

We need governments to be brave, strong and decisive.  Then we need them to step aside.   Short term pain, long-term gain.  Fail and we risk generations of disaffected unemployed.  It is too high a price to pay.  Action is needed now.

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Anything to be gained from a jobless recovery?

I guess good news doesn’t sell newspapers.   This weekend was full of the latest views on double dip, inflation, stagflation, rising interest rates, dropping consumer confidence, rising unemployment and a jobless recovery.  None of these are fact.  For sure all are simply possible scenarios and all warranted countless column inches.  Someone once warned me ” be careful what you wish for”.

Much is being made of the jobless recovery.  Regular readers of my blog will know my views when it comes to unemployment (frankly one person out of work who does not wish to be is one person too many).  However, trying to take the positive from the negative I considered what is to be gained from the doomsday scenario the newspapers are suggesting.

Firstly a jobless recovery is not an accurate description.  It is simply not the case that employers are not hiring.  What is true is where they are hiring.  A recent Chartered Institute of Personnel and Development survey highlighted 36% of employers expect to lose staff in the next three months.  Despite this threat of cuts, the CIPD’s net employment index, which measures the number of companies planning to hire against the number planning to lose staff, is still in positive territory at +two (admittedly down from +five three months ago but still a positive number).

Dig a little deeper in the numbers and that’s where things get interesting.  What you will see reflects the stark difference between the public and private sectors, with the private sector showing strong hiring intentions at +19 while the public sector gives a reading of -35.

This is great news.  The private sector is hiring.  We have grown to depend for too long on an overbloated public sector and we need now to take the medicine to protect ourselves in the long-term.  I am not talking front-line services (I am married to a nurse and clearly too much of a coward to consider such a thing!).  Anything that puts more nurses on hospital wards, policeman on the street or makes for better public transport is to be supported and applauded but it is the private sector that drives long-term, sustainable economic recovery.

It is the private sector that creates employment and wealth, that pays down the massive public debt we have accrued in the western world.  It is the private sector that puts huge sums in to the public purse through taxation to create world-class public services.  It is the private sector that drives innovation, that will create the tools that are required to combat climate change, hunger, water shortage, disease.  This gets forgotten all too often.  It is the private sector that got us in to this mess and it will be the private sector that gets us out.

It will be the private sector that re – trains out of work former public sector workers and it will be the private sector that re – hires them.  Will this happen quickly enough to ease the pain for such individuals?  Probably not.  Rarely does any return to work happen quickly enough for the person concerned.  Governments need to create the environment that encourages entrepreneurialism to thrive.  For it is entrepreneurialism, the seeing and seizing of opportunity that will create long-term sustainable employment.

Human Beings are incredible.  In adversity comes incredible strength, determination, invention, creativity.  Through adversity comes great change.  We might just be living in one of the most exciting times in history.  Sure its tough, but let’s make the most of it instead of constantly finding ways to talk ourselves in to an even bigger mess.

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