Public sector hiring intentions at 12-year high

An increase in hiring intentions among public sector employers looks set to support further employment growth in the UK, according to a report from the CIPD and the Adecco Group. The latest quarterly Labour Market Outlook survey suggests that public sector employment growth is expected to increase in line with the private sector for the first time since 2008.

The increase in employment confidence in the public sector coincides with a number of pledges by the government to boost investment in public services. Women already account for around two thirds of the public sector workforce, suggesting that increased hiring by public sector employers will further boost the number of women in work.

Gerwyn Davies, Senior Labour Market Adviser for the CIPD, said: ‘After more than a decade of contraction and pain, the public sector is now very much part of the good news employment story. The recent recovery in public sector employment is undoubtedly one of the key reasons behind the recent strong gains in the female employment rate, and this looks set to continue in the near to medium term.

“However, we should not lose sight of the net loss of more than 300,000 jobs in the public sector since 2010 and the challenges this has presented public service employers and employees in delivering crucial public services. Public sector organisations must prioritise managing and developing their workforces to empower and motivate existing public service employees, not just increase headcount.’

High confidence

Overall, the report shows that employer demand for labour remains strong. The report’s net employment score – the proportion of employers expecting to increase rather than decrease staffing levels in the next three months – has remained strongly positive at +22, compared to +21 the previous quarter. Greater public sector confidence – rising for the second quarter in a row from +14 to +21 – has compensated for a fall in the private sector from +25 to +21.

[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Employers who can offer less than a 2 percent pay increase cited affordability, public sector pay restraint and costs such as the National Living Wage as factors inhibiting pay growth.[/perfectpullquote]

Other key findings of the report, which is based on a survey of more than 1,000 employers, include:

• employment confidence has fallen sharply among manufacturing employers, down from +22 to +6, while confidence is highest in healthcare (+28), construction (+27) and the voluntary sector (+23)
• public sector employment recovery is broad-based, with public administration, healthcare and education all predicting strong growth
• pay growth is likely to remain consistent with recent trends, with those surveyed expecting to award an average pay rise of 2 percent over the next 12 months

Employers who can offer less than a 2 percent pay increase cited affordability, public sector pay restraint and costs such as the National Living Wage as factors inhibiting pay growth.

Skills shortages

Around two-thirds of respondents who have vacancies reported that at least some of these vacancies are proving hard to fill. In addition, almost four in ten said there were unable to fill a permanent vacancy during the past year, with roles in healthcare, engineering, teaching and IT being the most problematic. Around a quarter of all employers said they have increased investment in skills in the last two years to address hard-to-fill vacancies. One in five have offered more apprenticeships, rising to 29% among public sector employers. This suggests the apprenticeship levy may be acting as a catalyst for more activity.

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