How will public sector pay freezes impact recruitment?

The economic crisis brought about by the pandemic has meant that Boris is being forced to break one of the pledges that won him the election a year ago.

As part of the Treasury’s Spending Review, it was announced that the salaries of most public sector workers will be frozen. It’s a move that has divided the country. Having had a pay freeze for 8 years that only ended 2 years ago, many unions are fuming.

Added to that the fact that many public sector workers are the very same keyworkers that we were clapping for on our doorsteps during the first lockdown and there is a lot of bad feeling around this decision. However, others argue that public sector workers have been kept in employment during the pandemic while other industries have had to make thousands of redundancies or cut hours and pay. Public sector pay is also more on average than that in the private sector and the sad reality is that the government needs to claw back money somehow. Whether it’s the right thing to do or not, the real question for our industry is, will these pay freezes affect public sector recruitment?

Who’s impacted?

Before we begin to tackle that question, it’s important to note that NHS workers and those earning under the median wage of £24,000 will be exempt. Granted, that leaves at least 1.3 million public sector employees – including fire fighters, teachers, police, armed forces, local authority workers and civil servants – facing a salary freeze. However, that represents less than 25% of the total number of 5.5 million in the public sector. Of course, that’s small consolation to those that recruit in those areas and there is also the question of whether the bad feeling and the sense of pay insecurity it has created will affect both retention and recruitment in the entire sector.

Certainly, the unions believe it will have a disastrous effect on the public sector workforce. The General secretary of the Association of School and College Leaders, Geoff Barton, said:

“The government asks more and more of teachers and leaders and then effectively cuts their pay. It should not be surprised of staff decide to leave the profession.”

Mike Clancy, General Secretary at Prospect, believes it “will cause huge damage to recruitment and retention in key areas.” It is clearly a possibility but I think a lot hinges on whether the pay freezes will last just for the year that the spending review covers or if it will be part of the government’s long-term strategy to mend public finances – currently this is unclear.

Public Vs. Private Sector

What needs to be considered is the backdrop to this announcement. The fact is that many private sector industries have been struggling for months now. The country is facing widespread unemployment and redundancies continue to rise. My feeling is therefore that these pay freezes won’t hugely affect public sector recruitment as the alternative is sadly not much better. There is a bigger issue for public sector recruiters and that is that many public sector fields – including education and healthcare – have struggled to recruit enough workers for some time now and Covid-19 has merely intensified that.

The Numbers

We have seen from WaveTrackR data that public sector recruiters have posted some of the highest numbers of jobs across the board during the pandemic – most recently 15% of all jobs posted in October and 11% in November – and yet public sector applications have been comparably far lower.

Figures just released by WaveTrackR show that public sector recruiters have received around 100% more applications over the past three months than over the first three months of the year but have posted over 700% more jobs – a massive contrast which serves to highlight a candidate shortage in this industry. I wonder if a perceived increase in job security will change that in the coming months?

It’s impossible to say for sure whether these pay freezes will impact Public Sector recruitment but it’s certainly not going to help drive interest in a sector that has experienced a skills shortage for some time, perhaps largely due to nearly a decade of pay freezes already. The hope is that the salary curbs will be a short-term, 12 month strategy and that alternative incentives are offered to help recruit public sector workers.