As employers gear up to work within a stronger labour market, there is evidence a growing scarcity of high-level talent could have a profound impact on the public sector, restricting both pay rises and recruitment.
Of course, even when there are more people within the labour market, this does not necessarily mean they have the right skill level. In many parts of the public sector, which recruits people for a whole career, the crunch point where there is competition with the private sector is typically at new graduate level.
The oversupply in the graduate market has helped the public sector to compete in recent years, but the upturn – and evidence of upward trends in graduate employment and pay – will become a concern for these employers.
Retention rates in the public sector are traditionally high. But, if talent starts to haemorrhage to the private sector and overseas, employers will need to look to the reward and employment experience of their skilled and talented people, who rarely leave just because of money.
Various pieces of research show that the rewards for talent lie as much in intrinsic as in money-based or extrinsic rewards. Therefore, providing challenging jobs, a corporate mission or brand that graduates will buy in to, a varied role and opportunities to develop are as important, if not more important, than pay.
However, while intrinsic rewards are a critical element in employee retention, and people might love their job, their pay needs to be at a level that enables them to live reasonably comfortably. If not they may, in effect, feel pushed out of the organisation by a need to – for example – earn enough money to get on the property ladder.
To read part one of the discussion, please click here.
