Public vs. private vs. third sector HR: The unique challenges
There are undeniably unique features of each sector that prospective multi-sector HRDs must bear in mind
Our July cover piece explores the fact that the skills required to be a public, private or third sector HRD are more transferable than previously assumed, with organisations in each often more similar than you might think. But there are some undeniably unique features of each sector that prospective multi-sector HR professionals must bear in mind:
Engagement. Engagement might seem an easier win in the charity sector but it’s anything but, advises head of HR at the Motor Neurone Disease Association Peter Reeve: “My engagement levels are around 90. You’d look at that and say ‘that’s incredibly high’ but people in the public and third sectors tend to be more engaged with the cause. That doesn’t mean we don’t still have some nasty employee relations issues.” He adds that a common challenge in third sector HR is getting people away from seeing their job as “paid volunteering”, and engaging them with the more challenging and mundane aspects of the work.
Reward. Heightened scrutiny on executive pay means much work for listed company HRDs around remuneration. And of course private sector HR professionals have much more room to be creative here at all levels, points out Anna Penfold, consultant at executive search firm Russell Reynolds: “In the public sector the comp is what it is; you’re not going to be able to change what the Treasury has set.” “The thing that took me a while to get my head around [in the public sector] is how you motivate people if you’re not motivating through money,” adds Alison Rumsey, HRD at Network Rail. “You have to change your perspective as an HRD.”
Commercial accountabilities. “It was at Westminster Healthcare Holdings, over a short period of time, that I noticed the accountabilities were a bit different [in the private sector]. The bottom line mattered,” says Martin Tiplady. This commercial focus doesn’t necessarily mean what you’d assume it would, however. “People have this misguided impression sometimes that you watch the share price every day, but you soon work out it’s got less to do with performance and more to do with the mood of the analysts,” he says. “The things I expected to be easy in the private sector were anything but. And the same with the things I expected to be hard. IT was a good example. The environment you invested in IT in was much tougher in a commercial organisation.”
Ambiguity. “In most places outside the public sector the answer to ‘who’s running this place?’ is pretty clear; in the public sector it isn’t,” says Reeve. “So you need to be much more resilient and able to deal with ambiguity.” “I do think the complexity of stakeholder engagement and managing politics and changes in government is something peculiar to the public sector,” agrees Wendy Cartwright.
Pace. “In the private sector you’re going to be pretty outcome-driven, fast-paced, and commercially-focused,” says Whitehall & Industry Group’s (WIG) chief executive Peter Unwin. “Certainly in the third sector the pace of decision-making is very different,” agrees Reeve.
Brand. “In the private sector it’s all about the brand,” explains Reeve. “People are incredibly loyal to that. We joked you could do anything at Barclaycard as long as you didn’t do anything that brought the brand into disrepute.” “In the private sector you’re much more involved in looking after the people side of the brand,” agrees business coach Carmel Flatley. “You’re responsible for how policies and how you train people to protect the company brand; you’re the caretaker of that brand.”
Further reading: The DWP's Debbie Alder and Bakkavor's Pippa Greenslade explain why cross-sector collaboration is a business imperative