As we approach the end of what’s been an incredibly eventful year not just in the public sector, but for Investigo’s public sector team, what better time to look back on the key trends and happenings of the last 12 months, and think about what 2024 might bring?
How public sector organisations attract, land and retain talent took another turn in 2023. Compared to previous years, leaders and businesses looked to batten down the hatches after the hiring frenzy of post-Covid bounce-back year, 2022, and the dramatic increase in public spending during the pandemic as well as Whitehall activity during the period spent exiting the European Union. A long sentence, but a lot has happened!
So what’s been going on in 2023? Let’s start with 2022.
The year following the end of Covid restrictions was for many, a time of plenty. Huge demands by public sector bodies to hire after slow hiring or even redundancy in previous years meant that candidates were in the driving seat, taking their pick of the roles. This pushed up salaries and contractor day rates (more on that later). But, as we began to see during early 2023, this was a pendulum swing now in reverse – leaders were tightening their belts, budgets weren’t getting signed off and time-to-hire got longer.
There are several reasons why this may have happened. Firstly, there was a large feeling of unease during the winter of 2022/2023. ‘Trussonomics’ caused a degree of chaos for the country by continuing to make money more expensive – particularly hitting some of those public sector bodies (and private sector companies) that were reliant on cheaper funding. The cost-of-living crisis was a barrage of bad news telling us to save money, spend less, cut our bills – keep your head down! The government had two changes of leader and the cascade of disrupted decision making meant that more projects and programmes were kicking off without a clarity of budget and long-term thinking. All in all, a negative spiral meant leaders hiring less. Less hiring has then also had the impact of fewer people leaving jobs and the natural attrition companies can expect. In October 2023, PwC reported they were making redundant a significantly sized group of employees that would have usually left on their own accord.
Interestingly, however, most of those contractors and consultants engaged on projects stayed on those projects. Leaders and transformations held on to what they had – the show had to continue. This is good news for us in the long run – the work is still there. Prisons, schools, hospitals, roads, rivers, ships and security still need to work properly.
‘Surge capacity’ became something many leaders were talking about; prearranged, pliable and quality benched teams of independent contractors who could be called upon quickly for reactive work or for natural fluctuations in project demand. I remember first creating surge teams in 2018 and 2019 for EU exit work. It was nothing fancy, born from necessity to make my life easier, the customer experience better and the product viable. I pre-vetted high calibre professionals, gave them a contract, laptop and mobile, then kept the customer informed every two weeks of their availability (good old Excel). Due to the nature of the work in central government these resources had to be the crème de la crème, appropriately cleared and within a (albeit healthy) budget. The result was super-fast, reliable resource that could deploy with sometimes hours’ notice, although usually a day or two.
Anyway, it seems more are talking about surge capacity now – largely I believe because organisations understand they have to be innovative to attract the skills they need for the budget they have. Organisations cannot rely on large, centralised hiring frameworks to deliver at the quality or speed needed and with a flood of resources on the market, the ability to properly vet and appropriate talent to programmes is critical for project leaders. I recently met with a large UK not-for-profit organisation that leads in its field, but their inexperience in how to approach the market is causing them terrible bother. We went through different ways of approaching the contract resource market (in this instance for digital and finance support) and you could see the ‘lights coming on’ at the realisation they were well behind the times.
Many of these surge contracts are, in reality, exclusive supply contracts which give the supplier the power to prioritise, pipeline and deploy the best people available, although customers need to be careful they don’t end up paying over the odds when a supplier can call the shots. However, surge contracts offer the opportunity for good suppliers and good customers to work together, understand the nuances of a body or project and secure talent that is properly skilled but also culturally fit for the surroundings. These contracts can offer a managed and quality service, but without the massive price tags found in traditional consultancy models.
Buyer confidence seemed to pick up again in Q2 of 2023 with organisations starting to move faster to hire, although permanent hiring still appeared lower nationally. Q4 is traditionally a busy period in the UK… people have had their holidays, the kids are back in school and we only have the festive cheer of Christmas to look forward to – so what do we do? We get to work! Get the old coat out of the attic in preparation for winter, lose a couple of umbrellas at London Bridge and start drinking dark ales to keep your circadian rhythm in check. I love this time of year because emails get answered quickly, and decisions made. We’re equidistant from the tax year and have everything to play for. Of course, we get the budget, an unexpected reshuffle and further insight into the forming tactics of the impending general election.
What could 2024 have in store?
A change of government potentially, usually a good thing for talent firms as everyone plays a game of musical chairs. Some projects get canned, others get pushed forward. Clear direction and agenda? We’ll have to wait and see. We’ve had a number of years of decisions swivelling and changes of mind. We’re now starting to see post-EU exit work in the shape of new policies and the corresponding work attached. Will the pendulum swing back and trigger another hiring frenzy? Possibly not at 2022 levels as the country still hovers around a possible recession. But, for the meanwhile the ‘happiness’ index seems to be holding out. A positive market is a buying market, things moving and people driving forward.
Customers who continue to engage with talent firms will get prioritisation as well as the best skills around. If you’re a public sector body looking for the right talent to strengthen your team or you’re a professional looking for the opportunity to make a difference for a public sector body, please contact our public sector team.
