Radical reform needed in the Public sector

PUBLIC SECTOR HIRING IS FINALLY NEGATIVE FOR FIRST TIME SINCE 1994 – REFORM IS VITAL

Manpower Employment Outlook Survey Shows The UK ‘Jobless Recovery’ Continues

• UK’s Net Employment Outlook remains steady at +1%
• Public sector hiring has become negative for the first time since 1994
• Finance & Business Services is the most positive industry sector for the third consecutive quarter
• Manufacturing has improved for the fourth consecutive quarter to reach +2%

LONDON, 8th JUNE 2010: Manpower, a world leader in innovative workforce and outsourcing solutions, warns of the need for radical reform within the Public sector as results from the forward-looking Manpower Employment Outlook Survey show employer forecasts have fallen into negative hiring territory for the first time in 16 years.

“At a time when the Public sector faces intense pressure to slash spending, its employers must be careful not to incur further financial burden by making short-sighted decisions,” Mark Cahill, Managing Director at Manpower UK, explains. “Workforce transformation is vital to the future success of the Public sector and the challenge for employers is to economise, optimise and transform, without compromising frontline services.

“By following the example of the private sector, where innovative solutions such as flexible working, internal redeployment programmes and well-managed non-permanent workforces have supported companies through the recession, the Public sector can begin to develop a smart, sustainable talent strategy.”

The Survey, which is one of the first in the employment services industry to be published since the General Election, confirms that the UK employment landscape is re-shaping but the jobless recovery is ever-present. Based on responses from more than 2,100 UK employers, the national results indicate cautious optimism with a Seasonally Adjusted Net Employment Outlook of +1%¹ reported.  This mild optimism from employers is not surprising at this stage of the country’s emergence from recession and represents no change in anticipated hiring intentions for the third consecutive quarter.

The Finance & Business Services sector, which dominated the UK’s decline into recession, has since been a strong contributor in leading the country back to growth.  With hiring intentions of +7% since the beginning of the year, it remains the most positive sector for the third consecutive quarter.  Construction sector employers continue to report weak job prospects with an Outlook of -5%, although employer optimism has improved considerably since its weakest point during the recession of -20%. Manufacturing has improved for the fourth consecutive quarter to reach +2%, which can be linked to the increase in UK exports as the pound continues to weaken.

Cahill continues: “Employers are recognising that cost-cutting doesn’t always mean reducing headcount, and are making smart business decisions such as utilising transferrable skills in the workforce, evaluating the real cost of headcount reduction, and pioneering new working practices. For many, overhead savings can be achieved by sharing resources with like-minded organisations, such as administration, HR and finance.   This, teamed with the engagement of a flexible workforce, will allow employers to build the necessary business infrastructure to deliver output-focused solutions.”

Cahill concludes: “The impact of government-imposed spending cuts on both Public sector departments and private sector outsourcing is casting a shadow over the UK’s gradual recovery. In the private sector there is a real need for immediate and long-term growth to boost the UK’s prosperity.  Government investment across the country that incentivises and supports the growth of UK businesses, especially SMEs, will be crucial in helping to rebuild our economy and offer opportunities for employment.  The challenge for all organisations - public and private - is to improve output through the reengineering of workforces to meet new and changing needs.”

Positive hiring intentions – however strong – are good news for employers and jobseekers.  Employers in two-thirds of the industry sectors and three-quarters of UK regions have reported stable or increased hiring intentions this quarter. However, the results show significant differences between industry sectors, geographical regions, and the private and Public sector. For those currently seeking work, opportunities exist around the eco-jobs of the future, the health service and within the buoyant Finance & Business Services sector – all of which is positive news for jobseekers.

Looking at some of the regional findings, employers in the South East report the most positive hiring intentions at +9%. In contrast, West Midlands employers are the least optimistic at -5%, however this is a considerable improvement from last quarter (-9%) and may be directly related to the increasingly positive outlook in the Manufacturing sector which is now at +2%. In London, employers report a slight decline in hiring confidence since last quarter to -2%.

Use the 'Download' option opposite to access the survey results in full, or click here to view an interactive pdf. 



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