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Public sector squeeze may benefit finance professionals

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13th Nov 2009
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Andrew Clark explains why a squeeze on public spending could be a mixed blessing for finance jobs.

Whether it’s Gordon or David who secures victory in the next election, one thing is certain and that’s a squeeze on public spending. According to research by the Institute of Fiscal Studies, the UK will face the tightest squeeze on public spending since the 1970s.

The effects on financial recruitment are difficult to predict. Will there be an increase in temporary positions as the public sector finds it increasingly difficult to get sign off for permanent headcount? Or will there be a flurry of recruitment activity on a temp to perm basis between now and the election on the assumption that the axe may fall swiftly on agency workers? How will the public sector balance savings in staffing costs with having to maintain a quality of service?

Many public sector bodies may be tempted to push through permanent recruitment now if they have the budget for it in order to ensure that they have the necessary business critical skills in place. This could result in an increase in temp to perm positions, because one of the biggest areas of expenditure for any organisation - not just the public sector - is staffing.

Temporary workers
For the public sector, one of the most significant areas of staffing spend is agency workers. While temps have long been used to plug skills gaps, possible reluctance for employers to commit to permanent headcount without a real guarantee of return on investment could well lead to the resurgence of the ‘working interview’ where candidates can prove their worth before the organisation commits to increasing permanent headcount. If public sector organisations have any staffing budget left, they may well want to use it to appoint permanent members of the finance team rather than risk being forced to let go of interim and temporary staff.

The other side of the coin is that the opposite may occur. Staffing budgets may be cut so much that public sector organisations find it impossible to obtain sign off for permanent headcount and therefore have to bolster their finance departments with temps and interims.

Skills gaps
What won’t be acceptable is for business critical posts not to be filled. Whether it’s an NHS Trust, a local authority or a government department, they simply cannot run without an efficient finance department - it’s like having a car without a steering wheel. Additionally, many public sector departments are experiencing an increase in demand for their services, so having the right skills in place is going to be crucial.

The type of accounting professional working in the public sector has changed dramatically over the past decade. The New Labour regime brought in an environment where budgets and targets have become increasingly important and departments and authorities have consequently needed to turn to the private sector for the necessary commercial approach.

Having worked so hard in recent years to attract commercial talent, it would be tragic to lose it again. Let’s hope that today’s organisations will remember the last major recession in the early nineties, when downsizing and recruitment freezes were the order of the day, and what a disaster that was for succession planning strategies a few years down the line. Demand exceeded supply with predicable consequences - an upward pressure on salaries and a dire shortage of available skills sets.

Outlook
So what advice can we give to finance professionals currently working in the public sector? Whether you are employed on a temporary or permanent basis, adding value will be absolutely key. Evaluate your role on an ongoing basis and note down your achievements.

Make sure you are flagging up any ways that you are saving the department money, such as making accounting cycles more efficient or evaluating risk. If you can, take the initiative and offer to take on more responsibility. Keep your ear to the ground for news of new projects that you may be able to get involved with and volunteer. Last but not least, stay positive – keeping a confident and upbeat attitude may not be easy to do but it counts for a lot.

Andrew Clark is a senior manager with the public sector and not for profit division of FSS, the financial recruitment specialist. 

 

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