Public sector employers are raising pay to new highs in the cost-of-living crisis and in response to challenges finding staff, with more than half (52%) reporting they have hard-to-fill vacancies. 

This is according to the latest quarterly Labour Market Outlook from the CIPD, the professional body for HR and people development.  

The CIPD’s report found that the strike-hit health and education sectors are facing particular challenges in recruiting staff, with 60% of education employers and 55% of healthcare employers reporting hard-to-fill vacancies. Looking ahead, 45% of public sector employers expect significant problems filling vacancies to continue over the next six months. To address recruitment challenges, and in addition to pay decisions, the CIPD is urging employers to focus on job quality, inclusive recruitment, flexible jobs, and investment in workforce skills. 

In response to current challenges, expected pay awards in the public sector have risen to 3.3%. This is the highest level seen in the CIPD’s report since tracking began in 2012. However, despite the record increase, this still lags median base pay expectations of 5% among private sector employers, who also report difficulties recruiting the staff they need. Four in ten private sector employers report hard-to-fill vacancies, while 23% expect significant difficulties filling vacancies over the next six months. 

Besides increasing pay, the most common responses by employers to address hard-to-fill vacancies over the last six months were:  

  • upskilling staff (55% of public sector employers vs. 49% of private sector employers) 

  • increasing the duties of existing staff (48% public sector vs. 34% private sector)  

  • improving job quality, for example, by increasing flexible working (21% public sector vs. 32% private sector) 

Jon Boys, senior labour market economist for the CIPD, the professional body for HR and people development, comments:   

“The labour market may have become less competitive in recent months but there is still strong demand for workers across the economy, with public sector employers finding it particularly hard to find the staff they need.  

“Pay will be key for many people in the cost-of-living crisis but employers should look beyond this to the full range of measures they can take to boost how they recruit and retain their employees. These include more inclusive approaches to recruitment, creating more flexible jobs, as well as investing in training and developing line managers’ people management skills.  

“The UK Government could also help employers upskill their workforce and fill skills gaps by reforming the Apprenticeship Levy into a more flexible skills and training levy.”  

To boost job quality, employers can consider a range of approaches including: 

  • Offering flexible working arrangements - this must go beyond homeworking to ensure people with frontline roles can also benefit 

  • Improving employment conditions, such as changes to contractual arrangements 

  • Giving employees more say in decision making 

  • Increasing progression opportunities and investing in skills development 

  • Improving job design  

  • Improving training for managers to enhance their people management skills 

  • Introducing or increasing automation for routine or menial tasks 

  • Introducing measures to support financial wellbeing.

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