vallierojas: Frontline pay in public sector now better than private sector, says report

Thursday, October 13, 2011

Frontline pay in public sector now better than private sector, says report

Hay Group's quarterly pay survey predicts gap will close again once cuts bite ? and finds senior jobs still pay far more in the private sector

Frontline and support staff in the public sector now earn more than their counterparts in the private sector, but that balance is unlikely to last as austerity measures bite, a new report predicts.

Management consultancy Hay Group's quarterly report into pay suggests the traditional gap between public and private, where those working for the state typically earned less, has reversed in recent years thanks to pay being cut or frozen at private firms.

But it says senior managers in private firms still earn significantly more ? on average �57,000 a year ? than their public-sector counterparts and suggests pay structures are significantly flatter in the public sector.

"Contrary to popular belief, for senior management in both public and private sectors, total percentage increases over the last 10 years have been identical ? challenging the view that public sector managers have enjoyed disproportionate wage boosts," said the PayNet UK Salary Tracker report.

Back at the "operative level", which includes roles such as receptionist and accounting clerk, pay for those in the public sector has risen 50% over 10 years, with staff now earning �695 more per year on average than those in private firms. In the private sector, the equivalent rise has been 37%, with salaries remaining unchanged or falling since 2009 as firms felt the effects of the 2008-09 recession.

Operative staff in the public sector now earn �18,027 on average, compared with �12,035 in 2000. Private sector equivalent wages average �17,332, from �12,652 in 2000.

But the current balance will be reversed over the next two years as public sector cuts hit, the report predicted.

That will leave the public sector with the challenge of attracting and keeping talented workers, said Hay Group consultant David Smith.

"The government's austerity programme, stuttering economic recovery and calls for restraint will all have a tangible impact on the pay divide. With pay restraint taking hold in the public sector and pensions set to become a less valuable benefit, we predict that the salary gap will start to widen at all levels in the next couple of years," he said.

The report analyses pay in some 600 organisations covering more than a million employees, but excludes top senior jobs such as chief executive.

Katie Allen