Tougher public spending control: recruitment can’t be squeezed much more
Tue, 24 April 2012
As Treasury secretary Danny Alexander outlines further government commitment to fiscal consolidation, leading recruiters in the sector have told Recruiter that it may be hard to take further constraints on their incomes.
In a speech yesterday, Alexander called the coalition “a government which is acting decisively and fairly to clean up the mess we inherited”.
He continued: “Under new rules, I have asked all departments to identify around 5% of their resource budget that could be re-prioritised if new pressures emerge or new policies have to be funded, so there is a shared understanding of how it could be paid for.”
This does not mean further budget cuts, a spokesperson for the Treasury tells Recruiter, but does put recruiters’ contracts, alongside all aspects of public spending, under further scrutiny.
Tristan Ramus, chairman of Human Capital Investment Group, which includes social care recruiter Caritas and public sector specialist Eden Brown among others working in the sector, tells Recruiter the sector is already prudent, saying: “Over the last 20 years the public sector has procured margins significantly better than most other sectors.”
Within local authorities, he says this is below 8%, and in the NHS margins averaging around 20% 12 months ago are now nearer 14%. Given ever-increasing costs on compliance and background checks, he says: “I don’t think there’s any further to go on that.”
However, Ramus is positive for the prospects of recruiters in the sector – even if margins are not as healthy as one might hope, he says at least that in the sector you’ve got a “relatively good workflow”.
Speaking to Recruiter James Campion, director of Michael Page Public Sector, agrees that in recent times in the public sector “there’s been a lot greater focus on value for money… I think historically that wasn’t always the case” – and he goes on to say that further pressures on spending would present further challenges.
In this climate, Campion says, “you have to really earn the right to earn money”, but he adds that “Michael Page views the public sector as one of its most important clients”, and as such is continuing to put extra resources into it, as it expects conditions to turn in 12-18 months time.
He adds that with increased focus on fiscal visibility, he would expect an accompanied rise in accountancy and finance staffing demands.
IT is another buoyant niche of public sector recruitment, as Don Tomlinson, managing director of IT recruitment for the NHS business max20, explains Recruiter: “The NHS is making substantial savings by utilising cutting edge technologies to produce more efficient and effective work practices,” adding that this “means that demand for IT staff, rather than contracting, is buoyant”.
His comments yesterday come the day before IT recruitment site CWJobs.co.uk announced that demand for IT professionals in the public sector is up by 3% in Q1 2012, the first rise since 2010.