With local councils already having a collective budget deficit of £4bn, and the public finances certain to worsen as the impact of the recession feeds through over the next few years, something has to give in public sector recruitment.

Already the impact has started to feed through with councils cutting 7,000 posts in the past six months. As the public sector faces up to even tougher times ahead, what will it mean for recruitment in the sector?

“The public is not going to recognise that there is no money for recruitment,” says Nana Amoa-Buahin, divisional director of HR and organisational development at the London Borough of Lambeth.

“The challenge is to get people into the organisation using a much more streamlined methodology. We will have to fundamentally change our
recruiting strategy, where we get our people from and how much it costs to recruit.”

Duncan Ward, director public sector at Badenoch & Clark, says that the prognosis for recruitment is gloomy. While hiring managers have been slow to receive their budgets this year, he says “more importantly they are envisaging next year being even worse”.

Ward says he expects less recruitment overall in the public sector over the next few years. He says the big challenge for agencies is going to be to identify where the opportunities are going to be.

Noorzaman Rashid, director of government & public sector at Harvey Nash, predicts that the squeeze on public finances will be felt unevenly across the public sector. While he predicts that recruitment in the NHS will remain relatively buoyant due to constant organisational change and high turnover of staff such as nurses, housing associations, for example, may be affected a lot more.

Local government is facing a particularly challenging few years and is already having to question what services it must provide, he explains. “This will in itself have an impact on its recruitment,” he adds.

Amoa-Buahin says one way Lambeth will look to cut the costs of recruitment is by placing more emphasis on talent management, “growing our own people and skilling them up so they can fulfil those roles”. Transferring staff between departments will also become more widely used, she suggests.

However, she admits that on their own these measures will not address the issue, particularly in more specialist roles where no succession planning is in place.

Other measures will be needed, she suggests. Recruitment advertising will continue to be cut, as its effectiveness is scrutinised more closely. Similarly the return on investment at assessment centres will increasingly be monitored.

The use of managed service providers to provide interim staff when staff leave will also be questioned, she suggests. “We have to have a much smarter way of recruiting not just renegotiating contracts,” she adds.

Paul Mallinson, director of Hays Resource Management, suggests that pressure on the public purse will increase interest in recruitment outsourcing, with public sector organisations looking to build long-term partnerships with staffing companies to cover permanent and non-permanent staff.

Similarly, as the pressure to ecome ever more efficient increases, the use of vendor managed service arrangements will inevitably become more attractive to some cash strapped organisations.

With pressure on public finances set to increase up to the next General Election in 2010 and beyond, according to most economists, irrespective of who wins it, public sector employers will increasingly look for ways of cutting recruitment costs.

Talent management and staff redeployment is likely to come to the fore. For external recruiters, the picture is likely to be mixed, with sectors such as health and much of education likely to remain relatively buoyant.

keyfacts

• Employed Number of people employed in the public sector — 5.8m
• Prediction The Chartered Institute of Personnel and Development (CIPD) estimate for number of job cuts by 2014-15 because of restrictions in public spending — 350,000
• Borrowing Public sector borrowing July 2009 — £8bn
• Job cuts Jobs cuts made by councils in past six months — 7,000

Figures from CIPD/KPMG Labour Market Outlook Summer 2009