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Why UK Businesses Don’t Want To Hire Public Sector Workers

As a result of widespread public service cutbacks many public sector workers are either set to lose or have already lost their jobs. Figures from the Office for Budget Responsibility (OBR) have predicted that between 330,000 and 490,000 public sector jobs will be lost over a four year period.

The coalition government had been hoping that the private sector would be able to take on many of those losing their jobs, and thus prevent spiralling unemployment rates, but new surveys appear to dampen such hopes.

Research reveals that private sector unlikely to offset public sector losses

In January, research carried out by the Chartered Institute of Management Accountants (CIMA) revealed that 74% of mid-sized businesses have no plans to hire ex-public sector workers this year. A shocking 59% of small and medium enterprises surveyed said that they do not anticipate a rise in recruitment levels during the first quarter of 2011.

Only 11% of businesses surveyed said that they expected to employ more workers from the public sector over the next 12 months.

The findings of this survey seem to suggest that the reason why private sector employers won’t be taking on unemployed public sector workers is primarily one of market conditions, and a general lack of confidence in the pace of economic recovery.

Ray Perry, executive director of CIMA, said, “going into 2011 mid size businesses predict no change to recruitment levels, with over half saying they do not plan to increase the number of full time employees. This may be a concern for many public sector workers who are facing redundancy and hoping to find jobs in the private sector.”

More than half of companies surveyed believe private sector workers lack skills

A survey by Barclays Corporate and the Financial Times also revealed that many businesses do not foresee being able to offset the job cuts affecting workers in the public sector.

More than 50% said that they were planning to create new jobs in 2011. However, three quarters said that they did not expect to create enough jobs to make up for those public sector jobs lost.

The survey of 500 companies also revealed more telling reasons why businesses had no plans to hire ex public sector workers. More than half asked (57%) said that they were not interested in hiring public sector applicants, of which 52% believed that they lacked necessary transferrable skills and were ‘not equipped’ for the job.

Lack of ‘like-for-like’ jobs

The Financial Times also points out that recruitment companies, “say there will be opportunities but they may not be attractive.” Many public sector workers are accustomed to higher salaries and better benefits than they might receive in an equivalent role in the private sector.

The Financial Times goes on to say that, “an absence of like-for-like jobs in the private sector will force many to look at other options, such as creating businesses, social enterprises or simply becoming self-employed and working for a variety of outlets.”

So it looks like the fallout from the public sector cuts has had a ripple effect on the jobs market within the private sector too. Unemployed and, most shockingly, unwanted by over half of private sector employers, public sector workers are going to have to undergo a fundamental shift in the way they think about work. It may be that one of the after effects of the current economic situation is that the UK suddenly sees a burst of new enterprises started by disenfranchised public sector workers. While the situation is difficult now, long term we could be looking at a very different employment landscape in five years time.

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