Public Sector Salaries Rising Faster Than Private Sector Ones
It is a traditional argument that employees in the public sector earn less than their counterparts in the private sector. New research however suggests this is increasingly a myth as public sector salaries increase faster than those in the private sector.
The survey, conducted by Hay Group, revealed that the pay gap between public and private sector has been reversed at operational levels. They found that people employed by the state saw their salary increase by 13% more than their counterparts in the private sector in the last decade.
The data comes from Hay Group’s PayNet UK Salary Tracker, which analyses pay and salary movements in over 600 organisations and represents over 1 million employees.
However at senior levels the gap still exists, with top managers in the private sector still earning considerably more than their public sector peers.
David Smith, reward information consultant at Hay Group, comments: “The public sector was not directly affected by the global economic downturn, unlike the private sector. But with Government austerity taking hold, many employees are beginning to feel the impact of cost cutting in their wallets.”
“Public sector managers should arm themselves with reliable and robust figures, particularly around the value of the total package, to help support their decisions about pay in the public domain. The Government’s austerity programme, stuttering economic recovery and calls for restraint will all have a tangible impact on the pay divide.”
The salary gap is predicted to widen across all employee levels over the next two years. Smith concluded: “In these tough times, the challenge for the public sector will be to contain costs yet still be able to attract and retain key talent.”