The work that you will do as a graduate will be quite similar across the public and private sectors.
You may have heard that choosing between working in the public sector or the private sector will affect your entire management career. Traditionally, there were seen as two distinct career paths with differences in work, earning potential and development. Is this still the case?
The truth is: whether you work in the public sector or for a private sector organisation, the work that you will do as a graduate is likely to be quite similar. The two sectors are also not as cleanly defined as they may have once been and likely to be some crossover between the two sectors: public sector organisations work with the private sector and vice versa. On a management graduate programme, there may even be the opportunities for cross-sectoral secondments and placements.
So, if the work is likely to be the same, does it matter where you choose to work? To find out how this choice might affect your future management career, we looked at the salary you could earn, the opportunities for training and qualification and the possibilities for career progression in both sectors.
How do public sector and private sector management salaries differ?
According to the Institute of Student Employer’s (ISE’s) 2020 recruitment survey, the median graduate salary offered by its member charity and public sector employers is £26,000. This is lower than the average from all sectors (£29,677) and is the lowest of all sectors.
In comparison, the ISE reports that the median graduate salary at financial and professional services firms was £31,425, it was £31,500 at digital and IT employers and £38,250 with law employers.
It should be noted, however, that this is a self-selected survey of the ISE’s members, who tend to be the largest graduate employers, and are likely to offer graduate salaries that are in the higher range. Additionally, charities will tend to offer lower salaries than public sector organisations, which may cause that grouping’s average to be lower than one purely for public sector employers.
Remember, it’s not just the pay cheque that you’ll get from your employer: organisations will also offer benefits (such as ‘cycle to work’ schemes or private health insurance) in addition to their financial remuneration. You can find out more about the most common benefits and incentives here.
How will salaries change with experience?
The above figures are all for graduate salaries, so how much you can expect to earn on a graduate scheme. But, how will this figure change after the end of a graduate scheme and beyond?
To get an idea of what you could be earning, we looked at data from the ONS (Office of National Statistics) comparing private and public sector salaries in 2019. In the public sector, the mean hourly remuneration for ‘professional occupations’ (jobs required a degree, and, in some cases, postgraduate qualifications and industry training) was £26 in the public sector sector and £27 in the private sector. Progressing to ‘managers, directors and senior officials’ the mean hourly figures rise to £30 in the public sector and £32 in the private sector.
The ONS report also concludes that ‘private sector high-skilled employees in the knowledge-intensive services had higher earnings on average than their counterparts in the public sector.’ So, if you are primarily motivated by high salaries, a career in the private sector may be more lucrative for you.
- Take a look at a selection of public sector graduate salaries here, including from the Civil Service Fast Stream, NHS and security services.
- For more on how your salary could change as you progress, take a look at The Pay Index’s interactive tool. You can compare the median salaries for graduates of specific courses and see how they change over time.
Public or private management: the options for training and further qualification
Whatever your employer, if you join a graduate scheme you will receive the training and support you need to do your job. This will usually take the form of a mixture of formal training sessions, on-the-job learning, work-shadowing and coaching.
Whether you’ll work towards formal professional qualifications will more likely depend on the type of job that you are doing, rather than whether you work in the private or public sector. While some of these qualifications may not commonly be gained as part of a graduate scheme, there will likely be opportunities to pursue these further in your career. You may even be able to study for a postgraduate qualification, such as a masters in business administration (MBA).
- If you are working in an accounting- or finance-related business role, you may work towards qualifications with the Chartered Institute of Management Accountants (CIMA), Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW). Qualifications from all of these bodies are recognised throughout the finance industry. If you were to join EY’s business consulting graduate scheme (in the private sector), you’d work towards a CIMA qualification, while the public-sector National Audit Office graduate scheme leads to an ICAEW scheme.
- If your job is more business or commercial-focused, you may study for professional qualifications with the Chartered Management Institute (CMI), Institute of Leadership and Management (ILM) and the Association for Project Management (APM).
- All of the NHS’s graduate management training schemes lead to a postgraduate certificate in healthcare leadership.
- The professional body for human resources (HR) is the Chartered Institute of Personnel and Development (CIPD).
- For sales and marketing roles, you may be able to get a qualification from the Institute of Sales Management (ISM), the Chartered Institute of Marketing (CIM) or Institute of Data and Marketing (IDM).
You can find out more about professional bodies and professional qualifications here, and, for specific information, take a look at the different TARGETjobs career sector pages.
Where can your management career take you?
As their name suggests, management graduate schemes will train you up so you are ready for a management role. However, whether a job is guaranteed or not will depend on the specific scheme you apply for. For example:
- in the public sector: all of the Civil Service Fast Stream schemes (including the ‘commercial’ and ‘project delivery’ schemes) guarantee a permanent job at the end, while the NHS’s graduate management training scheme does not (though you will be invited to apply for management jobs within the NHS).
- in the private sector: Lloyds Banking Group states that it supports its graduates (including those on its commercial banking and finance graduate schemes) to find a role that suits them at the end of their scheme. McDonald’s trainee manager programme ends with an interview and the chance to secure a permanent management role.
In both the private or public sectors, graduate managers will typically be managing a single team or process, supporting their work and working towards certain business objectives. With experience managers can progress to become middle managers and senior managers, where they may be managing other managers and will have more input in defining the objectives and goals of their part of the organisation. Finally, managers can progress to the highest roles in their organisation, serving as an executive officer.
Make your own graduate management choice
Now that we’ve gone through some of the differences and similarities between public and private sector management and business careers, it’s time for you to consider your options. As with all career decisions, it’s important to do your own research before making any firm choices. Instead of looking at broad-stroke trends, it would be more helpful to compare the salaries of individual private and public sector employers that you are interested in.
After all, the only right answer to ‘private or public?’ is the one that best suits your circumstances and will motivate you to get out of bed in the morning.