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The benefits of public and private sector careers

Public sector security or private sector salary? Which should you opt for when making your graduate management career choice?

Money, service, training and qualifications: weigh up the benefits of, and differences between, public and private sector graduate management schemes.
According to the ISE, the number of candidates applying for graduate roles in the public sector is much smaller than those applying to the private sector.

A generation or two ago there was a preconception that public sector workers had a cushier, less stressful working life than those working in the private sector. But whether that is true now (if it ever was) remains open to debate, especially in the aftermath of cuts in public spending. Yes, public sector organisations often espouse more flexible working initiatives than private companies, but gone are the days when public sector workers could assume that they’d have a job for life and receive a gold-plated pension along with a gold watch.

Public or private: how easy is it to get a job?

According to the Institute of Student Employers’ (ISE’s) 2019 recruitment survey, the median number of candidates applying for graduate roles with charities or in the public sector is much smaller than those applying to other sectors: 18 per vacancy as opposed to 50 across all sectors. It’s notable that the accountancy and professional services sector attracted 51 applications per vacancy and retail and FMCG 67. While this suggests you’ll face less competition for a job in the public sector, the ISE only surveys its members and it received responses from just 153 employers – so it is probably not a representative picture of graduate recruitment as a whole.

Public sector payscales or the competitive market: how much will you be paid?

According to the Office of National Statistics, from April 2018 to April 2019, full-time workers in the public sector had higher median weekly earnings than private sector workers: £632 a week compared to £570. However, as the ONS points out, this broad-brush figure encompasses roles across the private sector, which includes more very lowly and very highly paid employees than are in the public sector, and so the figures do not represent differences in pay between comparable jobs. So this does little to help us work out the differences for graduate roles within the public and private sector.

The ISE, meanwhile, reports that the median graduate salary offered by its charity and public sector employer members is £25,000 – the lowest amount across all of the sectors it surveyed. Finance and professional services employers pay a median of £30,125, digital and IT employers £30,000 and law employers £40,000. However, the ISE’s membership is self-selecting and comprises the largest employers, so how far this represents the full picture is open to question.

Rather than looking at broad brush figures, it may be more helpful if you compare the salaries of individual private and public sector employers you are interested in. After all, to state the obvious, what you earn depends on what career stage you are at, what is ‘competitive’ in the sector and which employer you choose. Most job sector advice sections on TARGETjobs include graduate salary round-ups, which may be a good place to start: begin with a selection of public sector graduate salaries.

If we take a look at what the NHS, Lloyds Banking Group and McDonald’s has to offer financially, we find:

  • Starting salaries in the NHS in England are the same across any of its management training schemes, including the finance scheme: £24,628 (plus a location allowance where applicable). After completing the scheme, if taken on into a management position, the NHS says you can expect a salary between £27,000 and £37,000. Future earnings can reach £90,000 as a director or £100,000 plus as a chief executive. The benefits package includes 27 days’ holiday (plus bank holidays), a paid-for study package and study leave, the NHS pension, financial discounts on specific products/services and sports clubs, childcare vouchers and a season ticket loan.
  • The salaries for Lloyds Banking Group’s graduate programmes start at £31,000 and vary according to the specialism. The finance graduate programme pays £31,000, for example, while the data science graduate programme, for example, pays £45,000. Internet forums suggest that senior managers at Lloyds Banking Group receive an average base salary of around £78,000 and directors £116,000. The benefits package for graduates includes a £3,000 settling-in allowance, 4% of your salary to purchase extra benefits, support for professional qualifications, 28 days’ holiday plus bank holidays discounts on the bank’s products and services, and private medical insurance.
  • Trainee managers at McDonald’s can earn between £22,000–£25,000 and, in time, are eligible for performance bonuses. Benefits can include: six weeks' holiday; pension scheme; paid sabbaticals (conditions apply); financial discounts from retailers; structured training and development opportunities; and a free meal when on shift. Internet forums suggest that general restaurant managers can earn around £31,000 and area managers £42,000 (but these figures are based on a small sample).

In general, the public sector has well-publicised pay bands for different levels of jobs, while salary negotiations in the private sector are more 'private' (if you'll excuse the pun) and are often driven by trends within the labour market and what competitor organisations are offering. This remains the case even with the publication of gender pay gap information, which is legally required of companies with over 250 employees.

Public or private: which is the best for continuing education?

If we take a quick look at private and public sectors, we can see that both give opportunities for professional training.

  • In the private sector, professional services firm EY offers training based around gaining the professional qualification appropriate for the job role: for example, qualifications with the Chartered Institute of Management Accountants if you join its business consulting graduate programme and the Institute and Faculty of Actuaries if you join its actuarial programmes.
  • In the public sector, the National Audit Office (NAO) provides training for an accountancy qualification with the Institute of Chartered Accountants in England and Wales.

The training and support on offer in both the public sector and private sector is provided by a mixture of formal training sessions, on-the-job learning, work-shadowing and coaching.

Can you switch between one sector and the other?

Can you learn your craft in the public sector then cash in by moving into the private sector later in your career? Yes, but you may have to re-focus your achievements on your CV to prove you understand the hard-nosed realities of working within a competitive business environment.

Similarly, private sector workers looking to make the most of perceived better public sector perks may find it’s harder to switch than they thought. Cuts in the public sector mean every post is under scrutiny and all new appointments have to be justified.

It can be done, though. For example, Maxine Bulmer, now a director of cyber security at CGI, started her career working for HM Revenues & Customs and stayed there for eight years, becoming security/business continuity team leader. She moved to what is now CGI after working in partnership with the company on a project. ‘I liked their approach to work,’ she told a previous edition of our sister publication, the UK 300. ‘I asked them “how do you become a consultant?” and they answered “send us your CV”.’

Is public sector work really so far removed from private sector practices?

Maybe not – take the Civil Service Fast Stream programme as an example: traditionally, in the course of your training you’d spend time in different areas of public sector work and possibly experience private sector placements as well. You could be managing million pound-plus budgets, dealing with complex laws and having to turn reports around quickly, accurately and to deadline, possibly for publication to a very wide audience.

Private sector organisations are not isolated from the public sector, either; management consultants work with businesses and organisations covering energy and property, telecoms and transport, healthcare and education, in both public and private arenas.

Still confused about the best option?

The only right answer as a career choice is the one that suits your circumstances and will motivate you to get out of bed in the morning. To gain a sense of what would suit you, browse different companies and opportunities on TARGETjobs.