Public sector security or private sector salary? Which should you opt for when making your graduate management career choice?
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 age of cuts: yes, in general, public sector organisations often espouse more flexible working initiatives than private companies, but gone are the days when you could assume a lifetime of service in the public sector would be traded for a gold-plated pension on retirement.
Public sector payscales or the competitive market: how much will you be paid?
According to an Office for National Statistics (ONS) report in November 2014, public sector workers across all ages and qualification levels earned, on average, between 3.3% and 4.3% less than private sector workers in April 2014 when differences in organisation size were considered. The differences between the top 5% of earners across public and private sector workers (those paid the highest amounts) were even more marked: public sector executives earned on average 13% less in April 2014 than their private sector equivalents when differences in organisation size were taken into account.
However, this is a very ‘broad brush’ analysis: what you earn often depends on what career stage you are at and the type of career you choose. If we take a look at what the NHS and the professional services and accountancy firm PwC has to offer in terms of graduate salaries, we find:
- Starting salaries in the NHS in England are the same across any of its management training schemes, including the finance scheme: around £23,000 (excluding location allowance). Within two to five years of completing the scheme, recent graduates have an average salary of £32,704. Future earnings can reach the heights of £90,000 as a director or £100,000 plus as a chief executive. There are extra employee benefits on top, including 27 days’ holiday (plus bank holidays), discounts on various products and services, the NHS pension scheme and a postgraduate study package fully financed by the NHS, plus time set apart as study leave.
- New employees in a graduate role at PwC can expect somewhere above £25,000 as a base salary – internet forums suggest that starting salaries may be between £27,000 and £29,000. Graduates may also qualify for performance-related bonuses. They can create their own benefits package, which can include financial support for professional qualifications, study leave, 25 days’ holiday, a range of pension plans and insurance policies, and discounts on services such as gym membership. Once professional qualifications have been gained, internet forums suggest that a typical salary is £40,000–£55,000 and that partners (senior-level executives) will earn £200,000–£300,000 as a minimum, with many earning more than half a million.
It’s worth noting, however, that salaries within the financial industry do tend to be higher than in other sectors. If you become a graduate retail manager, for example, your starting salary is more likely to be around the £24,000 mark.
In general, the public sector tends to have 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 often driven by trends within the labour market and what competitor organisations are offering.
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 training.
- In the private sector, professional services firm EY offers training based around gaining chartered accountant status, as well as offering a number of programmes designed to develop future leaders.
- In the public sector, the National Audit Office (NAO) provides Associate Chartered Accountant (ACA) training, while the NHS graduate human resources scheme leads typically to a postgraduate diploma (CIPD) in human resources.
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? In theory, yes, but you may have to sharpen up 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 (flexible hours, good childcare, for example) may find it’s harder to switch than they thought, especially at middle management level. Cuts in the public sector mean every post is under scrutiny and all new appointments have to be justified.
It can be done though: Philip Orumwense, the head of corporate services at the Department for Work and Pensions, has also worked in the private sector. He was quoted in the 2015 edition of The Guardian UK 300 as saying: ‘Working in the private sector first gave me a good lifestyle with a nice home and financial security. The benefits of a public sector career can compare favourably to the private sector, however. The pension and the commitment to the employee for a work/life balance are two of those factors.’
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 what motivates you to get out of bed in the morning. To give you a steer, browse different companies and opportunities via the TARGETjobs employer hubs.