Public sector jobs shift ‘yet to boost contract IT market’

Agents have their say to ITContracting.com on whether a public sector ‘hiring frenzy is on the horizon.’

A shift in hiring momentum towards the public sector is yet to boost IT contracting, despite its potential to, pending Autumn Budget 2024.

Buoyed by a new Labour government, and private sector job market malaise, the public sector “shift” is being flagged up by CV-Library.

Managing director Lee Biggins said last week that candidates were now “favouring public sector roles over private sector positions.”

‘In an ideal world’

Biggins was alluding to his agency polling 1,167 candidates, to find 34% would go public and 30% would go private, “in an ideal world.”

Separately, a Sapphire Contracting survey of 2,300 contractors shows that those in the public sector are “the most confident” about their work pipeline.

Public sector contractors emerged in the survey as more bullish about future roles than contractors in seven other sectors, including Financial Services (FS).

‘Struggling’

Released this week, the contractor accountancy firm’s finding coincides with new research by TechMarketView (TMV).

The IT analyst firm says that despite “struggling” of late, the public sector is still the second-largest UK SITS sector by spend.

The analyst firm said the winding down of Brexit and covid responses, plus the energy crisis, put “pressures” on Software & IT Services budgets.

‘Core’

Yet an August-September TMV poll of 250 IT-business bosses shows the public sector is set to be the “core” end-user for the majority.

Fifty-three per cent of the CEOs said their “industry of focus” was the public sector, versus 47% for FS, and 43% for Energy.

Sounding aware ‘focus’ does not mean ‘big spend,’ TMV said general election 2024 placed “pressure and uncertainty” on public sector SITS budgets.

‘Interesting public sector requirements in past 12 months’

However tech staffing firm First Point Group says “over the last year,” it has received “interesting requirements” from public sector clients.

“Technical experience of the latest telecoms tech such as 5G, Cloud and Open-RAN,” the staffing firm exampled to ITContracting.com yesterday.

“For these…we’ve had a positive response from the market due to the nature of the roles; exciting, forward-thinking and impactful.”

‘Public sector isn’t as strategically dynamic’

IT jobs agency VIQU believes ‘excitement’ may be part of the public sector’s problem, exacerbated by STIS budgetary pressures.

It says: “In the public sector, there are naturally a lot more legacy systems due to governmental restrictions and budget constraints.

“In short, the public sector is not as strategically dynamic.

“Therefore, although the majority of tech workers ‘could’ move to the public sector…we have not seen this shift.

“And we would put it down to a lack of excitement and innovation around IT projects and transformations in the [public] sector.”

‘Slight increase in tech contractor demand from public clients’

VIQU’s Matt Collingwood added that despite his agency now being on “multiple” public sector frameworks, the figures don’t look good.

“We’ve seen revenue percentages from public sector clients fall,” he told ITContracting.com. “Slowly but surely over the past two years.”

However, the technology director for UK and Ireland at Hays, Amanda Whicher, says a corner has now been turned.

“We are starting to see a slight increase in demand for tech contractors,” Ms Whicher said last night to ITContracting.com.

“Largely due to a range of transformation programmes taking place across public services with large-scale ERP and CRM implementations.

“[It’s also due to] to cyber and data requirements, as [public sector] organisations start to become AI-ready.”

‘Competitive daily pay rates’

Whicher says digital transformation continuing as a “significant driving force of investment” should see “competitive” day rates offered.

“This has not been my experience,” says a contractor fresh from a transformation programme director role at a university, Steve Strain.

“I have seen some roles advertised, but always with an…inside IR35 [status]. And the rates are still low compared to a few years ago.

“I operate more in the transformational change and operating model design space than just IT. But I can’t say the market looks buoyant.”

‘Hiring frenzy could be on the horizon’

CV-Library says the new Labour government bringing more investment into the public sector “means a fresh hiring frenzy could be on the horizon.”

In a new report exploring the public sector jobs “shift” which it says its agents are witnessing, the recruitment agency added:

“Labour might be promising to control public finances, but they also want to ensure the public sector gets the support, investment and resources it needs.

“Investment in the workforce is central to this. [And] the new government has certainly seemed keen to make appropriate pay rises to satisfy some in the public sector. For example the NHS, and Armed Forces.”

‘Starmer has cancelled significant AI and tech investments’

In its report, CV-Library acknowledges Sir Keir Starmer’s government has already cancelled a “significant investment into AI and technology.”

But despite the withdrawal of the £1.3billion in funds, including £800m for the exascale supercomputer, the recruitment agency concludes:

“As the Autumn Budget begins to take shape… the new government is likely to spend more [on the public sector] than its Conservative predecessor.”

‘Real fight’

Referring to the 34% and 30% of candidates who would ideally work in the public sector and private sector, respectively, the CV-Library report adds:

“There is also a large cohort of candidates — 38% — without a preordained sector preference. And this is likely where the real fight will take place.

“As the new government gets its feet under the table, the public sector seems in a strong position to attract the people it needs.”

‘Private sector has challenges sourcing and managing its workforce’

Taking to LinkedIn, CV-Library’s Lee Biggins listed the public sector’s ‘pull factors’ as “job security, flexible work arrangements and a growing emphasis on employee wellbeing.”

The report also cites ‘push factors’ too, by saying the private sector is “rife” with skills shortages and “facing challenges in sourcing and managing its workforce.”

Senior delivery team leader at First Point Group, Pendy Hou said yesterday to ITContracting.com: “[Any] increase in applications to the public sector may be because there is less investment from private sector companies.

“And that might mean fewer opportunities within the private sector for active candidates to pursue which in turn leads to them applying for opportunities in the public sector.”

‘Workers are keen to move’

VIQU all but recommends that technology job candidates get flexible work arrangements with government and other non-commercial organisations in writing,  before signing on the dotted line.

Mr Collingwood says: “Some say that more [deviation] is tolerated in the public sector over private…[so] some workers are keen to move in that direction.

“However, in our experience, speaking specifically about IT workers, although there is a desire for flexible working, there is also significant focus around working on certain types of projects and scopes.”

‘Flexible working options’

In the CV-Library report, though, “flexible working options” was the third biggest draw to candidates eyeing the public sector.

To those eyeing private sector roles, it was the only fifth biggest draw.

“With the public sector now perhaps more able to set its own terms without political interference,” the recruitment agency writes in its report, “and firms like Amazon demanding a return to the office five days a week, there is perhaps an opportunity for the public sector to steal a march.”

CV-Library listed “leadership, project management…and technical knowledge,” as among the skills that both the private and public sectors regularly hire.

Clearly an expert at putting his own transferable skills to work, one freelance techie asked to comment for this article said yesterday: “I work in the private sector now. However as with any other IT contractor, I go where the work is.”