Is the public sector the most attractive employer?

And what does the private sector bring into competition?

Ever since the beginning of last year, we are dealing with a new phenomenon. Employees from the private sector turn their attention to state institutions. A good thing I was mentioning in an article I wrote at the end of 2016, when I was talking about the tendencies for 2017. I was saying then that this tendency may be an opportunity for the public system to reinvent itself, using the know-how of these people. For this, there has to be a clear reforming strategy and a clear intention coming from the political players, regardless of the party they represent.

Let us see an analysis of the figures at macroeconomic level:

1. The total number of employees in Romania – 4.8 million, according to ZF (January 2017);
2. From 4.8 employees, 1.2 million are in public service, working under the local and central        administration (data from the Ministry of Public Finance of Romania, March 2017);

3. The average gross salary in Romania increased in 2017 with RON 450, reaching RON 3131 (Law no. 7/2017);
4. The National Prognosis Committee (working under the government) was stating that the average gross salary of the public sector was, in 2016, of RON 3.186, after an increase by 13.9% in 2015, while in the private sector the average gross salary was of RON 2.731, following an increase by just 9.3%;
5. In the public system, the gross salary will increase, according to official estimates, by 16.9% in 2017, 10.3% in 2018 and by 11.5% in 2019. So, in 2019, the average gross salary of people working in public service will be of RON 4.850, with an increase by 43% compared to its value in 2016 (source: The National Prognosis Committee);6. On the competing side, the average gross salary of the private sector will increase only by 9.9% in 2017, 8.9% in 2018 and by 7.6% in 2019. In other words, the average gross salary of employees of the private sector will be of RON 3.521, following an increase by just 28% compared to its value in 2016 (source: The National Prognosis Committee).

As the figures above show, employers from the private sector will be seriously fighting the competition from state institutions when it comes to new employees. What is the criterion of this comparison? The salary!

Yes, the salary is one of the important criteria, but it is not the only one. The employers from the private sector enter the competition with other elements, which, if they know how to bring forward, stand a chance of attracting talents from the labour market:

Unfortunately, state institutions show us they are not a skills trainer

The simplest example – the educational system – the first that needs to adjust to the requirements of the labour market, to the changes that technology brings. For 17 years I have been working in recruitment, and this situation has not changed. We have college graduates who enter the private sector with out-dated skills, which have long been replaced with others. Only if we think about the “speed” of updating the curricula in pre-university and university environments, we have a clear argument. We have teachers paid to teach the curricula, not to train skills.

 State institutions have a “unique” organizational culture

This organizational culture can only be found in companies where the state is the main shareholder. It is enough to think of: tools offered by technology, from the accessed terminals to the implementation of electronic payment systems, of direct or online communication with its clients (citizens who pay taxes), of the respect grown inside the organisation, but also to its clients (citizens who pay taxes), of performance evaluation methods and evaluation criteria when we have promotions in the typical hierarchical structure state institutions have.

The employers from the private sector have long been taking responsibility for training their employees

It is an element taken into consideration when we talk about the stages of growth within a company. Thus, employers become trainers who keep up with the market’s evolution, with its products, being engaged in the production or services offered NOW, at today’s standards. They do not have any alternative. Otherwise, they would leave the market and competition would replace them.

Different competencies from private sector to public one

Picture yourself for 2-3 years in a system as defined above and you will easily figure out that you would be an employee with skills much lower than the requirements of private companies. But the greatest impact is represented by the attitude formed throughout the years, the lack of predictability and the frustration experienced by people who know their potential when working in an obsolete organisational environment, which lacks real desire for reform.

Is the private sector the ideal employer? No, not even close

As the saying goes: “There is no garden without its weeds”. It is just that the private sector feels the pressure given by innovation and competition. As such, some organizations turn to EXIT or to GROWING. It is important to know on which side we want to be. If we think of the opportunities offered by the online, at companies such as Tesla, Google etc., which build their future having innovation as basis, not to be constantly changing means to disappear. By comparison, state institutions are not yet threatened by this aspect.

As the saying goes: “There is no garden without its weeds”. It is just that the private sector feels the pressure given by innovation and competition. As such, some organizations turn to EXIT or to GROWING. It is important to know on which side we want to be. If we think of the opportunities offered by the online, at companies such as Tesla, Google etc., which build their future having innovation as basis, not to be constantly changing means to disappear. By comparison, state institutions are not yet threatened by this aspect.

I tried to offer you a brief analysis. As an employer, it can help you define your unique elements. Are there any others? Of course! Please mention them in the comments section. Together we support a business environment that focuses on development!

Kind regards,

Claudia