As people, often good people, leave the public sector there will be opportunities for private sector organisations to access skills and experience not previously available to them. But smaller organisations will have to be careful.
Firstly, recruitment is time consuming and for this reason, expensive. According to the Chartered Institute of Personnel and Development (CIPD) it costs around £3,000 to recruit an employee, and nearly three times that amount to recruit a senior manager or director.
Selection mistakes are therefore costly. If you are “lucky” the new employee leaves of their own accord in a few months. Then you have a second chance, at much the same cost. If you are unlucky, then your “mistake” remains with your organisation for many years. As a manager it can damage your career. As a business owner, think what an employee underperforming by 10% is being paid for that 10% of non-performance over a year, each year. That is the hidden cost of poor selection.
Among smaller organisations, interviewing is still the main, often the only, selection method. Yet to be effective, interviews have to be structured interviews, or even competency based interviews. In our experience these interview techniques are the exception outside the large corporate world and the public sector. But unfortunately, the average untrained interviewer “gets it right” only a third of the time. Given the costs, a little training in interview skills will go a long way.
Secondly, when it comes to retention, there is some evidence that the private sector is a more enjoyable place to work, even if less well remunerated. The CIPD survey suggests that the relationships between line managers and employees are crucial to good retention. In our view the private sector performs better here. But expectations of training and development opportunities (another important factor in retention) may be higher among ex-public sector employees. Smaller employers, with shorter career paths on offer, may find it hard to respond to aspirations. There is a risk too that such employees will have other high expectations and be more challenging employees, especially if they have been used to a unionised environment.
Therefore the small business sector may have to raise its game if it is to attract, select well, and retain employees coming from any predicted fall-out in the public sector.