Working In Public Sector Vs Private Sector: The Key Differences

The debate of working in the public sector vs private sector is often on the minds of professionals who are at the beginning of their careers or have so far exclusively worked in one sector.

There are various stereotypes surrounding the sectors, however, there are great benefits to working in both.

Individuals wanting to explore the key differences between working in the public sector vs private sector will likely favour one or the other depending on their personal career goals, preferences, and general values.

What is the public sector?

The public sector refers to the bodies and organisations that are owned and funded by the UK’s Central Government. This includes government departments and public services, such as the NHS, the Police, schools, and more.

The public sector is one of the largest single employers in the UK. Latest statistics show that 5.95 million people were employed by the public sector.

What is the private sector?

The private sector encompasses businesses and organisations that are run by individuals and private groups rather than the Government. Private sector businesses can range from sole traders to organisations with thousands of employees. They are run for profit and can include a board of directors as well as shareholders. There are around 5.6 million private sector businesses in the UK, each of which are structured differently with distinct benefits and perks for their employees.

Public sector vs private sector – the key differences:

Private and public sector employers differ significantly in terms of what they offer permanent employees. For private sector businesses, there are typically minimal stakeholders and processes to be beholden to. Whereas, in the public sector, there are certain aspects of employing individuals that are set out and imposed nationally. There are less opportunities for public sector organisations and departments to be agile because there has to be a level of consistency across the board. However, consistency can bring big benefits to employees on occasion.

Candidates that are considering whether public or private sector employment is best for them should keep in mind that these are generalisations that can differ between businesses and organisations.

Advantages of working in the public sector

Purpose

A major draw for candidates in the public sector vs private sector debate is having a strong sense of purpose in what they are doing. Largely, public sector organisations are run not for profit, but to offer key services and support to the UK public. Many organisations in the industry are focused on helping, supporting, and protecting people. For some candidates, this can make work feel more fulfilling and motivate them to be more productive. However, this won’t be the case for everyone.

Flexibility

Flexibility has been commonplace in the public sector for decades. Job-sharing, part-time hours, flexible /compressed working options, and even 4 day working weeks (as reported by The Telegraph) encompass the flexibility that can act as a big attraction for candidates.

Latest statistics show that for 77% of employees, flexible working is more important to them than a pay rise. Flexibility can benefit employees’ sense of autonomy over their work life balance and promote better wellbeing. Workers in the public sector are more likely to have hybrid working practices (35%) than in the private sector (26%). With many private businesses (37%) making office days mandatory in 2024, this gap may get bigger and more employees may be more tempted to find work in the public sector.

Job security

The difference in stability and job security of public sector vs private sector jobs cannot be understated. Whilst businesses in the private sector can go into administration or choose to make mass redundancies, public sector funds are more stringently watched. This leads to less risk being taken within the organisation and fewer chances of redundancy or business failure. For the most part, public services and departments have to continue, which creates job stability.

Public sector jobs are also secure because there is a lot of cross-departmental career mobility. With similar systems and culture across the public sector, it is easier to move across departments for various opportunities. So, if the need for an employee’s skills becomes less important, they may move to a different department.

Less stress

In comparison to the private sector, there are fewer cases of competitors vying for customers and less focus on profit-making. Therefore, there can be less stressful working conditions in some areas and job roles within the public sector. However, issues around budget constraints and public demand can outweigh these positives in some cases.

Pension contributions

The Institute for Fiscal Studies found that 47% of public sector workers had an employer contribution of at least 20% into their pension fund. In comparison, the same was true for only 2% of private sector employees. Whilst the private sector can produce higher wages, the whole compensation package should be considered by professionals.

Working hours

It is often said that in the debate of working in the public sector vs private sector that public sector employees, especially in the civil service, work fewer hours. As the public sector is not profit orientated, managers are under less pressure to ask employees to work longer hours and work overtime. This can be a huge benefit to workers who have responsibilities outside of work or simply want more of their evenings and weekends.

Advantages of working in the private sector

Salary

Research from the House of Commons stated that median weekly earnings in the public sector were 8% higher than those in the private sector in April 2023. However, this data accounted for all jobs across all industries in the private sector where there can be vastly different pay. Generally, private sector professionals have the potential to earn significantly higher than their public sector counterparts when looking at high level jobs such as directors, managers, heads of departments and c-level executives. Even in the case of skilled graduates, pay in the private sector is higher with an average starting salary of £25.5k, whilst in the private sector it is £33k.

Additionally, salary bandings in the public sector are significantly more restricted than the private sector. The public sector salary bandings are usually pre-determined so it can be difficult to have flexibility. This also includes elements like yearly pay rises, which are often also set by the Government rather than being based on individual employee performance. The private sector has significantly more freedom in this regard for altering salary ranges and raising employee salaries and bonuses.

Variety

In the debate of public sector vs private sector, one of the key benefits of working in the private sector is the variety in businesses. Competition between companies means that businesses will offer different set ups, and benefits to attract more workers. This is in contrast with the public sector which might give a similar experience across multiple public sector organisations. The private sector can have significantly more variety in business size, dynamics, culture, career opportunities, and skillset needs.

Career advancement

It is often easier to be promoted in the private sector compared with the public sector. There tends to be strict funding and headcount restrictions in place across public sector organisations. Often, a position will not be made available unless someone leaves or additional funding becomes available. However, in the private sector, businesses may go through a period of growth due to high profits or investment. This creates fantastic career advancement opportunities for employees.

Exposure to innovation

As organisations in the private sector are run for profit, they are more likely to take risks, whether this includes creating new branches, departments, or moving into a new sector. These risks can bring significant profit to a business and allow it to scale up significantly. As the public sector is funded by the Government and taxpayers, such risks are rarely taken and never taken quickly.

Faster recruitment

Quick hiring may not be a universal experience in the private sector. However, in most organisations there is less red tape to hiring than the public sector. Private sector businesses often can make much faster decisions around what role they want to hire for, what compensation to offer the candidate and make the decision on who to hire easily. The public sector will often need greater amounts of sign off on each aspect of the recruitment process. Therefore, for candidates considering the public sector, they might not think it is worth the drawn-out process and take a job in the private sector instead.

VIQU is an award-winning IT recruitment agency that works with both private and public sector clients. As a Crown Commercial Service Supplier operating through two public sector frameworks, we have access to an extensive range of both private and public sector job opportunities. Please click here to send our team your CV.