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Top 5 areas affecting employee retention in the public sector, and how digitally transformed HR processes could help

The public sector is an industry that relies heavily on its people to deliver valuable services to citizens. 

As a result, the public sector can be heavily affected by high employee turnover rates, not just in people-facing roles but across digital back-office roles as well. 

In a recent speech to the UK parliament, Gareth Davies, Head of NAO, recognized that “The public sector is finding it harder to retain staff. […] Neither is this problem confined to ‘frontline’ roles as evidenced by the thousands of digital vacancies across government.” 

Tight budgets, increasing workloads, and service backlogs mean that traditional approaches to talent management are falling flat. Across all industries, employee expectations of HR have changed, and public sector HR leaders need to join those modernizing their HR processes through digital transformation.

By digitally transforming HR processes in the Cloud the public sector can better manage employee retention and engagement rates, which will help soothe what Davies identifies as a ‘productivity problem’.

In this blog we will cover 5 key areas that are affecting employee retention in the public sector, and why a digital HCM solution could help boost retention, and in turn productivity.

1. Underdeveloped Compensation strategies

Employee expectations of pay need to match their experience of pay for compensation strategies to catalyze productivity, rather than be an obstacle to productivity.

The HR Research Institute’s 2022-23 survey showed that while 75% of organizations deem employee retention as a number one priority, 42% of organizations describe their approach to total rewards as “underdeveloped” or merely “beginning,” with only 7% describing their approach as “advanced.”

For employees, not understanding compensation was the biggest issue (62%), closely followed by compensation not being competitive (42%), poor flexibility (41%), poor personalization (40%), and poor transparency (40%).

These responses show that the actual content of compensation packages isn’t always the fault, but it’s the management of compensation and employees' experience with it that must change.

By digitizing compensation data into the Cloud’s common data model, these processes become much more transparent as both managers and employees have this data at their fingertips.

With critical information in one application, such as core employee data, performance information, guidelines, policies, and more, employees and managers in the public sector can have more transparent conversations about pay.

2. Slow Career Progression

Bureaucratic red tape and slow career progression in the public sector can be discouraging for employees. The rigid organizational structure and lengthy decision-making processes may hinder professional development and limit opportunities for advancement.

Often, career progression can stagnate without clear avenues to upskill or reskill where necessary, or without an obvious place for employees to express their desires to progress and gain new skills.

When individual employees can express these interests and have a continuous feedback loop with their manager, managers can get a better idea of how to help unique employees progress.

Modern HCM solutions prompt employees for this kind of feedback with pulse surveys and create a continuous feedback loop with more regular conversations about performance that are informed by data.

Click to read Unit4 HCM product brochure Gated 

3. High workloads and stress

With large backlogs from recent disruptions, and only more on the horizon, the public sector is unfortunately stuck with large workloads. Moreover, due to the responsibility and duty of public service roles, stress is also high.

General optimization of administrative and back-office optimization, as well as an improved HR experience, can do well to ease the burden of high workloads.

By embracing Cloud SaaS ERP, the public sector can embrace Cloud capabilities such as AI to automate manual data entry tasks that often lead to fatigue. NRS, by investing in digital transformation initiatives, saved 2,500 FTE hours annually by implementing SaaS HR solutions.

When engagement rates improve as a result of optimized HR operations in the Cloud, the employee experience will naturally improve, and employees will burn out less.

4. Lack of recognition and praise

Due to high workloads, public sector workers need praise and recognition of their work to feel valued and avoid becoming disgruntled.

A digital HCM solution can provide simple and easy avenues for managers to provide kudos to their employees who have performed well, and these same platforms can also be used by staff to internally praise those who have performed.

A continuous feedback loop provides managers with the data they need to turn feedback into action, showing employees that they are heard and valued by managers and senior leaders.

Moreover, Microsoft reports that employees are 121% more likely to feel valued by their company when they have access to high-quality data experiences at work.

5. Poor development opportunities

Performance management is a key part of HR that is often neglected in legacy systems. Paper systems, poor scheduling, and a lack of data insight mean that these meetings often become year-end box-ticking exercises rather than the valuable data-gathering experience that they are.

The public sector can benefit greatly from digital performance management experiences. Notably, this means that performance documents can be platformed on the Cloud, allowing employees easy access and ownership of these documents and data.

This will lead to more transparent and regular conversations between managers and employees allowing development opportunities to be clear and encouraging employees to be more productive in the long run.

Final Thoughts

It’s clear that successful digital transformation of HR can help resolve some of the key HR problems affecting retention in the public sector. With a revitalized workforce, it’s likely that productivity could also increase and lead to improved service delivery.

Unit4’s Cloud-based HCM solution offers many modules that are designed to refocus on your people, from the intuitive user experience our Talent Management module provides to our best-of-breed Workforce Planning and Analysis solution that has been rated #1 by Dresner.

Additionally, Unit4 Compensation Planning solutions allow you to plan, make, and communicate pay decisions in a single, simple-to-use, and easy-to-implement solution.

Consult our website to learn more or talk to our sales team today to speak to one of our experts.

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