Where to find the biggest carrot

Public sector pay is on the up. And when holidays and other benefits are added to the pot, a move to public IT can seem even more attractive. Helen Beckett looks at how the career divide between public and private IT is closing

Public services IT is fast approaching pay parity with the private sector according to a number of recent studies. The pay gap narrowed from 15% in late 2003 to 10.33% in 2005, the latest Computer Weekly/SSL survey reveals. Public sector services specialist Capita also found that annual pay rises for public sector IT staff reached 5.6% by mid-2005, exceeding private sector levels for the first time.

Despite this shift, a survey of senior IT managers from the private and public sectors found that established perceptions die hard. Application management specialist Mercury quizzed 100 senior managers, half each from public and private spheres, on a range of topics to do with their working environments. There was consensus on the subject of pay: 98% of the private sector thought they were paid more, and 94% of their public counterparts thought they were worse paid.

There was a similarly strong and shared response to the question of work/life balance: 76% of public IT managers surveyed thought they fared better, and 81% of their private counterparts agreed. Despite the flow of money into government projects and a keener interest in work/life balance throughout the business world, a strong perception remains: the public sector is poor on pay and big on work-life balance.

This view of different worlds is sustained by all the softer aspects of a pay and benefits package that still look pretty different. "In terms of pounds, shillings and pence, they are a lot closer in terms of base salary. But the public sector does not do bonuses, share options or company cars," says Bruce Mair, principal consultant at recruitment firm Harvey Nash . 

What is does offer, however, is a generous holiday allowance - six weeks is not unusual - pension plans and training programmes. Five days a year training is typical of many local authorities, says Tony Riding, best practice adviser at public sector IT managers association Socitm. More controversially, Mair says, "The notions of security of tenure and bullet-proof jobs in the public sector still persist," despite growing evidence to the contrary.

However, there is evidence that the culture of the public sector offering a nine-to-five job for life is disappearing under the pressure of modernisation, says Martin Wilson, a programme director in the public sector for the past five years. Working at the Department for Work and Pensions, he found a working environment that he recognised from his former private sector days. "We had very able people putting in very long hours. They were as motivated as anyone I ever found in the private sector," he says.

Wilson is not surprised by the discovery of a slender pay gap either. Even a couple of years ago he was pleased at what he could get for his money. "I was working for the probation service then and had to get some project managers in. It was possible to get very competent people from the big consultancies like Ernst & Young for £45,000," he says.

Private sector pay incentives and rates have been adopted in pockets where agencies or departments have had to compete with market rates to recruit essential skills. This has often been spurred by deadlines or events that have required IT directors to sidestep the normal bureaucratic grading system or pay bands to get IT bums on seats.

Riding, who was previously CIO at Leeds City Council, says his council was the first authority to offer retention bonuses. "These were cumulative over three years and did encourage people to stick around," he says. The chance to upgrade skills was also a recruitment winner for local authorities as the drive for e-government led them to adopt leading-edge technologies such as mobile systems.

Local authorities also offer greater diversity in their clients. It is common to have up to 24 lines of business, ranging from refuse to education and road maintenance, says Stewart Jackson, head of member services at Socitm. By contrast, work in the private sector can be samey, he says. "In a single-sector company there are usually fewer key applications that you may have to support." 

Although local authorities have been flexible in their attitude to remuneration when necessary, wholesale change is now being ushered in across government computing, following the Gershon Review. Those recommendations have had the biggest impact at the top of the IT tree: the proposal to trim the civil service by 8,000 staff has translated into fatter salaries for those leading the IT change.

"Gershon did not result in a massive shift the next day but it did mean that departments were prepared to be more flexible about top rates in order to get the senior people in that they needed," says Steve Sandhu, head of public sector practice at IT services firm Capita Resourcing.

Mair confirms this shift. "There has been a big push to recruit people, who can run large-scale programmes. These people are recruited from a number of areas whether they are from outsourcing suppliers who have crossed the Rubicon, or to seniors within blue chips who make the move for a different kind of package to gain new skills."

A £100,000+ salary is the norm for senior IT people drafted in to reform IT delivery - the unitary authority of Swindon recently advertised its IT director post at £97,000, for example. However, Wilson believes IT chiefs in the public sector still have to manage bigger budgets and more people to realise the same salary.

Although this may be viewed as a downside by those within public services, there is no doubt that the reforming work and accompanying big budgets offer greater opportunities for career progression. The project management skills that have been honed in the private sector are now being acquired for bigger, flashier projects. "These are big, exciting projects. How often do you get to manage a quarter of a billion pounds?" says Wilson.  

Nor has the impact of the Gershon Review been limited to the upper echelons of IT. Its effects have rippled all the way down through the IT ranks says Sandy Gilchrist, an IT director at HM Revenue and Customs.

"The view 'I am happy to take the final pension scheme in return for lower remuneration' flies out the window," he says.  

Uncertainty and doubt in the IT department is also fostered by continuing high levels of outsourcing. Research conducted by the Economist Intelligence Unit on behalf of Telewest found that by 2006, 21% of public sector respondents predict they will be spending 10% to 25% of their IT budget on managed services, and 19% say they will be spending upwards of 50%. This compares to 10% and 11% respectively for the private sector.

Although pockets of powerhouse activity and salaries to match can be found in public services, there remain differences in working culture and career progression. Tim Wilton, lead project manager on the MoD's defence information infrastructure for IT services company Parity, says slower career progress and rigid pay grading rules mean that managers have to work harder to keep staff. 

Nonetheless, the faster flow of professionals from private to public, also found in the Mercury survey, indicates that more than just pay barriers are being rolled away. Just as society is getting a lot keener on work/life balance, the merging of public and private cultures means that the nine-to-five job may finally be on its way out.

Myths exposed

Myth: private sector workers are better paid

"There has recently been a pay freeze in government departments, which means that a lot of people are potentially working at a grade lower than their capacity. But on a role-for-role basis, there is a basic parity."

Martin Wilson, programme director, central government

Myth: It's a nine-to-five culture in government IT

At the Department for Work and Pensions, we had very able people putting in very long hours. They were as motivated as anyone I ever found in the private sector."

Martin Wilson

Myth: It is very hierarchical in the public sector

"In the old days [of the MOD] you would be given a job and be told to get on with it. Now it is more 'what do you want to get involved in?'"

Tim Wilton, lead project manager, Ministry of Defence

Typical rates of pay

Case study: the not-for-profit package

Before joining Cancer Research UK as information risk manager, Brian Shorten had worked in the private sector in security roles, most recently for MCI WorldCom but also in the financial services sector.

The pay is the same. Shorten admits he would have moved for less, in return for the reduced travelling and extra time he gets to spend with his family. But the only financial penalty he pays is no private health insurance.

The immediate reason for leaving WorldCom was its change of location from Chancery Lane in central London to Reading. After three years, the daily 160 mile commute on the M25, M3 and M4 was too much for Shorten. "I wanted to get away from Reading," he says.

Shorten did not seek out a public sector role but was attracted by the job on offer at Cancer Research UK because it was a "greenfield" site. "They had not done security in this way before and that appealed - I like to be first in the job."

The chief difference is that people are really pleased to be working for the charity and proud of its connections with the research world. "When I used to say I worked for MCI WorldCom, most people's reaction was 'that was the company that was put in chapter 11 bankruptcy. How did you come through that?'"

For the most part, however, Shorten was struck by the similarities he found between not-for-profit and private enterprise. "It was interesting how like other companies it is here. Most of the other systems and network people have worked in big plcs previously."

The programmer's tale

"I have worked for a local authority for 20 odd years now and I doubt I will ever leave - the pension is too good," says a local authority IT team member.

"I started out as a Pick programmer, but local government moved to package software. I retrained in Crystal and now prepare management reports from our Oracle database for our clients.

"I have had no major pay rise since 1998, apart from inflation-related increases, because I am at the top of my band and there is no extra increment in line. It is probably not worth going for the next role up - IT team leader - because the extra pay does not justify all the added responsibility and effort that goes with it.

"The flexi hours are great - you can do your work any time between 7am and 10pm. I also get 26 days holiday a year plus four extra days for long service."