Wales has seen a big increase in public sector employment since the pandemic

The Covid-19 pandemic and its aftermath have changed the workplace forever. Remote working became standard practice, fostering a more flexible approach to work, while digital transformation and technology investments reshaped operations across industries.

Health and safety measures, including remote onboarding and mental health support, became paramount leading to redefined office spaces and an increased reliance on gig workers.

The consequences of the pandemic also emphasised the importance of employee well-being and, as a result, businesses invested in reskilling and upskilling, remote hiring practices, and a began a shift towards a results-oriented cultures.

They also began to focus more on business continuity planning to prepare for future disruptions and there was increased expenditure on innovation to solve immediate issues across a range of sectors.

Given these changes, it’s worth examining the statistics on what has happened to the composition of the UK workforce following one of the biggest economic shocks in centuries and one of the more interesting findings relates to the balance between private and public sector employment.

As we all know, the public sector played a pivotal role during the Covid-19 pandemic by leading healthcare efforts, implementing various economic relief programmes and conducting critical research and development for vaccines and treatments.

Its importance in safeguarding public health whilst supporting the economy highlighted the essential role of a well-functioning public sector during a global health crisis.

As a result, it is no surprise to find that during the last two years, there has been a considerable increase in the number of people working for public bodies.

According to Welsh Government statistics, those employed in the public sector in the UK has increased by 671,400 since March 2020.

This doesn’t include GPs and those working in higher education institutions which are excluded from the statistics mainly due to their autonomous nature.

At the same time, there has been a decrease in those working in the private sector of 650,900 employees.

In Wales, there are some who continue to claim that we are too dependent as a nation on public sector jobs.

Whilst it isn’t the high levels frequently quoted, the data does bear this out and as of June 2023, Wales had 31% of its working population employed in the public sector as compared to 24% for the UK.

Of course, this is not uniform across the country and the highest proportion of public sector workers were to be found in Swansea and Ceredigion whilst the lowest were in Powys, Flintshire, and Pembrokeshire.

Since Covid, the proportion of Welsh public sector workers has increased by 17% (or 64,000 employees) as compared to a 10% increase for the UK.

Perhaps more telling is that the numbers employed in the private sector has decreased by 66,900 in Wales and this accounts for 10% of the decline in private sector job despite having only 4.5% of total employment.

It can be argued that public sector jobs in Wales can offer greater job security and stability compared to the private sector and are essential for the provision of public services such as healthcare and education.

It’s also worth noting that the latest labour force statistics show that the public sector has seen the highest regular growth in pay rate since records began.

However, any productive economy requires a strong private sector and with the Welsh economy continuing to lag the UK, this data is worrying as it suggests that private sector employment is reducing at a faster rate here in Wales.

And when politicians speak about how jobs are being created, then it is clearly not being done through encouraging greater entrepreneurship, innovation, and productivity in businesses but through the taxpayer-funded new jobs in the public sector.

To date, there has been little evidence of such policies at both a regional and national level and whilst there seems to be plenty of public funding available for a range of initiatives, few of these seem to directly address the real needs of businesses.

That must change and whilst there will always be those who say the public sector in Wales need to be reduced, that is not the actual problem.

In fact, the real challenge for those in power is how to create economic policies that stimulate greater job creation in the private sector so that a productive workforce can finally start to make the difference to the competitiveness of businesses and the economy.