Resetting for a new era: public and social sector study 2024

Based on insights from almost 400 executives in the sector, the study uncovers a significant shift in the overall outlook and priorities of leaders in the sector, indicating a strategic reset is on the cards. Organisations are live to the intensifying influence of public perception and leaders are looking to build resilience in a new era where talent is essential to the effectiveness of emerging technologies and sustainability expectations are exceeded.

Our research highlights:

Executives in the public and social sector are generally optimistic: 58% expect funding to increase in the next financial year, but this is a significant drop from 85% last year.
Economic factors, including high inflation and cost of living (27%), and increased demand for services and political change (each 26%) are three of the top external trends impacting organisations most in the coming year. The emergence of new technologies (23%) and scarcity of talent (22%) are also expected to impact organisations significantly and only 25% are confident they’re prepared for this.
Meeting demand for services is a potential issue for a quarter of organisations stating they will likely fail to achieve this.
Boosting investment of time, money and resource, averaged across all business activities and operations, is expected by 50% of organisations. While maintaining IT and digitising operations are at the top of this list, funding/financing issues or concerns is at the bottom second only to reducing headcount.
Scarcity of talent is one of the top five external trends leaders say will impact the sector in the next three to five years, with over half (63%) of executives confirming a difficulty in hiring talented people. Yet, crucially, talent strategy is only positioned at number nine in their strategic priorities for the year ahead.
Transformation through IT or emerging technology is the top strategic priority for leaders for the second year running. 79% of public and social sector organisations are already using generative AI in some form and, of those who don’t, 44% say they will in five years’ time. Yet 69% of those already using generative AI in their organisation say they have ethical concerns.
Generative AI will not replace people according to 64% of leaders, proving that human skills are still very much valued within such a people-orientated sector.
Sustainability responsibilities are a clear focus for sector leaders – 76% of public and social sector executives say they already produce a sustainability report or plan to in the next 12 months. Over 50% of leaders say new regulations would be more effective than internal or external pressure in accelerating reporting.