ONS Pay – What does this mean for recruiting principals and senior leadership in FE colleges in the future?

Luke explores what impact the reclassification of FE Colleges as public sector organisations could have on recruitment and retention of senior staff in the sector.

Following a review into the classification of the statutory further education (FE) sector and their subsidiaries in England, the Office for National Statistics (ONS) has reclassified colleges and their subsidiaries into the central government sector.

One of the implications of this is pay controls; colleges will retain responsibility for setting the pay, and terms and conditions for their workforce, however, the reclassification means that colleges will fall within the scope of senior pay controls, as set out by HM Treasury. Any salaries of £150,000 or more will need to be signed of at government level, this includes all new appointments that are due to be advertised from May 2023.

The details of the process are explained in the guidance for approval of senior pay, its not clear how long on an average salary sign off will take and how many requests are approved. This will become evident after the commencement in from May 2023.

The question of whether the reclassification is a good idea or not has already been debated at length, one big question is what impact this will have on recruiting and retaining Principals, CEO and senior leadership staff with the FE sector that fall into scope in the future.

Potential delays;

What is absolutely crucial in the recruitment market – even more so in current conditions, is the ability for employers to be agile and work at pace when hiring. There is huge competition for talent and being able to run a smooth and efficient search and selection process is essential. There is concern that by adding additional layers of approval to a recruitment process will restrict Colleges ability to hire talent

Recruiting a new member of a Colleges senior leadership team can already take 9 months from vacancy sign off through to the appointee starting, given most staff at that level have a 6-month notice period

Impact of Delayed or rejected sign off request;

The potential impact this could have on the staffing market are;

• More senior members of staff leaving the sector to seek higher renumeration elsewhere or take early retirement thus impacting stability and retention across the leadership team.
• Impact on the pipeline of aspiring future leaders coming through the sector who may chose to pursue other careers
• Restricting ability to attract Senior staff from outside the sector
• More need to recruit interim senior leaders, which under some circumstances is an important and necessary solution for relatively short-term cover– however the longer they remain in post, this will likely end up costing significantly more than a permanent equivalent, having the opposite effect of what the cost controls were brough in for, given an increase in temporary recruitment spend

CEO and Principal roles in FE can be massive jobs, often having responsibility for over 1000+ members of staff, 20,000 + students and turnover in excess of £100 million. The implications of having these roles vacant or recruiting someone who does not bring the right skills or experience can be catastrophic, with implications for the running and sustainability of the College also impact on staff, students and employers. I feel the key in requesting rates of above £150k is that colleges can demonstrate value for money with their hires. CEO’s in the private sector will command at least twice as much money for similar sized roles, without having the added complexity of the safeguarding and wellbeing of students, often young and vulnerable.

Ian Pretty of Collab Group comments;

“The FE Sector is currently in a competition for talent at all levels and in all parts of a college’s business.   Colleges are now reporting vacancy levels of upwards of 20%.  

Government cannot afford to inhibit the ability of colleges to attract the best leadership talent in the way that it is inhibiting, through pay, the ability to attract teaching and other staff.  

The Government has said in its response to the ONS reclassification that this will mean colleges will fall within the scope of senior pay controls, the general principle being that no one can earn more than the Prime Minister.  

They go on to indicate that colleges are able to get approval for any award packages that fall within the scope of the controls where they want to pay more including all new appointments from May 2023. 

We can foresee a real challenge, as these controls do not take into account the realities of the marketplace for attracting the best and brightest talent from both within the sector and from outside the sector to take on what are incredibly demanding roles at the CEO and senior leadership levels.  

The largest college groups are now businesses with turnovers in excess of £100m per year, with some having turnovers in excess of £140m per year.  

These are highly complex businesses that need leaders with the skills to be able to successfully lead and manage them.  

Those leaders, be they from within the sector or outside, will be looking for award packages in excess of £200,000 and given size of large colleges, this does not seem unreasonable.  Private sector comparators would see CEOs earing in excess of £500,000 . 

Within the education sector, CEOs of Academies, which are far less complicated than FE Colleges, are commanding salaries in excess of £300,000 and we are aware of award packages of £450,000 in that part of the education sector.

 If Government seeks to unnecessarily restrict the ability of colleges to pay market rates for the most senior executives, there is a real risk of a flight of talent, at a time when colleges are struggling with major challenges and when the Government most needs the colleges as the drivers of key parts of their economic and social policy.  Policies from levelling up and achieving economic growth through innovation needs a high wage, high skilled workforce.  

Colleges are the backbone to deliver new skills. Without talented leadership this will not be delivered.”