What are the Benefits of Private Sector Employment?

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  • Written By: Lily Ruha
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 27 September 2019
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The benefits of private sector employment typically include larger salaries, more opportunities for advancement, and better benefits in the form of insurance coverage, vacation time, and annual bonuses. Working in the private sector entails more freedom related to hiring and terminating employees, budgeting and making work-related purchases. In most instances, private sector employment offers less job security in comparison to government jobs.

Private sector employment often has greater financial benefits than the public sector. Through the ingenuity of one person or a team of employees, a small business can create products and services that suddenly experience great demand. This usually rewards employees with higher salaries, greater benefits in the form of insurance coverage, vacation time, and bonuses. In some cases, private sector employment offers profit sharing opportunities, opportunities that do not exist in the public sector.

Opportunities for advancement are often greater in large and successful private corporations. While it can take decades to move from an entry-level position to that of management in the government sector, this same advancement can occur much more quickly in private companies. Whereas promotions in the public sector require specific academic qualifications and work experience, in the private sector requirements are more flexible, and such decisions often rest in the hands of only one or two individuals.


Management positions in the private sector afford more freedom in regards to hiring practices. The public sector is generally required to follow rigid hiring guidelines. A specific number of qualified candidates must be interviewed across months before hiring can take place in many public sector circumstances. This can be a time consuming process for a manager whose department may be shorthanded. Private companies can often adjust requirements to expedite hiring and advance the company’s goals.

The private sector is also more efficient in terminating employees. This is a benefit for a manager in a private company who needs to replace an underperforming employee. In the public sector, firing an employee typically takes a long time. In absence of blatant offenses, documentation of poor performance is generally needed across many months or years before a government employee may be terminated. This protection of employee rights is considered to be a large benefit of public sector employment.

Procurement of products, services and materials is achieved much more efficiently in the private sector. Public sector requirements for procurement and purchasing generally involve special permissions, adhering to rigid budgets and filling out standard forms. Private sector employment affords greater flexibility in this regard; an employee for a private company may be given general guidelines for spending, but have in his possession a company credit card and the freedom to make on-the-spot purchasing decisions about the materials needed to do his job.


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Post 2

Private sector jobs may have the advantages cited in the article, but it is somewhat of a myth that there is no room for advancement and decent salary increases in public sector jobs.

Yes, governmental budget cuts could spell trouble for workers in some public sector departments, but the private sector has been far from immune to belt tightening, so to speak, downsizing and layoffs in recent years.

Public employees usually get every "bank holiday" off, including days like Presidents Day and Columbus Day, which many private sector employees don't get.

Government pension benefits are also often more secure than those offered in the private sector.

In addition, depending on the job title, the government is more likely to pay for continuing education than private sector employers.

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