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Employers, need to wake up to urgent labour market challenges

Rt Hon Esther McVey MP

British employers need to act now to improve the way they source, engage and nurture their workforce if they are to avoid rising skills shortages and further declines in productivity and competitiveness over the next seven years. Comment from Rt Hon Esther McVey MP.

At the same time, government policy must be geared to prepare for “seismic” changes in the world of work. So says The future of jobs, published today by the Recruitment and Employment Confederation (REC).

The concluding publication of the REC’s Future of jobs commission, chaired by Rt Hon Esther McVey MP, former Employment Minister, articulates a clear vision for the kind of jobs market the UK should aspire to create by 2025 and lists practical examples of what the government, recruiters and hiring organisations should do to make it a reality.

Big challenges are around the corner which mean business as usual is not an option, the report notes. The UK’s labour market will continue to ‘hollow out’ with mid-skill jobs declining in many sectors, sometimes exacerbated by automation. Demographic changes will see Baby Boomers decline as a percentage of the workforce offset by the growing influence of younger generations who place a higher value on flexibility, work-life balance and personal development. And Brexit and its aftermath will profoundly impact candidate availability by altering the types and numbers of foreign workers from the EU.

Recommendations include that: Hirers should engage with schools, colleges and universities to provide real-world, practical advice and help young people be better prepared; Employers be more creative with their recruitment procedures, offer flexible work as standard and remove barriers for under-represented groups, eg by using collaborative hiring or name-blind recruitment; The government creates a new Employment and Skills Advisory Committee to review data and take evidence to help the government plan investments in training, and immigration policy.

Policy-makers ensure that all people can progress, for example by making the apprenticeship levy into a broader training levy that benefits all workers. The government and business need to find new ways of measuring the success of the UK jobs market, including progress on inclusion, social mobility, pay gaps and productivity.

Recruitment & Employment Confederation chief executive Kevin Green says: “We rightly celebrate the fact that the UK labour market has remained both resilient and agile. But in order to retain that competitive advantage, business and government need to work collaboratively to implement some radical changes. By 2025 we want good work to be the norm, where businesses champion diversity and inclusion and invest in training and skills development for all staff, no matter what kind of contract they are on. We need to foster a labour market where anyone can both find work and progress within work, irrespective of their background.”

Chair of the Future of jobs commission Rt Hon Esther McVey MP says: “With the world of work undergoing seismic changes, we need to do more to support people on their journey from school to retirement. In particular, helping individuals develop the skills they need to capitalise on new opportunities must involve greater collaboration between business and schools. With the pace of change, there will be turbulent times ahead, but we want this report to fuel the debate about what the future world of work could and should look like”.

Over the course of the past six months the REC brought together labour market experts as well as representatives from government, think tanks and trade unions to discuss the kind of jobs market we should be aspiring to by 2025. Today’s report presents the findings of this commission, which was produced in association with Brookson.

Brookson chief executive Martin Hesketh says: “The most valuable asset that this country possesses is its people, and the way that people want to work, and the work that they will do, is changing. Creating the right work environment for people is of critical economic and social importance, and the recommendations that this commission has produced are aimed at delivering this.”

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