Employers will be looking to the new Skills England body to help them overcome ongoing skills and labour shortages – and the stakes are high. Our own research suggests continued failure to tackle these could cost the economy up to £39 billion every year (just short of building two whole Elizabeth Lines) in lower GDP and productivity.
Report on Jobs is our regular monthly tracker of activity in the jobs market. Organisations like the Bank of England use it as a lead indicator on labour market performance.
In July’s report, recruiters highlighted skills shortages in accounting, blue collar, construction, engineering, executive/professional, hotels/catering, IT/computing, nursing/medical/care, retail and secretarial, among others.
In this labour market, it is right for the new government to act quickly. We have long said the apprenticeship levy is not fit for purpose.
Apprenticeship numbers are in decline, and equally importantly, the funds are only available to those who have the same employer for at least one year – the time it takes to complete an apprenticeship.
That excludes 960,000 of the one million temporary workers on assignment in the UK every day, a waste that leaves employers caught short on accessing talent.
Employers need more of a say in how the new growth and skills levy is allocated if we are to learn the lessons from the apprenticeship levy. The prompt announcement of Skills England will also need significant input from business leaders and labour market experts if it is to tackle the root causes of the problems we see.
Employers are demanding not so much a stick or twist from the new government on skills policies, but a complete reshuffle of the pack.
We need a skills system that is more responsive to local labour markets and job creation opportunities, one that reflects a world where people’s work and wants are different. This is achievable by local and national governments giving business leaders a fixed seat at the table and ensuring the voice of SMEs is regularly heard.
Employers don’t want a stick or twist but a complete reshuffle
Recruiters’ involvement in further education, employability and career development programmes and in Local Skills Improvement has paid dividends. Continuing this work so local leaders determine regional skills priorities in partnership is a great way forward.
The message from business leaders to Labour is that they want involvement in the education system. However, just as employers need to recognise the priorities and duties of training providers and colleges, so too must policy makers recognise how a business runs and sets its priorities.
Key to much of this is making sure people are ready to take up employment when they leave education. A step forward would be to build on the Gatsby Benchmarks to ensure every young person gets effective careers advice.
There must also be an emphasis on the ‘soft skills’ employers value. Surveys of employers often report that they are hesitant to recruit 16- to 18-year-olds due to concerns that they lack skills such as problem solving, communication or teamwork.
Sometimes, it is just about how they articulate their abilities in the hiring process. More emphasis on real-life work placements will help, something which the education system can work with employers and recruiters to achieve.
We need to replicate the great employer-education partnerships that already exist. After all, one-third of productivity improvement over the past two decades is explained by improvements to skills levels. This includes using schemes such as Restart to promote the uptake of digital and green skills training.
Our own Restart scheme with Maximus has placed more than 2,000 non-working people into jobs. Good labour market activation schemes are proven to enable people to ‘try’ different types of work in different sectors, picking up new skills and experience quickly.
Helping domestic talent to shine takes time, but it is time we in the business community are willing to give. In the interim and in parallel with the development of a more-responsive skills system, we need a fair and flexible immigration system.
Survey after survey shows people support the immigration of those who are here to work, pay tax and build a life.
To maximise economic growth, we need a combined skills and immigration policy that coordinates responses, and truly meets the needs of everyone.
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