employment

The youth unemployment challenge: Day Two of #CIPD12

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I’ve written about unemployment, skills and training on a number of occasions – because it is an issue that is close to my heart and because it is an issue that is close to the heart of our economy and future competitiveness.  I was therefore, absolutely delighted to see it taking centre stage on day 2 of the CIPD Conference with a panel discussion involving Peter Cheese, CEO of the CIPD, Michael Davis, CEO of the UK Commission for Employment and Skills, Anne Pickering, HR Director for O2, Toby Peyton-Jones Director of HR for Siemens UK & North West Europe and also Jo Swinson, Minister for Employment Relations and Consumer Affairs.

The debate was a good one and unsurprisingly a number of key themes and issues were highlighted. The current issues that we are experience in youth employment are structural and not cyclical. This is not an issue just driven by the current economic environment, but has been a long time coming as highlighted in this blog by Mervyn Dinnen, caused by a decline in entry-level jobs and a reduction in big one company towns.  Add to this the contradiction of employers requiring work experience and young job seekers’ inability to get that work experience and we have ourselves a problem.

The problems are long-term and structural and likewise the solutions will also be long-term and structural. O2 talked about their inability to actually predict the skill sets that will be required in the future because of the speed of change in technology, requiring them to focus on recruiting mindset and broad skills instead. Siemens, in a rather germanic way, talked about how they had mapped out future mega trends to help understand the markets that they would need to be growing in and therefore which future skills they would be needing.

And of course, there was talk of the education system, vocational training, the role of universities and work experience schemes.

It is probably here that there are more questions than answers. Clearly there is a need for reform, but as I’ve written before, we seem to be dancing around the edges and sending contradictory messages. Take this, all the panelists including Swinson were extolling the virtue of other routes into employment other than university. Agreed. But we don’t seem to act as if it is.

As I tweeted at the time, I struggle to understand why we happily loan someone £27k to study for a degree in Zoology, but we won’t loan a job seeker money to undertake unpaid work experience, workplace training or even to start their own business.  When Government funds workplace schemes they give the money to the employer and the job seeker has to apply for it. Almost as if we don’t trust them with the money in the way that we would someone going to University.

It also strikes me that we place the power with the organisation and not the job seeker. Would an alternative model be to provide the funding to the job seeker? Although it wouldn’t change the overall outcome it would change the ethos. If I think Tesco aren’t providing as good an opportunity as Asda or Lloyds as Barclays then I can take my money to the employer I think would train and educate me best.  Creating competition between employers as well as between job seekers. It would also potentially open up more opportunities with SMEs and other companies who may not have the resources and the structure to apply fo Government funding in the way that larger organisations can.

I’m sure there a thousand holes that can be picked in this argument at the moment and I need to reflect on it and work it through more. But it seems that we would have a better bet if we both empower the young unemployed to find work and challenge organisations to create it. Businesses are competitive by nature, shouldn’t we be making the most of that?

The future workforce

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If you’re unable to make it to #TruLondon then below is the provocation that I’ll be putting forward in the stream entitled Future Workforce. Please feel free to share your views and we will try to include them in the debate.

“The employment market as we know it is broken. For all we know, it is broken for all time. There are record levels of unemployment, record levels of youth unemployment and yet steadily high levels of unfilled vacancies.

Successive Governments have been incapable or unwilling to address the problems. Private enterprise is consistently moaning about skills shortages but doing little if anything to cure their own ills. And the recruitment industry, which could (and I stress COULD) be the cohesive force, is intellectually stunted, focussed on short-term gain and happy to flog the proverbial dead horse to within an inch of its life.

The problem requires a new way of thinking, a new model. It requires thought leadership, experimentation and innovation. And more than ever it requires courage. But where we see these elements, we also see significant mainstream media pressure to desist. Unpaid internships, government work schemes, university funding changes have all been the subject of liberal left outcry and hysteria.

These solutions might not be correct, but there are few alternative solutions being presented by the critics. Instead they are happy to bathe in the warm glow of self-satisfaction whilst the economy crumbles around our ears.

If we are to solve the problems, we need to think in a totally different way. We need to accept realities that we find unpalatable, but are not without historical precedent. Bonded labour, a significant increase in the single employee company, portfolio careers, a low education but high skill economy.

We need to start the thinking now and only through debate and disagreement will we reach truly innovative 21st century solutions. And we start right here, right now. Or we accept that we are irrelevant , lose competitive edge and ultimately die.”

We can’t work it out

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Another Government, another job creation scheme, another waste of time and money.

Last Friday saw the launch of the latest employment white elephant, “The Work Programme” charmingly described by Employment Minister Chris Grayling as,

“a giant employment dating agency”

The concept is to use private companies to find employment for unemployed people and incentivise them to do so with the payments for success ranging depending on how unemployable the placed people are.  There are a number of serious faults with the scheme, many of which have more than adequately been highlighted by my friends at the Work Foundation:

  • Unemployment has huge regionality – if you’re unemployed in an area of high unemployment then incentives to contractors to find you work are not going to help one iota
  • Unemployment has huge emotional, social and psychological implications. Trying to solve it through a commissioned based system is a recipe for disaster – expect to hear stories of vulnerable people being ill-advised and placed in roles that are unsuitable
  • Private enterprise will focus on where it can achieve a return, not where it can be most socially useful
  • The scheme is focussed on demand side, not supply side

And this last point is the real issue, the real area where this and other job schemes come crashing down.  Employers don’t (generally) create jobs because of Government schemes.  There may be some headline grabbing stories – generally from retailers creating part-time, low paid jobs. But that hardly deals with the issues that are driving the unemployment figures – such as tens of thousands of public sector workers losing their jobs.

If we are serious about creating meaningful sustainable employment, we need investment in the key market sectors that Britain can be strong in. We need to invest in the knowledge economy, in creative industries, in R&D. We need to learn the lessons from the financial crisis and incentivise the development of a mixed economy. But perhaps most importantly we need to understand that the burden of tax on businesses needs to be reduced.  Business creates jobs when they are growing and investing in their future, not when they are holding their own or at worst contracting.

There is no genuine, long-lasting value behind “job creation” schemes or incentives, they don’t lead to a step change in the labour market, they are political window dressing that hide the main issues of economic frailty. Within the UK, if we are serious about solving the current unemployment situation (and we should be as it is a 17 year high) then we  need to create an environment that supports business growth, entrepreneurialism and innovation.

At the same time, we need to address long-term skills shortages, through significant investment in retraining and finally to support business development in those communities that have been devastated through long-term unemployment and public sector cuts.

The “Work Programme” does nothing to tackle the crux of our unemployment problem. It is time to grow up and start discussing the real issues that lie at the heart of the matter, only then will we take any meaningful steps forward.