What we need next is job cre­ation, train­ing and hir­ing

The Daily Telegraph - Business - - Business Comment - NEIL CARBERRY Neil Carberry is chief ex­ec­u­tive of the Re­cruit­ment and Em­ploy­ment Con­fed­er­a­tion

Pos­i­tive eco­nomic com­men­tary is hard to come by right now. That’s un­der­stand­able. Ear­lier this month, the ONS con­firmed GDP fell by a record 20.4pc in the sec­ond quar­ter of the year – while there were an ex­tra 730,000 peo­ple out of work com­pared with March.

And it’s fair to say things will get worse be­fore they get bet­ter. The fur­lough scheme comes to an end in Oc­to­ber and only then will the ex­tent of the un­em­ploy­ment prob­lem be re­vealed. It’s bad, but it’s im­por­tant to re­mem­ber that we are not just pas­sen­gers in all this. We can act to min­imise the un­em­ploy­ment in­crease that is com­ing.

There are glim­mers of hope. This is a con­sumer busi­ness re­ces­sion un­like any­thing we’ve seen be­fore. As lock­down has eased and con­sumer de­mand picks back up, we are see­ing a steady beat of new va­can­cies start­ing to fill up jobs boards again.

Our Jobs Re­cov­ery Tracker is trac­ing a month-on-month in­crease in new job ads – a sign that busi­ness is pick­ing up and re­as­sur­ing news for peo­ple who have lost jobs. Em­ployer con­fi­dence, a vi­tal in­gre­di­ent for eco­nomic growth, is also on the up and many firms are telling us they in­tend to take on more staff soon. Mak­ing sure we take steps to nur­ture these bud­ding but frag­ile shoots of re­cov­ery will help avoid a long-term cri­sis.

At the top of the Gov­ern­ment’s pri­or­ity list needs to be a plan for en­cour­ag­ing job re­ten­tion and boost­ing hir­ing. The sup­port we’ve had so far, like the fur­lough scheme, has been vi­tal. But now we need to fo­cus not just on keep­ing peo­ple in jobs, but help­ing the un­em­ployed tran­si­tion into new roles – ones that will be sus­tain­able without gov­ern­ment sub­sidy.

Low­er­ing em­ploy­ers’ Na­tional In­sur­ance would re­duce staff costs without hit­ting em­ploy­ees’ earn­ings. It’s the big­gest busi­ness tax and re­flects a con­cern­ing trend over the last decade – tax­ing com­pa­nies more for do­ing busi­ness, rather than tax­ing prof­its once they are made. Lower NI would en­cour­age firms to keep more peo­ple on their pay­roll while low­er­ing the bar­ri­ers to hir­ing new staff. If more tax rev­enue is needed, it would be more eco­nom­i­cally ben­e­fi­cial to raise it else­where, rather than by tax­ing jobs.

This is go­ing to be a stag­gered re­cov­ery. Dif­fer­ent in­dus­tries are re­cov­er­ing at vary­ing speeds. Jobs in con­struc­tion, lo­gis­tics and child­mind­ing were lead­ing the way in early Au­gust, while of­fice-based roles are re­turn­ing more slowly. But not ev­ery in­dus­try will bounce back com­pletely – our econ­omy will change shape in a re­ces­sion, as it al­ways does. The im­por­tant ques­tion is how to help peo­ple who have lost their jobs tran­si­tion into growth in­dus­tries, and young peo­ple make their way into work in grow­ing ar­eas.

Some newly un­em­ployed peo­ple may not have had to seek work for many years. They will need help iden­ti­fy­ing their trans­fer­able skills and look­ing for va­can­cies in a digi­tised en­vi­ron­ment, as well as the prac­ti­cal tasks of putting to­gether a CV, writ­ing ap­pli­ca­tions and pre­par­ing for in­ter­views. The Chan­cel­lor’s an­nounce­ment of fund­ing for a job search sup­port scheme is wel­come. The im­por­tant thing is to move fast and to use the un­par­al­leled ex­per­tise of the UK’s re­cruit­ment busi­nesses to help. Re­cruiters are jobs ex­perts who are al­ready sup­port­ing peo­ple with core em­ploy­a­bil­ity skills on a daily ba­sis.

We will see mas­sive de­mand for these ser­vices in the com­ing months, and a real part­ner­ship with the re­cruit­ment in­dus­try would mean this sup­port could be ex­panded quickly to meet it. Us­ing the na­tion’s net­work of lo­cal and sec­tor jobs spe­cial­ists to de­liver this scheme makes sense – bet­ter har­ness­ing the ge­nius of all our busi­nesses than do­ing it from one big call cen­tre!

But it is about more than match­ing and in­ter­view sup­port. Grow­ing ar­eas need dif­fer­ent skills.

The Gov­ern­ment’s record in sup­port­ing skills de­vel­op­ment is patchy, at best. Too much of the pro­vi­sion has been de­signed in White­hall, not the work­place. As an ex­am­ple, the fail­ing Ap­pren­tice­ship Levy has caused a fall in new starts, not a rise. But busi­ness dis­con­tent on this isn’t about pay­ing the levy – it’s about mak­ing sure they are buy­ing what work­ers and com­pa­nies need.

A swift move is nec­es­sary to en­sure

‘The im­por­tant ques­tion is how to help peo­ple who have lost their jobs tran­si­tion into growth in­dus­tries’

state train­ing funds – and busi­ness levy funds too, if the De­part­ment of Ed­u­ca­tion is imag­i­na­tive – can be used on high-qual­ity train­ing, how­ever long the course is. Ap­pren­tice­ships are great, but they aren’t the only show in town. Why should a firm leave levy money un­spent when they could give a young per­son a chance in a role without a recog­nised ap­pren­tice­ship, and use that money to fund the im­por­tant ini­tial train­ing that young per­son needs to start work?

An un­prece­dented cri­sis calls for an un­prece­dented re­sponse. The ini­tial gov­ern­ment sup­ports put into place were the big so­lu­tions we needed. The suc­cess of the Job Re­ten­tion Scheme, for ex­am­ple, can be mea­sured in the num­ber of peo­ple still on the pay­roll de­spite a drop of more than 191 mil­lion work­ing hours. What we need now is to build on that suc­cess with the same bold­ness and sense of ur­gency and make it stick. We’ll need dif­fer­ent poli­cies for the re­cov­ery, but busi­ness is ready to play its part.

We must help the job­less move into new roles – ones that are sus­tain­able without gov­ern­ment sub­sidy

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