Third Age Employment Network - Archived News December 2005

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Archived News December 2005

Week Starting : 26th December

Older Workers More Cost Effective – Claims U.S. Survey

A new report based on research conducted amongst U.S. businesses by consultancy company Towers Perrin and the AARP, has reinforced earlier findings that one of the most enduring myths about older workers, i.e. that they cost more to employ, just doesn’t stand up.

The report found that older workers were more motivated to exceed expectations on the job than their younger counterparts. Motivation tended to increase with age and there was a strong relationship between employee engagement and financial performance. Companies with higher levels of employee engagement tended to outperform those with lower levels of engagement.

The report concluded that the extra per-employee cost of retaining or attracting more workers over 50 ranged from ‘negligible’ to 3% in certain key industries.

Roselyn Feinsod of Towers Perrin said, “Enhancing the retention or hiring older workers can result in marginal differences in total cost for the talent pools studied, while experienced people can offer a distinct performance advantage in many key roles.”

Also commenting on the findings, the chief executive of the AARP (American Association of Retired Persons), said, “These findings are especially important because the workforce is ageing, labour shortages are projected in a number of sectors, and many employees intend continuing to work beyond retirement age.

Keeping people in the workforce longer benefits the employee, the employer and society as a whole.”

4 out of 10 Employers Using Jobcentre Plus

A new survey of employers found that just over 4 out of 10 employers (43%) who are looking for staff use Jobcentre Plus services. The level has remained the same over the past 2 years. In 2004, 38% of all vacancies were advertised with them.

According to JC+ it works with over 400,000 employers to place 20,000 people into work every week. Over 300,000 vacancies are listed each week on its website and more than 3 million job search requests are received – making it the UK’s number one recruitment website.

EOC Calls For New Sex Equality Law

The Equal Opportunities Commission (EOC) says that new laws are needed to deal with continuing sex discrimination against women.

Although its been 30 years since the first sex discrimination laws were passed, they have not had the impact campaigners – and the Commission – had hoped for.

The gender pay gap for women working full-time has closed but still remains at around 18% with men, but when it comes to the part-time pay gap it still remains stuck at just under 40%.

The EOC also estimates that around 30,000 women are still sacked each year from their jobs - simply for being pregnant.

Whilst the public sector has made major strides in addressing sex equality issues, the EOC’s Chairwoman, Jenny Watson has called on private sector employers to do more to promote equality and eliminate sex discrimination.

With the Age Regulations still due to be laid before Parliament early in the New Year, the EOC’s call is timely because it reminds us all that whilst legislation helps, when it comes to equal opportunities and discrimination issues, changes in employer mindsets, policies and practices can take years to happen, even if it happens at all.
Legislation is necessary, but it is not a silver bullet.

Final Salary Pensions : Death By A Thousand Cuts Continues

More news over the past week of the continuing assault upon final salary pension schemes for the 1 in 4 workers in the private sector who continue to be members of such schemes.

First there was the announcement just before Christmas that Rentokil is the first FTSE 100 company to declare its intention to close its final salary scheme to existing employees.

Its announcement was greeted by a warning from a spokesperson for Nthe NAPF (National Association of Pension Funds) that more top companies are likely to follow Rentokil’s lead of freezing the pensions of existing employees at current levels in a bid to tackle their pension fund deficits. Nearly 9 out of 10 of all final salary schemes are thought to be in deficit.

The second piece of bad news came from the consultants Deloitte & Touche who estimate that despite the revival in the stock market over the past year and an increase in the value of most pension scheme assets, the size of most of the deficits have increased, rather than fallen. This is largely due to the effects of falling interest rates, but means that the estimated deficits amongst just the FTSE 100 companies has risen to £75 billion, from £65 billion the previous year.

Deloitte’s estimate the stock market would need to rise immediately by a further 30% to eliminate the UK’s pension scheme deficits.

Week Starting 19th December

NAO Joins Skills & Training Debate

Over the past few weeks we seem to have been inundated with reports about skills and training, now the National Audit Office (NAO) has waded in with one of its own.

Their ‘Employers’ perspectives on improving skills for employment’ report estimates we spend over £20 billion a year in England on employment related training (plus a further £10.3 billion on the labour costs of trainees).

Despite this expenditure, 6% of employers have skill shortage vacancies and 20% have skills gaps, costing in total some £10 billion a year in lost revenue – equivalent to £165,000 a year in a typical business with 50 employees.

The report looks at who employees work for; regional data on productivity, skills gaps and training days and expenditure per head of working population; gives the rationale for the government’s strategy for improving skills and then looks at what employers want from the various skills strategies currently being pursued. These include :-

Wanting a simple way of getting advice on the best skills training for their staff.
Wanting training which meets their business needs.
Wanting incentives to train their staff more.
Wanting to influence skills training without getting weighed down by bureaucracy.

The NAO comes up with 5 main recommendations:-

The Learning & Skills Council, in collaboration with other organisations, should co-ordinate coherent information and advice for employers on improving skills.
Brokers and training providers should focus on innovative and affordable training that employers need, and on providing the training at a time and place that is convenient to both employers and employees.
In addition to reflecting national priorities, funding should be tailored to encourage more training to meet skills shortages and regional priorities.
The Sector Skills Councils need sufficient time and capacity to develop as genuinely employer-led bodies providing sector expertise in developing skills training and formal qualifications.
The Department for Education & Skills and the Learning & Skills Council should seek to maximise value-for-money from the National Employer Training Programme (a.k.a. Train to Gain) by using public sector funds to leverage funding by employers of skills training that will benefit their businesses.

25% of Training Providers Still Inadequate.

The latest report from the Chief Inspector of the Adult Learning Inspectorate says 25% of WBL (work based learning) training providers are still considered to be inadequate.

However according to the Inspectorate there has been a substantial improvement overall in standards over the past 4 years and that improvement is continuing. Going back to 2001-02, nearly 6 out of 10 (58%) WBL training providers were deemed to be inadequate.

But when it considered the performance of training providers whose only contract is with Jobcentre Plus, it found that inspection grades had worsened over the inspection cycle. Some 40% were unsatisfactory and the performance of Workstep training providers gave particular cause for concern. Of these, over half were judged to be inadequate.

The report found the performance in the Adult & Community Learning sector was disappointing and that the messages from previous inspections had not filtered through; 37% of the provision was still unsatisfactory; 64% of providers took an unsatisfactory approach to quality improvement and 70% of providers had needed re-inspection of at least one of the areas they offered – an all time high.

In a situation where individual learners (or their employers) are being expected to cover more of their course costs, this is simply not acceptable..

ACL Has Become the Learning & Skills ‘Cinderella’

Looking at Adult and Community Learning (ACL), the ALI report makes the point that this sector has become ‘the Cinderella’ of the learning and skills sector. This is because its public funding has become a lower priority than that of 16-18 year olds.

The report says that in part, ACL’s growing disadvantage has been caused by a definition of ‘work’ as exclusively benefiting individual learners rather than the communities in which they live or the companies in which they might work.

It goes on to say…”The notion that adult and community learning is primarily ‘leisure’ provision is both wrong and deeply damaging. Much has been made over the years, and rightly, of the many cases where interests which were initially recreational have evolved into a new means of making a living; where pursuit of a personal interest has flowered into a passion for learning at the highest and most demanding levels; and where the social context offered by learning has been the means of sustaining the vitality of the old and the ill. All this is true. As an argument, however, it has the weakness of suggesting that adult and community learning has a value mainly when it can be shown to lead to something else. Instead, we need perhaps to reflect on the obvious fact that economic activity does not take place in a vacuum.”

Continuing Decline of New Deal 50+

Latest figures show that the number of people being helped by New Deal 50+ continues to decline:-.

In January 2004, 4050 people aged over 50 signed up for this voluntary scheme, the figure had dropped to just 1820 in August 2005.
The age profile of those signing up appears to have stayed relatively stable. Those aged 50-54 account for some 55%, those aged 55-59 make up just under 40% and 5% are aged 60+.
Two thirds (67%) of scheme participants are male.
Participation varies around the regions. Those living in London account for 15% of participants since January 2004, whilst those in the East Midlands account for just 5%, the other regions come somewhere in between those two.
Around 50% of those going onto ND 50+ appear to end up getting a job.

First-time Mum’s Doing It Later Too

Its not only first-time fathers that are getting older, the same is happening for first- time mothers too. According to the ONS, in 2004 the average age for women having their first child increased to 27.5 years, although the average age of women giving birth remained at 29.4 years..

For the first time the birth rate for women aged 30-34 overtook that of women aged 25-29 and it reached the highest rate for any age group since 1997.

The overall number of live births in England and Wales went up by 2.9% last year (to 639, 721) and was the highest number since 1997.

Housing Costs Continue To Exacerbate Skill Shortages

The cost of housing is a concern to employers in most English regions but it is a particular problem to London employers where 75% of them say it is having a direct impact on their businesses.

The latest London Business survey from the CBI and consultants KPMG found that just under half (48%) of London employers said housing costs are putting upward pressure on wages, whilst over a third (36%) say its impacting staff morale.

Looking ahead, 53% of London businesses fear skill shortages during the next 6 months, and these concerns are most significant amongst professional service companies and in the construction sector.

According to Digby Jones, the CBI’s Director-General, “London’s economic success is crucial to the UK as a whole. But inadequate housing supply is pushing up costs and making it more difficult for firms to recruit and retain the staff they need to sustain and grow their businesses.….. ”

High time then for more of them to start changing their attitudes towards employing older workers who are already living in London and the South East - as part of the solution to their labour shortage problems.

Week Starting 12th December

Job Prospects Expected To Improve In the New Year

The latest Employment Outlook Survey from Manpower has found job prospects in the UK look set to improve in the New Year. Recruitment intentions amongst employers in the Finance & Business Services sectors appear particularly bullish with 28% of employers looking to take on more staff and just 8% looking to reduce their headcount.

The survey of 2000 employers looks ahead to the first three months of next year and found an 8% increase in the percentage who were looking to increase their staff numbers versus the last 3 months of this year.

Mark Cahill the MD of Manpower, commented: “These results should bring some festive cheer for the New Year as they show that hiring confidence has picked up after a cautious end to 2005.“

The report shows that 8 out the 9 business sectors surveyed are reporting a positive employment outlook. At a regional level, employers in 10 out of the 12 UK regions are looking to take on staff. Those in the North East are the most optimistic, closely followed by employers in London where 29% are planning to take on staff and just 5% expecting to shed them. But employers in the South East, South West, East Midlands and West Midlands came in below the national average figure.

Manpower’s survey covers 12 European countries but employers in the UK were the most optimistic about their hiring intentions.

‘Soft Skills’ More Important Than Qualifications - Discuss

A new research study conducted for the Department of Work & Pensions (DWP) has been investigating what employers look for when recruiting unemployed or economically inactive people.

Drawing on previous research and a number of interviews, one of its conclusions is that when employers are recruiting they are less demanding in respect of technical skills, considering them to be trainable, as long as candidates exhibit employability, soft skills (e.g. interpersonal and communication skills) and positive attitudes.

Amongst the core characteristics employers look for in candidates are motivation and flexibility. These include willingness to work and learn, and appearance, behaviour confidence and positive gestures and mannerisms.

Qualifications, it seems, do not appear to be important for a large number of employers and jobs, consistently ranking beneath candidate’s characteristics and soft skills. However, they are used to screen job applications – especially for those jobs where there are legislative requirements for certification of competence.

Certain recruitment methods can disadvantage unemployed or economically inactive jobseekers. Informal methods of advertising, such as word-of-mouth, disadvantages those without contacts in the workplace so they are unlikely to hear about vacancies.

The study confirms that age stereotypes exist amongst employers about both older and younger workers and they can damage the employment chances of both groups.

It says that, “overall, the evidence suggests that a focus on qualifications would not appear to contribute to an individual’s employment outcomes, due to the low emphasis on these in recruitment. Developing soft and generic skills is more likely to be important.”

But the study cautions that it is a complex picture and the extent to which, for instance, CVs are used for screening for qualifications and other attributes is unclear. Also that the use of qualifications for screening candidates is heavily sector dependent.

However, candidates with long periods of worklessness were perceived by some employers as lacking work preparedness and more likely to quit at short notice.

First-Time Dads Getting Older

The age of first-time dads is soaring with second-time and third-time dads joining the trend.

Recent figures from the Office of National Statistics show that the most popular age range for dads is now 30 – 34. However nearly 6500 children a year are being born to fathers aged 50+.

Given the costs of raising children, the likelihood is that those having them later are more likely to need to go on working longer.

Latest Employment Figures

This month’s figures show an increase in the number of people in work – up by 58,000 over the last 3 months and 326,000 on the year. The number of people in work stands at 28.81 million – giving an employment rate of 74.7%, down by 0.1%
from the previous quarter.

The number of unemployed people rose by 72,000 over the last 3 months to reach 1.49 million. The unemployment rate was 4.9% in the 3 months to the end of October, up by 0.2% on the previous quarter and 0.3% on the previous year.

The claimant count has increased to 902,000, up by 10,000 from revised October figures and 70,100 higher over the previous year.

The number of job vacancies was 602,000 on average over the 3 months to the end of November, down 25,200 over the previous 3 months and down 41,500 in comparison with the previous year.

In the 3 months to the end of October, 142,000 people said they made redundant in the three months prior to their interview. This was down 2,000 on the previous 3 months but up 6,000 on the previous year.

Week Starting 5th December

Government Announces New Into-Work Programmes

Gordon Brown announced a number of new and expanded into-work programmes as part of the ‘increasing employment opportunities for all’ theme in his Pre Budget Statement this week.

They include:-

New outreach support programmes for people who are neither in work nor on benefit. These to be led by private and voluntary sector organisations and aimed at groups which face particular barriers to employment. The statement specifically mentions ethnic and faith minority groups but its not clear yet whether the programmes will include over 50s as a specific, separate group. TAEN is trying to clarify this because a number of Outreach 50 Plus pilot programme are already running around the country.
Extending the support offered through the New Deal Plus for Lone Parents for an additional two years in the five pilot areas already on board and expanding it to two further JC+ districts in Scotland & Wales.
Introduction of a Commission of Business Leaders to advise on helping the private sector to tackle racial discrimination in employment.

ACAS Celebrates 30 years.

The Arbitration and Conciliation Service (Acas) this week celebrates its 30th birthday.

Acas has come a long way since it was founded in 1975. Whilst it has built its reputation on helping to resolve industrial disputes, nowadays more of its work is focused on providing the advice and good practice needed to help prevent disputes arising in the first place.

To coincide with its birthday, its published some ‘then’ and ‘now’ information to show how much things have changed over the past 30 years. These include :-

Days lost through strikes - down from 5.5 million in 1975 to only 214,000 in 2004.
Growth in the workforce - there has been a 13 percent increase in the labour force - from 22 million to almost 25 million since 1975..
Gender shift - Women make up the extra workforce, with the number of women working having increased from just under nine million to over 12 million while the number of men in work has fallen from 13 million to 12.6 million.
Employment tribunal applications - unfair dismissal cases have increased from 24,367 to 34,864 today. We now have many more employment rights, including sex, race and disability discrimination legislation.
In 2004/5 there were 81,833 employment tribunal applications in total - although 75 percent of those were settled or withdrawn with Acas' help.
Trade Unions - with many mergers there has been a huge reduction in the number of trade unions - from 488 to 67. Union membership has fallen too, down from almost 12 million to 7.4 million.

Great material for a seasonal Employment Relations Pub Quiz !

DWP Report Suggests End of 6 Month Eligibility Rule

One of TAEN’s major criticisms of New Deal 50+ has been that individuals only become eligible for the programme once they have been on ‘qualifying benefits’ for 6 months.

Any one who has been involved with providing support to older jobseekers, especially those who have recently lost their jobs and are trying to get new ones, knows how damaging that 6 month wait can be for the morale, self confidence and motivation of older jobseekers. And as a fair proportion of older jobseekers are not registered for, or in receipt of, qualifying benefits – they never become eligible for help under the programme. Too many never recover to surmount the barriers they’ve encountered and drift into sustained ‘economic inactivity’

The DWP’s (and Treasury’s) argument in favour of the 6 month eligibility rule is that if it were extended to everyone, the ‘deadweight’ costs would be too heavy because many people do not need any of the sort of help which ND50+ offers, to find suitable new jobs.

But a new report* published this week by the Department of Work & Pensions says in its conclusions…..

“To be effective policy must be tailored to the specific needs of the over-50s. ….

“The analysis has shown……that there is potential for any individual to become trapped in inactivity, and ideally, policy should intervene as soon as an individual experiences a period of non-employment. In view of the employment stability status among the over 50s, the deadweight costs associated with this should not be too great.”

However, don’t expect to see the 6 month rule scrapped anytime soon.

* Labour market transitions among the over-50s. Research report No 296.

© TAEN 2006