Week starting 23rd February

CBI More Bullish About Growth & Job Prospects

The Confederation of British Industry (CBI) says the UK’s economy will grow more in 2004 than it was previously predicting. In its latest quarterly economic review the CBI is forecasting the economy will grow by 3% this year – a rise of 0.2% versus its previous forecast. It is also expecting employment will rise, resulting in a drop of nearly 140,000 in the number of people unemployed between now and the end of next year.

The CBI’s Chief Economist, Ian McCafferty said: “The economy should grow robustly this year and next as exports benefit from the gathering momentum in the global recovery.”

Export volumes are expected to grow by 4% this year and 5.3% next. Manufacturers’ order books are at their highest level for 3 years.

Future Workers Can Expect To Change Jobs 19 Times

City & Guilds has been doing some crystal ball gazing and says that the average British employee starting work in 20 years time will change jobs 19 times during their working lifetimes. Some of those changes will result from internal promotions, some from structural change within the organisations they work for or from starting new careers altogether.

It predicts that twice as many people (5 million) will change their jobs each year in 2025 as do currently and that pursuing ‘parallel’ careers (undertaking two or more jobs at the same time) will become much more normal. Here again the numbers are set to double to 2.4 million over the next 20 years – equalling 8.5% of those currently working. The parallel careers will be necessary because people will need the additional income to manage during their working lives. Futhermore, they will have to go on working because they will need to top-up their income in ‘retirement’.

How will people acquire the skills necessary to make all these career changes? According to City & Guilds – the UK’s leading vocational awarding body – the answer lies in technology. “The development of online education means people can re-train for a new career while holding down their current job.” (or jobs presumably).

If only it were that simple……

‘From Blue Rinse To Blue Jeans’

This catchy title comes from a new report published by financial services company GE Life. The report – fully titled ‘From blue rinse to blue jeans : Achieving a dynamic old age in 2030’ - predicts an increasing polarisation between the ‘haves’ and the ‘have nots’ amongst the over 50s in the next 30 years.

The report looks at the life of the 50+ age group in the coming years including work, leisure, healthcare and lifestyle. The picture on the front of the report depicts a baby boomer sitting astride his Harley Davidson to press home the point of the wealthy, healthy lifestyle it is predicting for those who are well off enough through their youth and middle age to save for their older age.

The wealthy 50+ age group will have better health than any previous generation, will benefit from medical advances to manage health problems, from cosmetic processes to improve appearance as well as mental and emotional well-being and will be able to afford the hardware on which to run SMART homes, intelligent cars and many other life-enhancing innovations.

Those who have little money in their youth and middle age will loose out all the way through their lives – poorer nutrition will lead to greater health problems, they won’t be able to afford the advanced technology or the cosmetic procedures their more wealthy counterparts can, and they will feel increasingly different and socially isolated. Clothing and personal appearance will be obvious give-aways of personal wealth. “Older people with little or no savings will face the stark choice of working into their seventies and even eighties or sitting out a long retirement on diminishing means,” says the report.

Week Starting 16th February

Working Time Directive – Reform Moves One Step Closer

The abolition of the UK’s opt out from the Working Time Directive - allowing workers to agree to work more than 48 hours a week – may have moved one step closer. The European Parliament called on the European Commission to scrap the opt-out to end what it described as the UK’s widespread and systematic abuse of the Directive. The UK has the longest working hours culture amongst the present EU member states.

The working time opt-out has been controversial ever since in introduction in the mid 1990s and is currently being reviewed by the Commission. The Parliament’s move has been heavily condemned by employers’ groups who described it as a serious blow to every individual’s right to govern their own time and flexibility.

49 - 55 Year Olds – The Golden Generation

A new report paints a picture of 49 to 55 year olds that many of them will struggle to identify with. According to a study sponsored by HBOS (a TAEN member), this age group are a ‘golden’ generation with more accumulated wealth than any previous age group. They also appear to have a stronger determination to spend it on themselves rather than leave it to their children.

The study, based on data from over 10,000 adults taking part in the British Household Panel Survey, claims that the average UK household has assets worth just under £87,000 in addition to any pension savings. The average amount of wealth for those aged 55 has reached a record £130,000 in addition to any pension savings.

The study shows the transition from being a mortgage holder to owning their home outright occurs when people are aged between 55 and 59. Its findings will fuel the debate about pensions and savings. It may reinforce the Government’s current commitment to means-tested benefits as a way of helping the poorest pensioners, rather than giving increases in universal entitlements, whether they are needed or not.

New Enterprise Agency for The Recruitment Industry

The Recruitment and Employment Confederation (a TAEN member) has embarked on a 6-month feasibility study of whether to set up an enterprise agency geared specifically for the Recruitment Industry.

The REC estimates that 1,000 new recruitment businesses are established each year and it believes the right support and guidance is essential to help recruiters become more professional, commercially effective, environmentally astute and quality driven. The role of the new enterprise agency would be to facilitate better business start-ups and development of new recruitment businesses “so that they can flourish and operate at the highest possible standards.” Including a whole hearted commitment to age diversity – obviously.

N.I. Error Could Impact Pensions For Millions

A National Insurance error is threatening over 10 million peoples’ entitlement to a full state pension. The error occurred because no letters were sent out to those who needed to top up their NI contributions for the years 1996/07 to 2001/02.

The average underpayment is around £425 but the worst affected people – estimated to number 200,000 – will need to pay £1500 to safeguard their rights to a full basic state pension. The Inland Revenue will be writing to the 10.2 million people impacted this year, asking them if they want to make up the shortfalls and setting out a number of options for them to do so by 2008.

Employers Raising Retirement and Pension Ages

Thousands of employers have already, or are planning, to raise the retirement age in their organisations. According to the CIPD 15% of employers have already changed it over the past two years and a further 17% say they are planning to do so in the next two years.

In most instances the changes mean an employee who retires ‘early’ at 60 will qualify for a less generous pension in future.

Private sector employers are taking the lead in raising retirement ages to 65 – many seeing it as a way to trim pension schemes and costs. But the Government is also planning to follow suit in the public sector and is running into opposition from unions who are keen to defend their members’ right to retire on a full pension at 60 - or earlier.

We are all waiting to see what line the Government will take on retirement ages in the draft regulations for the 2006 age discrimination legislation. Will they abolish mandatory retirement ages and introduce a ‘default’ retirement age of 70 as they were originally considering? All should be revealed by the summer….

Week Starting 9th February

The Pensions Bill: A Curate’s Egg

The new Pensions Bill published this week is something of a curate’s egg – good in parts. On the ‘good’ side, amongst other things it:-

• Establishes the Pensions Protection Fund – a new insurance fund which all employers running pension schemes will have to pay into and which protects members of occupational pension schemes if their employer goes bust.
• Establishes the Pensions Regulator – which by focusing on under-funding, fraud and mal-administration will give better protection to members of occupational pension schemes. It will also reduce red tape for employers running well administered and funded schemes.
• Introduces a new duty for scheme trustees, advisors and managers to ‘whistleblow’ if they feel something is wrong with the scheme.
• Brings occupational pensions within the remit of the Transfer of Undertakings regulations so that employees whose businesses/organisations are acquired by another have their pension rights protected.
• Allows people who defer taking their state pension to receive a lump sum payment and a higher rate of deferment accrual.

However, missing from the Bill are:-

• Measures to compensate the 60,000 workers who have lost all or most of their occupational pensions as a result of their pension schemes going bust or being wound up. Some 200 schemes have folded since 1999.
• Reform and simplification of the state pension scheme by introducing a ‘citizens’ pension entitlement, re-establishment of the link with average earnings, increasing the value of the state pension and sweeping away most, if not all, means tested benefits.
• Abolishing the ‘retirement cliff edge’ by allowing employees to draw a pension and a salary form their employer at the same time and thereby encouraging gradual/phased retirement and people to extend their working lives and save more for their eventual retirement. (click here to see TAEN press release)
• Any compulsion on employers and employees to pay into occupational pension schemes.

The Government hopes the Bill will restore public confidence in pensions and saving for retirement after the battering it has received in recent years. On its own, this Bill is neither ambitious nor wide-ranging enough to do it, but it does appear to take some important steps forward and as such deserves cautious welcome.

The Strongest Labour Market For A Generation - Allegedly

Commenting on this month’s employment figures from the Office of National Statistics, Des Browne - the Minister for Work – claimed “The UK has the strongest labour market for a generation. We have record numbers in work, unemployment is falling and job vacancies are high.”

The number of people in work rose by 5,000 in the 3 months to December and was up 156,000 on the same time the previous year. It now stands at 28.16 million bringing the overall employment rate to 74.5%.

The unemployment claimant figure fell by 13,400 to 892,000 last month and the ILO unemployment figure fell by 21,000 to 1.46 million in the 3 months to December. It is down 55,000 on the same period the previous year.

ONS’s vacancy survey estimates there were 572,000 unfilled vacancies over the past 3 months - up 6.6 thousand on the previous year.

However, 7.85 million or just under over 1 in 5 (21.5%) people of working age are economically inactive i.e. do not have a paid job and are not actively seeking or available for work within two weeks. Out of this number 2.12 million say they want a job.

Even though there are record numbers of people in work, at 79% the employment rate for men is 3% below what is was in 1990 and 10% lower than it was a generation ago.

According to John Philpott, Chief Economist at the CIPD (a TAEN member), “Failure to provide today’s large army of jobless men and women with the opportunity, incentive and ability to work makes talk of ‘full employment’ in the UK premature…Policy makers and employers must in tandem do more to draw the inactive back to the world of work.”

The Value of Over 50s Paid & Unpaid Work

A report just published details the value of the contribution the over 50s make to the UK economy. According to Age Concern’s ‘The Economy and Older People’ they contribute £201 billion a year from paid work and £24 billion from unpaid work such as grandparenting, caring for partners and volunteering. This means that over 50s currently create a quarter of the UK’s economic wealth.

Around 5.25 million over 50s provide unpaid voluntary work the Government estimates would cost over £5 billion to replace.

The report challenges the view of an ageing population as a burden. It says that despite their enormous input, under-employment of the over 50s rather than the ageing demographic itself poses a serious threat to the economy. By 2021, 40% of the population will be 50+ yet many older workers cannot get jobs. It reaffirms earlier research that there are a over million people 50+ who are not in paid employment but would like to be and that older people’s under-employment costs the UK economy £12-£30 billion a year.

The report calls on the Government to have a clear strategy in place to reduce under-employment of older workers, to scrap mandatory retirement ages in the 2006 legislation and to make the New Deal accessible to all over 50s who are unemployed. At the same time age discrimination has to be tackled to help ensure older people are not denied opportunities to work because of their age.

It also reminds politicians and policy makers that the over 50s are a powerful electoral force, having cast one third of the votes in the 2001 General Election.

Age Positive Campaign Takes Off in Northern Ireland

Within days of the end of the consultation period on proposals for legislation to tackle age discrimination in employment and training in Northern Ireland, its very own Age Positive campaign has just started. The campaign will focus on raising employers’ awareness of the business benefits of an age-diverse workforce.

In N. Ireland the employment rate for those aged 50 to state pension age is only 62.2%, this compares with just over 70% for the UK as a whole. It is estimated that by 2011, 53% of N. Ireland’s population will be over 45.

As in the rest of the UK, the age legislation is due to come into effect by the end of 2006 but unlike in the other countries, there is work going on to extend protection from age discrimination in goods, facilities and services. This is being done in the context of the single Equality Bill already in place.

Not unnaturally it raises the question that if protection against ageism can be extended to goods, facilities and services in N. Ireland, why not in the rest of the
UK as well?

The Pru Finds Increasing Numbers Intend Working After Retirement

In its second annual ‘Retirement Index’ the Prudential reveals that 30% of people
due to retire in 2003 and 2004 intend to work again. The reasons for wanting to go on working included:-

• Needed the additional income (29%)
• Bored at home (19%)
• Missed the social scene of work (17%)
• Sense of purpose (14%)
• Wanted to be able to get out of the house (11%)
• Pension not providing as much as expected (7%)
• Wanting to do something for the community/charity (7%)

Whilst 27% of men go back to work because they’re bored at home, only 12% of women go back for the same reason.

There are strong regional differences in the percentage of those going back to work. In the South West 31% return to some form of work after retirement, in East Anglia it is 29% and in Yorks/Humberside 27%, whereas in Scotland only 16%, and in Wales and the North East only 18% do so.

As last year’s report from the DWP on Working after State Pension Age (SPA) pointed out, those most likely to work on after SPA are those working up to it. Therefore it comes as no surprise to find that those regions with low numbers working after retirement are the same as those with lower percentages of people working between 50 and SPA.

Week Starting 2nd February

Over 2 Million Employees ‘Incompetent’

As a result of their latest National Employers Skills Survey of 72,000 employers, the Learning and Skills Council have concluded that over 2 million UK workers are incompetent because they lack the skills needed to do their jobs. Given the existence of these skill gaps it is surprising that nearly 40% of employees received no training over the past 12 months.

On the other hand, many employers are taking the problem seriously and over 50% of employees received an average 5 days training in the past year. Employers are currently spending around £4.5 billion a year on training but as previous research has established, there is a training rich/training poor phenomenon which perpetuates the skills rich/skills poor divide - with those who are already better qualified tending to receive the lion’s share of the training spend. Typically, older workers do badly in the training stakes.

The survey also found that 20% of vacancies remain unfilled because of problems finding people with the right skills.

LSC Unveils IAG Strategy

Just weeks after the publication of the new National Framework for Information, Advice and Guidance (IAG) by the DfES, the Learning and Skills Council has now responded with its own strategy document. It sets out the LSC’s vision for the future of IAG services and will give existing IAG Partnerships and their networks of providers plenty to consider in the next few weeks. The LSC says its new vision puts IAG at the heart of all the learning provision it funds.

All adults over 20 will have an entitlement to learning and job related information and advice services and there will be a published IAG statement of service for users. However, a ‘differentiated’ advice service will operate favouring those adults who are below NVQ level 2 (5 GCSEs at A-C grade or equivalent). This supports the universal entitlement to learning/training to achieve level 2 announced in last summer’s Skills Strategy.

At long last there will be a national brand for adult IAG, supported by a website. There is an acceptance within the LSC that at a national level, the existence of adult IAG services has been one of the country’s best kept secrets. (This has been in stark contrast to the ‘Connexions’ brand which is widely recognised as providing IAG services for 14-19 year olds).

Learndirect will provide the national entry point to the reformed service via on-line and telephone access.

All funded providers will have to have ‘matrix’ quality standard accreditation and all Partnerships will have to re-tender to deliver the service in their LSC area.

Whilst there is much reference in the strategy to ‘information’ and ‘advice’ services and entitlement, the word ‘guidance’ is largely conspicuous by its absence. How this, and the introduction of the ‘differentiated’ advice service, will impact the support available to individuals at a local level remains to be seen….

The Huge Cost of Staff Turnover

Annual staff turnover in UK organisations is averaging 17.9% and is apparently costing them a staggering £48 billion a year according to new research from Momentum Financial Services. The research found that it costs on average nearly £10,000 (£9,766) to recruit and train a new employee.

With the labour market tightening there is all the more reason for organisations to try to improve retention rates, recruitment policies and practices.

Interim Management Changing

Last year nearly 75% of interim assignments were concerned with managing short-term projects calling for specialist expertise. This sort of assignment is growing (up from 59% the previous year) whilst the number of assignments requiring interim managers to step into permanent roles on a temporary basis nearly halved.

Not so long ago, interim management was the preserve of older managers and professionals who had typically been made redundant and turned to this up-market form of ‘temping’ as a way to remain in the labour market in the face of the difficulties they encountered in securing permanent positions.

Now, according to the HR consultancy firm Chuimento, the competition for assignments is increasing as younger, ‘mid-career’ professionals are deliberately choosing to become interims.