Week Starting 31st January

Tories Pledge To Axe The LSCs

First they pledged to get rid of Jobcentre Plus, now the Conservative party has pledged to axe the Learning & Skills Councils (LSCs) if it wins the next election. But they’re not stopping there. They will also get rid of the Learning & Skills Development Agency and the Sector Skills Development Agency.

These latest pledges form part of the Conservatives’ education policy proposals.

Funding for all post-16 education and training (except for universities) is currently channelled by the Department for Education and Skills through the Learning & Skills Councils. They handle a budget of around £9 billion a year.

Announcing the proposals, Michael Howard said, “We will establish a network of skills Super Colleges. We will provide them with extra funding by abolishing the LSC and a whole raft of centrally-directed initiatives and regulations.”

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Employers Sticking Their Heads in The Sand Over Age Laws

Less than 40% of employers have introduced age policies at work, although a further 25% are planning to introduce them over the next year. However, nearly a third (30%) had no clear plans to do anything to prepare for the introduction of the age discrimination regulations in October 2006.

These are just some of the findings of a new survey which looked into attitudes towards age amongst 1500 employers.

The research, conducted by RHL Executive Search for the Recruitment Confidence Index, also found widespread age stereotyping affecting younger and older workers. Nearly half - 45% - of respondents said older workers lack technological skills; 23% said older people are slow to learn and 22% said older people are not interested in training. Younger workers on the other hand are viewed as ‘inexperienced’ by 60% of employers, prone to take sick leave (52%) and as ‘unreliable’ (37%).

However, it found a sizeable number of employers are also aware of the benefits an age diverse workforce can bring to the business. They said age diversity reduces turnover (53%) improves moral (41%), raises productivity (35%) and increases profits (16%).

Richard George, managing director of RHL Executive Search said: "Introducing age diversity into the workforce adds stability and experience to teams and offers more balanced management styles. It also provides another perspective on the ageing of the client and customer base and the rise of the grey pound."

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IOD Breaks Ranks On Compulsory Retirement

The Institute of Directors (IoD) has broken ranks with other employer organisations by coming out in favour of the ending of compulsory retirement. A survey of its members conducted by NOP showed that over 3/4s of them were opposed to staff being compulsory pensioned-off when they reached a certain age.

Miles Templeman, Director General of the IoD, said: "We all know that demographic changes will radically affect our pensions position. Abolishing a compulsory retirement age could certainly help in easing the problem. From our research there seems to be a genuine belief amongst employers that many of their staff will want to work for longer than the current law allows. Ultimately, what we need most of all is flexibility in the system."

The IoD stressed that ending compulsory retirement was only one of a number of reforms necessary to ensure adequate pension provision in the future. Of equal importance would be a radical simplification of the whole pensions system, enhanced employee and employer contributions and increased tax incentives for pensions funds.

Templeman said, "Employers are very keen to tackle the whole pensions crisis. Partly out of responsibility to their employees but also because they, as individuals, will be affected in the same way as their staff. Our research shows that two-thirds of directors are on the same pension scheme as their workforce."

By breaking ranks the IoD has challenged the insistence of other employer organisations that compulsory retirement ages are essential for manpower planning purposes. An insistence the Government accepted and which led to its announcement last month of a new national default retirement age of 65 to be introduced from October 2006.

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Labour’s Big Idea : Employment Opportunity For All

‘Employment Opportunity For All’ is the Labour Party’s big idea for the next 5 years. Alan Johnson the Work & Pensions Secretary confirmed that increasing the employment rate from 75% to 80% was the aspiration at the heart of the DWP’s new Five Year strategy. “This”, he said, “is to be achieved by tackling inactivity while still supporting those who are unable to work.

An 80% employment rate could mean as many as 300,000 more lone parents working and as many as one million more people in jobs rather than on incapacity benefits. We also envisage one million more older workers being given the choice and opportunity to work for longer.

We know employment is the best route out of poverty and our achievements speak for themselves. There are now more people in work than ever before and we have one of the strongest labour markets in the world. This success is rooted in policies like the New Deal and Jobcentre Plus as well as the stable macro economic framework we've put in place.”

TAEN's response may be read here

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IB Reform Proposals Unveiled

A large plank in the Department of Work & Pensions new Five Year strategy is to tackle the reform of the Incapacity Benefit (IB) system. The proposals are not as radical as either its MPs and disability organisations first feared, nor Daily Mail readers might have hoped for.

Describing his approach to reform as “fairly bold‘, Alan Johnson, the Secretary for Works & Pension told Radio 4’s Today programme he was intent on helping the 9 out of 10 of those going onto IB who wanted to work once their immediate medical issues were resolved, but who all-too-often then got stranded on the benefit. Over 50% of the UK’s 2.7 million IB claimants have been on the benefit for 5 years or more.

The key elements of the reform for new claimants are :-

• The name 'Incapacity Benefit' will be scrapped so that people are not immediately classed as incapable.
• Initially people will be put on a holding benefit paid at JSA rates, accessing the new reformed benefits only once they have been through a proper medical assessment. This will take place within 12 weeks, and be accompanied by a new Employment and Support Assessment.
• Two new benefits "Rehabilitation Support Allowance" and "Disability and Sickness Allowance" will differentiate between those who have a severe condition and those with more potentially more manageable conditions.
• The majority who have more manageable conditions will receive the "Rehabilitation Support Allowance". It will offer everyone a basic benefit at JSA levels (about £55), but then ensure that they can build up to get more than today's long-term IB rate by giving them extra money, first for attending Work Focused Interviews, and then also for taking steps to get them back towards the labour market.
• Those with the most severe conditions will automatically receive more money than now on the "Disability and Sickness Allowance". They will be able to volunteer to take up employment support.
• The reforms will be built on the foundations of the successful Pathways to Work programme which is being extended to a third of the country on the road to making this a national offer.

As things currently stand that national offer (aka as ‘mainstreaming’) will not be in place until the financial year 08/09 - after the next public spending round settlement.

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Unions Facing Extinction

Trade union membership was 13 million at its peak in 1979 but now its dropped by 6 million and British trade unions face a painful journey to extinction unless they evolve according to a new report* from The Work Foundation.

Presently 29% of employees belong to a trade union. Three-in- five employees in the public sector are union members but this drops to under one-in-five in the private sector and the prospects for union membership in the private sector look very bleak indeed.

The Work Foundation points out the roots of union power - the closed shop and the strike threat - are gone. And that evidence suggests the employer now has less incentive to oppose unions because their impact on productivity and profits is so modest. Equally, the worker has less cause to belong to a union because s/he gets a much reduced wage premium.

The challenge for the union movement is to demonstrate that they can come through for workers without putting employers at a disadvantage and/or deliver for employers while simultaneously looking after worker interests.

Whilst unions still have 7 million members, 1.6 million of these are not covered by collective bargaining because, in many cases, the employer abandoned collective bargaining without formally derecognising the union. Unions face a hard task convincing such members that it remains worthwhile to continue to belong to the union.

Despite a raft of initiatives to increase numbers, such as Unison’s present ‘One is the loneliest number’ TV campaign, membership remains the same as it was in 1997.

However there may be light on the horizon for them. The new EU Directive on Information and Consultation could be an important influence on unions' futures. It establishes, for the first time, permanent and general arrangements for information and consultation for all workers in the UK in organizations employing more than 50 employees and will cover three quarters of the British labour force by 2007.

* ‘British Unions : Resurgence or Perdition' by David Metcalfe for The Work Foundation.

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Week Starting 24th January

Call Centres Still Not Getting The Message

A survey this week showed that despite experiencing ‘severe staffing difficulties’, 75% of UK call centres have no plans to relocate overseas. Its estimated there are now over 5300 call centres in the UK and that the sector now employs nearly 5% of the workforce.

Somewhat surprisingly, considering its higher cost base, Inner London remains the dominant UK location for contact centres, with Glasgow second, Birmingham third and Manchester fourth in importance. Between them, these four cities account for over 600 call and contact centre operations.

Just under half (49%) of those surveyed reported skill shortages – particularly sales and language skills. And there is an expectation that employees’ salaries will have to rise to help retain staff, improve the skill base and attract new talent to the industry. The average basic starting salary for city-based contact centre agents is now £13,318 but ranges from £10,511 in Hull to £18,752 in London, these two being respectively the least and most expensive cities for contact centres.

Throughout the survey the widespread shortage of suitable labour is seen as an inhibiting factor and is certainly a key consideration in deciding the location of new call and contact centres.

What the report from OMIS Research seems to demonstrate is that the majority of call and contact centre operators have still not woken up to the potential staffing solution offered by older workers. There is increasing evidence that those who have widened the age diversity of the teams they employ - by bringing in older workers, are reaping the rewards in terms of reduced staff turnover, higher returns, lower costs, improved team morale and customer retention and satisfaction.

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Pathways To Work Programme Extension

In his pre-Budget Statement in December, Gordon Brown announced that the incapacity-to-work programme pilot - Pathways To Work – is going to be extended to cover 1/3rd of the country over the next two years. Now details have been given of the 14 new areas that will be added :-

• Phase 1 (Oct. 2005) : Cumbria; Glasgow; Lanarkshire West; Tees Valley
• Phase 2 (April 2006): Barnsley; Rotherham and Doncaster; Sunderland; County Durham; Lanarkshire & East Dunbarton; Liverpool & Wirral; Manchester & Salford; Swansea & West Wales
• Phase 3 (Oct. 2006): Eastern Valleys; Greater Mersey; Staffordshire

The extension of the scheme means that 900,000 people will be able to get help under the scheme.

According to Alan Johnson, the Work & Pensions Secretary, “The expansion will cover the most disadvantaged areas with the greatest concentration of people on incapacity benefit – transforming lives by opening up opportunities. Pathways has given hope to people who thought they would never work again, giving them the practical job advice and rehabilitation support they need.”

In each area, new claimants will attend compulsory work-focused interviews with Personal Advisors, be able to access NHS rehabilitation support and may be eligible for a £40-a-week return to work credit.

Up till now the 6 existing Pathways pilots have targeted new IB claimants and existing claimants who volunteer. But from next month the approach is being extended to some of those who have been on IB for over a year.

Currently there are around 2.7 million people claiming incapacity benefits, 50% of them are aged over 50.

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Majority of Mortgage Holders Needing To Work On

Further evidence this week that the Government’s decision to introduce a national default retirement age of 65 was wrongheaded…According to a new survey by Yorkshire Bank, six out of ten mortgage holders believe they will need to work into their 70s to pay off their mortgages and build up a decent retirement fund.

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Minimum Wage May, Or May Not, Be Damaging Businesses

When it comes to the National Minimum Wage it seems that size (of organisation) does matter…

Earlier this month a survey of 12,000 small and medium sized enterprises (SMEs) claimed nearly 60% of them were being damaged by the latest rise in the national minimum wage (NMW). The survey conducted by the Association of Chartered Certified Accountants found 23% of the SMEs had responded by freezing staff recruitment, 18% had reduced overtime and 17% had cut working hours.

At the other end of the employment scale however, 9 out of 10 employers in larger organisations have given overwhelming support for last October’s increases in NMW.

On the contentious issue of what level it should rise to next, nearly 50% of the larger private and public sector employers surveyed by IRS Employment Review thought it should increase to £5 an hour (from its present £4.85 for adults).

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Week Starting 17th January

Labour Market Pressures Expected To Ease

Whilst the overall levels of employment look set to rise during the first quarter of 2005, the rate of increase is expected to slow down. Most significantly, after several years of leading the charge on recruitment, the public sector’s recruitment intentions are now the lowest.

The latest CIPD (Chartered Institute of Personnel and Development) quarterly survey on HR trends and indicators found that less than half (45%) of the 1300 employers surveyed expect to increase staff numbers during the first quarter.

However, labour market pressures are far from disappearing, with over half (55%) of employers anticipating ongoing recruitment difficulties in the coming quarter. In the longer term, too, employers see no major tail off in employment - with a net 17% of employers expecting to employ more staff than they do now by this time next year.

A net quarter of all private sector employers expect to be employing more people in one year's time. However, the net figure for public sector employers expecting to employ more staff is zero. In other words the proportion of public sector employers expecting to employ more staff by the end of 2005 is entirely offset by those expecting to employ fewer. This no doubt reflects the pressure being put on them to reduce staff numbers, as well as the current ‘dutch auction’ going on between the political parties on who can cut the most public sector jobs.

The survey found that lack of specialist skills (66%) and experience (54%) are the main reasons given for recruitment difficulties experienced in the last quarter. And that more than 40% of employers experienced a complete absence of applicants for some vacancies.

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Latest Employment Figures

The latest set of employment figures from the Office of National Statistics show:-

• The number of people in work climbed by 271,000 over the year to November to reach 28.49 million. (The highest figure since comparable records began in 1971).
• The working age employment rate for the 3 months to November rose to 74.8%, an increase of 0.3% over the previous year.
• Over the past quarter the number of employees increased by 63,000 to 24.62 million and the number of self-employed increased by 30,000 to reach 3.64 million.
• The figures show an increasing trend to full-time employment (+146,000 to 21.17 million) and a drop in part-time work (-47,000 to 7.32 million).
• The number of unemployed people rose by 13,000 over the quarter to 1.4 million. Over the year though, it fell by 64,000.
• When it comes to ‘economic inactivity’, the number fell by 73,000 over the past 3 months to 7.86 million.
• The number of vacancies on average over the past three months (648,800) was up 44,900 compared with the previous year.

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New Support Group For IT Sector Victims of Ageism

The IT sector in the UK has long been regarded as one of the most ‘ageist’. Job candidates over 40 frequently experience difficulties in getting permanent employment.

Now a new support group has been set to provide a forum for exchanging practical ideas and discussion that will help improve the chances of individuals getting paid employment in IT.

The link to their website is: http://uk.groups.yahoo.com/group/ageofit/join

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Week Starting 10th January

Yet Another ‘Skills’ White Paper On The Way

The Government is expected to publish another White Paper on Skills at the end of February. Officially it is said to ‘build’ on 2003’s ‘21st Century Skills – realising our Potential White' Paper. Unofficially its acknowledged that it will seek to address the glaring omissions we pointed out in that previous report of any serious consideration of the impact of demographic and labour market change on the skills requirements of older workers and the UK economy.

Hopefully we will see practical strategies, funding and actions for adults – whether they are in or out of work - enabling them to gain ready access to skills training throughout their working lives, and thereby helping to ensure their employability for life.

The new White Paper will also be something of a ‘litmus’ test on the Prime Minister’s recent Opportunity Society speech in which he said that everyone who wants a job, should be able to have one. (click here for related item).

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New Campaign To Attract Potential Social Care Workers

A new TV and press advertising campaign has been launched to attract more people to work in the social care sector and to fill the 50,000 social care posts required nationally each year.

The campaign uses the slogan “Doing the small things that make a big difference” to illustrate the rewards of a career in social care and to challenge negative perceptions about the sector.

According to Health Minister, Stephen Ladyman, “Social care work is worthwhile and satisfying, with the flexibility and development opportunities many people are looking for.”

Visit www.socialcarecareers.co.uk or phone 0845 604 6404 for more information…

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Job Cuts Forecast For Financial Services Industry

The Financial Services industry is expecting to shed jobs over the next 3 months at the fastest rate for two years. According to the latest CBI/PwC survey, the number of people employed in the sector fell last quarter, for the second quarter in a row and is expected to intensify. Those sectors looking to cut jobs are banking, fund management and insurance.

Investment intentions in the industry are depressed with IT being the only area where companies expect to spend more than last year.

But there are some sectors which are doing well. Building societies and finance houses are expecting to create new jobs at the fastest rate.

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Public Sector Pension Reform Proposals Stir Up Unions

Government proposals to increase the retirement age of civil servants from 60 to 65 and to move from a final salary pension to a ‘career average’ scheme has, unsurprisingly, set the cat amongst the pigeons as far as trade unions representing its employees are concerned.

Public sector unions have agreed on a day of action on Friday February 18th following the publication of proposals covering NHS staff. The unions hope millions of angry workers will protest at the Government’s plans. A variety of activities are planned ranging from workplace rallies to marches and demonstrations.

The largest of those unions, Unison, has written to every Labour party MP urging them to press the Government to suspend the proposed changes. Unison has told the MPs the proposals will damage the party in the run-up to the general election expected in May.

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Week Starting 3rd January 2005

The City’s Pay Gulf

News this week that the difference between the average earnings of men and women working in the City of London is not so much a pay gap - as a pay gulf. The pay gap in the City is around 42%, which makes it the biggest difference nationally.

Women who work full-time in the City receive just 58% of the average City man’s pay. This reflects the sort of roles that the majority of women employed there perform – mainly secretarial or support roles. Although even where women are doing the same sort of jobs as male colleagues, the pay and bonuses they receive are often lower – as a stream of recent sex discrimination cases have illustrated.

However, according to the GMB union who did the calculations, some areas in the country had virtually no pay gap between the sexes, including the London Borough of Lewisham, and Sterling and East Lothian in Scotland.

Meanwhile the Women in London’s Economy report commissioned by London Mayor, Ken Livingston, found the gender pay gap in the capital as a whole, now stands at 25%. The average for the UK as a whole is 18%.

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New Employment Rate Objective Requires 2.8 million New Jobs

Tony Blair has set two new employment objectives for the Labour Government which require the creation of 2.8 million new jobs if they are to be met.

The first is that everyone who wants a job should be able to have one. The second is that the UK should aspire to having the best employment rate in the industrialised countries which would translate into a target of 80%. The latest employment figures show the current rate to be 74.7%.

UK economists and the Bank of England have historically regarded an employment rate of 76% as representing ‘full employment’ - on the basis that a certain amount of unemployment is necessary in the economy in order keep a lid on inflationary wage pressures which would be driven by labour shortages.

With unemployment at record lows, the new jobs will need to be filled by people who are currently classified as ‘economically inactive’ and/or by increased immigration, if
the current low level of inflation is to be maintained. Drastically increasing immigration is politically unacceptable so the main thrust will be on reducing economic inactivity.

To achieve the target, the current age/gender balance of employment needs to change. Employers will have to target potential groups of workers many of them have previously ignored such as older workers, disabled people, those from ethnic minorities, refugees, ex-offenders etc.

The Prime Minister also said that in order for the new ‘full employment’ target to be met, the employment rate gap between regions will need to be closed. This means that 2.8 million new jobs will need to be created over the next 5 years.

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1/3rd of Work Based Learning Providers ‘Inadequate’

The Adult Learning Inspectorate say that 34% of organisations delivering work-based learning, Adult and Community Learning and learning programmes offered by Jobcentre Plus, are offering inadequate training.

Most poorly served are the most needy learners. The report highlights two groups in particular – disabled people and ex-offenders. Learning needs were poorly, or rarely, identified or met. Over 50% of providers offering ‘Workstep’ and 40% of residential colleges for people with learning difficulties were found to offer inadequate training.

However, the inspectorate noted an overall improvement on the previous year (2002/03) when 46% of work-based learning providers were judged inadequate.