Third Age Employment Network - June 2005

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Archived News June 2005

Week Starting 27th June

Corporate Life Less Secure For Those At The Top

The average survival time of chief executives in FTSE 100 companies has fallen to four and a half years. It has been driven down as the result of 17 chief executives having been sacked or deciding to resign over the past year.

Commentators say that the fall in job security will be used as further justification for the huge packages received by FTSE 100 bosses. The argument goes that the packages need to be so generous to compensate them for the short life expectancy of jobs at the top.

Of course the fact that they invariably move from one such job to another tends to get forgotten.

Local Papers Still Best Place for Jobs

A new survey into recruitment advertising has found over half (51%) of jobseekers still turn to their local papers as their first port of call. Nearly a third (30%) had found their current or last job through word of mouth , whist almost a quarter (23%) from it through an ad in their regional newspaper.

Just over 1 in 10 (11%) had found their job through a recruitment agency, and under 1 in 10 (9%) had found it through Jobcentre Plus.

The survey of 8,000 people by research firm Human Capital also found that 11% of those questioned were always looking to move jobs and 32% said they would consider a new job if they came across a job ad which appealed to them.

Women’s Job Satisfaction Dropping

Despite equality and flexible working legislation, job satisfaction levels amongst women are continuing to fall and now match those for men.

One of the key labour market trends over the past 25 years has been the increasing proportion of women doing paid work. And increasingly they are competing with men for better jobs. But the price many are paying is in increased stress - and lower job satisfaction - as they try to balance all their competing responsibilities.

Latest Regional Economic Trends Survey

The CBI has published its fifth Survey of Regional Economic Trends. It provides a rich source of comparative information on the state of UK business and the variations between regions.

Business Optimism

The survey confirms that firms are less optimistic about the general business situation than they were 6 months ago – but only marginally so. The last six months saw a net increase in orders, output, employment and prices, yet profit margins fell – and are not expected to increase in the next 12 months.

Nearly half of firms are operating below capacity.

A net balance of 13% of firms are expecting business to improve over the next six months with companies in the North West and Yorkshire and Humberside showing the highest levels of optimism, whilst those in the East of England are the most gloomy.

Employment

A net balance of 13% of businesses in Great Britain report they are employing more people than they did a year ago. The West Midlands and the East of England saw the largest increases with around 1 in 5 firms employing more people, in the North East it was only 1 firm in 50. But over the past year, 74% of firms in Britain have had vacancies

Looking forward, two thirds of firms are expecting vacancies in the next 12 months, with 10% predicting an overall increase in the number of people they employ.

Barriers To Growth

As in previous surveys, businesses believe that regulation/red tape and inadequate support from the Government are the key factors that most inhibit growth, although labour market issues are also restricting it.

High unit labour costs are cited by 24% of firms, 23% are finding difficulties attracting staff to their region and 16% are finding skills shortages continue to be a problem – although this has dropped from 24% a year ago. In virtually all regions the top 3 skills perceived to be most in need of improvement are management, marketing and selling.

Investment & Competitiveness

Businesses are investing less than they did a year ago, but training and retraining remains the most popular area for increased investment.

Over 6 out of 10 firms believe that the high level of their workforce’s skills contributes the most to the competitiveness of their business. Over 4 out of 10 also cite flexible working as a key factor.

Training & Skills

Seventy percent of companies funded training for their employees over the last year – a small growth (4%) over the previous year. Businesses in the West Midlands are the most likely to offer training, businesses in Scotland are the least likely to.

Of the companies offering training, only 36% provide it for more than half of their staff.

Training budgets vary throughout the country. At one end of the spectrum 16% of companies don’t spend anything at all, whilst at the other end just over a quarter (26%) spend on average over £250 per employee, per annum. The highest percentage of firms spending more than £250 per employee, per year on training are in London (36%) and the South East (32%).

Corporate Social Responsibility

Nearly half (48%) of all businesses in Britain have a mission or value statement incorporating the concept of responsible business practice.

Over the past year, 56% of firms have allowed their employees to work flexibly (giving them a choice of hours they can work and giving them the option to work from home), 46% have provided apprenticeships or work experience and 44% have improved their waste management. But just 15% have intentionally helped disadvantaged groups.

Week Starting 20th June

‘Statutory Duty’ Further Skews Apprenticeship Funding

Plans just released for next year’s funding of apprenticeships for young people and young adults show public funding will be yet further skewed in favour of 16-18 year olds – to the detriment of 19 to 25 year olds.

Apprenticeship funding rates for 16-18 year olds are to be increased by 2.5% (roughly in line with inflation) whilst funding rates for apprentices starting at age19 or over are to be reduced by 6% from this year’s level. Employers are expected to make up the shortfall and the cut will further widen the already large gap between the level of public funding support given to the two different groups.

Although heavily criticised for its funding allocations, the Learning & Skills Council is between a rock and a hard place. It has a statutory duty to provide training to 16-18 year olds and the success of the Government’s drive to get more young people into (and completing) Apprenticeship frameworks means more money has to be found to support them. If the budget the LSC receives from the Government isn’t increased by enough to meet all the demand (which it never is), it has no choice but to prioritise. And as 16-18 year olds are at the top of the pecking order – because of the statutory duty – their programmes, such as Apprenticeships and Entry to Employment (E2E), get first priority.

Next in the pecking order come 19-25 year olds. Older learners and workers are pretty much at the bottom of the public funding pile. Apart from Basic Skills training and the coming adult entitlement for a first NVQ level 2, they (or their employers) are being expected to cover more of the cost of their courses themselves.

Ill Health Costing Employees Up to £9 billion A Year.

The estimated costs to employees of work-related ill-health in 2003/2004 were between £5.9 billion and £9 billion. The cost to the UK economy is around £11 billion a year.

Speaking this week at a symposium on the issue, Lord Hunt, one of the ministers at the DWP said: “Just as there are costs to the employer, there are costs to the employee. Pay as overtime and bonuses may be lost as a result of long-term or persistent absence. It also affects occupational related pensions and savings.
“Studies show that unemployed people suffer from increased mortality, greater suicide rates, and higher levels of depression and anxiety which worsen with the duration of not working.

“Research shows that after six months off work there is a 50 per cent chance of ever returning to work, after 12 months there is 25 per cent chance of return, and after two years the chance of return is practically nil. “

Lord Hunt heads a cross-government Ministerial Task Force, set up to address the problem, which resulted in 29.8 million working days being lost due to ill-health.

Its estimated that sickness absence costs employers £567 per employee every year.

Lord Hunt added “I must stress that it would be wrong to demonise sickness absence….. Those who are off work sick have the right to expect sensitive treatment and support. We are not seeking to attack genuine absence, but to bear down on the causes of sickness, to help those who are able to return to work to do so and to be responsive to those who have responsibilities outside.

“We need to ensure that organisations recognise that doing more to prevent people from falling ill at work and getting them back sooner, as well as discouraging abuse of absence, is a key component of their efficiency."

Sex Discrimination Means HR Managers At Bottom of Pay League

When it comes to pay it seems that senior HR managers come bottom of the league, at least in comparison with their counterparts in sales, finance, marketing and IT.

According to the Chartered Management Institute’s 2005 National Management Salary Survey, the average annual salary for senior HR professionals is £31,763.
This compares with an average of £45,477 for general managers, £45,278 for IT managers, £45,213 sales and marketing managers and £43,842 for finance managers.

But why should there be such a large gap between HR and other managers ? Much of the reason is probably down to the fact that the HR function has increasingly become dominated by women. And women are invariably paid less than their male counterparts……

Week Starting 13th June

ND 50+ : Numbers Just keep Dropping

New data from the Department of Work & Pensions shows the number of people gaining a job through New Deal 50+ continues to drop. In the first 3 months of this year just 2880 people aged 50+ were helped into work by the scheme. This compares with 4420 helped over the same period in 2004, which in itself was nearly half the figure of those helped in the first quarter of 2003.

The scheme has never recovered from the replacement of the original Employment Credit by a less generous Working Tax Credit based on household, instead of individual income. The change occurred in April 2003 and since then the numbers have plummeted.

Last year the National Audit Office sharply criticised the DWP for not having carried out a proper economic evaluation of the scheme - a criticism which was recently echoed by the House of Commons Public Accounts Committee.

The DWP’s original response was that as ND50+ (along with other New Deal programmes) was going to start being replaced by a new scheme called BoND (Building on New Deal) in April this year, such an evaluation was unnecessary.
However it now appears that budgetary constraints are delaying the BoND pilots till next April.

If the same trends continue, perhaps fewer than 500 people a month will be being helped into work through ND 50+ by then.

Positive Employment Outlook

The latest Employment Outlook Survey from Manpower predicts the number of companies expecting to increase staff levels over the next 3 months, outweighs those expecting to reduce them by 12%.

Employers in eight out of the nine industry sectors surveyed have net positive hiring intentions, while the picture in the regions is also positive with employers in all 12 regions anticipating taking on staff this quarter.

Employers in Scotland are the most ‘bullish’ – with 33% of employers expecting to take on additional staff, and only 3% expecting to cutback staff numbers. Next comes employers in the East Midlands and Wales where the net positive figure is 16%. In London, the North East, South West and West Midlands the net positive figure is 10%.

The weakest region is the North West, with a net positive figure of just 5%.

The sectors with the strongest hiring intentions are Finance & Business Services, Construction, Transport and Communications and Community & Social.

Employers’ Recruitment Difficulties Persist

Even though growth in the UK economy appears to be slowing down, it seems the majority of firms are still struggling to fill their vacancies.

The CIPD’s latest Annual Recruitment, Retention and Turnover Survey shows that of the 715 firms surveyed, 85% had experienced difficulties recruiting staff over the past year.

The problem was worse in private sector firms with a quarter struggling to recruit the most senior staff and directors that their organisation required.

But the category of vacancy causing the biggest recruitment headaches for employers was ‘management and professional’ vacancies – 45% of employers said it was one of the vacancies they were finding most difficult to fill.

Firm’s responses to their recruitment difficulties vary.

Over two thirds have had to appoint someone in the past year who didn’t have all the skills and experience required to the job, but who has the potential to grow into the role.

Nearly two out of five (38%) of employers have recruited non-UK residents to fill vacancies in the last year – rising to 44% of employers in the public sector.

When are the scales going to fall from their eyes ?

Every time they restructure or reorganise, firms shed mature middle and senior managers – who then find extreme difficulty finding new positions of this type because so many employers simply refuse to consider recruiting mature managers and professionals for jobs. The same also applies to other categories of older workers.

Extra Cash to Boost Employment Equality Awareness

The Government has announced it is investing a further £2.5 million in raising awareness of employment equality regulations.

The money will help voluntary and not-for-profit organisations in their work to raise awareness of sexual orientation and religion or belief legislation and builds on the £2m already awarded in the last two years.
A range of organisations will be able to bid for the funding to help them raise awareness with individuals and employers about their rights and responsibilities under the legislation

Speaking at a conference of TAEN’s sister organisation – the Equality & Diversity Forum - Meg Munn, the new Deputy Equality Minister, said:

"This £2.5 million will benefit organisations around the country in their work to raise awareness of this legislation. It is important that employers and their employees know the facts to enable them to reap the business benefits of a happy and diverse workforce.

"It is especially important that people understand the law as we work towards the creation of the Commission for Equality and Human Rights and the work it will do in ensuring people are protected from discrimination.

"Everyone has the right to work without suffering discrimination and this important legislation shows the Government's commitment to outlawing it in Britain."

Interested organisations are asked to submit proposals to the DTI by 27th July.

Latest Employment Figures

This month’s employment figures from the Office of National Statistics show a small rise in the number of people in work but a fall in the employment rate. The number of self-employed and unemployed people is down, but the unemployment rate is unchanged and the claimant count has increased. The number of job vacancies is down. The number of redundancies is down but the economic inactivity rate has risen.
The detail :-

The employment rate for the 3 months ending April 2005 was 74.8% - down 0.1% from the previous quarter but unchanged on the year.
The total employment level was up 11,000 over the quarter and by 196,000 over the year at 28.58 million.
The number of self-employed people fell by 3000 over the quarter to 3.62 million.
The unemployment rate was 4.7% for the three months ending April 2005. The number unemployed was 1.4 million, whilst the number claiming Job Seeker’s Allowance was 855,300 – some 13,200 up from the revised for April but down 5,600 from May last year. The claimant count has increased for the last 4 months.
The number of economically inactive people rose by 71,000 over the last 3 months to 7.91 million and the rate stands at 21.5% of people of working age.
Job Vacancies were on average 11,500 down in the three months ending May 2005 at 635,900.

Week Starting 6th June

Just 55% Saving Enough For Retirement

Just over half (55%) of UK workers are saving enough for adequate incomes in their retirement. That’s the conclusion of a new report from Scottish Widows – the financial services company. The percentage saving enough drops to 33% if those in final salary pension schemes are excluded.

Scottish Widows’ research found that it was not simply a lack of affordability which was preventing people from saving – 1 in 3 of those who are not paying into a pension earn over £30,000 a year.

A third of those who are ‘non-savers’ said they were planning to compensate by working on till they’re 70. However, this could be a dangerous strategy because the decision about working on is not in the hands of individuals but in the hands of their employers. Being willing to do so, is not the same as being allowed to.

Click here to read TAEN’s press release….

National Pensions Debate : Who forgot to invite the Public ?

This week David Blunkett, the Work & Pensions Secretary, kicked off the National Pensions Debate. Only problem was someone seems to have forgotten to invite the public! Just 40 people turned up for the first public discussion held in East London.

Opening the meeting Mr Blunkett said:

“One of the first things I said I wanted to do when I came to the department was take the debate on the future of pensions direct to the people it would affect.

“I want to reach out to people, to take the public into our confidence. To debate, listen and share the problems and ensure we all have ownership and understanding of the possible solutions.

“That’s why events like today are crucial to help establish a consensus that will provide the stability, certainty and fairness we all want to see in the pensions system.

“It is not enough just for politicians or industry to agree a way forward. This whole process will only work if people who will ultimately be affected by the decisions we make understand why they have been taken and know they have played a part in reaching the solution we all seek to the pensions challenge.”

A special website has been established for those who wish to contribute to the debate: www.dwp.gov.uk/debate. Interestingly, it doesn’t seem to contain details of any future public meetings. The debate, it seems will be web-based - which is pretty useless for those on the wrong side of the ‘digital divide’.

Adult Guidance Works

New research* from the Institute of Education Studies shows that adult (career) guidance works. In a study of over 4,000 recipients of information, advice and guidance services, the researchers found the outcomes were significantly higher/better for those who had received guidance, as well as information and advice.

Interestingly however it showed that the difference in outcomes was lower for older clients. Part of this may be due to the fact that the sample size of those over 50 was very small, also of course that employment barriers facing older people are higher than those facing younger workers.

The report comes at a time when there is continuing controversy about the provision of publicly funded career guidance to adults – or rather lack of it. The only adults who presently qualify for it are those whose formal qualifications lower than an NVQ level 2 – or equivalent (e.g. 5 ‘0’ levels or 5 GCSEs A-C grade).

*’Intermediate Impacts of Advice & Guidance’ by Claire Tyers and Alice Sinclair published by the Department for Education & Skills. Ref: RR638

CBI Conditionally Willing To Extend Flexible Working Rights

The employers organisation the CBI (Confederation of British Industry) has told the Government it is willing to see an extension of family-friendly and flexible working rights - but they have put conditions on any extensions.

Namely, that the introduction of new rights must be accompanied by a commitment from Government to no further changes in this area during the lifetime of this Parliament and for the introduction of new measures to reduce the burden on businesses

Early results from a new Employment Trends survey reveal that 3 out of 4 requests from employees for flexible working were fully accepted, with compromise reached in a further 15% of cases. Only 1 in 10 requests were not accepted.

The CBI says that employers will conditionally agree to :-

The extension of paid maternity leave to 9 months by April 2007 and to 12 months by the end of this Parliament.
The proposal to allow mothers to transfer part of their leave and pay to fathers.
An extension to the number of employees who can request flexible working – but only one group at a time, and preferably to those with caring responsibilities.

CV Liars Come Unstuck

According to the CIPD’s latest annual Recruitment and Retention Survey, a quarter of UK employers withdrew at least one job offer over the last 12 months - after discovering someone had lied or otherwise misrepresented their job application.

Also nearly a quarter of employers had dismissed someone who was already employed for the same offence.

However the survey found that 1 in 4 of the employers who responded never, or rarely, check out academic qualifications, with a further 19% only checking ‘sometimes’.

© TAEN 2006