Week Starting 24th November

Regional Survey Shows Business and Employment Prospects Improving

According to the latest Regional Survey of Economic Trends, business confidence has risen in every English region and Wales over the last six months. Furthermore between now and next summer, output, domestic orders and employment are all expected to rise in every region.

Businesses in the East Midlands are most optimistic about the overall business situation whilst those in Wales are the least. But in every region the number of respondents expecting an improvement outnumbered the number expecting things to get worse.

Over the past year employment rose in every region apart from London where it fell. The strongest increases were in the North East and South West. For the coming year the biggest increases are anticipated in the North East and North West.

In terms of vacancies, over 75% of firms have had vacancies over the past year but a slight drop is expected in the coming year with only 70% forecasting vacancies. Although demand is expected to be strongest in the South West and East of England where over 80% of firms expect to have vacancies.

However, it has been a tough year for company profits. Profit margins fell in every region – the biggest falls occurring in London and the North West – but the situation is expected to improve in the coming year.

Business enthusiasm for staff training in England and Wales has not improved notably over the past six months. Around two thirds of firms have invested in staff training over this period – the largest exception being in London where, faced with tough trading conditions, only 53% of firms did so. At the opposite end of the spectrum nearly 75% of firms in the East of England and 72% in the North East made the investment.

Asked about factors contributing to their own competitiveness, firms said overwhelmingly that skills were most important. The top 3 skills gaps which businesses identified within their own businesses were management, marketing and customer care.

According to Sir Graham Hall, Chairman of the Yorkshire’s regional development agency (Yorkshire Forward) commenting on the survey said: “….we can foresee recruitment problems for businesses next year. We need to invest now in training the current workforce to take full advantage of the opportunities the expected upturn will bring.”

He could have encouraged employers to embrace age diversity as one way to overcome their recruitment problems…. unfortunately he didn’t.

Government Acts To Protect Pension Scheme Members

The Government has announced it will be introducing a new Pensions Bill to protect the rights of employees in company pensions during this session of Parliament. The Bill will introduce a new safety net for members of final salary schemes in the form of a new pensions protection fund – an insurance scheme which will provide greater protection for employees when their companies become insolvent. It will also establish a pensions regulator.

The Government hopes the new law will help restore public confidence in saving for retirement.

What Works With Jobcentre’s Older Clients

The Department of Work & Pensions (DWP) has published findings from an internal review on which strategies work for clients over 50. Not surprisingly the DWP’s findings echo our own ‘Challenging Age’ research published earlier this year which looked at the information, advice and guidance needs of older age groups.

The DWP’s Report re-iterates that older customers can face a range of barriers to work, e.g. long-term health problems and age discrimination. It says that those older customers classed as ‘economically inactive’ need particular support to help them overcome additional barriers such as lack of recent work experience or more severe health problems. They need access to specialist provision tailored to older customers’ needs and in-work support.

The review highlights a number of approaches that appear to be particularly effective for older customers – New Deal 50+, financial incentives and modular (age specific) training. However it did identify some gaps in provision and recommends four areas that would benefit from improvement or ‘enhancement’, namely:-

• In-work support from Personal Advisers
• Specialist age-related provision
• Work with employers to overcome age discrimination
• Careers advice and guidance

DWP stopped publishing monthly data on New Deal 50+ back in March at the same time the back-into-work Employment Credit – which was widely seen as one of the key elements of the scheme – was replaced by a Working Tax Credit.

Jobcentre Plus actually re-launched New Deal 50+ at the end of last month – although it was done with barely a whisper, let alone a bang – so don’t worry if it passed you by. The relaunch was essentially an internal affair aimed at helping Jobcentre staff sell the ‘new’ New Deal 50+ to clients – now its major benefit (the Employment Credit) has been removed. In fairness the scheme has also been redesigned to plug the gaps identified by this research report.

TAEN helped to redesign some additional training which is being given to personal advisers as part of the re-launch. Although no figures for New Deal 50+ have been published since March they are promised ‘soon’. We await them with interest….

Click here to download either the full ‘Challenging Age’ report or just it's Executive Summary.

Week Starting: 19th November

Employers’ Changing Attitudes To Occupational Pensions

An increasing number of employers feel that pensions are less important in the package of benefits they offer to their employees. Where employers have closed their final salary schemes to new members, the value of the employer’s contribution into the alternative scheme introduced has often reduced by over two thirds – down from typically 15-20% to 4-6% of salaries. These are just two of the findings in a new report from the Department of Work & Pensions which was commissioned to find out what is happening with occupational pensions.

The DWP’s report Pension Scheme Changes and Retirement Policies: An employer and employee perspective also found:-

• Some employers are beginning to think in terms of tiered or targeted pension provision for particular categories of employees.
  
• Some employers had closed their final salary schemes to new members without realising there were alternative ways to reduce costs
  .
• Where employers had reduced pension benefits or contributions they had not increased wages to compensate.
  
• Many employees do not appreciate the extent of their employer’s contribution to their pension and they don’t read, or are baffled by, the promotional literature and pension statements or forecasts they receive.
  
• Very few employers had policies on late or flexible retirement and few intended introducing them.
  
• Employers regarded Stakeholder pension schemes as inferior and few made any contribution into them.
  
• Few of the employees who took part in the survey wanted to work on past their employers’ Normal Retirement Age. This finding is contrary to other recent surveys showing a substantial number of those approaching retirement would like to work on – but want more flexible working arrangements to do so.
  

Saga Census Confirms More People Delaying Retirement

A new study from Saga claims that 40% of people over 50 are delaying retirement for financial reasons. It is also predicting a 63% rise in the numbers working past state pension age (SPA) by 2020 and that employment rates for older women will be higher than for older men.

Apart from financial pressures, job satisfaction and enjoyment are significant influencers on individual’s decisions of whether to go on working past SPA. Over a quarter (28%) of people aged 50+ and in work (or seeking work) would like to carry on working up to, and past, 70. This figure rises to 85% for 65-74 year olds who are still working or wanting to work. Over 9 out of 10 women and 8 out of 10 men who work past SPA say they are satisfied with their jobs.

The study again highlights the UK’s changing demographics. It predicts that nearly half (48%) of the adult population will be aged over 50 by 2020, as compared to 27% in 1992 and 33% in 2002.

Adult Learning Inspectorate Slams Quality of Work Based Learning

At TAEN we bang on about the importance of increasing the opportunities for older people to learn because learning in general, and vocational learning in particular, is so important in helping people to maintain their employability in later life. It therefore comes as a real disappointment to hear that much of what is on offer leaves much to be desired.

According to the Adult Learning Inspectorate (ALI), nearly half of all work-based training schemes in England are sub-standard.

The claims are made in ALI’s latest annual report which is particularly critical of Modern Apprenticeships – saying that 46% of the courses are inadequate and 40% are poorly led. However there has been some improvement on last year’s figures which showed 60% failure rates among work-based learning programmes.

The report expresses ‘grave concerns ’that some 40% of Adult Learning institutions inspected were “not so much ill-managed as un-managed.”

Week Starting : 10th November

Employment Up, Claimant Count Down But Job Security Fears Grow

The latest employment figures released this week show there are 309,000 more people in work than a year ago – some 28.2 million in total. The trend has been towards permanent and away from temporary jobs with 90,000 more people in permanent jobs and 81,000 fewer in temporary employment than a year ago.

The number of people claiming Jobseekers Allowance fell by 3,000 last month and now stands at 927,000. Those classified as ILO unemployed (which measures active jobseekers in addition to JSA claimants) rose by 12,000 over the last quarter to just under 1.5 million - but this is still 70,000 down over the past 12 months.

The Office of National Statistics estimate that the number of unfilled vacancies in the UK economy in October was up by 38,000 to 652,000.

These latest figures confirm that the UK has the highest employment and lowest unemployment rates amongst the G7 countries (USA, Japan, Germany, France, Canada, Italy and UK). However, whilst the number of people in work in the UK has grown, so have fears of job security. According to the RightCoutts Global Career Confidence Index, workers here have the greatest fears about job security of workers in seventeen countries they surveyed. Just under 30% of UK workers think it is ‘very likely’ they will be made redundant from their current jobs in the coming 12 months. This is a rise of nearly 2% since RightCoutts’ previous survey eight months ago.

Employers Turn Overseas To Fill Skill Gaps

Last year the number of overseas workers given permits to work in the UK increased by 11% to 129,000. The biggest recruiters have been the NHS and the IT industry.

The health services now employ 24% of overseas workers (up from 7% in 1995), whilst computer services employ 17%, business and managerial services employ
13%, education and financial services each account for 8% of overseas workers.

Some 50% of overseas workers gaining work permits come from just five countries – India, USA, South Africa, Australia and New Zealand.

Without wishing to sound like paid-up members of the BNP, the question does arise as to how many employers actively try to fill their vacancies by embracing equal opportunities / age diverse recruitment policies before looking overseas for staff….

ASDA Targets Over 50s As ‘Permanent’ Temps

ASDA, the well known supermarket chain, recently announced it is looking to recruit a new ‘Seasonal Squad’ of employees who will be permanent members of staff but who will work as little as ten weeks a year. The new recruits will have a contract to work an annual, rather than weekly, number of hours.

The jobs on offer will range from greeters to porters, checkout and warehouse workers and are designed to cover the busy times of year like Christmas, Easter and the school summer holidays. As well as guaranteed seasonal work, the new employees will also be able to take year-round advantage of ASDA’s award-winning flexible benefits package.

ASDA hopes this move will encourage even more over 50s to apply for the jobs on offer. Since the launch of its ‘Goldies’ campaign aimed at recruiting more over 50s,
the company has seen its absence levels drop, customer service levels increase and labour turnover fall.

Anyone wishing to apply should contact their local ASDA store.

Company Insolvencies Fall

As if to underline the cautious claims of improving business confidence, the number of company insolvencies has been falling. In the third quarter of 2003 there were some 3400 company insolvencies in England and Wales – a decrease of 11% on the previous quarter and a decrease of 12% versus the same period last year.

Although company insolvencies may be falling, personal bankruptcy has been steadily growing. There were nearly 9,100 individual insolvencies in the third quarter – an increase of 4% compared to the previous quarter and up 17% versus the same period a year ago.

Week Starting : 3rd November

CBI Backs Retirement Age of 65

Employers’ organisation, the CBI, has published a belated response to the ‘Age Matters’ consultation in which it calls for firms to be allowed to continue to set Normal Retirement Ages (NRAs) for their employees in the forthcoming age discrimination legislation. It says firms need to be able to retire people with dignity and that current competence and performance management systems are relatively underdeveloped (especially in small firms) and unable to cope without NRAs. So it proposes linking firms’ NRAs to a newly introduced ‘state normal retirement age’ of 65 which it says would allow even small firms to practically manage the end of their employees’ working lives. However it proposes that employers and employees should have enough flexibility to agree earlier or later retirement ages as ‘appropriate’.

The CBI’s response welcomes the Government’s desire to protect legitimate employment practices (e.g. the concept of a retirement age, pay and non-pay benefits based on seniority and age limits for recruitment, selection and promotion) from claims of unfair direct age discrimination – but wants more flexibility for employers. This means for example the possibility of offering enhanced redundancy packages to those with statistically less chance of finding work (e.g. 50-60 year olds) or for offering free breast screening to women in the most at risk age group.

They call for selection for training to be allowed on the basis of age and firmly support the Government’s (flawed) proposal of having a justifiable exception based on the concept of return on investment for training, although the CBI only mention this being applied in relation to older workers or job applicants.

Their other proposals include :-

• The retention of graduate recruitment schemes even though they indirectly discriminate against older people.
• Employers being able to justify direct age discrimination on the grounds of unreasonable or unjustifiable costs and/or business needs.
• Protecting pension schemes from claims of age discrimination and deliberately excluding them from the legislation.
• Excluding length-of-service benefits and schemes from the legislation
• Extending unfair dismissal rights to all ages if a state normal retirement age of 65 is retained and dismissal on the grounds of retirement is potentially fair.
• Introducing a justifiable exception in recruitment based on an individual’s ‘potential’ rather than their ‘experience’. (An exception that would generally favour younger applicants).

The CBI claim they are in favour of the legislation but their proposals would give employers enough ‘get out of jail’ cards to justify and perpetuate blatantly ageist recruitment, employment and training policies and practices. Thankfully not all employers’ organisations share the CBI’s views on ‘age matters’.

Lib Dems To Develop ‘Active Ageing’ Policies

Charles Kennedy has launched a period of policy development on active ageing by the Liberal Democrats. Nick Clegg an MEP will lead a task force to develop policy on learning, flexible retirement, advice and support, law and order and community service. Sandra Gidley (MP for Romsey) has taken over as party spokesperson for older people from Paul Burstow who has played a vigorous part in that role during the last year or two.

The Lib Dems are firmly against fixed retirement ages and for free university tuition for any adult, regardless of age, who does not already have a degree. They also favour a ‘one-stop shop’ approach to services for older people. The Government put this idea forward at the time of the last election but it has been making very slow headway.

Older Workers : Less Expensive And More Loyal

Contrary to public and employer perception, older workers pay is not higher on average than that of their younger counterparts. The average gross hourly wage for those between 50 and state pension age (SPA) is £10.30 (£11.70 for men and £8.74 for women). This compares with an average gross hourly wage for 25-49 year olds of £10.75 (£12.19 for men and £9.24 for women).

When it comes to time spent with their current employers those aged 50-SPA average 13 years versus 7.2 years for those aged 25-49 and just 1.7 years for those aged 16-24. This is extremely significant because it blows away the justification some employers are seeking to have built into the forthcoming age legislation for discriminating against recruiting older workers i.e. on the basis that they will get a better payback period from taking on and training younger employees. The evidence is quite the contrary.

These are just two invaluable pieces of ‘myth-busting’ information contained in the latest ‘Older Workers : Statistical Information Booklet – Spring 2003’ published by the DWP.