I met Secretary of State for Work and Pensions Esther McVey in Caxton House in Westminster last week.
It was a very useful discussion of the labour market with key industry leaders. They included Peter Cheese, chief executive of CIPD, James Hick, MD of Manpower, Laura Hegarty, head of comms for Indeed, Chloe Brassey, director of Four Seasons recruitment, Martin Warnes, managing director of Reed, and Sophie Wingfield from the Recruitment and Employment Confederation.
We discussed universal credit, topical challenges and how government can support industry.
Universal credit is based on the principle of ‘making work pay’ – creating incentives for people to work. In the previous system some people may have been better off on benefits than working (depending on the specific thresholds). Universal credit aims to make the benefit more flexible, so it is always better to work. The meeting broadly agreed that while universal credit is in the early to medium stages of roll out, the ethos appears to be working. Having no specific maximum working hours in a week before benefit is cut, means that people can increase their working hours, undertake overtime and ultimately make themselves more financially independent from the state.
There was a lively discussion on the key issues that currently face employers. These include:
- Brexit – statistics from some companies had identified changes in recruitment patterns linked with political events such as the referendum and article 50 being triggered. Dublin has benefited in terms of recruitment search patterns.
- Labour market – the labour market is tighter than it has ever been. DWP estimates nearly full employment. It is getting harder to recruit people so companies need to do more to attract and retain the best talent. We agreed that it is not just entry or top level roles that need to be addressed – we need to look at roles across the board and make sure we have plans to develop people and professionalise all roles.
- Visa systems – there are serious concerns over what will happen around free movement of people across Europe after Brexit. March 2019 is coming up quickly and we don’t know what will happen to our European workforce.
At VGC nearly 25% of our workforce is from EU countries.
This number has already decreased – it is down by 3% in the last 12 months.
We are concerned that we need to have clear guidance on what we can do with our European workforce. Their skills are essential to the successful completion of current and future projects. We want to offer our people continuous employment into 2019 and beyond. For example, as Crossrail comes to an end we want to move people to projects such as HS2 and Thames Tideway. The indecision of government around this is hampering our long term people strategy planning and decision-making.
We need clear guidance on free movement or any proposed visa systems. This is important so that we can continue to encourage people with the skills we need into the country. HS2 is due to start and the third runway at Heathrow is getting the green light: we need to address now how we will resource these projects. I believe that the construction industry requires a dispensation on visas – a number of construction trades need to be added to the list of shortage occupations to ensure that we continue to have a free flow of skilled labour.
Any visa or permit system must be easily to understand and quick to administer. For UK industry to continue at its current pace we cannot be waiting weeks or months for permits to be processed. We need to be agile and timely to ensure that we compete for the best skills on the world stage.
Construction will need to continue using European labour in the short to medium term. Businesses must also invest now in skills development through T levels, apprenticeships and other development programmes.
I believe the apprenticeship levy has been a good thing, because it has encouraged businesses to address lifelong learning. Education should not finish the day someone walks out of school or college. Instead it should be continuous, to allow them to grow and adapt in our rapidly changing industries.
However, most participants in the meeting were in agreement that there needs to be more flexibility in the system’s administration. Personally, I think businesses should be able to use an element – possibly 20% – of the fund for shorter technical and off the job training courses or NVQs. Apprenticeships are not always the right programme for someone, and particularly in construction, workers are not always on a project long enough to complete an apprenticeship.
It was suggested that there should be a formal consultation on the apprenticeship levy and how we can make it work better for business.
The meeting was in broad agreement that diversity and corporate social responsibility (CSR) is becoming increasingly important. These are not a ‘nice to have’, but an essential part of attracting and retaining people, allowing the UK to perform on the global stage. At VGC we are doing huge amount of work in this area, including programmes for women, youth, BAME, ex-forces, ex-offenders and schools. We need to continue to address how we can support our diverse workforce and ensure that we harness the skills and talents of all.
Willing to learn
It was great that so many of us were in agreement on the issues affecting UK businesses. We also all agreed that UK companies are willing to learn and adapt to our changing circumstances.
It was an honour to be invited by Esther McVey MP to share my perspective on how we can make UK industry the most forward-thinking, flexible and high performing in the world. I look to following up with her team to continue sharing our experience and expertise.