Gerwyn Davies
Tom Keighley

Member Article

Bdaily meets the labour market advisor

It’s labour market focus week on Bdaily. Gerwyn Davies, labour market adviser at the Chartered Institute of Personnel and Development (CIPD) answers Bdaily’s questions.

What are the stand-out issues in the UK labour market currently?

Despite the fact that we have seen improvements to the unemployment rate over the recent past, unemployment remains well above pre-recession levels. What is more, the recent pattern of strong employment growth has not been shared equally across the country, so the challenges facing jobseekers in many of parts of the country, especially those that have a disproportionate share of public sector workers such as the north east of England, are great.

Which sectors are experiencing the biggest changes?

The public sector is seeing its biggest transformation since the second world war, as reflected by the sharp contraction we are seeing in many parts of the public sector. Some, such as the health and education sector, have fared relatively well compared with others, such as local government and central government who have experienced a vast number of redundancies in recent years. In addition, the public sector workforce is becoming a lot more flexible – as reflected by the greater number of employers who say that they are employing people on temporary contracts, or in some cases, zero-hour contracts.

And while the recent pattern of employment growth has been led by the private sector, it is noticeable that the numbers employed in the construction and manufacturing sector have continued to decline in sharp contrast to services companies who have seen strong growth.

On skills, where is the UK excelling and also, where is it failing?

The UK, like many of our international competitors, continues to struggle to train enough professionals in certain sectors of the economy. Skills shortage are commonly reported by employers in a small, concentrated number of professions that include IT, engineering, accountancy and finance and law. The tightening of the points-based system has made it more difficult for employers to recruit these skilled professionals from outside the EU, so the hope is that more employers will train more UK-born workers to fill these posts. However, the challenge is that it takes many years to train staff for some of these professions, which may be one of the reasons why employers are still reporting skills shortages despite high levels of unemployment.

What do you think about the introduction of a living wage?

The declining living standards of workers has undoubtedly been one of the key features of the labour market over the recent past, as wages have consistently failed to keep up with inflation. The living wage should therefore be encouraged and aspired to, at least for those employers that can afford it. However, the CIPD is opposed to the concept of making it a legislative requirement, simply because there are some employers and sectors who might be forced to make redundancies.

What impact will the changing laws around freedom for Bulgarian and Romanian migrants to work in the UK have on our labour market?

The CIPD estimates that the changes will not have the same impact as the introduction of the accession countries in 2004. This is mainly due to the fact that the UK was only of only three countries to allow workers from these countries to live and work in the UK. In addition, the cultural ties between Romania and Bulgaria and other parts of mainland Europe, especially those in southern Europe, are closer than in the UK. However, much will depend on how the UK economy performs in relations to the rest of the Europe.

How do you think austerity measures have impacted the labour market?

There seems little question that the austerity measures have had a major impact on the UK labour market. Those sectors affected most by the cuts, the construction sector and public sector, have not generated jobs like other parts of the economy. As the most recent official data shows, the number of people employed by the public sector has fallen by half a million during the past two years. Meanwhile, the sharp reduction in capital spending, has reduced demand for construction companies. The number of people employed in the construction industry has thus fallen by around 120, 000 during the same period.

For more from Labour Market Week, check out; Focus on STEM subjects will drive innovation; overcoming the UK skills gap; why recruiters need to search for the x-factor; recruitment among growing industries.

This was posted in Bdaily's Members' News section by Tom Keighley .

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