And there’s more… by Andy Bowie
At the start of the month, we shared the thoughts from one of the team at partners, 50 Degrees on the challenges and opportunities facing the employability market. In this follow up piece, we’ve asked Andy Bowie to dive a bit deeper.
Reports suggest that upwards of two million people have applied for universal credit benefits since lockdown began… an unprecedented increase. It’s too soon to make a sensible prediction on exactly what Covid-19 will do to the unemployment rate, but we think it’s safe to say that it’s not going to be good. Despite Rishi Sunak announcing the job retention bonus scheme, high-street employers like Primark and Marks and Spencer have still announced large scale redundancies.
Some economists are predicting a structural change in the economy not seen since the 1980s due to:
a. the post Covid-19 landscape and, in particular, local labour markets connected to office space and commuting
b. the more rapid rise of automation and AI, in which the UK has lagged behind our competitor economies. See some work here that we contributed to looking at GM’s productivity.
In our work in GM we highlighted the extent to which the jobs miracle over the last 10 years has been predicated on self-employment, part-time work and the gig economy – in occupations and sectors that are being hammered in the current climate. On the Labour Market statistics front, by the way, the Institute for Employment Studies are releasing some really good stuff.
So these are the issues, but what are the solutions…?
The Solution (maybe)
The Chancellor announced a series of measures to get Britain working again, focusing the more eye-catching initiatives on the demand rather than supply side. We sense a general unease about welfare to work. In part this may be corporate memory – it’s a long time (2010!) since large scale employment programmes were commissioned in the UK. The reputation and performance of the sector has been patchy.
This has resulted in a continued large role for Jobcentre Plus, which is generally seen as efficient and performing well. This is perhaps reflected in the announcement to double the number of advisors in job centres, investing £800m in the recruitment of 13,500 staff.
What else? The new Kickstart work placement will be for 16-24-year olds in receipt of Universal Credit, with referrals made through Jobcentre Plus. Previous experience tells us that work placements need to be meaningful and offer quality accredited and non-accredited learning, and on the job training.
Making the process simple for customers and employers is key. Wage subsidies are notoriously difficult to administer and regulate quality. Previous attempts have harvested very mixed results. And there is the additional complexity of overlap / duplication / confusion with ESFA funded provision.
And there’s more
We expect significant additional monies to pour into the Work and Health Programme and IPES as a short term boost to employment programme capacity over the next 18 months, with changes in the cohort and funding model to facilitate rapid expansion and access to provision previously focused on those furthest from the labour market.
There is also the new framework for the provision of employment and health related services (CAEHRS) but as yet, there is no clarity on the opportunities that will actually come to market through the framework.
On the provider side, we anticipate the following capabilities as being critical to success:
- Digital: organisations that can demonstrate digitally enabled delivery models, from customer contact, through interventions and job matching to in work support
- Diversification: organisations with a stronger balance sheet and a diversified contract/revenue portfolio will serve to strengthen the market
- Integration: organisations that have invested locally in integrated employment provision with local specialist services, including housing, debt, mental health and skills training support
- Job creation: supporting enterprise and business start-up as well as joint work with inward investors and business support providers (e.g. Business Growth Hubs)
These are big themes and we will be exploring these in more detail over the coming weeks.