Industrial strategy

On 8 November, Ben Willmott - CIPD Head of Public Policy, appeared before the House of Commons Business, Energy and Industrial Strategy (formerly BIS) Select Committee to give evidence to their ongoing inquiry into the Government’s industrial strategy. It was Ben’s second representation in front of a Select Committee in recent weeks, having also been invited to discuss our work on apprenticeships with the Sub Committee for Education, Skills and the Economy.

Ben appeared alongside representatives from Balfour Beatty and the Institute of Chartered Accountants in England and Wales (ICAEW). The hour-long session focused on investigating the skills policy that any industrial strategy should incorporate. Ben received considerable air time during the session, and was offered the opportunity to discuss our work and viewpoints on a range of areas.

The Committee considered our views on the Government’s proposed Apprenticeship Levy - the 0.5% levy on the payroll bill for organisations with over 250 staff, due to come into force in April 2017. Our research has found that the levy, in its current form, risks a number of unintended consequences, and therefore we‘ve called on the Government to make it more flexible to incorporate a wider range of training.

Following on from apprenticeships, the issue of careers advice and guidance for young people came under the spotlight. Ben argued that technology should be embraced and harnessed as a way to educate and inspire children, from as young an age as possible, about the wide range of careers open to them. He explained that we need to see an end to the ‘conveyor belt’ of students going straight to university without even considering other options, such as vocational routes, which our research has demonstrated can often result in just as productive outcomes for learners, at a considerably lower cost.

Throughout the rest of the session, Ben was able to tell the Committee about the other vital work that the CIPD and its members are engaged in, including our People Skills programme offering free HR support to SMEs, Steps Ahead Mentoring and our involvement with the Careers and Enterprise Company.

Impact of Brexit on London’s workers and labour market

Also on Tuesday, Gerwyn Davies - CIPD Labour Market Adviser, was invited to give evidence to the London Assembly Economy Committee on the likely effects of an EU withdrawal on both workers’ rights and the development of a flexible, fair and inclusive labour market.

Thanks to the CIPD’s broad research base and our members’ expertise, Gerwyn was able to give a view on the majority of issues covered in the evidence session. Here are some of the main points he made:

On employment rights

We would be reluctant to see any major changes to employment rights and protection as a result of leaving the EU. The current legislative framework in the UK strikes the right balance between protecting employees and employers’ interests.

We see little evidence of any great employer demand or political will for significant changes to employment law. In fact the UK has often been a leader in the EU on employment rights and has gold-plated parts of EU provisions. 

On low-pay

Our latest research shows that employers are concerned about the uncertain economic outlook and rising costs caused by the EU referendum result. Those worries seem to be depressing investments in skills and capital.

The ‘elephant in the room’ is productivity growth, which has been stagnant since the 2008 recession. Without gains in productivity, employers are unlikely to afford any further rises in wages.

On immigration restrictions

Stemming the inflow of migrant workers won’t necessarily force employers to invest in skills. In fact, our research has established that firms which employ EU migrants are more likely to have advanced HR practices and to invest in skills and training than those which don’t employ EU migrants.

On retaining a flexible labour market

We believe that used responsibly, zero-hour contracts can provide flexibility that works for both employers and individuals. Our 2013 and 2015 research reports found that zero-hour contract employees are, on average, as satisfied with their jobs as employees on the whole.

The problem with zero-hour contracts doesn’t stem from poor policy design, but from poor practice. Organisations that don’t provide managers with the right training, support and tools to manage employees on zero-hour contracts are where we‘re likely to find poor practice and frustrated individuals.

To help improve how zero-hour contracts are used, we need an agreed code of practice. The CIPD has called for all workers to be legally entitled to a written copy of their terms and conditions no later than two months in employment.

In his final remarks, Gerwyn called on London’s Mayor to encourage employers in the capital to recognise that this is the time for investing in skills and for thinking more strategically about how they make the best use of the available workforce.

One practical suggestion is for the Mayor to front a campaign to promote flexible working among London employers, whom we know are less likely to embrace it. Offering high-quality, flexible-working jobs at all levels will allow employers to access a much broader pool of talent, enhancing their competitiveness at a time of great uncertainty.