Tag Archives: job creation

Apprenticeships and The Apprentice the answer to jobs creation

To kick of Apprentice Week, Business Secretary Vince Cable is to announce the UK Government is committing £1.4bn to Apprenticeships in 2011.

This is a great move and part of an overall strategy to encourage 100,000 additional apprenticeships by 2014.  This at a time when UK Manufacturing is growing at record rates and 70% of employers in a recent survey claiming skill shortages as one of the biggest barriers to future growth.

Apprenticeships have been undervalued and undermined for years.  For too long successive Governments have espoused the virtues of higher and further education to the detriment of practical, hands on learning, giving Apprenticeships second class status.  They are not.  They are of enormous value.

Not everybody is academic, but everybody has something to offer.  If you are practically minded, the opportunity to further your career with a combination of practical skills and theoretical learning is not to be dismissed.

Apprenticeships are crucial to encourage the skills needed to facilitate future growth and to ensure the UK has the skills we need to remain competitive globally.  The more done to encourage those best suited as to the virtues of such a pursuit the better.

At the same time Entrepreneurship is also essential to encourage the creation of jobs.  This is one area of Economic policy that is yet to be sufficiently addressed by Government.  Sure, the rhetoric is that we cannot afford tax cuts.  Can we afford not to?

Business is mobile.  If you do not create the conditions, the environment, in which talented people with great ideas are encouraged to start business, this essential fuel of economic prosperity will soon start to dry up.

Don’t get me wrong, the successful entrepreneur will find a way to make his or her’s business work regardless of the circumstances.  It is that determination regardless of circumstances that contributes to their success.  That is my point, if it can’t be done here, if it is easier to do elsewhere, then elsewhere it will be done.

Who will create the jobs, the Apprenticeships of tomorrow?

Todays announcement is a great step in the right direction.  Encourage Apprenticeships and encourage The Apprentice.  The next generation of Lord Sugar‘s are just as essential to future prosperity as the skilled trades.

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Employers Charter – A step in the right direction.

Yesterday saw David Cameron announce The Employers Charter, measures announced to give businesses added confidence to grow and create jobs.

Something had to be done to stem the flood of applications to Employment Tribunals witnessed in 2010, which increased 56% on 2009 to 236,000.  The average cost to employers to defend themselves was £4000.

it is absolutely right that legislation exists to protect hardworking, dedicated employees from those less scrupulous employers.  However the balance had been lost, the power placed squarely in the hands of the employee.  Employers of all shapes and sizes had become nervous, fearful even, of dismissing an under – performing employee for fear of the repercussions.

That is not healthy.  It certainly does nothing to encourage employers to hire.  Quite the opposite.  It costs nothing for the under-performing employee to launch a claim.  That in itself encouraged a whole host of “chancers” to pursue a payout, having been advised by the no – win no fee brigade that they had nothing to lose to pursue a claim.  The wasted management time was enormous, the legislative cost vast, nobody wins.

The answer to this has been to introduce the prospect of a fee for employees to fight an unfair dismissal claim.  A great idea, certain to prevent any such chancers from trying their luck.  Those that know or can be advised that they have a genuine case for unfair dismissal will pursue such a claim and have every chance of winning, rightly so.  Employers are afforded a greater degree of protection and will as a consequence feel more confident about the prospect of hiring.

To add to that confidence is the proposal that companies would have greater freedom to dismiss under – performing workers, extending the current period from one to two years.  I am not convinced this measure is necessary.  If someone is not performing in your business, you know early enough.  If they have been performing and after a period of say 12 months that performance starts to tail off, it is managements responsibility to look at the reasons behind that decline and to performance manage that employee back to “health”.

After all, you have invested enough time, money and resource getting them through the door, getting them trained and in to the DNA of your business that it is absolutely right to support them.  Still the principle behind the move strikes me as a positive one, business friendly, jobs friendly.

If you are a committed, motivated, hardworking employee you have nothing to fear in the new legislation.  I for one applaud these steps.  We have allowed an entitlement culture to develop.  If something goes wrong, who can I blame?  How much can I get?

A nonsense.  If you are a responsible, hardworking, decent, honest person then you have nothing to fear in this change.  If you are the kind of person who thinks life owes them a living, then I am afraid you are wrong and you will get what’s coming to you.

I am all for the Employers Charter.  The reaction from business and employers groups would appear to be broadly supportive.  A step in the right direction.  Next step, tackle the cost of employing someone and reduce the cost of Employers NIC’s.  Now there’s a thought!

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Job creation or devastation?

Governments can create jobs in the public sector.  However unless they are balanced by jobs growth in the private sector, the public sector will not sustain employment and wealth creation.  Private sector prosperity creates the wealth required to sustain great public services.  It is the responsibility of government to create the conditions in which private sector businesses can flourish.

This means lower taxation to encourage re – investment.  The more you can encourage businesses to re – invest, the more jobs they will create, the more they will grow, the more sustainable they will be, the more profitable they will become.  The more people employed, the greater the revenues, the greater the profits, the more goes back in to the public purse via taxation.  It’s a simple model.  The more you tax business, the more ways business will spend money trying to find (legitimate) ways to avoid paying those taxes.

Across much of the developed world at the moment the argument is that we cannot afford to reduce taxation.  I understand why, but we are trapped in a vicious downward spiral.  Businesses are hoarding cash.  The survival mode of the last few years has meant strengthening balance sheets has been order of the day.  Having done that, confidence and the conditions required to re – invest still do not exist.

If you have cash right now then arguably you will emerge from this period much stronger.  Valuations are low, assets are distressed.  If you are in a position to acquire then the opportunity to strengthen your business is too good to miss.  So why are we missing it?

Its going to take a brave leader to create the conditions to encourage business to start spending again.  However do it we must.  Public spending must be cut, that much is clear.  Unless governments create the right conditions to encourage private sector investment and spending,  the private sector will not be able to pick up the “slack” created by public sector cuts, particularly in employment.

We need governments to be brave, strong and decisive.  Then we need them to step aside.   Short term pain, long-term gain.  Fail and we risk generations of disaffected unemployed.  It is too high a price to pay.  Action is needed now.

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Half full or half empty?

This morning the latest UK Recruitment and Employment Confederation / KPMG UK Labour Market Survey is out.  Good news is to be found amongst the headlines.  Firstly the number of job vacancies grew.  There are more jobs available in September 2010 than September 2009.  More people were appointed to permanent jobs in September 2010 than 2009.  These are positive signs and should give cause for optimism.  They don’t.  Why is that?  Good news doesn’t sell newspapers, it doesn’t work on air.   The 24 hour media world in which we now live is not interested in painting a positive picture.

Take the BBC (those purveyors of doom and gloom for us Brits).  The headline for the above report reads as follows;

“Jobs market growth slows again”

Talk about how to turn a positive in to a negative!  We have jobs market growth.  However virtually every media outlet reporting this story focuses on slowing jobs market growth.

Why is jobs growth slowing?  Nothing here that we weren’t expecting, nothing that we all know needs to happen.  Jobs market growth is slowing is because public sector hiring activity has slowed dramatically.  It had to.  At one point we had 52% of the UK workforce working in the public sector.  Simple economics dictate that is impossible to sustain.  We just can’t afford it.

Back to the good news.  There is continued strong demand for engineering, construction and executive staff, reflecting the recovery in the private sector.  We need it.  Services (public or private) cannot sustain an economy, we need to make stuff.  Growth in manufacturing is vital to the long-term sustainable success of the UK economy.  Job creation in the private sector is great news for all.  It is job creation in the private sector that feeds the great public sector services we have in the UK.

Back to the headlines?  If your glass is half full, you have jobs growth.  That gives people, business and employers confidence.  It encourages people to think positively about investment intentions, hiring intentions.  Confidence is fragile but it is crucial to so many elements of the economy.   If your glass is half empty and jobs growth is slowing, you are nervous.  You are not going to hire, invest, grow your business, create jobs.  The talk is of a double dip in the jobs market in much the same way as it is talked about incessantly about the economy.

I wonder if journalists ever stop to consider the wider implications of what they report?

Self fulfilling prophesy?  Be careful what you wish for.

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Thank you, David Cameron, what about the rest of the world?

No sooner had I published my previous post extolling the virtues of government truly engaging with business, than David Cameron unveils his panel of leading industry bosses he says will help to the shape the UK Governments economic policy.

He would appear on the face of it to have picked a group of real winners.  Amongst them Ratan Tata, Chairman of Tata Group, Sir Howard Stringer, Chairman and CEO of Sony, Paul Walsh, Boss of Diageo, Sir Martin Sorrell from WPP, Justin King of Sainsburys, Sam Laidlaw of Centrica, BT Chairman Sir Michael Rake and Dick Olver of BAE Systems.  These guys know a thing or two about job creation.

Cameron is quoted as saying “the group offers a real interchange with us about the priorities for growth, the priorities for the economy” .  A word of warning if I may Mr Cameron.  Your predecessor had a similar panel and didn’t listen to them.  Please make sure you do and act.  Your actions could have hugely positive impact on the 5 million unemployed in the UK.

Now for the remaining 207 million…….

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Anything to be gained from a jobless recovery?

I guess good news doesn’t sell newspapers.   This weekend was full of the latest views on double dip, inflation, stagflation, rising interest rates, dropping consumer confidence, rising unemployment and a jobless recovery.  None of these are fact.  For sure all are simply possible scenarios and all warranted countless column inches.  Someone once warned me ” be careful what you wish for”.

Much is being made of the jobless recovery.  Regular readers of my blog will know my views when it comes to unemployment (frankly one person out of work who does not wish to be is one person too many).  However, trying to take the positive from the negative I considered what is to be gained from the doomsday scenario the newspapers are suggesting.

Firstly a jobless recovery is not an accurate description.  It is simply not the case that employers are not hiring.  What is true is where they are hiring.  A recent Chartered Institute of Personnel and Development survey highlighted 36% of employers expect to lose staff in the next three months.  Despite this threat of cuts, the CIPD’s net employment index, which measures the number of companies planning to hire against the number planning to lose staff, is still in positive territory at +two (admittedly down from +five three months ago but still a positive number).

Dig a little deeper in the numbers and that’s where things get interesting.  What you will see reflects the stark difference between the public and private sectors, with the private sector showing strong hiring intentions at +19 while the public sector gives a reading of -35.

This is great news.  The private sector is hiring.  We have grown to depend for too long on an overbloated public sector and we need now to take the medicine to protect ourselves in the long-term.  I am not talking front-line services (I am married to a nurse and clearly too much of a coward to consider such a thing!).  Anything that puts more nurses on hospital wards, policeman on the street or makes for better public transport is to be supported and applauded but it is the private sector that drives long-term, sustainable economic recovery.

It is the private sector that creates employment and wealth, that pays down the massive public debt we have accrued in the western world.  It is the private sector that puts huge sums in to the public purse through taxation to create world-class public services.  It is the private sector that drives innovation, that will create the tools that are required to combat climate change, hunger, water shortage, disease.  This gets forgotten all too often.  It is the private sector that got us in to this mess and it will be the private sector that gets us out.

It will be the private sector that re – trains out of work former public sector workers and it will be the private sector that re – hires them.  Will this happen quickly enough to ease the pain for such individuals?  Probably not.  Rarely does any return to work happen quickly enough for the person concerned.  Governments need to create the environment that encourages entrepreneurialism to thrive.  For it is entrepreneurialism, the seeing and seizing of opportunity that will create long-term sustainable employment.

Human Beings are incredible.  In adversity comes incredible strength, determination, invention, creativity.  Through adversity comes great change.  We might just be living in one of the most exciting times in history.  Sure its tough, but let’s make the most of it instead of constantly finding ways to talk ourselves in to an even bigger mess.

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Positive role models required to inspire a generation

According to statistics from the Centre for Economic and Social Inclusion, the number of long-term youth unemployed (aged 16 to 25) in Britain now stands at 342,000 (although this number is falling, albeit only slightly, but falling nonetheless).  Perhaps most striking is the fact that the youth unemployment rate stands at 17.3%, against 6.4% for those aged 25 to 49 is now 6.4% and 4.5% for those aged 50 or older.  Youth unemployment has risen more in the last two years, at a rate of 5.1 percentage points for young people, than any other category (the figure is 2.5 points for those aged 25 to 49 and 1.7 points for the over-50s).  Of this group of long-term unemployed, young men represent the significant majority.

We are not quite gambling away the future prosperity of UK plc.  However we are at risk of raising a generation of disaffected young men, wasting a huge amount of talent and opportunity as a consequence, let alone the drain that this is placing on the state in unemployment benefits and missed tax revenues from those out of work.

There is no quick fix to what is a long-term social problem.  However fix it we must.  The answer lies in education.  Not just education in the academic sense, but in raising awareness, opening eyes as to the opportunities by recruiting positive role models with whom young people can engage.

There are countless examples of successful people who have come from disadvantaged backgrounds in economically deprived areas.  Many I am sure would be only to willing to go back to those areas in which they grew up, to give of their time to inspire young people, to educate, to raise awareness of just what can be achieved.

Success means different things to different people.  I am not just talking about people who have created their own material wealth.  Positive role models come in all shapes and sizes and from all backgrounds.  Such a scheme should extend to those in public service, Fireman, Nurses, Soldiers.  They should come from Churches, from Sport, from the Media, from Industry.  It can be the CEO of a large Corporation, the Team Leader in a call centre, the foreman in a factory, the electrician, the plumber, the mechanic.

It really doesn’t matter who they are and what they do.  What matters is the story.  Where they came from, the journey they took to get them to where they are today.  Real life stories, real experiences, something that young people can relate to.

Whilst we need help from Politicians to create the frameworks through education, apprenticeships, incentives for employers to hire young people, it is not the Politicians who will provide the inspiration.  Find a way to engage with the people who can really transform lives, who can provide the inspiration, who come from the communities that need help.  Start with the schools and youth centres and encourage our young people to see the very real opportunities that are available to them.  People will do it, will give of their time to share their experiences.  Lets give them the platform to inspire a generation.

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