Tag Archives: unemployment

Where will the new jobs we need come from?

All over the developed world we hear a similar story.  Rising unemployment in the face of improving (in various degrees) economic conditions.  Take the United States.  It’s gross domestic product has recovered from the recession far better than in Britain, Germany, Japan and Russia, yet the unemployment rate in the US remains significantly higher than in those countries, particularly Germany and Japan (where admittedly labour laws make it much more difficult and costly to lay workers off).  America is producing more and relying on fewer people to do so.

Last week Steve Ingham, CEO of Michael Page, the UK’s second largest recruiter, attributed a 40% increase in permanent job orders to “jobs churn” ie people moving jobs as opposed to new jobs being created.  The unemployment numbers in the UK are, in the grand scheme of things, flat.

A 6% fall in GDP ought to have caused a similar fall in employment numbers, but it didn’t, mainly due to employees being prepared to take pay cuts and cuts in hours rather than face unemployment.  Unemployment in the 3 months to November 2010 in the UK was 7.9%.  In the same period 2009 it was 7.8%.

There are some encouraging headlines to be found in private sector jobs growth.  In the nine months to September 2010, the private sector in the UK added 184,000 employees.  In the same period public sector employment fell by 77,000.  We had net jobs growth, surely a good sign?  Those organisations that are hiring are only replacing headcount that was cut, and in many cases cut too fine, during the recession.

Youth unemployment in the UK is perhaps the most worrying sign.  A record 951,000 young people aged between 16 and 24 are out of work.  Where will the jobs come from that will stimulate the employment market and prevent a generation of disaffected young people?

For as long as I can remember the drive in business has been for more and more and more efficiency.  Improving productivity has been the name of the game.  Do more with less.  We have invested (rightly) so much in technology that we no simply no longer require the same number of people to produce substantially more.  That trend is only going in one direction.

It is innovation that will drive new jobs growth.  The jobs we need are going to come from new and emerging industries, companies that today don’t exist will appear tomorrow and grow to employ thousands.  10 years ago we never had Facebook.  Twitter didn’t exist.  Google was an infant.  Between them they employ today thousands of people.  The Ipod, the Ipad, the Blackberry.  They have all come about in the last 10 years.  What will be the product developments of tomorrow?

We need governments across the globe to create the conditions to encourage entrepreneurs.  We need to make it easy and inexpensive to employ someone.  We need the law to continue to protect the rights of individuals in employment.  Those rights must be balanced with the flexibility employers need as the business grows.

Emerging technology, new energy, healthcare?  What are your predictions?  Where will the jobs growth we need come from?  I would love to know your thoughts.

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Staff Turnover costs the UK £42BN per year! What are you doing about it?

A new report is out this week from PriceWaterhouseCoopers.  It is a frightening read.  In the last 12 months, despite one of the toughest economic climates on record and rapidly rising unemployment,

“an average of 10.4 % of UK staff resigned from their job in the last year”.

That is a staggering number.  Can you imagine losing 10% of your staff in one year of their own volition?  What would be the impact on your business?  Do you know?

The cost to UK Plc of staff turnover in the last 12 months has been a staggering £42 billion!

The cost to business of staff turnover is huge.  Yet this cost would appear to be largely ignored.  So many espouse the virtues of people as the organisations greatest asset.  Yet how many are truly focused on having a great hiring strategy?  What about engagement?  Retention?

To much of hiring is left to chance.  No other business process would be treated in the same way.  Why?

You would never take a chance on a business critical pitch.  You would give it your all to ensure you got your new customers signature on the contract.  Once you’ve got them, you’ll move mountains not to let them go.  Why not do the same with staff?  What’s the difference?  Do we work any harder to attract customers?  Attracting retaining and engaging talent is crucial.  The same survey highlights

24% of UK employees are looking or intend to look for a new job.

Look around at your workforce today.  One in every four is looking for a new job.  Can you afford to lose them?  What are you going to do about it?

Take your hiring seriously.  Invest in your people.  Do it from today.  Do it every day.

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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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We elected you, what are you doing to help us?

Unemployment in the Eurozone is 10%.  In the US 9.6%, the UK 7.8%.  Do you know what the means in terms of the number of people out of work?  I did the maths.  Its frightening.  Clearly this is why politicians talk in percentages.  The actuals do not make for pretty reading.

50 million people in the Eurozone are unemployed!

30 million people in the United States are unemployed!

Nearly 5 million people in the UK are unemployed!

What about the wider world?  According to the International Labour Organisation, in 2009 the number of people on the planet out of work was 212 million!

212 million employable people without a job.  That is an outrage.

What is being done about it?

Everywhere we look governments are talking about deficit reduction.  The cuts have yet to come.  Unemployment will rise and yet I hear no talk, no innovation, no ideas, no strategy about creating jobs.  Many a politician espouses the virtues of job creation and yet nobody seems to be putting forward any suggestion , (let alone a sensible one), as to how what specific schemes or ideas they propose that will help people get back to work.

That is because they are clueless.  They are out of touch with the real world, far removed from their constituents, in cosy offices with cosy benefits.  They don’t know how to create jobs because they have never had to.  We are paying them.  We elected them.  (We are, therefore, not entirely blameless).  That aside, what are they doing to help?

It is time to engage business.  Business has the answer, not politicians.  I am not talking about paying lip service with cosy committees and advisory panels.  I mean really engage business.  Are any politicians asking businesses what they need to create jobs?  If you are asking, are you really listening to the answer?  Are you taking specific action?

Engage with business, big and small, before it’s too late.  Sure it was business that got us in to this mess in one form or another but it will be business and not politicians that lead us out.  Politicians need to create the environment, the conditions, that will encourage businesses to start to invest once again.  It is that reinvestment that will create jobs.

One person out of work, who wants and is willing to work, is one person too many.  212 million is a travesty.  Do something and do it now.  Your lack of action is unforgivable.

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National Service the answer to skill shortages?

An article in yesterdays Daily Telegraphy (www.telegraph.co.uk) by Richard Tyler got me thinking, is bringing back National Service the answer to skill shortages and high unemployment amongst young people, young men in particular?

Compulsory National Service was abolished long before I was born and therefore I cannot speak from experience as to its value.  There were however a number of things in the report that struck me as a possible solution to many of the problems employers and the unemployed are facing.

The article was entitled “Employers Benefit from Afghan Tours”.  In it, Richard Tyler highlighted a recent report from the Ministry of Defence that was endorsed by the Chartered Management Institute.  The report found that reservists “deployed to Afghanistan gain up to £18,432 of relevant civvy street experience”.

Dig deeper and the report evidences “during a typical year, a reservist gained skills from military training that would cost £8,327 for their civilian employers to buy”.  It is estimated that “10% of the experience of deployment in Afghanistan was relevant to employers”.

There has been much talk recently of the challenges facing young men in particular as the largest percentage of the population out of work.  Employers talk regularly of young people leaving education and lacking many of the basic skills employers require.  We have in the region of 270 graduates applying for every graduate training position.  Many will be disappointed yet clearly have much to offer.  Could a stint in the military be the answer?

The purpose of this post is not to debate the rights and wrongs of the war in Afghanistan.  However there is much the military can offer young people in terms of equipping them with the skills they need in the workplace.  Discipline, teamwork, focus, commitment, responsibility, accountability, leadership, structure, application, communication, clarity, purpose.  These are all words we recognise as essential workplace attributes for a succesful career, but in many cases employers evidence that these are not qualities evidenced in abundance from the employees of the future.  Education it would appear in this regard is letting employers down.  Could a stint on the parade ground be the answer?

A quote from Richard Tyler’s article from Corporal Kelvin Roberts, a Reservist who has just completed a tour of Afghanistan and an employee of Bank of America gives further insight in to just what this might mean for employers;

“I feel I really developed as a person in Afghanistan, I gained experience that has definitely helped me since I returned to work”.  “I’ve learnt how to better manage a team and delegate tasks.  I am more confident and have a greater sense of my own leadership abilities”.

Could any employer confidently predict similar feedback and return from a training course, not matter how effective?  Corporal Roberts experience is something that is firmly engrained in him and I have no doubt such experience and qualities will serve him well in his career.  Should employers and governments be looking to the military as a great way of developing skills amongst our young men and women?

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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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