The 2020 dilemma: how to solve the UK’s critical unemployment and skills shortage problemsby
Covid-19 and Brexit are creating a perfect storm of unemployment and skills shortages in this country. We need to take a long-term view of these issues and adopt more holistic approach to skills development and employment to aid recovery.
Over the past few weeks the government has made several announcements that impact employers across the country. The most significant of these is the arrival of the new Job Support Scheme, which will replace the existing furlough programme.
While this is a welcome relief for employers and employees alike, this six-month scheme is yet another short-term intervention to save jobs – but what happens beyond this, in the long-term? With so many jobs being lost every day and more redundancies inevitable, this emergency measure is simply not enough. What we need now as a matter of urgency is a genuine longer-term solution to stem unemployment and fill skills gaps.
The time for action is now – not only to minimise unemployment in the short term, but also to help our economy recover and become more resilient.
Indeed, in a time that we’re seeing unemployment skyrocket – with around 4 million people across the UK expected to be unemployed by the end of the year – many industries still have skills gaps. Just last month, the Migration Advisory Committee set out a report which detailed Britain’s skills shortages in certain key industries such as social care, and nursing, as well as bricklaying and welding.
According to the June 2020 OECD economic output report, “the world economy is on a tightrope”. In Britain, arguably this issue is amplified further as, alongside battling a global pandemic and the consequential rising unemployment and economic recession, there is also the question of Brexit and changing immigration laws.
This lethal combination presents the UK economy with some perilous challenges to say the least.
Not only is urgent action needed to tackle this before a whole generation of people is permanently ‘left behind’ – we also need to ensure that any new measures provide British businesses with the skills they need to be productive in the future.
Unlike the current ‘quick fix’ solutions in place, we need a plan with longevity to address unemployment, skills shortages and ongoing productivity issues. We need to think differently. Crucially, we need to bake lifelong learning into everyone’s career journey, helping people to retrain, reskill and upskill throughout their working lives. There are two principal ways that this can potentially be taken forward.
Investing in skills
First, let’s focus on the immediate context. While some industries, such as travel and hospitality are shrinking, there are opportunities in other sectors, such as nursing and social care. What if we could help people to find a way to transfer from one industry to another? By helping displaced workers to recognise and leverage valuable transferable skill sets needed to unlock a new career path, we could help individuals to access jobs in industries where there are opportunities. This could be a vital step to stemming unemployment. Access to flexible, digitally enabled and bite sized training, will be key to helping these individuals gain the top up skills needed to get back into work.
If we can set up the infrastructure, support, guidance and training to make these ‘skills bridges’ a reality, this won’t just be a quick fix. With the workplace and economy changing so rapidly, being able to adapt and transfer from one career to another will be a vital lifeline for many.
Encourage and enable lifelong learning
The second – and most important step – to creating a long-term strategy, involves matching up local demands and making lifelong learning a priority. Skills needs vary across the country and as such, individuals should receive support and guidance that directs them to the skills and jobs in demand in their area.
This is why, in partnership with The Prince’s Trust, City of London and FutureLearn, City & Guilds Group has created a comprehensive plan to reskill Britain in the face of an uncertain future, submitted as a response to the government’s Comprehensive Spending Review. Together, we propose the establishment of a network of employment and training hubs as a practical solution to help accelerate economic recovery across the UK.
These employment and training hubs would provide a blended (digital and physical) ‘shop window for skills’, making employment and re-employment pathways more accessible, and the skills system less fragmented. By bringing together job seekers, employers, training providers and local government into one space, the hubs will be fully aligned with local and regional needs – and supporting the government’s levelling up agenda.
The time for action is now – not only to minimise unemployment in the short term, but also to help our economy recover and become more resilient. After all, Covid-19 is not the only factor impacting the labour market; ongoing change caused by technology, AI and Brexit mean that skills needs will only continue to evolve at pace.
In order to meet the challenges of today and the future, we need a more holistic approach to skills development and employment – and above all we need to embrace lifelong learning.
Interested in this topic? Read What lies beneath: the skills issue undermining inclusive growth.