What is the new normal for labour markets?

Thursday 30th April 2020 by casadmin
post it notes saying covid-19, economic crisis and job loss

In the employability world we like to be temperate in our language, but Covid-19 makes a mockery of this.  The Covid impact on employment will be huge and long-lasting and many lives will be blighted and scarred – some of them forever. So the Covid impact will dominate the work we do for the foreseeable future. The DWP has done a remarkable job in managing the demand for UC registration, but as we emerge from the emergency planning phase, what lies in store?

What it is possible and appropriate to do locally will depend on the national response, and there are big national differences here.  In Scotland Fair Start Scotland is a major source of support in every area and the Scottish Government is using it to explore how to create more locally appropriate and collaborative approaches, drawing on the skills, expertise and capacity of a range of local partners – in effect it has become a local programme.  In England the Work and Health Programme has become peripheral – important to its clients but marginal in terms of money, and lacking any ability to influence more collaborative local approaches – so local partners have needed to step into this breach to tackle Covid impact on employment.  

If there is to be a scaled up national approach it is vital that it is sensitive to local differences and finds a way to build on and support local assets and collaborative approaches.  If this isn’t done there is a real risk that carefully nurtured local approaches, resources and capacity could be damaged. This will help neither clients nor the Government overcome the Covid impact damage.

Ironically, we entered this extraordinary period with perhaps the healthiest ratio between local service capacity and need that we have had for a long time – resources have been shrinking but at a slower pace than unemployment.  Now it is all change, and it will be important for local partnerships to find ways to make the best use of the capacity of the whole structure of local employability support in an organised way.

It is possible to envisage a number of stages as the situation unfolds:

  • In the short term there will be a need to provide a transformed scale of support locally with a focus on resilience, mental health, and tackling money management and debt issues. Responding to a massive increase in demand will require services which can respond to the very different profile of this demand – in other words there will be a need for substantial and rapid triage and referral to the full range of existing support in an agreed and organised way.
  • There are jobs available in the short term – through turnover and the specific demands in logistics/delivery, health and social care and large scale retail and many will find these appealing as at least a stop gap (with health and social care in particular offering a range of longer term careers).
  • We need to identify those more vulnerable to long term unemployment, with a particular focus on young people emerging from school and college. The DWP’s own research has identified a range of indicators which help to pinpoint those at greater risk of long-term unemployment – while this it is not perfect, it is good enough for times like these.
  • In putting in place a short term response it will be important not to dilute the value of services which are currently targeted on those further from work, those with disabilities and health conditions. These will remain priority clients and they are likely to find it even harder to find or stay in work. We don’t want to overwhelm these services with those who are newly redundant.
  • We are facing a much looser labour market for a long period, so it will be important to help people maintain work-like routines and engagement, and use the time to enhance their skillsor to retrain into areas that are likely to emerge strongly from the recession.
  • Employers will be able to take the pick of the bunch, and if the last recession provides a model many skilled and experienced people will take jobs well below the level they would normally work at, so squeezing out more appropriate recruits – and exacerbating the availability of jobs for less qualified people. Local approaches can help employers to take on a more balanced workforce which will include those who will find it harder to find work and are at risk of very long-term unemployment. This will bring significant benefits in terms of loyalty and sustainable workforces.
  • In the medium term, in each area we will need to reconfigure the whole infrastructure of support, so that it can respond to the different needs of specific client groups and make effective connections with different employment sectors as they recover at different speeds.
  • The depth of the recession and the scale of business failure may create opportunities for significant business start-up – perhaps associated with rapid growth. Our work with the FSB has revealed the extent to which small businesses tend to under-recruit, so there is real scope to ensure that they don’t and that they feel comfortable to grow through recruitment, mainly by putting skilled HR specialists alongside the business development process.

Out of this assessment emerge five touchstones for success

  1. The futures of those who are unemployed are intertwined with the futures of employers as they emerge from the recession. There is a need to align business growth support and employability support to ensure that growing businesses are not under-recruiting, and that people have the right skills at the right time
  2. It is important to take a whole system approach in each area – what is our joint capacity, who has the specialist skills for particular groups and needs, how can we collaborate on a system wide triage and referral approach to reduce the load on JCP and make the best use of the capacity we have?
  3. Related to this, national investment needs to support strongly collaborative local approaches – aligned to local issues and employment profiles. The way that national investment is played out can ensure that it builds on this and creates a local infrastructure that will stand us in good stead for many years – or severely damage it by overwhelming it with a large national programme.
  4. There is a need to ensure that services are carefully disaggregated in terms of their provision of specialist help – for young people, for people with disabilities, for those most at risk of long term unemployment, and for those with health conditions – and it will be important to ensure that eligibility for these is not relaxed.
  5. These approaches will need to be underpinned by much more accurate and sensitive local labour market intelligence. This needs to draw on the army of those engaged with employers to understand current and emerging needs, and the wide range of insights emerging about the most affected sectors and business types and how they may emerge during the recovery phase, and ensure that this information is transformed into useful intelligence for local training providers and employability organisations.

There is no reason why we can’t do this. There is a huge reservoir of knowledge, insight and skills around employability across the UK. A carefully phased, disaggregated approach, built on high quality intelligence and integrated business development and employability approaches – locally designed and implemented – will help to accelerate the route out of recession. The Covid impact may not lend itself to temperate language, but we can put in place a carefully planned and balanced response that can create a world class infrastructure for the future. 

Richard is a Founder and Director at Rocket Science based in our Edinburgh office.  You can check out his profile here.