Job creation: busting the myths and joining the dots
Over the last five years, more than two million new jobs have been created in the UK and that’s despite the cuts in public sector employment. The unemployment rate has fallen to 5.5% and things are, more or less, back to where we were before the Great Recession struck.
These things are well-known, but I was struck by a recent article by Andrew Sentance of PwC, formerly a member of the Bank of England Monetary Policy Committee, in which he pointed out that there are quite a few employment myths still prevalent. One of the most pervasive is that the growth is all in low-value, part-time/zero hours contract work. Not so: he says 75% of the increase in employment since 2009 is in full-time jobs and zero-hours contracts account for just over 2pc of all jobs in a workforce of 31 million.
As regards the idea that low-value jobs are in the majority, Sentance notes that professional, scientific and technical services have actually been the source of most new jobs over the past five years. Moreover, at C-Suite level, there’s been a surge in recruitment, with all that implies for business confidence and future growth. That’s obviously good news for us here at exec-appointments.com. Overall, employment in both higher-value-added and lower-value-added areas has increased, but the reality is that the vast majority of jobs are in the service industries where some 80% and more of people work today. Manufacturing employment, Mr Sentance reveals, has hardly changed in the last five years, and, perhaps unsurprisingly, there has actually been a slight decline in construction jobs. Actually, economic history shows that since industrialisation the South East of England, with its greater population and preponderance of service industries/government, has always generated more employment income than anywhere else in the country.
What is interesting now is the new dynamic created by the UK government’s desire to create “Northern Powerhouses”, and also the hegemony of the SNP in Scotland. The most recent Markit* surveys of recruitment for the UK and Scotland are relevant here, showing that although still increasing, growth in demand for staff in Scotland was at its lowest for 21 months, while across the UK as a whole we saw the strongest increase in permanent staff recruitment in eight months but recruiters’ temp billings eased to a six-month low. These figures tend to support the idea that one of the best things our new government can do is invest in the other countries/regions of the UK – and not just for political reasons.
Equally importantly, the number of unfilled vacancies is approaching 750,000. This figure has risen by a quarter of a million over the last two years. The Markit surveys mirror this, with recruiters finding candidate availability decreasing. Alongside the imperative to increase productivity, this is the most pressing concern for the economy, and the biggest difficulty for recruiters. There are serious skills shortages, especially in the key STEM disciplines. Education it vital but takes time, and then the vagaries of the employment market kick in and there is a natural degree of attrition. However, do we have any choice? We have more universities than ever before: we have an increasing number of jobs going unfilled due to skill shortages. We have a new government. We need to join the dots, otherwise all the good work of the last few years in increasing employment could go to waste and the UK will be left behind by the new powerhouses - not of the north but of India and Asia.
Steve Playford, Global Director, FT Career Management.