CBI Director-General Calls For Major Rethink Of Labour Market

Labour market principles have changed forever after the pandemic, leading to a major rethink by government and businesses alike, says Tony Danker, Director-General of the Confederation of British Industry (CBI). The CBI is arguing that businesses and the government need to embrace a new set of principles to solve the ongoing people and skills shortages crisis. Danker will set out his vision of the future of work in his opening speech at the CBI Future of Work Conference. He will argue that generational shifts, alongside the pandemic and longer-term trends, are completely transforming the world of work.

“We in Britain don’t have the workforce and the skills we need to prosper and grow. Why? Our demographics have changed. The population is ageing. And a generation in their 50s and 60s – with private pensions and property wealth – can take early retirement,” Danker said.

Five New Principles To Overcome The Labour Shortage Crisis

Danker will state that these forces are combining to challenge traditional ways of working and the UK’s labour market, pushing both policy makers and business leaders to take radical action in response. In his speech, Danker will set out five new principles to boost productivity and overcome the ongoing labour shortage crisis.

The first principle is a childcare revolution. The government needs to boost funding for existing childcare provision for three- and four-year-olds and expand free childcare hours to cover one- and two-year-olds to get parents back into work. The UK has some of the highest childcare costs in the Organisation for Economic Cooperation and Development (OECD), with public funding for childcare comprising less than 0.1% of GDP, the second-lowest investment in the OECD. Danker will say that unaffordable childcare prevents parents from working, especially women who continue to carry the burden of caring responsibilities.

“As the Government contemplates labour inactivity – fighting an uphill battle against early retirement or long-term health problems, they must turn to the parents who would be in work or increasing their hours but for unaffordable childcare and conclude – The UK Needs a Childcare Revolution. We simply can no longer trail other countries in enabling parents to work,” Danker said.

The second principle is that wellness is becoming an employer’s job. Over a quarter of those who are now economically inactive are out of the workforce because of long-term sickness. The cost of poor health to the UK economy is upwards of £180bn GDP, with around 131m working days still lost to ill-health annually. Employer-led health interventions, to prevent common physical and mental health risks, could help save £60bn every year – reducing the impact of ill-health on the UK workforce by up to 20%. Danker will argue that business leaders need to lead on preventing illness because the NHS doesn’t have the bandwidth, adding that this is what employees want and need.

The third principle is that flexible working is becoming a mainstream practice. Danker will cite research from Timewise, which shows that nine out of ten people want flexible work. But only three out of ten job adverts offer it. He will argue that the stats around part-time work are even starker, with the volume of people wanting to work part-time outpacing available part-time jobs by 4:1. Danker will say that flexible working is vital to growing supply because it’s likely the only way to get those who have left to return, adding that it’s hard to see how those who are now economically inactive will become full-time active overnight.

The fourth principle is that skills policy and immigration policy must finally be brought together. Danker will argue that governments of all flavours have serially failed to have the most elementary approach to the labour market. He will state that we need to work smarter in upskilling and reskilling existing workers and attracting the best talent in the world. This means migrating the Apprenticeship Levy