Fluid Consulting eBulletin Issue 10

Earlier this year the Confederation of British Industry (CBI) published a report entitled Emerging Stronger - the value of education and skills in turbulent times. The report highlighted concerns of employers in sectors such as science, IT, energy and water tackling a potential shortage of applicants when the green shoots of recovery take hold. Faced with competing economies such as France, Germany and Japan showing modest economic growth, organisations in these industries need to take a proactive approach now to minimise the ‘brain-drain’ as existing and future employees migrate overseas.

LEITCH REPORT
After the interim report Skills in the UK: the long term challenge, published in December 2005, the final Leitch Report was published in December 2006: Prosperity for all in the global economy – world class skills. The Report found that the UK currently ranks 12th out of 18 comparative members of the Organisation for Economic Co-operation and Development (OECD). It recommends that the UK should aim to be a world leader on skills by 2020 and suggests the following ways that this can be achieved:

95% of adults should have achieved the basic skills of functional literacy and numeracy, an increase on 85% literacy and 79% numeracy in 2005;
more than 90% of adults should be qualified to at least Level 2 (equivalent to five good GCSEs or their vocational equivalents), an increase from 69% in 2005, with a commitment to achieve 95% as soon as possible;
the balance of intermediate skills should have shifted from Level 2 to Level 3 (equivalent to two or more A levels), which means achieving 1.9 million additional Level 3 attainments and 500,000 apprenticeships;
more than 40% of adults should be qualified to Level 4 and above (equivalent to degree-level qualifications), up from 29% in 2005.
The Leitch Report emphasises the necessity of shared responsibility: individuals and employers, as well as government, should increase their investment in training and education.

The Report was written prior to the economic downturn and the impact so far is somewhat difficult to gauge. Right now a debate is raging about whether the slowdown in the economy means there is little enthusiasm for skills training or whether the task of upgrading the nation’s skills is best left to government.

SHORTAGE OCCUPATION LISTS

In 2009, Fluid has had an increasing volume of work with schools and young people, who typically ask what should I study or apply for to maximise chances of gainful employment. A source we refer them to is the list of occupations produced by the Migration Advisory Committee in September 2008, used alongside Tier 2 of the points-based system for managing immigration. This was the UK government’s first attempt to analyse the skilled occupations for which there are shortages that can sensibly be filled by enabling employers to recruit from outside the European Economic Area (EEA). There are partial reviews to the list every six months and a full review will occur in September 2010.

As of June 2009 the following occupations were covered:

Aircraft component manufacturing engineers
Biological scientists and biochemists
Care assistants and home carers
Chefs and cooks
Chemical engineers
Civil engineers
Dancers (ballet and contemporary)
Dental practitioners and technicians
Electricity transmission overhead lineworker
Fish processors (Scotland only)
IT - various relating to visual effects and computer animation
Medical practitioners, radiographers and technicians
Nurses
Orchestral musicians
Pharmacists/pharmacologists
Psychologists, speech and language therapists
Physicists, geologists and meteorologists
Secondary education professionals teaching maths or science
Ship and hovercraft operators
Skilled work rider (horses) and skilled shearer (sheep)
Social workers working in children’s or family services
Vets
Welders of high integrity pipes

Further details are available from the UK Border Agency website www.bia.homeoffice.gov.uk

GOOD SALES PEOPLE ARE HARD TO COME BY

Although not specifically mentioned by the Migration Advisory Committee, we find that top-performing sales people are in short supply. Telesales, business development, account management, field sales - these are the people that can make the difference in staying afloat or going under, and our clients know that good ones need looking after otherwise competitors will succeed in poaching them. One of our clients in London recently removed all email addresses and mobile phone numbers to minimise the chance of this happening. I met a CEO last month who was telling me about the high levels of staff turnover in India, where such poaching is rife particularly amongst employees who possess strong language skills.

CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT (CIPD) ANNUAL SURVEY REPORT 2009 - RECRUITMENT, RETENTION AND TURNOVER

In June 2009, the reasons given for recruitment difficulties amongst 755 respondent organisations were as follows:

73% lack of specialist skills
39% insufficient experience
37% pay issues
19% no applicants
12% lack of interpersonal skills
10% image of sector/occupation

We find that an insistence on specialist skills can sometimes be quite short-sighted, where an employer expects an applicant to have worked in the sector before, without offering any additional responsibility or financial benefit. In our opinion many roles have been de-skilled through the use of technology and other advances such that transferable experiences are often sufficient when applying to a new position.

Some organisations that operate in sectors offering the National Minimum Wage have experienced issues during 2009 as migrant workers leave the UK. Many of the national retailers continue to expand by offering a choice of working hours, but we encounter issues in care homes and food processors where the working conditions are not always very attractive or weekend/evening work is necessary.

LEARNING AND DEVELOPMENT

Forward-thinking employers keep up to date with rapid changes by investing in their workforce, recognising that even in a downturn technology keeps developing. In the world of software engineering, many individuals operate on a freelance basis undertaking full-time contracts before moving on to the next. However, a number of software contractors still refuse contracts working with packages or languages that would be seen as a step-back in terms of skills, constantly seeking to be involved with the very latest technology so that their experience attracts a premium rate.

The firm Caterpillar has established a network of vocational schools in six countries teaching a pre-approved curriculum, and students enter it with a dealership already committed to hiring them. They will spend up to half their time in apprenticeships at Caterpillar dealers, learning on the job.
FlyBe, McDonalds and Network Rail were the first organisations in the UK to be approved by the Qualifications and Curriculum Authority (QCA) to award nationally recognised qualifications through their internal learning and development programmes.

Coaching and mentoring may prove invaluable in ensuring that workers stay put rather than jumping ship, removing the need to fill tricky vacancies.
There are many criticisms of the government’s Train to Gain scheme, including a failure to address the fact that currently less than half of British managers have a management qualification despite the scheme having had an increase in funding from £4M in 2007-8 to £30M in 2008-9.

Volunteering in community projects can help young people build self-confidence and develop important skills such as problem-solving, communication and teamwork. Managers and leaders of the future can be spotted in such a ‘low-risk’ environment that is not business critical and rarely involves a financial contribution. This is an important consideration at a time when despite considerable investment by the Government there seems to be a shortage of apprentice places available, with an original target of 210,000 for next year.

The Department for Innovation, Universities and Skills is quoted as saying:
"We believe it is no longer acceptable for those without the necessary skills to work simply to remain on benefits."

This comes at a time when the Government calculated in 2008 that only 31% of UK adults have a degree although productivity is higher by 30% if the entire workforce is degree-educated. Half of the 18 million vacant jobs in 2020 will be graduate level and emphasis is being placed on obtaining more graduates in science, maths and engineering. Compared to the US, where 74% of managers have a degree, only 49% in the UK are educated to this level.

SO WHAT ELSE CAN BE DONE?

FLEXIBLE WORKING, HOME WORKING AND WORK LIFE BALANCE - certain geographic locations are unattractive to potential employees, and setting up a home office that allows people to work around childcare, other caring responsibilities and social activities may attract individuals unwilling to relocate.

CORPORATE SOCIAL RESPONSIBILITY, ENVIRONMENTAL INITIATIVES AND SUSTAINABILITY - highlighting their importance and centrality to the business on the website, at interview and in marketing material can be a valuable tool in minimising attrition and attracting environmentally-conscious candidates. Discussions now take place about a green skills gap due to the new jobs that are being created in industries such as renewable energy and sustainable homes assessment.

DIVERSITY - as the population becomes older consider hiring people with more experience than would traditionally have been selected. Toyota in Japan recently contacted all employees aged 60 or over to delay their retirement by at least one year to offset the shortage of young people entering the labour market. Succession planning issues mean that organisations still need to focus on young people, perhaps making their industry more appealing to under represented groups such as women and ethnic minorities who have felt marginalised due to an absence of role models in senior positions.

HEALTH AND WELLBEING - research what competitors do with respect to showers, cycle to work schemes, canteens, gyms and running clubs to make sure you are the best in class. Many of these initiatives cost little or nothing –offer small incentives to show you encourage this and maybe contact local providers to strike up a deal.

PAY AND BENEFITS - in this era of pay cuts and pay freezes it is tempting to think that no employer pays over the odds in terms of reward. Joining a pay club or conducting a salary survey may prove invaluable as it will show you where your compensation and benefits package lies in comparison to other organisations that are fishing in the same talent pool (or talent puddle when it comes to some job titles!)

COMMUNICATION AND TRUST - through performance appraisals, employee satisfaction surveys, exit interviews, trade unions and focus groups, log the information received to assist future decision making. Following redundancies considerable resources should be invested in communication to reduce the likelihood of ‘survivor syndrome’. Where people are not trusted they will leave; and because they are likely to communicate with people who studied with them/worked with them previously, an employer of choice can quickly become an employer of last resort. An employer brand can easily become tarnished if inadequate consideration is given to ensuring previous and existing employees are able to act as ambassadors, portraying the organisation in a positive light at every possible opportunity.

IN SUMMARY

A change of Government in 2010 will lead to a change of emphasis, but considerable investment of time and money will be needed to create a highly-skilled workforce where skills shortages rarely exist. As most of our work focuses on retention, we advocate an approach of employee engagement to minimise resignations from individuals who will be hard to replace. One size definitely does not fit all and managers need to invest resources to find what makes each of their subordinates tick and be proactive.


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	Return to work after the holiday season traditionally coincides with an increase in pagination of the jobs/careers section of newspapers and magazines. Even in a recession this trend is likely to continue...