‘2015 needs to be the year that UK employers secure a productivity rollover’
Forecast expects economic growth in 2015 to turn more people in employment and less unemployment. The net employment balance in autumn 2014 – the percentage of employers planning to recruit in the next three months less those anticipating redundancies – was at its highest level prior the recession.
Wage growth is likely to remain in the 1–2% range for most or all of 2015 and economic growth of around 2.4% is expected in 2015.
Nevertheless, there are many factors that could affect economic growth in the UK this year, such as:
First, May 2015 will see a general election.
Second, forecasters expect the Bank of England to start increasing interest rates this year.
Third, there is the economic situation in Europe. The possibility of a Greek general election is a reminder of the country-specific risks that could throw the markets and the Eurozone into turmoil. (Governments in the Eurozone cannot use public spending to raise economic growth apart from Germany.)
Employers in the UK need to raise their productivity – and that includes developing their workforce – before skill shortages mount.
In just five years (2020) a third of workers will be over the age of 50 in the UK, and employers will be expected to respond to this demographic shift by making work more attractive and feasible for older workers. For instance, in Germany there could be a shortage of up to 2.4m workers by 2020, growing to 10m by 2030. Germany is presently trying to increase the over 65’s participation in the labour market from 4 to 10 percent. This year (2015) one-third of China’s population will be over the age of 50. In India, by contrast, over half of the population is under the age of 30. Aging and shrinking populations will result in fewer workers and the global crisis of a shrinking workforce is scarcely noticed never mind managed.
However, the UK is seeing more migrants for work-related reasons from Europe (countries such as Spain, Portugal and Poland), because of their high rates of unemployment and these migrants are likely to find highly skilled work in the UK filling many areas of skill-shortages.
It is imperative for UK employers to up-skill their existing workforce because this is an insurance policy against future skill shortages.
Investment in education in Asia and Africa is creating a steady stream of talented youngsters who will increasingly be in demand at home and abroad. At the same time, the population of Europe is in steady decline. At Cordant Recruitment we appreciate that these are serious challenges that multinational organisations must face if they are to succeed in the future.