Growth must remain the priority for employers and workforce planning
The Association of Professional Staffing Companies (APSCo) congratulates the new Labour Party Leader and incoming UK new Prime Minister on his appointment, while urging the Government to ensure that economic growth, business confidence and skills investment remain central to its policy agenda.
The Association of Professional Staffing Companies (APSCo) congratulates the new Labour Party Leader and incoming UK new Prime Minister on his appointment, while urging the Government to ensure that economic growth, business confidence and skills investment remain central to its policy agenda.
While the appointment is unlikely to signal a dramatic shift in the business environment, APSCo believes employers and recruiters will be looking closely for any indications of increased taxation or regulatory burden in the coming months, particularly as pressure mounts on the public finances ahead of the Autumn Budget.
Commenting on the appointment, Tania Bowers, Global Public Policy Director at APSCo UK and OutSource, said:
"From the perspective of employers and the professional recruitment sector, the new Prime Minister is likely to inherit many of the same challenges faced by his predecessor. While businesses will welcome stability and continuity, there is understandable concern that pressure on the public finances could result in higher taxes later this year to fund key spending priorities.”
"Additional costs on businesses, whether through taxation, regulatory obligations or changes to employment legislation, are dampening business confidence and hiring intentions at a time when employers are already operating in a challenging environment."
APSCo noted that the Prime Minister's track record as Mayor of Greater Manchester offers encouraging signs for the future of skills policy and employer engagement.
“Burnham’s clearest message thus far is his support for greater devolution and even a potential deputy PM office in Manchester. His support for employer-led approaches to devolved technical education, apprenticeships and workforce development, including initiatives connected to the Greater Manchester Baccalaureate (MBacc), demonstrated a clear recognition of the important role businesses play in driving economic growth and social mobility. Programmes such as InnovateHer have also shown how targeted interventions can improve digital skills and encourage more women and girls into technology careers.”
However, APSCo warned that the Government must avoid repeating a pattern seen to date, whereby the cumulative impact of increased employment costs and new obligations on employers has been underestimated- and any devolution of tax receipts could lead to even greater complexity.
"One area of particular concern is youth employment. When hiring becomes more expensive or administratively complex, it is often younger workers and those entering the labour market for the first time who are most affected. Agency work is an established first route into work for school leavers and student. The Government must carefully consider the unintended consequences of policies such as guaranteed hours reform that increase the cost and complexity of creating jobs and agency work.
"The Government has indicated a desire to reduce spending on outsourced public services, particularly where this involves large consultancy providers. However, it will be important to distinguish between high cost, large scale outsourcing arrangements and the increasingly valuable role that specialist consultancy and Statement of Work (SoW) solutions play in delivering public sector projects. These allow access to specialist skills as wider employment reforms, such as the guaranteed hours provisions, are implemented. Under these arrangements, responsibility for workforce management sits with the consultancy partner rather than the public sector body itself, offering greater certainty around compliance and project delivery.”
APSCo also expects the Government to maintain its current trajectory on employment rights reform, with a continued emphasis on strengthening protections for workers. While supporting the ambition to create fair and secure work, the organisation urged Ministers to consider the wider economic implications of increased labour market regulation.
Bowers concluded:
"Businesses need confidence to invest, hire and grow. While fair employment protections are important, employment rights reform will create unintended barriers to recruitment, workforce flexibility and business expansion, unless the Government prioritises economic growth, in practice and not simply in its rhetoric."
"The recruitment sector stands ready to work with the new administration to ensure reforms support both workers and the businesses that create jobs, invest in skills and drive economic prosperity."