REC welcomes a good budget for employment

The Recruitment and Employment Confederation has welcomed today’s budget announcements on measures for creating the right environment for business and for addressing the skills shortage threatening the UK economy.

Maintining flexibility is more important that ever
Commenting on the Chancellor’s commitment to addressing red tape, REC managing director, Gareth Osborne, said:

In an increasingly competitive business environment, measures to remove barriers to enterprise and to enhance flexibility are essential. In particular, it is a positive sign that the Government will remain strong in opposing EU regulations such as the current draft of the EU Agency Workers Directive which could threaten the provision of flexible employment solutions in the UK. The importance of flexibility in the UK labour market, and it’s contribution towards the creation of over 2.1 million jobs, was expressly recognised in the Chancellor’s address.

One of the key challenges facing UK business is the widening skills shortages. The Chancellor mentioned that there were over 650,000 vacancies currently in the UK, a figure backed by the REC’s monthly Report on Jobs which shows that demand for staff has increased continuously over the last eighteen months.

One aspect of a tight labour market is the possible impact on wage inflation which remains a real threat to the UK economy.

Pensions reforms are needed to entice older workers into the labour market
One opportunity that was missed was more measures for encouraging older workers to remain active within the labour market. Gareth Osborne commented:

Increasing the benefits of deferring a state pension is one thing, but in practice older workers will need to combine the taking of a pension and a salary. Under current arrangements those with occupational pensions are penalised if they choose to work too. As the workforce gets older and the Government needs to retain workers for longer in the labour market, this policy needs to be urgently reviewed.

Extending parental leave could make labour shortages worse
Commenting on the measures for extending maternity pay and for transferring some maternity leave to fathers, Gareth Osborne said:

These proposals could have a real impact on employers who are already experiencing severe resourcing difficulties. Although employers can appreciate the long term benefits of offering flexible working provisions, it is difficult to see how organisations can cope with more leave arrangements at a time of such acute resourcing difficulties due to an increasingly tight labour market. We must be careful to ensure that more flexibility for some employees does not result in more work and stress for others. Employers will need to find innovative and effective ways of accommodating increased flexibility and parental leave, for example by drawing upon the pool of highly skilled temporary workers that exists in this country.

Enticing loan parents back to the labour market is welcomed
Measures announced by the Chancellor to entice lone parents back into the labour market will be good for British business. Recruitment agencies will play a key role in training and advising those returning to the labour market and in helping them access suitable jobs.

Clearer enforcement and accountability for healthcare was overdue
The decision to merge the inspection regimes for nursing and social care will make many small businesses sigh with relief. REC Managing Director, Gareth Osborne, said currently a small business supplying temporary nurses and carers has to submit to two Government enforcement agencies and two sets of rules. Harmonising these two inspection regimes is a decision for common sense.