Speaking ahead of the Budget, and as outlined in a letter to the UK Chancellor Rt Hon John Healey MP, Neil Carberry, chief executive for the CIPD, the professional body for HR and people development, said:
We must tackle the rising non-wage costs of employment, which are driving our youth unemployment issues.
Neil Carberry, chief executive, CIPD
"There are two things we need to see from the Chancellor's Budget that will be crucial for boosting employer confidence and producing the sustained improvement in productivity and economic growth that the UK so desperately needs.
"My first ask is: no nasty surprises. Employers are still reeling from National Insurance increases in 2024 and the cut to NI thresholds, both of which have had a brutal effect on employers and employment opportunities, especially for younger people. We cannot continue down that path. And we must tackle the rising non-wage costs of employment, which are driving our youth unemployment issues.
“The second, on which I have written to the Chancellor, is a coherent UK workforce strategy. A workforce strategy isn’t an optional extra to an economic growth strategy. It’s how we make one work.
“At present, there’s a fundamental challenge with how scattered workforce thinking is across government. Skills shortages sit in one policy conversation, economic inactivity in another. Workforce health, employment regulation, migration, management capability, and the impact of AI each have their own initiatives and debates.
“But employers don’t experience these issues separately. Nor do the people working for them.
“And while piecemeal reforms may deliver moments of individual success, they cannot produce the sustained improvement in productivity and economic growth the UK requires. Indeed, they often have the opposite outcome of well-intentioned policy, causing more issues than solutions.
“We need an approach that starts with the economy Britain wants to build and asks what kind of workforce, workplaces, and management capability will be needed to deliver it.
“That means connecting skills policy with the realities of business demand. Linking employment regulation to the hiring decisions and economic performance impacts it will have. Thinking about AI not simply as a technology investment, but as a challenge of job design, skills, and leadership. And recognising that getting someone into work is only the beginning: helping them stay, develop, and progress matters just as much if we are to turn the tide on labour market inactivity.
“I don’t expect the Chancellor to announce a complete national workforce strategy in a single Budget. But neither would another grand document or initiative, on its own, solve the problem.
“What’s needed is a clear commitment to bringing the different strands of workforce policy together, with employers properly involved in shaping and delivering the result. That is the only way we will find the performance and productivity that will help firms to grow, raising wages and paying taxes that will close the fiscal gap.”
About the CIPD
The CIPD is the professional body for HR, learning and development, and the wider people profession, established by Royal Charter to promote and develop the art and science of people management for the public benefit. When people management is done well, organisations perform better. Productivity improves. People have greater opportunity to develop, progress and participate. And stronger organisations contribute to greater prosperity and better economic and social outcomes. Our role is to set the standard for professional people practice, help our members reach it, and make the profession's impact impossible to ignore. With more than 160,000 members globally, we are an independent, practitioner-focused and evidence-led voice for the people profession. We are advocates for what it achieves, trusted advisers to our members, and amplifiers of their work. We help people professionals build the capability, credibility and confidence to solve organisational problems, design better workplaces and drive performance and growth. www.cipd.org
