Sunday, June 16 2024

The voice for the global staffing industry

The Skills Crisis: a manifesto for growth

Tania Bowers on APSCo’s the core Manifesto recently published at the House of Commons

The UK’s professional skills crisis is intensifying. There’s a wealth of data that shows the dearth of talent in core remits and most, if not all, recruiters will have felt the impact. However, while there may be a recognition that this is a crisis, solutions have been thin on the ground.

In order to address this, APSCo has launched its manifesto, which tackles the key barriers to creating a strong labour market. Initially launched at an invitation only event at the House of Commons, with  a cross party group of MPs, peers and Minister in attendance, the recommendations have been widely applauded. Ministers have welcomed not only our recommendations, but also the timeliness of APSCo’s manifesto for skills, given the growing difficulties of sourcing highly skilled professionals that so many businesses face today.

There’s clearly both a need and appetite for the solutions we outlined in our manifesto to address the stark dearth of resources that the UK faces. So, what policy changes do recruiters want to see?

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The right workforce regulatory environment

There’s a fine line between appropriate regulation and over-protection of all workers, with the latter often a result of taking a catch-all approach to policy decisions. However, the right balance desperately needs to be struck, particularly given the increasingly complex nature of work today.

Aside from the nuances in requirements of the highly skilled contract workforce and agency staff that must be recognised in employment law, access to international resource is also becoming a critical requirement for the recruitment sector. Most of APSCo’s members are global businesses or deliver international services in some form. Those that fall into this category have long reported the scarcity of global talent and have become concerned about the UK’s ability to remain competitive due to a lack of flexible hiring policies. This has to change.

While there won’t be an overnight solution, we have called for a clear definition of self-employed status to be written into legislation in order to create a legal environment that is conducive to appropriate support of independent contractors and the self-employed.

This must clearly differentiate between the highly skilled segment of this workforce, and those in the less independent elements of the gig economy. There also needs to be allocations for skills development and appropriate taxation of contractors and the self-employed to ensure this critical source of skills is supported, rather than hindered in their growth. The reforms should also include the potential exclusion of highly skilled, and paid, workers from the Agency Workers Regulation.

APSCo and its members remain steadfast in the need for an overhaul of Off-Payroll and IR35. The problems we have historically raised with the existing regulation haven’t yet fully been addressed and we are calling for a more comprehensive review of the rules to strengthen the labour market in the country.

We certainly support the recognition that umbrella companies need to be regulated appropriately, but the recent announcement during the tax maintenance day left a lot to be desired. More clarity is still required as to how rogue companies will be stamped out, without having a detrimental impact on the labour market.

While our manifesto was more broadly focused on strengthening the UK’s recruitment sector, we also provided an outline as to how the NHS skills crisis in particular can be addressed. This involves greater collaboration with staffing partners and reforming hiring practices for temporary staff to deliver immediate relief to the NHS.

Boosting workforce skills through training and development

While shorter term solutions to the professional skills crisis are needed, a longer-term strategy to upskilling the UK workforce is also crucial. Delivering this will require a co-ordinated national strategy for skills that is aligned with investment in education. This should include identifying and channelling funds into regional hubs of excellence.

Our recommendations around Apprenticeship Levy reforms were a stand out point for the MPs and policy makers that attended the launch of the manifesto. Existing levy rules don’t match the flexible nature of the world of work. APSCo has outlined core changes including allowing the funds to be used for shorter, more flexible training that is more accessible to the more inactive segments of the workforce, including 18–24-year-olds, lane changers and older workers.

With many of our larger recruitment and outsourcing members also revealing that Levy pots are going unused due to an inability to spend these on their large payrolls of staff, agency workers and independent contractors, we have also called for the scope to be widened to support the upskilling of these groups.

While the UK is no longer part of the EU – which has impacted the country’s access to skills – new means of bringing critical talent into the UK are required. A flexible short term visa route for those deemed to be highly skilled foreign employed and self-employed is the best course of action. We have also advised that existing programmes like the Global Talent Scheme need to be expanded to encourage more core workers into the country.

Although this is an election year which creates a level of uncertainty, it is important that international trade negotiations include agreements for professional qualifications and skills to facilitate the transfer of highly skilled professionals.

Supporting fairness and inclusion in the workforce

There’s no doubt that we’re operating in a totally different landscape in a post-Covid world. In this new working environment, fairness and inclusion is crucial, but there needs to be allowance in Government policy to encourage and drive this.

The topic of skills-based hiring has been building momentum for some time and is something which will deliver significant value to the UK labour market. But moving to this approach does require a step-change in mindsets and regulation. Elements need to be removed for recruitment to enable this approach, including replacing the traditional job specification with a greater focus on hard and soft skills assessment and task-based jobs specs. Guidance must be provided and driven by policy to enable this approach and APSCo will be exploring this in greater detail with policy makers over the coming months.

More broadly, though, there are means of encouraging greater inclusion in recruitment. Reforming childcare support genuinely supports working parents and supporting policies targeted at older workers are just two examples which are already being explored, but more can be done. Legislation that encourages people to stay in work is one such option, which can be achieved through tax incentives on occupational health, mental health and physical health screening budgets.

Harnessing technology for the skills revolution

Our fourth and final manifesto focus centres on the potential of technology such as AI in the staffing sector. Delivering against the points mentioned earlier such as skills based hiring needs to be enabled through appropriate use of tech innovation. But regulation and guidance are necessary to prevent misuse and minimise the risks for recruitment businesses.

The recently published DSIT AI guidance for recruiters was certainly welcome, but a standard for the use of artificial intelligence in hiring is needed. Any such regulation has to ensure accountability and transparency is clearly defined in the staffing supply chain. There has to be absolute clarity around responsibilities and liabilities to mitigate against risks and biases in technologically enabled hiring. Whatever shape this AI regulation takes, our recommendation is that it aligns with EU and US guidance as well, given that this is a global challenge to address.

Our manifesto has been developed to address the professional skills crisis which threatens the strength of the UK economy. While it was promising to see so many policy makers back our recommendations, what’s needed now is action – something which will remain top of the agenda for APSCo in what is not only a general election year, but also a time when we celebrate 25 years of recruitment excellence.

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