CBI: government and bosses must commit to boosting skills
10 November 2014 -
Business association publishes range of recommendations to help politicians boost economic prospects among low-income households
Government must focus on providing more effective “ladders to higher-skilled, higher-paid work” to boost real wages for UK employees, according to the Confederation of British Industry (CBI). Upon today’s London launch of its new report A Better-Off Britain, CBI director-general John Cridland said that increasing productivity, competitiveness and training investment are key to raising pay in a sustainable and organic way.
“To ease pressure on families and people on low incomes,” he said, “we want immediate action, including cutting employee National Insurance and making childcare more affordable. Then we have to tackle the long-term issues. Higher productivity leads to better wages, so we must have a laser-like focus on boosting firms’ competitiveness. We also need to create better ladders to higher-skilled, higher-paid work and improve our education system for all, to overcome disadvantage. Business leaders need to step up to the plate, as well as politicians.”
One particular ladder that the CBI wants reinforced is that of available skills. With the breadth of skills required for middle-ranking roles growing dramatically over the past 20 years, it is estimated that half of all jobs need personnel to have at least a Level 4 Higher Education qualification.
As such, the organisation says, legislators, educators and businesses must focus on delivering more vocational routes that teach wider sets of abilities, as that will help more people gain the new middle skills they need. Equally, leaders must make a “board-level commitment” to helping employees with their career development, and incentivising line managers to make that a priority. Employers must also work with educational institutions to make sure courses are tailored to the demands of the economy, by rewarding them for specialisation and employment outcomes – not just attendance.
CBI Deputy director-general Katja Hall said: “Our economy is changing. Middle-level jobs now require ever-higher levels of skills, and many firms across the country are crying out for people to fill these kinds of roles. At the same time, a third of workers in the lowest pay group have been stuck there for at least 14 years, which is an unforgivable waste of potential. We need to help more of these people retrain and boost their skills and confidence – increasing their chances of moving up in their careers to the higher-paid roles our economy is creating.”
According to CBI’s report, whether it’s the making of a product or the delivery of customer service, the amount of value added to the UK economy each hour closely aligns with pay levels. As such, the group says, the more companies are competitive, the more wages will increase. However, in reality, UK productivity is still 16% behind where it would have been had the economic crisis of 2008 not happened.
With all that in mind, the report asks for the Office for Budget Responsibility (OBR) to be placed in charge of reporting on key productivity trends and challenges – just as the Australian Productivity Commission does on the other side of the world. Furthermore, the CBI backs a simplification of the support network for smaller and medium-sized firms, improving their access to public-sector contracts, finance and export deals.
Cridland explained: “The productivity challenge leaves many economists scratching their heads. There is no blanket solution – what value-added is varies from sector to sector, and business to business. By working together on boosting investment and innovation, businesses could make a real difference to growth and pay.” He added: “Business wants to help build a more prosperous Britain where everyone has the chance to get on in life.
This is the right thing to do to build a stronger and fairer society – and it makes good business and economic sense too.”
Read the CBI’s full report Better Off Britain.
For more on these issues, sign up to the forthcoming CMI seminar Essential Management Skills.
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