Underemployment and its impact on workforce politics

Underemployed (adjective) 1.employed at a job that does not fully use one’s skills or abilities.
2. employed only part-time when one is available for full-time work.
3. not utilized fully.

The unemployment rate dropped in the last three months, but figures show that the rise in part-time and temporaryworkers has been significant. There are now 1.4million people ‘underemployed’ in the UK; that is that they are working, but not in a role which is insufficient in some way to the workers, for example pay, hours or skill-level.

Whilst some work is obviously better than no work, the strain underemployment puts on workers and their families is pronounced. The phenomenon is gripping across the market too – whereas many would expect women to be part-time workers, the latest figures show that 645,000 men are now working part-time. Many people are finding the need to work multiple jobs to make ends meet, not only is this a risk to their health, but it’s also a concern to employers as productivity levels are likely to drop.

The impact on workforce moral and politics is, unfortunately, a hugely detrimental one. Although employees are choosing to work on a part-time or temporary basis over relying on Job Seekers Allowance, there is still likely to be a level of resent, especially toward those who are employed on a full-time basis or in desirable positions. HR Managers have an increasingly difficult job to maintain moral in an underemployed workforce, at the same time recognising underemployed talent that could benefit the business if better utilised.

According to the TUC, involuntary part-time work has risen quicker than unemployment since the start of the recession. During this period, the number of men in this position has risen by more than 115%. And nearly a third of young people in work are having to do part-time hours, even though they want a full-time job.

Youth unemployment and the graduation season

With dissertations being handed in and graduation season almost upon us, another influx of job-hungry, educated workers are about to embark on the journey that is the search for their first ‘proper’ job.

The (very) lucky few may already have secured their dream position, but others may find themselves unemployed for a significant period of time. Currently the rate of unemployment amongst 16 – 25 year olds is at 22%.

Last month the Youth Contract was launched, offering businesses £2,000 for every under 25-year-old they employed. The highly-criticised scheme, is aimed at “avoiding a crisis in youth unemployment”, but is paying companies really the way forward?

Part of the cause of the current levels of joblessness amongst youths, is simply that there are so many more experienced workers available to fill positions at the moment, due to high numbers of redundancies. So, should universities and colleges be offering students more work-based experience?

According to an article in Personnel Today, that is exactly what the students want. Research by City & Guilds found that young people want to bridge the gap between education and work, and improve their chances of finding employment by obtaining greater access to employers.

Preparing young people for the workplace is also a major issue when it comes to employability, the research found that, despite work experience placements being common place, irrelevant and poor-quality placements are failing to prepare young people for meaningful employment. Only 33% of 14- to 18-year-olds considered work experience to be necessary when it comes to getting their dream job.

Whilst the incentives of the Youth Contract may be appealing to business, alone it may not be the push that businesses need to kick start youth employment again.

Positive signs for the jobs market

Unemployment has fallen for the first time on almost a year according to the latest figures from the Office for National Statistic (ONS).

The total dropped by 35,000 from December to February, meaning the total number of unemployed now stands at 2.65million.

Whilst the fall is a great sign, the figures are still significantly higher than they were this time last year – 170,000 higher in fact. Nick Palmer from the ONS explains:

“If you look at the longer-term picture, unemployment rose quite strongly during the summer of last year, then the increases tailed off a bit towards the end of the year. So despite this latest decrease, the level of unemployment is significantly higher than it was a year ago…”

Breaking down the figures women have been badly affected in the last, although youth unemployment appears to be taking a change in direction. The number of women without work rose by 8,000 to 1.25million – the highest figure for nearly 25years. News for younger jobseekers is more positive as those unemployed fell to 1.03million, although the rate of unemployment in 16-24 year olds stands at 22%.

A Budget aimed at boosting UK business and encouraging employment

Forecasts:

Today’s Budget forecast some positive figures for the future of UK industry and business, which will hopefully go some way to getting business confidence back on track.

The Independent Office for Budget Responsibility (OBR) has revised the UK growth forecast for 2012 to 0.8%. Unemployment is expected to peak at 1.67m in 2012 before slowly starting to fall again, with the promise of one million more jobs to be created over the next five years.

For business:

Not only did the Chancellor announce a cut in corporation tax, allowing businesses to invest further in their workforce, and continued investigation into the rolling up of income tax and National Insurance, he also focused on transport and infrastructure investment and sector specific funding.

The construction sector is likely to see a strong recovery with further investment in the housing sector. With the industry being such a heavy user of temporary agency labour this will be welcome news to temps and their supplying agencies.

Railways in the North will be improved, bringing jobs to the area and boosting business and there are plans to improve air travel in the South East of England.

The Chancellor is keen to encourage global businesses to move to the UK with plans for enhanced capital allowances for businesses setting up in new Scottish enterprise zones in Dundee, Irvine and Nigg and Welsh enterprise zone to be created in Deeside.

The Science, Engineering, Aerospace and Energy sectors also benefited from announcements and extra funding.

“Changes to corporation tax will encourage businesses to invest in their workforce. Plus, in continuing and speeding up year-on-year reductions the Chancellor creates certainty for businesses, which is so important in encouraging growth.” Kevin Green, REC Chief Executive

What was left out?

Many had speculated that the Government would go some way to easing EU red tape for businesses, relaxing laws around the use of agency labour and simplifying the new auto-enrolment pension scheme – due to come into effect later this year – in order to encourage job creation.

Temporary work bucking national employment trends.

The use of temporary agency labour has increased again in most sectors, in antithesis to the latest government figures regarding temporary employment.

The manufacturing sector has seen it’s second increase in the use of temps this year, suggesting the industry could be returning to growth in the first quarter of 2012. Date from de Poel shows that the number of hours worked by temporary staff has increased year-on-year by 35% in January and 48% in February as the manufacturing sector has increased its labour needs to support improved levels of output. Reports out by the Purchasing Managers’ Index (PMI) showed levels of activity in manufacturing were at its highest for eight months in January 2012 thanks to a rise in new orders and an increase in production.

The data also showed usage of temporary labour rose by 79% within the Business Services sector, 30% within Care and 4% in Construction. Facilities Management and Logistics sectors reduced their use of temporary labour during February 2012 by 33% and 27% respectively.

In complete contrast the Office of National Statistics figures release today (14/03) show unemployment at a near 17-year high, with 2.67 million people now out of work.  Despite the increase, many commentators have suggested the figures aren’t too bad:

In an interview with the Financial Times,Howard Archer, an economist at HIS Global Insight, said the data were “mixed overall but the rise in unemployment does appear to have moderated recently which supports hopes that the economy is returning to modest growth”.

For a complete overview of the latest employment statistics for both the permanent and temporary arenas take a look at our Employment Snapshot.

Temporary agency staff…a way out for youth unemployment?

Companies are wary of employing the young, and at a time when there a thousands of older, experienced and well qualified workers unemployed and often willing to work for less than they deserve, it is resulting in a legacy of youth unemployment. So, could offering 16 – 24 year olds temporary positions be the answer?

Permanent staff are seen as an expensive and risky outlay in a time of economic turmoil and the recent recession has supported this theory with temporary agency workers being in constant demand.

The benefits of employing young people should not be forgotten though. Fresh out of college and university graduates are eager and willing to learn – often more so if they have found themselves unemployed for long periods, they have no previous employment ‘baggage’ making them easy to adapt to your businesses way of working and they often have less commitments than older workers, so they’re more willing to work overtime and can be flexible with hours.

Taking on graduates on temporary basis is much less of a risk; think of it as a ‘try before you buy’ option, with over a million 16 – 24 year olds currently unemployed there is a huge pool of talent for employers to choose from. Not only that but the graduates themselves are given the opportunity to gain work experience, start earning and achieve a foot on the career ladder.

Temporary positions on the up, as unemployment continues to climb

Unemployment increased by 48,000 between October and December official figures from the Office of National Statistics (ONS) show. That brings the total amount of people out of work in the UK to 2.67m.

It’s not all bad news though: The Recruitment and Employment Confederation (REC) latest report on jobs showed an improvement on temporary appointments in December. Our monthly figures also show a marked increase in the use of a flexible workforce. e-tips ® data shows the use of temporary staff in the UK rose by 13% in January compared to the same period last year.

 

The TUC have said that the unemployment figures could be more than double the amount that the ONS has announced. They believe the way the figures are calculated skews them. Using an American calculation, which includes temporary agency workers, those in part-time jobs because they cannot find full-time work and recent redundancies, would increase the figure to 6.3 million.

The ONS figures also revealed a slight decrease in youth unemployment but an increase in people claiming job seekers allowance.

The amount of job vacancies rose by almost half a million in the three months to January.

CIPD forecasts more employment misery in 2012

Private sector redundancies are predicted to contribute to the worst job prospects since 2009. The news comes as another survey predicts that a double-dip recession is not inevitable.

According to the Chartered Institute of Personnel and Development (CIPD) “The first quarter of 2012 will be the most difficult quarter for the jobs market since the recession, as the number of private sector firms surveyed planning to make redundancies increases.”

However, a separate report by the employers’ organisation, the CBI, suggests the UK economy will grow in 2012. It found companies were starting to invest in new equipment and in finding new export markets, despite the CIPD’s research finding many companies were to make redundancies.

The conflicting news will do nothing to help employers who have yet to decide whether staff cuts are necessary. The CIPD’s Public Policy Advisor, Gerwyn Davies, suggests that such news is the cause of many redundancy pushes:

“Whereas employers were in ‘wait and see’ mode three months ago, more private sector firms, particularly among private sector services firms, have decided to push the redundancy button in response to worsening economic news. This will exert yet more pressure on a jobs market that is buckling under the strains of contractions in economic growth and public sector employment.”

Lazy phase of unemployment?

For a man never normally shy in dispensing his effervescent wisdom, it comes as no surprise that Mayor of London Boris Johnson’s opinion that the current 2.68 million UK unemployed lack the desire and work ethic of their foreign counter parts in order to secure their long or even short term futures is the reason so many are out of work.

The “prêt a manger phenomenon”, in which he made reference to the sandwich chain to highlight this ever growing trend, explicitly reasons why current unemployment stands at its highest number since 1994.

With so many out of work, and a seemingly lack of willingness from the participants of this growing figure to curb it, where does the Government begin in order to tackle the issue; or is it even their responsibility at all? Is Boris spouting hot air again???

Calls for the unemployed to take on a more ‘enthusiastic approach’ to finding work has resulted in a number of solutions being mooted, from more apprenticeship schemes being made available, to individuals following the temporary agency labour route – at least until the jobs market has a little more prosperity on the horizon.

Although temporary agency workers are currently under scrutiny from employers due to businesses having to adhere to the Agency Workers Regulations, it is a route which could not only put more people back into work, but increase the hunger amongst those that are seemingly happy to pick up their benefit cheques to get back into the working world.

Is a change in the system and how recruitment agency management is handled required?

Would putting more of an onus on the agencies to improve the attitude of the temporary agency worker, in order to mould a better candidate, make them more marketable?

Those that do become temporary agency workers need to try and avoid the more unscrupulous agencies and find an agency that not only finds suitable employers, but instils a positivity that temporary work is the first step to permanent employment.

As always, it’s a two way street, and effective recruitment agency management has to be coupled with the initial desire from the individuals to want to work in the first instance.

Now Boris has highlighted the problem we look forward to hearing his solution…..

Unemployment rises to a 16-year high

Unemployment rose by 118,000 in the three months to November to almost 2.7milllion. The latest figures from the Office of National Statistics show that the rate is at it’s highest since January 1996.

Youth unemployment also increased by more than one million, taking the amount of 16-24 year olds out of work to 22.3%.

Recent statistics released by the Recruitment and Employment Confederation (REC) show that positions for temporary agency workers are also declining – however only slightly.

It comes as the news is getting increasingly gloomy, with each day another story of a business going into administration or making large-scale redundancies making the news.

In the last week well-known names such as Peacocks and Past Times have announced that they have appointed administrators, Dixons – who own Currys and PC World – have revealed further declining sales and RBS is cutting 3,500 jobs.