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Ian McCartney - Former Minister of State for Competitiveness (May 1997 - Jun 1999)'Institutional And Organisational Obstacles To Labour Market Participation' |
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This morning's session addressed the needs of integrating a specific group of workers into our labour markets. This afternoon we will be concentrating on institutional and organisational obstacles to labour market participation. This is important because we are changing from a world where people expect jobs for life to one where the aim is employment for life. We need to look at the barriers that can prevent this happening, and see what can be done to get rid of those barriers. There are two important cultural barriers to be broken down: -the attitudes of employers who think that training and development of their workforce is a cost rather than an investment; and -the attitudes of workers themselves, such as those who have been in the labour market for a long time but not in education since their original school or college. They may think lifelong learning is not for them. We need to challenge that. In the UK, we have found that workers spend longer planning their annual holiday than on their own career development! So, why is change necessary? Why do we need to challenge ingrained attitudes? A process for modernisation We are still in the early stages of a fundamental shift, from the technology of mass production in manufacturing industries, to technology of the information society. This also means a shift of the organisation of enterprises and of work itself. This requires new skills and competences, to meet new and different demands on workforces. There is a need to shape policies for the modernisation of work, and there is a strong expectation of the social partners to shape the new policies this demands. They have a key role in this, and in establishing and reaching common objectives. What are our objectives? I would say they are
There is considerable agreement that improvements in productivity, through a better organisation of work, are necessary if individual enterprises are to improve their competitive position and if the Community is to achieve the above objectives. In addition, a positive approach to reconciling the needs of flexibility and the needs of workers for security in change, is essential. Security for workers means a more stable, versatile and motivated workforce. Flexibility not only promotes corporate productivity, but also improves the quality of working life. In my view what we are talking about is:
If we want to generate more jobs and include more people in the labour market, we must - across Europe - increase the flexibility of our labour markets. We must, in particular remove the barriers which prevent employers from creating jobs and taking on workers. Our concept of flexibility has an additional dimension: the requirement to strike a balance between the needs of businesses and employees. When Tony Blair addressed the TUC Partnership Conference in London on 24 May, he talked about recognising the realities of the modern world: living in a global economy, where competitive pressures and technological and demographic change are affecting the way we all work. To meet challenges of these changes we must move away from the old structures of "us and them" in employment relations. Partnership is the key to developing and furthering employment relations in the UK. People are a company's most important asset. Greater adaptability at work is one of the key elements of the UK government's strategy. Employers are responding to this. For example, ASDA, a major supermarket chain has embarked on a cultural change programme, rearranging departmental management rotas so that managers are able to commit themselves to working no more than 45 hours a week, whereas previously it was not unusual for the working week to be between 55-60 hours. Partnership in the workplace. Another key element of the government's strategy is partnership. This means -
Both employers and employees have a role to play. They must take responsibility for developing constructive relationships in the workplace. Partnership is all about a balance of rights and responsibilities; both employers' right to expect commitment and flexibility from the workplace, but with the responsibility to treat the workforce fairly and to train and develop them. These are our objectives. What are the obstacles in our way? Institutional/organisational barriers Of course, discrimination occurs in the labour market. Not only racial discrimination: an individual's chance of employment depends on the type of area they live in, their gender, their nationality as well as their ethnic origin. It is vital for businesses to realise that this occurs and that it is bad for business. Any form of discrimination not based on business objectives reduces the chances of getting the best person for the job. The message is: recruit on the merits of the individual - good business is fair business. Being able to reach and employ older people, women returners or the unemployed could dramatically increase the competition for positions. A company should go further if they want to be really competitive, however. Positive action can be taken and can make a real difference to the business when connected to the business's objectives and bottom line. This means companies looking at their current workforce first:
Once this is done, companies should be asking themselves questions about their recruitment and retention processes:
All this looks expensive to many small companies but they should not be put off. Focused recruitment can often be cheaper, targeting smaller circulation media with cheaper advertising rates. Connecting with labour market intermediary organisations in areas of high unemployment can help focus training for the unemployed, and provide access to post- employment support and other subsidies or training support, as we are using successfully in the New Deal for the Unemployed. We have ourselves recently adopted such an approach to the recruitment of employment tribunal lay members. We need employment tribunals to reflect the changes in multi-cultural Britain. By considering and accepting applications from people from a wide variety of backgrounds, this will be achieved and confidence in the system of tribunals will be kept high. The new recruitment process will, therefore, not only allow more people to put themselves forward for nomination, it will also ensure that the appointments are based on merit, are transparent and open to public scrutiny. It should also encourage the appointment of members from a wider variety of backgrounds, with particular emphasis on achieving a higher proportion of women, people from ethnic minorities, the disabled and small business on the panels. There is help available for companies in the UK on these issues through our business support services. DfEE issues guidance on equal opportunities and Andrew Smith has just published a code of practice on age diversity. The Institute of Personnel and Development is active in this area as is the Commission for Racial Equality. Another institutional barrier can be the social security system, if finding a job means that a person earns less than they would receive in state benefits. We are addressing this problem, by making work pay. Work is the best form of welfare for people of working age. The aim is to rebuild the welfare state around work. For both individuals and families, paid work is the most secure means of averting poverty and dependence. Family Friendly policies We all know that family-friendly employment policies benefit individuals, and we looked at some aspects of this this morning. But family friendly policies also support competitiveness - ensuring that skills and experience are not lost, either to the individual employee, to the individual employer or to the economy as a whole. A good example of what can be done is provided by one of the UK's largest retailers, "Boots The Chemist". Boots operate a number of flexible working schemes: career breaks, job sharing and school term-time contracts. Later this month I will officially open a centre for the care of the elderly, based at a shopping centre in the West Midlands of England. This centre is unique in Europe. It enables the dependants of workers to be cared for so that people can continue to work or find work. Costs will be subsidised within the means of the employee. It is the first facility constructed in the workplace. And it shows how large firms can work with smaller firms, which might not otherwise be able to afford to be involved. A facility to reduce stress, worries and concerns of the employee must make good business sense for the employer. It will inevitably produce a higher rate of productivity and decrease in absenteeism. The growing importance of work organisation as a source of competitive advantage in the knowledge-driven economy We also need more imaginative use of technology. As knowledge becomes the most important source of competitive advantage, companies are relying less on exploitation of physical resources to achieve success. Increasingly the way that resources - especially human resources - are organised, provides one company with a competitive advantage over another. The global nature of competition With the global nature of communications and markets for goods and services, competition no longer comes necessarily from within the same locality. If another company at the other side of the globe has found a better way of producing a good or performing a service, then they are likely to be the new competition. Companies need to start thinking harder about how they should organise their business around the potential offered by electronic-commerce so that they too can be globally competitive. The potential for radical change The factors which are creating the knowledge-driven economy - increasing use of information and communication technologies; scientific developments; global competition and changing demands - are bringing about the possibility of radical change in the way we work and the way our companies do business. It will therefore pay for us all - in Government, business and academia to be alert to changes which are taking place. We need ready to respond to radical change - both by helping business to foster a successful economy and by enabling individuals to adapt positively to a new world of work. Employability New ways of working require people to have greater employability, greater adaptability to changes in the workplace. This requires investment in training and in improving our education systems. Lifelong learning is the key to our future success We need to anticipate and plan for change, both at national, regional and company level. We need to anticipate the skills bottlenecks that can stifle growth. This is a task for Government, employers, social partners and individuals alike. The Government has already announced a number of innovative solutions, such as the University for Industry and Individual Learning Accounts, which we believe will improve the skills base of the UK. Many of our best businesses are also acting on this too. Many are establishing corporate universities, such as British Aerospace and Lloyds TSB. Others, like Scottish Power and Stagecoach, have set up Open Learning Centres. All of these initiatives allow employees to learn new skills and knowledge in the way that best suits them, at a time when it best suits them. And it's not just large businesses that are taking such steps. Small businesses are too. A small automotive component supplier, Frederick Woolley's in Birmingham, have also set up a Learning Centre. They have opened it to both their suppliers and other local companies with which they work. We want to encourage more and more businesses to work together in this way and the DTI will be publishing, later this month, a best practice guide to spreading learning through business networks. Conditions for successful new organisation So we should embrace the changing organisation of work subject to two conditions: (i) we must have decent minimum standards to prevent unreasonable demands on workers. The working time directive is a good example of such standards; (ii) we must have a partnership approach to introducing change. I expect that this afternoon's other speakers and discussion will give us a better idea of the barriers to work, and what is needed to break them down, in order to achieve the objectives of more productivity, flexibility and security, which together can improve our competitiveness and increase employment. |
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Other speeches by Ian McCartney - Former Minister of State for Competitiveness (May 1997 - Jun 1999)
(the following are available from the archive) |
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