CBI reveals principles to overcome UK labour challenges

Employers and the government need to stop taking an ‘analogue’ approach to addressing modern skills needs, according to the Confederation of British Industry (CBI) which sets out new principles to boost productivity and overcome UK labour market challenges.

In a speech to open the CBI Future of Work Conference today, director-general Tony Danker will say that a new, “radical” approach is needed to address the current labour crisis, which has been exacerbated by generational shifts alongside the Covid-19 pandemic and longer-term population trends.

This, he will say, will require businesses and the government to stop fighting the “same old” war for talent.

“We in Britain don’t have the workforce and the skills we need to prosper and grow. Why? Our demographics have changed. The population is ageing. And a generation in their 50s and 60s – with private pensions and property wealth – can take early retirement,” Danker will say.

“We are suffering from a mental health epidemic. It is keeping many at home, and impacts many more still in work. More broadly, the pandemic has changed perspectives on the balance of work in our lives and the way we lead them. This means many may work still, but not like before.

“Meanwhile, in this country, political views on immigration have hardened, with politicians afraid to explain its benefits even in a world of massive labour shortages. And technology has evolved so fast, that 90% of today’s workforce need to retrain by 2030. Yet our skills system is still operating in an analogue world – in so many ways.”

He will set out five new principles the CBI believes employers and the government should embrace in order to overcome UK labour market challenges:

1. A childcare revolution, where free childcare hours are expanded to cover 1 to 2-year-olds to get more parents back to work, as well as more free hours for 3 to 4-year-olds.
2. More employer-led wellbeing interventions to prevent physical and mental health risks and reduce the impact of ill-health on the workforce.
3. Make flexible working a mainstream practice.
4. Align the UK’s skills and immigration policies, including reforming the apprenticeship levy into a new skills challenge fund which businesses can access to pay for accredited training, as well as taking a cross-departmental approach to immigration to attract the best talent in the world.
5. Embrace automation and artificial intelligence to help the UK work smarter and keep up with competitors across Europe.

Danker will say: “We need more robotics and AI to help us deploy the people we have more effectively, as well as take the place of people we can’t hire. Any firm not reviewing now how to do this will find themselves chasing in vain to catch up.

“The politics of automation have changed too. Politicians and academics now champion it as a replacement for immigration. They seem to ignore the reality that it’s likely to replace as many if not more skilled jobs than lower-skilled ones. They seem to believe the UK can miraculously achieve an economy with only higher-paid, higher-skilled jobs. They are wrong about that. But not that automation and AI are now a must-do. They are.”

He will also outline three further principles that employers should follow to attract the best talent:

1. Progressive business strategies, with a central sense of purpose and a commitment to bettering employees’ lives. Younger workers especially are looking for value and purpose in their jobs.
2. Ensuring work is a platform for a better life, including making work meaningful and rewarding in terms of pay, health wellbeing and flexibility.
3. Striking a “new deal” for workers, by constantly evaluating and evolving their offer to employees and prospective candidates.

The CBI Future of Work Conference takes place in London today and features speakers including Angela Raynor, deputy leader of the Labour Party, the education secretary Gillian Keegan, and Simon Lambert, chief learning officer for Microsoft UK.

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