Demand for unqualified workers expected fall sharply

leaders are warning of a massive fall in demand for unqualified workers,
threatening thousands of jobs.

latest employment trends survey by the CBI and Mercer Human Resource Consulting
shows 29 per cent of firms will recruit fewer people without qualifications
over the next three years.

the survey finds the demand for well-qualified people will grow, with 47 per
cent of firms expecting to take on more graduates.

survey shows that 30 per cent of firms believe skill shortages have a
"significant" or "severe" impact on business. Worst hit are
firms in construction and professional services such as accountancy and legal

addition, 23 per cent of employers expressed dissatisfaction with the numeracy
and literacy of school leavers. Firms said they invest around £23.5bn a year on
training, with much of this going on remedial work to make up for deficiencies
in state education.

Edelsten, European partner at Mercer, said: "The knowledge economy is
putting management and workforce skills centre stage. This will increase
because of less hierarchical organisations, technological change, greater
public scrutiny and globalisation.

management skills are now the most decisive factor to the future competitive
advantage of a significant number of companies. Firms are having to find
innovative ways to attract, develop, involve and reward people."

survey, covering 940 companies employing about 3.5 million people, also shows
that UK firms:

plan to extend performance-related pay. Fifty-eight per cent of respondents use
formal assessment to determine pay.

use high-levels of flexible working. Some 96 per cent of employers operate at
least one flexible working policy and 60 per cent offer three. The most common
forms of flexible working are part-time work, job sharing and flexitime.

struggle to recruit people from diverse backgrounds despite best efforts. Some
33 per cent of firms report a difficulty, with ethnic minorities recruitment
proving the greatest problem. Possible explanations include misconceptions about
their skills not being of value.

prefer to consult employees directly rather than through representatives. Team
meetings are the most popular method followed by e-mail and attitude surveys.
Thirty five per cent of firms have a formal consultation mechanism such as a
staff council.

Cridland, CBI deputy director-general, said: "Companies are serving notice
that there is a time bomb ticking under the job opportunities of the low
skilled. The findings should be a wake-up call to employers, employees, unions
and the Government.

must work together to prepare people for the inescapable realities of the
modern labour market. I hope this will dominate the agenda at the TUC, rather
than the promotion of job protection at the expense of job creation."

pensions, the survey says 24 per cent of firms closed their final salary scheme
to new entrants in the past five years and 12 per cent are considering doing
so. But 64 per cent said they are currently not planning to close their scheme
to new entrants, despite increased financial risks.                                  

Cridland said: "There is clearly a need for a national debate on pensions
as many employers are struggling to maintain traditional provision, despite
their best efforts.

the TUC proposal for compulsory contribution is not a realistic solution. It
would only exacerbate the real problem, which is the falling value of the stock
market. Unions must stop playing the blame game if they want to generate
constructive proposals as well as headlines."

By Quentin Reade

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