Labour market review identifies incapacity benefit problem

Government efforts to get more people off incapacity benefit and back into work need to include a greater effort to win employers over, research suggests.

The findings from the latest quarterly Labour Market Outlook from the Chartered Institute of Personnel and Development and consultancy KPMG also highlight rising medium-term confidence in the jobs market.

Incapacity benefit findings
The quarterly survey of more than 1,000 UK employers reveals that:

  • 18% of employers admit to not considering invalidity benefity claimants with a history of mental ill health for employment
  • 10% make the same judgement for claimants with a history of physical ill health
  • For private sector employers in the service industries, these figures rise to 23% for claimants with a history of mental ill health and 10% for those with a history of physical ill health
  • For employers in manufacturing and production, the figures are 25% and 17% respectively.

The research also provides some useful pointers for policy-makers keen to deliver on the government pledge to get 80% of all people of working age into work:

  • One of the main concerns that prevent the recruitment of invalidity benefit claimants, highlighted by 17% of employers, is a about lack of skills
  • Almost two thirds of employers say more invalidity benefit claimants would be hired if grants were available to assess and improve the skills and development needs of potential recruits
  • More than 90% of employers say that GPs could play a more informed and proactive role in helping people return to work quickly.

John Philpott, chief economist at the CIPD, said: “Getting people off welfare and into work is not as simple as setting targets – you’ve got to win the hearts and minds of employers too.

“With a bit of extra support, and some effective work across government departmental boundaries, employers are sending out a clear message that they have a positive role to play in achieving the government’s 80% target for people of working age in employment.

Wider labour market trends

The report also takes its regular look at the overall state of the labour market.

Employers are more confident about the future – with a 12% positive balance of employers expecting to be taking on more staff in one year’s time (34%) over those expecting to be employing fewer (22%)

However, there has been a notable increase in the number of employers expecting to make some redundancies in the next quarter – 27%  – up from 25% in the last quarter and the 22% average recorded during 2005.

Broken down by sector, redundancies are expected by more public sector employers (34%) than for any other sector – providing further evidence of the extent to which the “job-for-life” assumption in the public sector no longer holds true.

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