John Cridland, head of the CBI (Confederation of British Industry), says British companies should pay workers more and offer them better opportunities so that they may come out of dead-end minimum wage jobs.
In his New Year message, John Cridland, CBI Director-General, says that we need to make sure that all British citizens benefit from the economic recovery that is taking hold. Economic growth should be properly balanced across the country, he added.
“The recovery is taking root and business leaders have a spring in their step compared to this time last year – but this is no time to rest on our laurels. Businesses must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work.”
“As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze. It’s really positive news that jobs are now being created fairly consistently across the UK. Encouragingly, this is also shaping up to be a full-time recovery with the majority of new jobs permanent.”
For the first time since the start of the great recession, the majority of companies will be increasing the size of their workforces in 2014, taking on more graduates and apprentices.
It is thanks to the UK’s flexible labor market that the economy managed to survive during a long and extended downturn. Our relatively low unemployment rate would be threatened if labor flexibility were suffocated by inappropriate regulation, Cridland emphasized.
People who propose restrictive legislation “miss the point; it’s not just the floor we should be concerned with – as Britain has a strong base of employment rights. It is also the escalator – how we ensure people move on from that first job.”
Although salaries will increase in 2014 as economic growth consolidates and productivity improves, there are still too many employees stuck in Minimum Wage jobs with no clear career prospects. Cridland believes this “serious challenge” must be addressed by firms and the Government.
Regarding skills and training, Cridland said:
“The future of the UK economy is undoubtedly higher-value and higher-skill, so training is critical to helping people move onwards and upwards, and key to our national success, particularly when it comes to delivering an effective industrial strategy. We need to widen the gateways into higher-skilled work for far more people, including those already working, or those for whom a degree may not be the best option. Of course, that doesn’t mean the end of the traditional three-year degree and universities will continue to play an important role in delivering growth.”
“However, at the moment, employers and potential students alike simply don’t have enough information on study options like higher apprenticeships and part-time higher education. That’s despite some excellent, well-established, programs at companies like McDonald’s and Asda.”
According to the CBI, over fifty percent of British companies either have or are considering implementing schemes to help their workers reach their full potential; one quarter of them are investigating whether there are potential issues that are holding staff back.
Move away from consumer and government debt
The 2008 financial crisis and the Great Recession that followed should have taught us about the perils of relying on consumer and government debt as drivers of our economy. As economic growth takes a stronger hold, it is important to make sure that the recovery is well-balanced, Cridland stressed.
“A sneak preview of our new CBI growth indicator, which we will officially launch at the end of January, suggests the recovery is broad-based and continues to gather pace. This new value-added analysis across our key economic surveys, covering the retail, manufacturing and service sectors, will act as an important bellwether on how the recovery is shaping up next year and beyond.”
“In 2014, we do still need to see far more business leaders getting on planes to sell their products and services in new markets around the world. And as confidence continues to improve, we also need to see more companies re-investing their profits in the UK. And while the economic outlook is improving, business is moving into a period of political uncertainty with European elections, a referendum on Scottish independence, a general election, and a potential EU referendum all looming. Our view is clear: we are better off inside the EU reforming it from within, and the UK is more than the sum of its parts and we must stick together.”