Recruitment agencies have a key role to play in maintaining the flexibility of the UK labour market, but workforce flexibility alone is not enough to fuel an economic recovery.
That was one of the main messages to emerge from a debate by a panel of labour market experts, as they discussed the state of the UK labour market and the economy yesterday (25 May), on the second day of the International Confederation of Private Employment Agencies' (Ciett) World Employment Conference 2012 in London.
Brendan Barber, general secretary at the Trades Union Congress (TUC), said that recruiters had a legitimate and important role in helping employers to manage peaks and troughs in demand for staff. David Frost, former director general at the British Chambers of Commerce agreed they had a central role to play in maintaining the UK's labour market flexibility.
John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD), agreed that labour flexibility was a good thing for the UK economy.
However, Philpott said it was important to distinguish between the labour market and the economy. “The underlying UK labour market has performed very well,” he said. On the other hand, however, he said with unemployment “well above 8%” the UK economy was underperforming.
Philpott called on the government to relax its programme of austerity. “The government can borrow at 0% interest, it should borrow more and spend it on infrastructure projects,” he said. This would also have the advantage of adding to the future productive capacity of the economy, he argued.
Philpott added: “If we were to see a reasonable increase in demand unemployment would fall quickly and sharply.”
Frost agreed that the economy and employment would be given a boost by infrastructure projects, and he urged the government to go ahead with the controversial expansion of Heathrow Airport.
“We need a plan B,” said Barber, warning that that the cuts made so far were only the beginning, with more than 700,000 jobs expected to be lost in the public sector.
Frost called on the government to do more to improve education, describing apprenticeships that can be completed within three to six moths as “a national disgrace that undermines the future of young people”.
A parliamentary report by the House of Commons Public Accounts Committee claimed this week that apprenticeships of less than six months provide “no real benefit to trainees or their employers”.
reported last month (2 April), the minimum duration of apprenticeships must now be at least 12 months
except in some exceptions.