Giving people a small nudge in the right direction can make a big difference to UK job creation, according to Ed Davey, employment relations minister.

Speaking recently at the EFF, the trade body for manufacturing, following the government’s proposals to boost employer confidence by reforming the UK’s employment relations, Davey argued that small changes of policy could give hiring a real boost.

Davey gave as an example the government’s Work Programme launched in the summer. “What is brilliant about it is that the people delivering it are heavily incentivised,” he told Recruiter.

Under the programme, providers receive the bulk of their fees only after the person has been in a job for three or six months.

Davey continues: “They [the employment providers] see the employers as a customer. They make sure it is a sustainable job and they look at how to employ people in a much more detailed way than in the past.

“For a given level of demand [in the economy] I do think that we can have more jobs,” Davey added. Davey explained that the government was adopting the principles of so-called nudge theory. “What we are trying to do is to nudge people to behave in ways that are in people’s own self interests, and in a way that they would behave [if they weren’t constrained].”

Legal constraints are a major barrier, and one way Davey mentioned that the government is helping people avoid being held back by them is with proposals for a rapid resolution scheme for Employment Tribunals.