News & Publications

National Living Wage Report from the Chartered Institute for Personnel & Development and the Resolution Foundation suggests that the introduction of the National Living Wage this month will force businesses to confront their productivity issues:

  • 54% of employers said the NLW would have an effect on their wage bill, with 18% saying it would be affected ‘to a large extent’, 41% said it would have no effect.
  • Retail, hospitality and health & social care expect a higher impact.
  • 30% of those expecting to be affected said they that planned to raise productivity – 32% of larger companies and 25% of SMEs.
  • Accepting lower profits was the second most popular response, given by 26% of SMEs (who are generally less well-informed about the NLW and the responses available) and 20% of large organisations.
  • The other options were: reviewing benefits (e.g. overtime and bonuses); raising prices.
  • Job losses were thought to be unlikely, at least in the short term – a shift to younger, cheaper workers (the NLW only applies to over-25s) was suggested by just 8%.

Retail 2020: Fewer but better jobs from the British Retail Consortium predicts that improved productivity and the introduction of the National Living Wage will result in “fewer but better jobs” in the near future, with almost 1 million retail jobs disappearing by 2025. Retailers currently employ one in six British workers (about 3 million people) and the sector accounts for a tenth of the economy. Official UK estimates suggest that the increase in the minimum wage will only cost about 60,000 jobs by 2020, but it is not clear how it will affect our labour market, where employment is high but productivity and pay growth are weak. Some US retailers are now paying higher wages, on the assumption that customers will reward shops where higher-calibre employees offer better service.

Employer Skills Survey 2015 from UKCES contains information on vacancies, skill shortages, by occupation, sector and region. Key issues include:

  • Around 1.6 million were deemed to be over qualified and over skilled for their job role – this was most commonly attributed to a lack of jobs in desired higher level roles.
  • There has been a steep rise in vacancy levels among employers – from 560 thousand vacancies at the time of the survey in 2013 to 797 thousand in 2015.
  • Approaching a quarter (23%) of these vacancies were due to applicants lacking the requisite skills.
  • The number of skills gaps among existing staff has remained at the same level at 1.2 million employees (5.1% of the total workforce).
  • Knowledge related to the organisation and its services and specialist skills for the role were most likely to be viewed as lacking from applicants and among existing staff.
  • The demand for improved people and personal skills was also apparent, with time management and prioritisation of tasks commonly lacking across the workforce.

Working Futures 2012 to 2020, from the UK Commission for Employment and Skills, suggests that high skilled jobs are due to increase over the next decade. The number of people employed in professional occupations and as managers, directors or senior officials is set to increase by 20% between 2012 and 2022. However, middle skilled jobs, blue collar and administrative roles are set to decline. There will be a steady demand for lower skill levels, as growth in the caring and leisure industries compensate for reductions in the need for machine, plant and process operatives. This is problematic for a number of reasons, not least because in this ‘hourglass’ economy it can be hard for those in lower skilled occupations to progress due to the falling numbers of roles that could act as their rungs up the ladder.

The future growth of degree apprenticeships report from University UK found that the new degree apprenticeships have the potential to help fill skills gaps and meet employers’ needs. There will be an estimated 1,500-2,000 starts for 2016 across 40 universities. Degree apprenticeships can be particularly attractive to non-traditional students, providing an opportunity for degree apprenticeships to support widening participation goals. The apprenticeships offer a way for universities to diversify their offer and develop alternatives to traditional full-time on-campus study. There is a need to raise awareness among potential apprentices, their parents and those who support them (such as careers advisers).

Response to apprenticeships inquiry from the he Social Mobility and Child Poverty Commission calls on the government to:

  • Increase the number of young people doing higher apprenticeships to 30,000 by 2020, compared to the present 4,200 (19- to 24-year-olds).
  • Develop a UCAS-style apprenticeship gateway that would give young people much better information on what apprenticeships are available and crucially on where those apprenticeships led.

Life after School report by Impetus explains how low numbers of disadvantaged young people are failing to achieve Level 2 qualifications in English and maths by 19. The majority are not progressing towards a Level 3 qualification, or beyond (to university, an apprenticeship, or a job). Post-16 education and training is not supporting disadvantaged young people to catch-up and attain these key qualifications and therefore gain the skills they need to progress into sustained education or employment.

Social Intelligence report by King’s College London and National Citizen Service identifies a gap in young people’s ability to interact with people from different backgrounds. It argues that developing ‘social intelligence’ is essential to the economy of the future and in building resilience against loneliness and mental health conditions. It finds that increased online interaction does not damage teenagers’ social intelligence levels. The findings showed a small relationship in the opposite direction – teenagers with better ability to form friendships reported more online usage thus suggesting that online usage could support the development of their social skills. NCS recommends young people find opportunities to develop social intelligence to confidently navigate the workplace and improve wellbeing.

Youth Unemployment: A Generation in Crisis from Youth Enterprise examines the challenges facing the next generation and preventing them from gaining employment. The poll of young people found that the majority of students aged 16-18 expect to wait at least a few months after finishing education before finding a job, with nearly a third expecting to wait over one year.  The vast majority (90%) also believe employers expect too much of school leavers, including more qualifications and more work experience. Half of this group cited more international competition for jobs as a reason for difficulty in the job market.

London Economy

The latest London forecast from GLA Economics (http://data.london.gov.uk/dataset/londons-economic-outlook-forecastsuggests that:

  • On the whole the outlook for the London economy remains positive for the coming years.
  • London household income and spending are both forecast to increase over the next three years.
  • London is forecast to see rises in employment in 2015, 2016 and 2017.
  • London’s Gross Value Added (GVA) growth rate is forecast to be 3.4 per cent in 2015 with growth moderating to 3.2 per cent in 2016 and 2.7 per cent in 2017

Employment

The Office for National Statistics www.nomisweb.co.uk website has data on employment, unemployment, wages and qualifications at national, regional, local authority and ward level. The latest figures for employment by industry sector (based on December 2015 data):

Sector London % UK %
Agriculture, Forestry & Fishing 0.0 1.2
Manufacturing 2.2 7.8
Construction 5.3 6.6
Wholesale, Retail & Vehicle Repair 11.5 14.7
Transport & Storage 4.9 4.6
Hospitality & Catering 6.7 6.7
IT & Communications 7.5 4.0
Finance 7.2 3.4
Real Estate 2.3 1.6
Professional, Scientific & Technical 13.6 8.7
Administration 9.9 8.4
Public Administration & Defence 4.1 4.4
Education 7.8 8.7
Health & Social Work 10.0 12.4
Arts, Entertainment & Recreation 3.6 2.9
Other Services 2.6 2.6

Future Employment

The annual report from GLA Economics shows that jobs in London are projected to grow by an annual average rate of 0.69 per cent, equivalent to 40,800 jobs per annum, to reach 6.418 million in 2036. The report also provides future projections for both the occupations and qualifications of those employed in London:

  • Employment growth is projected in some service sectors, including the professions, scientific & technical, information & communication, admin & support, and accommodation & food service.
  • Projected declines in manufacturing and some other sectors, including wholesale, transportation and storage, and public administration.
  • Increased demand for higher level qualifications – the proportion of jobs in London requiring either a degree is projected to reach 53 per cent by 2036, with the proportion of jobs with no qualifications reaching less than 5 per cent.

The full report can be found in the GLA London Datastore.

Unemployment

The unemployment rate in London remains higher than the UK as a whole and much higher than the South East. The March 2016 ONS Regional Labour Market Statistics show that:

  • Unemployment in London was 6.3% compared to 5.1% for great the UK as a whole and 3.8% in the South East.

Figures for February 2016 from www.nomisweb.co.uk show that:

  • The all age Jobseekers Allowance claimant rate was 1.9% in London, the same as the UK as a whole.
  • The 18-24 claimant rate was 2.3% in London, below the 2.8% for Great Britain as a whole.

Graduate Employment

According to the latest (2015) edition of the annual What Do Graduates Do? report:

  • This year more graduates found work than ever before – 76.6% of graduates were working or combining work and study, against 75.6% in 2012/13 and unemployment fell from 7.3% for 2012/13 to 6.3% this year.
  • The majority of graduates who were in work, 68.2%, were in professional level employment, up from 66.3% the year before.
  • Four professions saw an increase of 500 or more graduate entrants last year – business project workers, HR and recruitment professionals, nurses and marketers.
  • The largest falls in numbers of graduate entrants were in sales and retail roles, and in routine office work.
  • The average salary for a graduate from the 2013/14 cohort working full time after six months was £20,637.

 The full report can be found on the HECSU website.

Apprenticeships

In London the number of people of all ages starting an apprenticeship has increased by over 400% since 2005-06, with a figure of 45,550 starts in 2014-15. However, the proportion of under 25 year-old starters fell from 100% to 56% over the same period. A recent Ofsted report recommended that the planned growth in apprenticeships should prioritise young people aged 16 to 24. Figures since 2011-12 show a fall in total apprenticeship starts – according to the Department for Business, Innovation and Skills this decrease is due to “quality improvement measures”. A TES article has examined this fall in more detail.

Apprenticeship Starts Age Under 19 % Age 19-24 %
England London England London England London
2005-06 175,000 11,010 57% 55% 43% 44%
2011-12 520,600 47,230 25% 23% 31% 29%
2012-13 510,200 45,070 22% 21% 32% 31%
2013-14 440,400 40,050 27% 24% 36% 36%
2014-15 499,900 45,550 25% 22% 31% 32%

Data from http://www.thedataservice.org.uk/Statistics/fe_data_library/Apprenticeships/

The Find an apprenticeship service is run by the National Apprenticeship Service and advertises vacancies across the country. Looking at a sample of advertised vacancies in London live on 15 February 2016:

Sector Vacancies Applicants per Vacancy
Agriculture, Horticulture & Animal Care 5 10
Arts, Media & Publishing 14 19
Business, Administration & Law 861 17
Construction, Planning & the Built Environment 310 6
Education & Training 15 24
Engineering & Manufacturing Technologies 258 11
Health, Public Service & Care 634 13
Information & Communication Technology 227 29
Leisure, Travel & Tourism 14 8
Retail & Commercial Activity 526 9
Science & Mathematics

A more detailed of a sample of apprenticeship vacancies can be found in Apprenticeships: A Guide for Advisers (2015) on the CLC Building Futures Apprenticeships page. Weekly updates of highlighted new vacancies in Central London can be found on the Live full-time and part-time jobs page.

Minimum & Living Wage

The National Minimum Wage is set by the government, based on recommendations from the Low Pay Commission. It is the minimum hourly rate that employers must pay their workers. The government has introduced a new National Living Wage, that must be paid to workers who are 25 or over from April 2016. This new National Living Wage is not be confused with the London Living Wage, which is not binding on employers, is based on the cost of living in London and is set by the Living Wage Foundation.

  London
Living Wage

 

National Minimum/Living Wage

25+*

21+

18-20

Under 18

Apprentice**

2015-16*

£9.40

£7.20

£6.70

£5.30

£3.87

£3.30

2014-15

£9.15

N/A

£6.50

£5.13

£3.79

£2.73

2013-14

£8.80

N/A

£6.31

£5.03

£3.72

£2.68

* National Minimum Wage increase in effect from 1 October 2015. The new National Living Wage for 25+ year-olds is introduced from April 2016.

** This rate is for apprentices under 19 or those in their first year. All other apprentices are entitled to the National Minimum Wage for their age.