Migration, Skills, Productivity and Active Ageing at Work from Eduard Iacob's blog

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Migration, Skills, Productivity and Active Ageing at Work

What kind of shared future are we building for business and the economy?

Listening to the BBC yesterday on the UK Government’s plans for immigration policy after Brexit raised some interesting questions. The intention is to allow highly skilled and well-paid workers to gain employment in the UK while placing significant curbs on the entry of low-skilled migrants.

Of course, in comparison with its European neighbours, Britain has long been a low skill, low wage economy. UK firms are generally more inclined to organise work in ways that minimise skill requirements, and they have been comparatively slow to take up the high performance workplace practices that lead to skills enhancement. The result is a predominantly low skilled workforce with low aspirations and few opportunities to raise their qualification levels. Moreover, the system is largely self-perpetuating, with an educational, training and policy framework that reinforces the status quo.

So, for a Government focused on a short-term electoral cycle, it makes sense to allow firms to buy in the more advanced skills they need from across the world and protect low paid jobs from the effects of migration.

And it certainly looks like a relatively straightforward option. The alternative is to build: a future in which Government and businesses create effective learning and development pathways at work, supporting jobs in which employees at every level use and develop their full range of competencies and potential. That means challenging many embedded assumptions and practices.

And migration would then be required to fill the residual low skilled jobs vacated by an upwardly mobile workforce, turning current policy thinking on its head.

Meanwhile low-paid employees are still faced with the insecurity resulting from their own limited skills and adaptability to an environment characterised by rapid change, technological innovation and globalisation, in which too many firms’ business models are based on outdated working practices.

Joined-up problems need joined-up thinking

In another part of Government, politicians and civil servants are wringing their hands over what has become known as the ‘productivity paradox’. Low productivity has been around for decades in the UK, but since the 2008 financial crisis the problem has become more pronounced. An annual growth in productivity of just 0.2 per cent widens the already substantial gap with France, Germany, Scandinavia and other OECD countries. Significantly the gap appears in key services as well as in manufacturing.

Unsurprisingly, low levels of skills development and skills utilisation caused by the slow uptake of high performance workplace practices are seen by an increasing number of experts as lying at the heart of the productivity challenge.

And there’s a further challenge: the ageing workforce. The challenge of recruiting and engaging ‘Generation Z’ continues to perplex many employers, while the gap between life expectancy and the average retirement age refuses to shrink, resulting in growing skills shortages in several areas of the economy. Older workers’ retirement decisions are often based on poor job quality, including a lack of intrinsic job satisfaction and dysfunctional workplace cultures. Yet rather than address these issues, migration has provided many employers with a quick fix for the skills gap.

Effective responses to the challenges of migration, productivity and demographic change are interdependent. If we want to restrict migration, then we have to become more productive, work until we’re much older, and/or have more children. Government works in silos and has failed to grasp, or at least communicate, a joined-up perspective.

Focus on the workplace

Evidence and experience alike show that working practices which enhance productivity are also closely associated with skills development, high quality of working life, employee engagement, the retention of older workers, and positive mental and physical health.

Comparing like with like, organisations systematically adopting workplace practices which empower employees to control their own tasks and contribute to innovation and improvement, achieve 20-60% performance gains in productivity, innovation and employee health when compared with traditional enterprises.

Yet while many organisations may be somewhere on the journey, the majority of UK enterprises are far from adopting these workplace practices systematically. One study shows that under 20% of British workers are in jobs that help them realise their full potential – less than half the figures for countries such as Finland and The Netherlands, and with the resulting waste of economic growth and human talent.

The key concept here is workplace innovation. It describes workplace practices and cultures which lead to significant and sustainable improvements in both organisational performance and employee engagement, well-being and opportunity.

With a strong basis in evidence, workplace innovation is also a very practical concept. It includes all those factors that enable employees at every level to use and develop their knowledge, skills and creativity to the full, including how their jobs are designed, the teams they work in, the technologies they use, their opportunities to contribute ideas and to take part in improvement and innovation, how their performance is measured, and how their managers and leaders act.

Our team and its partners co-created workplace innovation as a concept and it’s spreading. It is part of the EU’s strategy for innovation and competitiveness, and has been adopted by governments in several European countries, including Scotland, as a means of boosting economic growth and quality of working life.

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