Addressing post-Brexit economic uncertainty
Steve Hill, July 26, 2017
Despite an improving economic outlook the period of post-Brexit resilience may ultimately wane
A precarious political climate, where nobody emerged as a clear victor in the recent general election, together with continued Brexit uncertainty, means that business confidence is likely to fall. Add to this the relentless pace of automation, which threatens to make many well-established jobs obsolete, and it’s perhaps unsurprising that the organisations ICAEW surveyed for its latest Economic Forecast are risk averse, despite a seemingly positive economic picture.
Recognising the challenge
So what does this mean for UK employers? How can they tackle an impending confidence fall head on, and ensure that the period of uncertainty doesn’t affect business growth?
Continuing to focus on staff is crucial. Finding skilled workers is a problem for many employers, and the need for investment in skills development will be even more urgent for a UK that is outside the EU.
Major skills shortages in vertical markets such as construction, engineering and IT means that entire industries are relying on EU workers to plug the gaps. As well as EU workers making a big contribution to the healthcare sector (11% of all NHS staff are not British) employers may see a shrinking talent pool that exacerbates the skills gaps that already exist in the economy.
Automation jeopardises predictable physical work and data collection and processing, endangering many ‘traditional’ jobs. However, this trend also increases the need for other skills. The application of expertise to make decisions will become increasingly important, together with people management, collaboration and creativity.
Investing in the workforce
In an uncertain climate the temptation might be to ‘batten down the hatches’ – focusing only on the immediate business issues. Firms must look beyond the immediate towards a long-term strategy of investing more in their workforce, to increase productivity and ultimately boost results.
This puts a big emphasis on apprenticeships, and we believe that the apprenticeship levy is likely to help. The levy means that employers are now highly incentivised to hire apprentices. The savviest employers will seize this opportunity to identify and address skill gaps they have now and in the future, putting them in the best position to deal with changing environments – and essentially gain real business benefits.
On the job training
Experts agree that the education system has a large role in equipping graduates with the skills to meet an evolving and demanding workforce. As well as encouraging closer links with industry, much is made of a groundswell movement away from rote learning towards self-directed and independent study, which prioritises critical thinking skills and readies them for the workplace.
But employers shouldn’t let the buck stop with schools and colleges. Seeking ways to improve employee engagement and productivity is a compelling, ongoing business strategy for achieving greater efficiency and boosting growth. Employers must think more about what makes staff tick and how they can get the most out of their employees. And, as well as specific on the job training, more must be done to encourage a broad skillset through lifelong learning.
Rather than encouraging the development of narrow skillsets that can (and ultimately will) be commoditised, forward-looking firms are laying groundwork that encourages the development of a polymath mindset – one that produces workers who are adaptable and multi-skilled. By regularly reviewing skillsets, and continuing to train staff in diverse skills across their career, these organisations will ultimately develop well-rounded and agile workforces.
Small steps lead to big rewards
So it’s clear that despite a period of unexpected growth businesses face significant challenges and threats. But in the face of global economic uncertainty firms can address some of their challenges by looking introspectively at their own workforce, using the right tools to inspire and recruit new employees, and by making sure that staff are adequately trained while on the job.
Business leaders need to consider the time and costs required to train staff, and how they can work with learning providers to get the skills they need. And knowledge needs to be gathered and shared. It’s only by working collaboratively that we can surmount these pressing challenges and ensure economic prosperity and business growth.
Steve Hill is external engagement director at The Open University