Political change: What the new UK Government means for talent

Political change: What the new UK Government means for talent

The correlation between political and economic landscapes with business and recruitment confidence is intrinsically intertwined. Unsurprisingly, the political uncertainty the UK experienced for much of the first half of this year correlated with a fall in optimism and GDP.

However, the return to stability is often a catalyst for the re-invigoration of the economy and, subsequently, the labour market. All party manifestos included a clear focus to boost the UK’s skills strength, so changes in the talent and employment landscape were inevitable.

There has been such growth and evolution in the world of work in the last few years – not to mention challenges and hurdles to overcome – that refocused efforts are welcomed.

What are the core plans in progress and what do they mean for the UK’s talent economy?  

The next 100 days

The new Prime Minister and his cabinet have been swift, with the first announcements being issued by Number 10 within a matter of days of Labour’s appointment.

The King’s Speech has laid the foundations for the next 100 days of the new Government, with skills and fair employment clearly at the heart of the plans to “Make Work Pay” for the UK. There’s also a clear investment in a number of key industries that will see further pressures on specialist skills across the country, particularly within the green energy and technology remits.  

While not all plans will be relevant to every business, or to skills development, there are a vast number of proposals from both the manifesto and subsequent speeches that will have an impact on the UK’s talent landscape.

Here are the core topics HR, talent and procurement leaders need to stay on top of.

Making work pay

Perhaps the most widely discussed part of Labour’s initial campaign and manifesto was the new Employment Rights Bill. As was announced in the King’s Speech new protections will be afforded to workers in accordance with the Labour party’s “Plan to make work pay” report.

There’s a lot to digest in the plans, but the core regulatory changes that will have the greatest impact on HR, talent and procurement leaders include:

  •        The ban of zero-hour contracts to provide baseline security and predictability for all workers. This would require the employer to pay compensation to the individual if shifts or hours are cancelled or changed without reasonable notice.
  •         A ban on fire and rehire practices, again focused on providing more stability for the worker and weeding out poor practice behaviours or abuses of power.
  •          Minimum wage reforms that would see the current cost of living also incorporated into rate decisions.
  •           A new duty for businesses to inform workers – regardless of the model of their employment – of their right to join a union.
  •           A right for the self-employed to have a written contract.
  •          Replacement of the current single status categories of worker (employee, worker and self-employed) with worker and self-employed.

Any legislative changes related to employment regulations are understandably difficult to navigate. The sheer scale of nuances in working style make a one-size-fits-all approach impossible. What is clear, though, is that workers and employers alike are set to navigate significant employment law changes in the very near future.

For Impellam customers, the good news is that our expert teams are well versed in supporting customers through significant legislative and economic change. We can provide compliant workforce and STEM talent solutions that help you to navigate and stay ahead of the evolving regulatory landscapes while securing mission-critical skills.

The Back to Work Plan

Economic inactivity [i] has been a topical news item for much of this year. Data from the Office for National Statistics has shown persistently high levels of inactivity throughout the first half of 2024, with younger demographics often cited as a large proportion of this group.

In a bid to address this, the new Work and Pensions Secretary, Liz Kendall, revealed further details on the Government’s Back to Work Plan.  As with much on-going political developments we have seen so far, the picture is constantly moving, however the core details of this plan at the time of writing include:

  •        Creating a new national jobs and careers service through the merger of Job Centre Plus and the National Careers Service.
  •        Bringing in new devolved powers for mayors and local authorities to tailor skills development options on a regional level. This will include health support aimed largely at helping those with a disability into work where feasible.
  •       The development of a Youth Guarantee for those between 18 and 21 which provides more training, further apprenticeships and better help into employment for this age group.

The finer details of the Back to Work Plan are still being mapped out and there have been calls from parties including the British Disability Forum to take a consultative approach with employers and relevant bodies to “get the plan right”. Whatever shape this eventually takes, businesses across the UK should get involved in reshaping the skills development of future generations for the benefit of all.

Skills England: driving workforce transformation

With an updated Employment Bill and new plans to get more people into work, there needs to be a clear line of reporting to ensure positive changes are implemented. The driver of this will be a new public body, Skills England.

The make-up of this new body is yet to be fully defined, but commentators are hoping it will include representatives from business, education and employment to ensure any action is aligned with the needs of the modern workforce. Currently there are plans to equip Skills England with the tools to address concerns around training and development for early careers workers, which includes replacing the Apprenticeship Levy with a growth and skills one.

This would broaden the scope of the Levy, giving employers far more flexibility around how to invest their funds into their talent pools, including the flexible workforce. While the likes of the Institute of Fiscal Studies (IFS) have warned that employers will need to ‘get on board’ with these changes to reap the rewards, others, including the Association of Professional Staffing Companies (APSCo), have highlighted the benefit this will have to modern workforces.

As Tania Bowers, Global Public Policy Director at APSCo, commented: “The commitment to reform the Apprenticeship Levy to deliver a Growth and Skills Levy is more akin to the modern world of work where rigid training routes simply don’t work. Skills, migration and industrial strategy must be in alignment and employers need genuine flexibility around using their Levy funds to fulfil their potential and help solve the skills crisis. We continue to call for the funding of upskilling and reskilling of all workers, including agency workers and the self-employed, and will work closely with the new government on the detailed implementation of this policy.”

New councils, roles and responsibilities 

With the pace of change in the UK economy accelerating at speed, plans have also been unveiled to create new bodies, councils and reshape responsibilities to best help the country thrive.

Key changes that will have an impact on workforces and recruitment include:

  •           A new Industrial Strategy Council to steer growth in ‘clean power’ and create a more resilient UK. This new council will be driven by what the new Government has referred to as a ‘genuine’ partnership between businesses, workers, unions and universities, delivering ‘good’ jobs and developing core skills.
  •         Launching a Single Enforcement Body to enforce statutory employment rights through stronger powers to inspect workplaces and uphold legislation for workers.
  •          The expansion of the Department for Science, Innovation and Technology (DSIT) into a digital centre for Government to drive digital transformation in the UK and across the likes of the NHS.
  •         Reforming the current points-based immigration system to have a more direct link to skills and the needs of UK businesses.
  •         An enhanced role for the Office for Budget Responsibility which may not have a direct link to skills growth, but will provide clear and planned fiscal rules to deliver stability in the UK economy.

Creating more diverse employment practices

While the King’s Speech outlined plans to improve equal pay and other elements to improve diversity in the workforce, one point that was missing that we certainly want to draw attention to is the plan to engage with prisons to help prison leavers into employment.

At Impellam, we know all too well that this is a significantly untapped talent pool and we are supporting many clients on campaigns to address this. Indeed, we have our own representatives at three prisons across the UK acting on their Employment Advisory Boards. Our brands including Comensura have run prison collaboration days to share insights with employers on how to better engage with this demographic and help more people into work.   

The appointment of James Timpson as Prisons Minister is a move that we fully support in driving change and we’re hopeful that we will see positive changes in rehabilitation very quickly.

Building a resilient skills landscape

It is clear the UK is in real need of a strong skills market.. Talent pools are limited in core STEM remits while demand is accelerating at a pace previously unseen. You can access the data that support this via our industry leading STEM talent solutions company Lorien and their latest 2024 Technology & Digital Report.

In amongst this, the makeup of the workforce itself has become more fluid and flexible. As Impellam’s UK & Europe CEO and Chair of the Employment Advisory Board for HM Prison Chelmsford Simon Blockley, explained, the next 100 days and beyond will be critical to lay the foundation for growth that the country’s employers and workforce are expecting;

“We’re seemingly at a pivotal point. Economic positivity, business optimism and a strong labour market all go hand-in-hand. As the new Government settles in and the UK looks towards the future, continued evolution, skills growth and development are top of the agenda.

“We are all excited to see what the next few months hold for the UK and will continue to work closely with our customers and their talent pools to support them all through a transitionary period.”

If you want to talk to our workforce solutions and STEM talent experts or need help navigating the latest labour market challenges, please get in touch: askImpellam@Impellam.com

 [i] People not in employment who have not been seeking work within the last 4 weeks and/or are unable to start work within the next 2 weeks.