The UK’s labour market has been “for ever changed” by the pandemic and requires a major rethink by politicians and businesses, a business lobby group has said.

A shift towards early retirement, greater mental health difficulties, and desire for more flexible and part-time work requires a new approach by government and business alike, warned Tony Danker, head of the Confederation of British Industry (CBI).

Younger workers are demanding businesses adopt new values of work and society, which will force employers to “forge a New Deal to win the war for talent”, he argued.

“In Britain we don’t have the workforce and the skills we need to prosper and grow. Why? Our demographics have changed. The population is ageing. And a generation in their fifties and sixties – with private pensions and property wealth – can take early retirement,” Mr Danker told the CBI Future of Work Conference.

Business leaders were warned that “without strong societal values, a central sense of purpose, a commitment to better employee lives and active diversity and inclusion strategies, we will lose the talent war”.

“A lot of this is also about the values we hold as bosses towards employment – it’s no longer just they work for us – we have to work for them,” he cautioned.

“The New Deal is a truly mutual value exchange of what the employee gives and gets that goes way beyond terms and conditions. The return for bosses from this better proposition is this: loyalty, discretionary effort, leadership. If we want these – not merely employees who clock in − we have to earn them,” he said.

A “New Deal” was crucial he says as younger employees are increasingly choosing where to work based on a firm’s behaviour to them and the world: “The pandemic has changed perspectives on the balance of work in our lives and the way we lead them. Many still work, but not like before.”

Workplace health schemes were vital to help keep people in jobs and get more back into employment.
“We are suffering from a mental health epidemic. It is keeping many at home, and affects many more still in work.

Long-term sickness “costs the UK economy upwards of £180bn, Mr Danker claimed, arguing employer-led health interventions could reduce the cost by a third because the NHS “doesn’t have the bandwith”.

In an appeal to the Chancellor, ahead of the Budget, he called for improved public funding for childcare to help get parents back to work. “The UK needs a childcare revolution. We can no longer trail other countries in enabling parents to work,” Mr Danker said.

With flexible working fast becoming mainstream practice, research shows nine in 10 people want it, but only three in 10 job adverts offer it. Equally, the numbers of people seeking part-time work is outpacing available opportunities four to one.

“Flexibility has always had deep merits, but given today’s shortages, and without immigration, it’s vital to grow supply, because it’s likely [to be] the only way to get those who’ve left to return,” he said. “It’s hard to see how those now economically inactive, will become full- time active overnight,” he added.

Governments of all complexions had “serially failed” to improve workers skills. The Apprenticeship Levy should be joined wuth a new Skills Challenge Fund, where businesses can invest in accredited training for the variety of skills they know their people need − working alongside a cross-departmental approach to immigration policy.

Upgrading staff skills will take “much longer than we’d like” and said fixed, short-term immigration could bridge the gap. “We can get that by updating the Shortage Occupation List and granting visas for roles in obvious shortage areas – at all skill levels,” he argues.

Greater robotics and Artificial Intelligent software would help deploy people more effectively or take the place of those who cannot be recruited he says.

After a machine (C) made a bowl of noodles, a serving robot (R) prepares to deliver it to a customer at a demonstration by Japan's SoftBank Robotics aimed to help restaurants provide completely unmanned services, in Tokyo on October 18, 2022. (Photo by Kazuhiro NOGI / AFP) (Photo by KAZUHIRO NOGI/AFP via Getty Images)
A serving robot prepares to deliver a bowl of noodles to a customer in Tokyo (Photo: Kazuhiro Nogi/ AFP)

He warned that the “politics of automation” had changed. “Politicians and academics now champion it as a replacement for immigration. They seem to ignore the reality that it’s likely to replace as many if not more skilled jobs than lower- skilled ones. They seem to believe the UK can miraculously achieve an economy with only higher-paid, higher-skilled jobs. They are wrong about that.”

More from Business

With competition between businesses for talent heating up over the past year, he said businesses would need to work harder to get and keep the best employees. “Younger workers especially are looking for value and purpose in their jobs.

“And they’re more than ready to challenge the organisations they work for – on that.

“Be it interrogating firms’ net zero credentials, commitment to equality, diversity and inclusion, or public advocacy.”

“Today’s workforce is looking to employers, to ensure that work is the place where people get in and on in life. Where we get a good job, with work that’s meaningful and rewarding. Where we get paid well, then trained or retrained for a better job and better pay. Where our physical and mental health are factored into our working lives and our employment relationship. Where our colleagues are our community who can support us. Where flexibility to our world outside work is not exceptional but default.”

By admin