In my role as Northern Ireland adviser on employment and skills and a member of the UK Commission on Employment and Skills (UKCES), I am one of the signatories to a call by UKCES to companies to resist the temptation to cut training budgets.
We all know from experience that finding skilled people again could prove extremely difficult. Skills shortages were a problem well before the recession.
We all believe that the skills of our people are our best guarantee of future prosperity — and the best investment a business can make in challenging times. I appreciate that cutting training budgets may appear to be the quickest way to cut costs. Demand for employees in manufacturing tumbled to a record low in February, according to the Purchasing Managers’ Institute.
Making people redundant is usually a very traumatic experience for senior managers particularly in smaller companies. It’s a decision which few business leaders take easily. Many companies, therefore, are currently trying to hold on to employees by measures such as short time working or cutting wages and salaries.
To conserve cash, they are postponing non-essential investments and cancelling projects that they no longer consider viable, and adjusting capacity and inventory levels for decreased demand.
To help manufacturing companies in particular to preserve skilled jobs, France, Germany, Spain and several US states have already introduced employment subsidies.
Schemes like the US WorkShare programme allow companies to reduce employees’ hours and make up the difference through unemployment benefits. Interestingly the Republic is considering such an initiative. In the UK, the Engineering Employers Federation and the Unite and GMB unions are now pressing the government to introduce wage subsidies to preserve skills. The UKCES message is that the reskilling and upskilling of the people we employ must remain a high priority, particularly during difficult times when increasing productivity is the best way to ensure survival and to prepare for growth in the future.
Experience shows that companies which invest in training when times are tough are in the strongest possible position to gain competitive advantage in recovery.
Companies could cross-train factory staff in different roles for increased flexibility in response to fluctuating demand.
Local companies also need to know that there is practical support, including financial assistance, readily available from the Department for Employment and Learning and Invest Northern Ireland to build the talent of their workforce and boost their overall competitiveness for recovery. As Northern Ireland Commissioner, my main role is to provide a voice for the local business community, raising issues proactively and effectively to the UK Government and giving advice on developing policies and measures. I see the following main challenges from an employment and skills perspective:
- Maintaining employment levels in industries that have long-term prospects in Northern Ireland. There is a need for joined-up support and rapid responses from the relevant agencies and departments.
- Addressing the skills development needs within industry while the dominant short-term pressures are on cash flow and weekly survival, particularly among SMEs.
- Maintaining our attractiveness for overseas investors.
- Ensuring we remain focused on the longer term vision for Northern Ireland as a knowledge based and innovative economy.
- Building management and leadership capacity of our businesses, as progress in this area can deliver high returns for companies and has long term benefits for the economy.
- Ensuring that those in the non working population who aspire to employment are provided with the skills to enter the workforce.
- Ensuring that those about to enter the workforce are better equipped to make a more productive contribution. In particular, adults must have the fundamental building blocks of essential and employability skills.
The immediate challenge, however, is to prevent our skills base from being eroded further by redundancies.
Dr Bill McGinnis, who is from Magherafelt, is Northern Ireland Adviser on Employment and Skills, a member of the UK Commission on Employment and Skills and chairman of the Northern Ireland Exporters Association.