CIPD: Govt must invest in workplaces to boost economy

Thursday 12 January 2017

The Chartered Institute for Personnel and Development (CIPD) has called on the government to invest more money into workplaces to bolster the UK economy. 

It believes the next 12 months could be more challenging for the country as it begins to tackle problems surrounding Brexit, along with factors such as the gig economy, pay and productivity. 

As part of the CIPD’s yearly labour market predictions, acting chief economist Ian Brinkley forecasts slower economic growth, a rise in unemployment, low productivity and downward pay pressure.

Mr Brinkley went on to say that, while the economy did not “fall off a cliff edge” following the Brexit vote, there has been a noticeable loss of confidence in international markets as a result of a fall in the pound. 

“The single biggest thing that the Government could do to help in 2017 would be to give businesses greater certainty over the direction of travel, the residence status of migrants already in the country and the likely extent of restrictions on new flows of migrants. 

“Very few employers want a ‘hard’ Brexit and the government must consider this when planning its strategy for both the final arrangement and the transition towards it," he explained.

Mr Brinkley went on to say that employment stopped growing between May and October, with weak job growth expected to carry on into 2017. He added that employment rights within the gig economy. 

However, the CIPD welcomes the government’s new productivity plan, which is supported by £23 billion of public investment and hopes to develop skills in order to improve productivity. 

“Equally, the Government’s new industrial strategy for 2017 should focus much more strongly on the workplace and skills, with the single aim of improving productivity,” Mr Brinkley went on to say. 

He explained that 2017 provides a chance for the government to move away from focusing on a narrow range of sectors, adding that investment in productivity should be as broad as the economy. 

The UK’s productivity problem can be helped by better investment from government, along with flexible working. If businesses are able to use flexible workers and temporary staff to fill positions in times of great demand, they can enjoy significant efficiency gains. 

While employing new workers allows businesses to properly develop their staff, short-term contracts can be significantly more effective when it comes to productivity, helping to deliver great results quickly from specialists with lots of experience. 

By Victoria McDonnell

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