Employers suggest priorities to overcome ‘cost of working crisis’

Employers suggest that any changes to public sector employment services should prioritise reform of financial support for new recruits, according to a survey by the Recruitment and Employment Confederation (REC) in collaboration with the Institute for Employment Studies (IES).

 With the government rolling out a number of welfare-to-work reforms right now, the REC in collaboration with the IES wanted to explore what help employers say they need to find, recruit and retain the right people. 

The results have led the REC and IES to call for a trial to make the existing Flexible Support Fund an entitlement for those returning to work after caring, ill health or having been out of work for more than a year, that travel costs and workwear would be reimbursed where needed. And to publicise that the availability of discretionary support with travel and workwear is available for anyone moving from benefits to work – including publicising to employers so that they can promote this to potential candidates.

The survey asked employers what types of support they will find most useful if the government reforms DWP policies around supporting people into work. Employers chose priorities from a selection of options which included help with skills training and easier one-stop access to government employment schemes.

REC Deputy Chief Executive Kate Shoesmith said:

“Jobcentre Plus customers need to build their confidence to start a new job and sometimes, that comes from addressing the seemingly small things that can be barriers to work – like how you will get to work or afford the kit you need. Employers are clear that the option of a financial boost to help with travel, potential childcare costs and clothes should be more widely available, publicised and easier to claim.

“Any welfare reform to employment services should be part of long overdue efforts to draw up a coherent workforce plan for the UK, that helps us overcome the acute labour shortages that persist in many sectors. The success of our partnership on Restart shows what can be achieved when the public and private sector work together and where each provider plays to their strengths to deliver what they do best.”

Tony Wilson, Director, Institute for Employment Studies, said:

“Even though inflation may be starting to ease, this data shows that many employers are still struggling to fill jobs because of a continued ‘costs of working crisis’ for prospective staff. Issues with the affordability and flexibility of childcare and transport in particular are continuing to act as barriers for people who are out of work, want to work but struggling to get back in. The good news though is that we can do something about this, in particular by increasing and publicising the funding available through local jobcentres and widening eligibility for this so that other local employment services can draw this down too.

“Looking longer term, the survey findings also reiterate the case for broader reform of our employment services, with many employers saying that they want to be able to go to one place to get information and support on skills, training and recruitment.”

The survey found that the top priority for employers was for a reformed employment service to provide funding to new recruits to help them overcome barriers such as transport, childcare or work clothes. There was particularly high support for this among small (0-49 workers) and large (250+ workers) employers. This was backed by employers across different regions and nations in the UK. It shows how the cost-of-living crisis is seen by employers as an obstacle to getting economically inactive people into work and how they feel the current Flexible Support Fund is failing in some regards.

The joint second most common options chosen was ‘support to identify and access skills training’, and ‘a service that is open and accessible to all those who want to change job as well as those who are out of work’. The next most common options chosen as a top priority was making a reformed publicly funded employment service a single point of contact for employers that acts as a gateway to a range of public schemes. This suggests the system is too complex now and is putting off employers engaging with DWP schemes. And ‘support on achieving more diverse and inclusive recruitment ’was the next most popular top priority.

Notes to editors:

1. The telephone survey of 172 employers across the UK was conducted in March 2024 by Savanta. Due to a high number of respondents selecting ‘other’, the data in this press release (and outlined below) is derived by removing these from the base. This means the totals in the press release are responses from 121 employers.
    
2. About the Institute for Employment Studies
   The Institute for Employment Studies (IES) is an independent, apolitical, international centre of research and consultancy in public employment policy and HR management. It works closely with employers in all sectors, government departments, agencies, professional bodies and associations. IES is a focus of knowledge and practical experience in employment and training policy, the operation of labour markets, and HR planning and development. IES is a not-for-profit organisation. www.employment-studies.co.uk
   
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   The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.
   
   Find out more about the Recruitment & Employment Confederation at www.rec.uk.com