The jobs market is already in trouble – loading employers with new regulations won’t help
Jobs postings have declined for the 26th month in a row. This isn’t the time to disincentivise hiring, writes Reed CEO James Reed
Our latest jobs data gives cause to worry
Employer confidence has taken a knock. This is clear from the mountain of data that we sit on at Reed, which is often a more reliable and up to date indicator of what’s happening in the economy than the official ONS statistics. Indeed, we forecast the last two recessions based on declining job postings as an indicator of economic contraction, contrary to Bank of England projections.
Over the last 90 days, the period since the election, our data shows that job numbers are down 25 per cent year on year. That’s a significant and worrying slump. It’s reflected in the official figures, which though they only go as far as July, show vacancies decreasing for the 26th consecutive month.
I’m concerned that we may be witnessing a slow motion economic car crash.
A lot of businesses are delaying hiring and other key decisions until they see what’s in the Budget on 30 October. All the talk of black holes in the economy and inevitable tax rises has some people spooked, it seems. Taxes had already been raised to their highest levels in 70 years by the Conservatives and businesses aren’t sure how much more they can take.
With the change in government, there are also changes in regulation – particularly in terms of workers’ rights – in prospect. I would urge caution. One of the proposals is for workers to get full employment rights on day one, which is clearly going to be a brake on hiring. Employers will have to be super sure that they want to take someone on in those circumstances.
It’s also going to be an accelerator for AI replacing people in jobs. AI works 24/7, doesn’t have a right not to be disturbed, and won’t sue you. I don’t think a four-day working week is a good idea either. A lot of services, both public and private, are seen to be failing to deliver already and I can’t see how ditching a working day is a recipe for greater success.
If we want to grow the economy, we have to support businesses and tackle levels of economic activity which mean more than a fifth of working age people aren’t in employment or looking for work. Loading employers with new regulations and taxes isn’t the way to do it.
Brits prove stingy
In the US, people are very generous when it comes to charitable giving. In the UK, there’s evidence that people – especially rich ones – are becoming less generous. The charity I chair, Big Give, is doing its bit to help by doubling donations to other charities taking part in its campaigns. Do give if you can to the next one, supporting women and girls’ charities, which runs from October 10th to 17th at www.biggive.org, which will double your money. More broadly, we need more generous tax breaks for philanthropists of the sort they have in the US. Government can’t do everything and a healthy third sector is vital for society.
Catch this show before it closes
I greatly enjoyed Ruby Wax’s one woman show at the Ambassadors Theatre, I’m Not As Well as I Thought I Was. It is a tour de force, a journey through depression and anxiety and Ruby’s successful treatment. The show contains some very funny and some very moving sections, and given how many people are affected by mental health issues, either themselves or among families and friends, it has something for everyone. The show closes on Saturday so do try to catch it if you can.
Yes to the YIMBYs
Ed Miliband deserves praise for taking on the NIMBYs opposed to the rollout of wind turbines, solar farms and pylons across the UK. I agree with him that investing in green energy infrastructure is a question of both national security and economic justice. In a matter of weeks, the new government has reversed an almost decade-long block on onshore wind farms, approved four large solar farms which had been stuck in the planning system and established the government electricity generation company GB Energy to help invest up to £8bn in low-carbon power. More power to the YIMBYs!
A Notting Hill recommendation
By chance, I recently found myself at what was the opening night of a new restaurant, The Barbary, on Westbourne Grove in Notting Hill. It’s run by brilliant restaurateur Zoe Paskin and is already well established in Neal’s Yard. It was fabulous: a lovely atmosphere and superb Mediterranean/North African cuisine. It’s occupying what was a 7/11 convenience store so it’s enhanced our neighbourhood too. I highly recommend it.
James Reed is chairman and chief executive of recruitment firm Reed