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Dr Vicki Belt

The OECD Employment Outlook 2015: Tackling the UK’s Progression Problem

Authors: Dr Vicki Belt

20 July 2015

The stark message of the latest Employment Outlook report is that in spite of recovery, millions of workers in OECD countries risk being trapped at the bottom of the economic ladder. Too many people have problems getting into the labour market in the first place, and large numbers of those that do manage it find themselves stuck in low-paid jobs.

The evidence also shows that low paid work is a particular problem in the UK, an issue that was clearly recognised in the summer Budget, with the announcement of the new compulsory national living wage. Tackling low levels of pay is undoubtedly important. But it is vital that this goes hand in hand with the creation of better progression opportunities and higher quality work.

In our recent report, Growth through people: evidence and analysis, the UKCES argued that the rungs are broken on the career ladder. The emergence of an hourglass economy has seen jobs grow at the top and bottom end of the occupational structure, whilst middle-skilled jobs – which have traditionally provided clear progression routes - have declined.

What’s more, at the bottom of the jobs market, too many UK employers are actively seeking to de-skill job roles. Tellingly, the number of employees in the UK reporting that their jobs could be performed with only primary level education is higher than in most other advanced economies. Too many employers are in a state of ‘low skill equilibrium’, limiting their ambitions and using minimal skills from their employees rather than seeking to fully utilise their abilities and talents.

Both the OECD and the UKCES believe that ensuring people have the opportunity to develop the skills employers need is central to helping them move up the career ladder. But this is not just about improving skills supply: we also need to address what goes on inside the workplace. More employers need to build workplace cultures which nurture talent, make full use of their employees’ skills and offer quality jobs with progression prospects.

However, such change is not easy to implement. It requires employers to embrace innovation, step out of comfort zones and try new ways of working. The new national living wage may provide many businesses with the kick-start they need to do this. But for this to work we need to see a real shift in mindset across the board, and more knowledge-sharing amongst employers. The UKCES Futures Programme is working in this territory, encouraging employers to work together to develop and test solutions to workforce development problems. The challenges for employers are clearly great, but so are the potential rewards - for businesses, employees and the UK economy.