Working longer – the reality ‘behind the headlines’

Senior businessman in office working on laptop

By Heather Cameron

With no shortage of headlines highlighting the record employment rate in the UK, and the increasing number of older workers widely reported, it may seem that the outlook for the ageing workforce is a rosy one. But do these headlines hide the reality?

Recent analysis from Age UK argues that the headline employment rate doesn’t tell the whole story about working longer, “making it an insufficient – and even misleading – tool for public policy decision-making”.

The statistics

The most recent official figures show that the employment rate (the proportion of people aged from 16 to 64 who are in work) is the joint highest since comparable records began in 1971, at 74.8%, while the unemployment rate is the joint lowest since 1975.

Data also shows that the employment rate for people aged 65 and over has indeed increased since the 2008 recession. It is currently at 10.4%, up from 7.3% in 2008.

Age UK has also recognised the increase in employment rates for older people, noting that, in fact, the older the age group, the greater the increase in employment. However, the average number of hours worked has declined since the recession, indicating a more complex and perhaps less reassuring situation than the one portrayed in the media.

The biggest drop was for 50-54 year old men, whose average hours declined by 29%. For men aged 60-64, the average number of hours declined by 8 hours (over 22%), while women aged 50-54 experienced a fall of 18%.

The only age group not to see a decline was women aged 60-64, which is likely to be as a result of the raising of the State Pension age.

Choice or necessity?

The change in the State Pension age was justified on the grounds that it gave people more choice and more scope to continue working if they wished to.

A recent CIPD survey found that the most common reason for wanting to work past 65 is that employees believe it will help keep them mentally fit, followed by wanting to be able to earn a sufficient income to continue to do the things they enjoy.

As Age UK suggests, it may be that the reduction in working hours is a good sign if it is due to older workers choosing to wind down their hours, maybe to enable them to juggle other responsibilities such as caring for their grandchildren, while still earning a wage.

However, the research suggests it may be less through choice and more as a result of the changing labour market such as increasing underemployment (working less hours than they would choose to) or increasing insecure working practices driven by the rise in self-employment and the ‘gig economy’.

As it is likely working fewer hours will mean less income, this could be a cause for concern since it will be more difficult for older workers to maintain their standard of living until they meet the State Pension age and for them to save enough for retirement.

Another issue highlighted by the CIPD, is that most employees don’t believe their organisations are prepared to meet the needs of the over 65s, suggesting that there is a need for employers to also review their practices in terms of managing older workers.

Final thoughts

It is clear that while, for some, choosing to work beyond the traditional retirement age will be a lifestyle choice, for many it will be a necessity. Any substantial reduction in working hours for these older workers could consequently pose a real issue.

It would therefore make sense for policy makers to heed the warning from Age UK not to rely on the headline rate of employment for older workers, and rather look beyond it to the reality of many struggling to get and keep the secure, well paid jobs they want and need.


If you enjoyed reading this, you may be interested in reading our previous post on the pros and cons of the gig economy.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Who’s afraid of the big, bad robot? Preparing the labour market for a future with AI

massive production

By Heather Cameron

Science fiction is slowly becoming science fact”. This is what the interim Chair of the government’s Science and Technology Committee said in their recently published report on robotics and artificial intelligence (AI).

While admitting there is still some way to go before we witness systems and robots like those portrayed in the creative arts such as Star Wars and Ex Machina, the report noted that there have been a series of recent advances across these fields that are beginning to have transformational impacts.

But just what will these impacts look like, particularly in relation to the labour market?

‘Transformational impacts’

Driverless cars and supercomputers that assist with medical diagnoses are highlighted as some of the transformational impacts of AI that have already arrived.  Others include improved automated voice recognition software and predictive text.

The increase in processing power, the wealth of data and the development of techniques such as ‘deep learning’ have all contributed to the recent progress.

However, the report also notes that such advances raise a number of social, ethical and legal questions that require consideration. These include issues about the transparency of AI decision-making as well as privacy and safety.

And while there is much excitement about the potential of AI to improve and enhance our lives, there is also widespread concern over the potential impact of increasing automation on the workplace.

Implications for employment

Fears over increased unemployment as a result of increasing automation are longstanding. The inquiry found conflicting views over the potential impact to the workforce, with some predicting a rise in unemployment, while others anticipate a transformation in the type of employment available.

It is likely that some occupations will become obsolete. Deloitte has warned that 11 million jobs across the UK economy are at high risk of being automated by 2036, with the retail and transport sectors most vulnerable. The research also indicated that almost 750,000 net jobs had been lost in manufacturing since the turn of the millennium, while the wholesale and retail sector saw net job losses of 338,000.

However, it was noted that millions of new roles had also been created in order to meet changing demand. So perhaps it is adaptation within the workforce that is needed.

Indeed, the Committee’s report highlights a need to focus on delivering the skills needed for people to adapt and thrive as new technology continues to emerge. It has been argued elsewhere that cognitive and social and behavioural skills should be made a priority in any skills strategy for the 21st century to “make workers more resilient to technology-driven labor market shocks like automation.”

And of course some sectors may be more susceptible than others.

Recent research by McKinsey suggests that the impact of automation differs dramatically across sectors and activities. It found that:

While automation will eliminate very few occupations entirely in the next decade, it will affect portions of almost all jobs to a greater or lesser degree, depending on the type of work they entail. Automation, now going beyond routine manufacturing activities, has the potential, as least with regard to its technical feasibility, to transform sectors such as healthcare and finance, which involve a substantial share of knowledge work.”

Another common theme highlighted throughout the inquiry was that robotics and AI could increase productivity and efficiency. One recent study estimated that ‘£1.24bn in automation investment could raise the overall value added by the manufacturing sector to the UK economy by £60.5bn over the next decade’.

Future

There are clearly many debates about the potential impact of robots and AI, but it is not yet clear what the actual impact of advances in these fields will be on the labour market.

What is clear is that there is a need for skills to be developed for a world where AI is more prevalent.

But as the inquiry highlighted, the government doesn’t yet have a strategy for developing these new skills or responding to the social and ethical issues it poses. The report therefore recommends that “the government must commit to addressing the digital skills crisis through a Digital Strategy, published without delay.”

Perhaps the future will be similar to the past, as written evidence to the inquiry suggests:

During the industrial revolution, mechanisation did not change long-run equilibrium employment because new jobs emerged which were unimaginable at that time. Similarly, jobs lost to automation today might be replaced by jobs we cannot yet imagine.


Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Costs and benefits of the National Living Wage

English money

By Heather Cameron

Britain’s bosses have been urged by the government to prepare early for the introduction of the National Living Wage (NLW) in April next year.

Firms are advised to follow four simple steps:

  • know the correct rate of pay – £7.20 per hour for staff aged 25 and over
  • find out which staff are eligible for the new rate
  • update the company payroll in time for 1 April 2016
  • communicate the changes to staff as soon as possible

Support

This push coincides with a new poll revealing that 93% of bosses support the Living Wage initiative, with a majority believing it will boost productivity and retain staff.

This is supported by new research by the University of Strathclyde and the Living Wage Foundation (LWF), which uses real-life case studies and evidence from employees working for accredited Living Wage employers. It suggests that paying staff a living wage leads to many business benefits – such as staff retention, more efficient business processes, improved absenteeism and better staff performance.

Potential benefits

Many of the findings highlighted relate to research on the London Living Wage (LLW). Among these include:

  • 50.3% of employees receiving the LLW registered above average scores for psychological wellbeing, a sign of good morale, compared to just 33.9% of non-LLW employees studied
  • an average 25% reduction in staff turnover was reported for organisations moving to the LLW
  • and 70% of employers studied reported reputational benefits through increased consumer awareness of their commitment to being an ethical employer

Estimates show that 4.5 million employees will see a rise in their wages as a result of the introduction of the NLW in 2016, with a further 2.6 million gaining from spillovers. By 2020, 6 million employees are predicted to have received a pay increase.

Up to one in four workers are expected to experience a significant positive impact from the NLW. If the result is indeed a happier workforce, perhaps the knock-on effect for businesses will be improved productivity.

There will however be variation across different parts of the UK and across different households, depending on how the NLW interacts with the tax and benefit system (it should be noted that many estimates were made prior to the u-turn on welfare reform). And let’s not forget that the NLW is not for all as under-25s will not be eligible.

Costs to employers

The impact on employees and therefore employment generally, will also depend on the actions firms take to prepare for the NLW in order to mitigate costs.

Indeed, the research from Strathclyde and LWF recognises that implementing the NLW will inevitably involve initial costs to businesses and could represent an issue for some companies more than others.

According to the Federation for Small Businesses, a negative impact on business is expected by 38% of small employers, with many expected to slow their hiring and raise prices.

It has been estimated that the NLW may lead to an increase in the unemployment rate by 0.2% points in 2020; resulting in around 60,000 more people unemployed and total hours worked per week across the economy around 4 million lower.

Businesses may also look to employ those under the age of 25 who won’t be eligible for the NLW. This could particularly impact on those sectors with a high proportion of lower paid employees, such as social care – a sector that is already under financial pressure.

The roll out of the Living Wage has certainly raised concern over potential costs for councils, which are having to deal with increasing budget cuts. The Local Government Association (LGA) has estimated that the NLW could cost local authorities £1bn a year by 2020/21.

So while increasing wages for low paid workers may seem like a no-brainer in the bid to help reduce in-work poverty, the full impact on employees, employers and therefore the economy, remains uncertain. Only time will tell what the true impact of the NLW will be.


Further reading: if you liked this blog post, you might also want to read our previous blog on the Living Wage

Our popular Ask-a-Researcher enquiry service is one aspect of the Idox Information Service, which we provide to members in organisations across the UK to keep them informed on the latest research and evidence on public and social policy issues. To find out more on how to become a member, get in touch.

Follow us on Twitter to see what developments in policy and practice are interesting our research team.

What technology brings to health and social care: a case study of Calderdale and Idox

 

By Steven McGinty

In the second of our articles on health and social care and technology, we‘re going to look at the advantages of using technology, as well as a case study of an innovative partnership between Calderdale Council and Idox.

The ‘Digital working, learning and information sharing’ strategy, developed in partnership with the adult social care sector, identifies three areas where technology would bring a number of benefits:

  • working directly with those who need care and their carers;
  • supporting the learning and professional development of staff;
  • organisational business support and information management systems.

The use of electronic notes, for instance, would be a simple step that would have a significant impact on homecare workers (highlighted in section 5 of the Burstow Commission report on the future of the home care workforce).  At the moment, care workers usually make handwritten notes and leave them in a book in someone’s home.  However, if care workers moved from handwritten notes to electronic notes, information could be shared more easily. This would mean that care managers and families would be able to monitor an individual’s care and conditions remotely.

Organisations have also seen the advantage of incorporating e-learning into staff development.  The Skills for Care ‘Digital capabilities in social care’ report found that 95% of organisations used e-learning courses to support staff development, particularly in administration-related areas, such as health and safety and fire training. For instance, instead of sending staff on full day training sessions, e-learning courses can be completed by staff in an hour, offering greater efficiency and flexibility.

However, the report also highlighted that social care related e-learning courses, which looked at issues such as dignity and respect, were of ‘variable quality’ and not able to compete with the experience of face-to-face and group learning. Therefore, it’s possible that an opportunity is being missed by education and training providers, as technology should be able to provide better solutions than the simple tick box exercises described in the report.

Interestingly, the report also suggests this might not be too far off, as one of the organisations revealed that they were looking at more interactive options and were currently working on a research project with a university in Greece, which focused on the idea of ‘gamification’.

One local authority that’s certainly tried to capitalise on the benefits of technology is Calderdale Council. The council has developed an innovative case management tool to support their day-to-day work, in areas such as child protection, looked after children, and fostering and adopting. Parveen Akhtar, Early Intervention Service Manager, at Calderdale Council explains that:

“The Child Social Care solution was created in partnership with schools, health and police. Providing an intuitive system to meet the requirements of front line social care practitioners, it enhances our ability to provide better services to families within our community.”

The Child Social Care solution creates a single view of a child through combining information from several sources into one record. This means that practitioners are able to create, access and share information easily and securely, supporting informed decisions and putting in place appropriate support for children and their families.

The system has a number of benefits and features, including:

  • improving multi-agency communication and response;
  • reducing the amount of time taken by practitioners to locate another agency involved in a child’s case;
  • enabling practitioners to access information remotely;
  • offering comprehensive performance and reporting tools for providing vital statistics;
  • providing the ability to monitor and track the progress that children and families are making.

Calderdale have teamed up with Idox, a specialist in providing technology, content and funding solutions to government, and are now offering their system to other local authorities. The partnership has already proven to be successful, with Calderdale and Idox providing their solution to councils in the Isles of Scilly and Leeds.

Over the coming years, health and social care will be facing ever greater demands with tighter budgets. For this reason, technology is going to be essential to support better outcomes and more efficient services.  It is therefore important that a strategic approach is taken concerning information technology, and that organisations look at its long term benefits, rather than the short term savings from cuts to investment.

The first article on health and social care and technology, “What’s preventing health and social care from going digital?”, can be found here.

Further reading:

 

What’s preventing health and social care from going digital?

Two women using a tablet computer.

Image by Innovate 360. Licensed for reuse under Creative Commons.

By Steven McGinty

In the first of two articles focusing on technology in health and social care, I will be looking at some of the barriers organisations face in adopting digital technologies. Financial pressures such as the reduction in public spending, as well as an ageing society, mean that health and social care will be expected to meet greater levels of demand with fewer resources.

The UK Government believes that the implementation of technology is the solution to helping the health and social care system become more efficient and more effective at delivering patient care. However, before health and social care can reap the benefits of technology, a number of barriers have to be broken down.

Information sharing challenges

Integration has been a main focus of health and social care in England, as well as the devolved administrations. If integration is to work successfully, different organisations must be able to share data securely. At the moment, data is recorded in a variety of ways across a number of different IT systems. We also have a situation where the main method for sharing data securely in local authorities, the Public Services Network (PSN), is not fully integrated with either the NHS in Scotland or England. Eddie Copeland, of the Policy Exchange, suggests that full integration of the NHS with the PSN should be seen as a priority.

Financial costs

The financial costs of rolling out new technology within an organisation can be significant. These costs can include the procurement of hardware and software, internet connections, and the training of staff. For organisations which are undergoing major budgets cuts, it may seem very difficult to justify the investment in technologies, even if there is the potential for savings in the future.

Management issues

The importance of technology in organisations can be underestimated by decision-makers. For example, according to Martin Ferguson, Director of the Society of IT Management (Socitm), the ICT challenges involved in introducing the new Care Act in England are not being given enough priority. He highlights that if organisations are unable to share information safely by April 2015, they risk failing to comply with new reporting regulations.

Local authorities can also have policies that restrict the use of technology. A recent Skills for Care report into the digital capabilities of social care found that local authorities are still wary of certain technologies, including cloud based systems, which can offer low-cost solutions, and social media, which can lead to savings for local authorities if used correctly.

The health and social care workforce

The Skills for Care report highlights that over 95% of staff feel they are confident in basic online skills. However less than a quarter of managers believe that they have staff with enough skills to make use of digital technology. This mismatch means that managers may be hesitant to introduce new technologies over fears that staff may have difficulties in using the technology, as well as the costs associated with staff training.

There is also a suggestion that social care staff may be resistant to the introduction of new technologies, due to concerns that introducing technology may over-complicate things and move the focus away from the patient. As we noted in a recent article on digital services within government, a key part of introducing any new technology is changing the mindset of staff and having effective leadership in place to champion it.

These are just some of the challenges associated with introducing digital technologies into health and social care. In a future article, we will look more at how technologies can be used within health and social care and the benefits they can bring to organisations. We also look at a case study of an innovative technology partnership between Calderdale Council and Idox, which is addressing the shared services agenda in social care.


Further reading:

 

Building STEM skills in the UK

Halten

The latest briefing from the Knowledge Exchange focuses on the provision of science, technology, engineering and maths (STEM) skills in the UK. You can download the briefing for free from the Knowledge Exchange home page.

Despite indications that increased levels of skills acquisition in STEM fields is critical to the future of the UK economy, surveys of employers frequently reveal issues with the recruitment of employees with appropriate skills. Continue reading