In its Ambition 2020 report, the UK Commission for Employment and Skills argues that 10 million people need to improve abilities if Britain is to be in the top eight countries for skills, jobs and productivity by 2020. It warns that current policies suggest only half that number will raise levels. Encouraging UK employers to be the standard bearer in upskilling staff is often a thankless task. With reduced government funding available, training is one of the first budgets to be cut, and staff development and CPD frequently disappears. . To understand why skills are so critical, the first step is to understand how the UK economy has fundamentally altered. The past ten years has seen an increase in knowledge-based industries and jobs and the current recession is simply accelerating this change. Whilst all industries have been affected, it seems that fewer jobs have been lost in knowledge industries, attributed in part to the presence of identifiable key skill components namely - hard (qualifications) and soft skills (teamworking, communication). There appears to be substantial returns for the individual, business and the economy who invest in skills. For the individual, the more educated an individual is, the more employable they are: ‘85% of employers who recruited higher education leavers into their first job found them to be well or very well prepared for work, compared to 66% of employers that had recruited a young person who had completed only compulsory education. Increasing the training rate by 5 percentage points is associated with a 4 percentage point increase in productivity and subsequent £40 billion on GDP. For business, developing and launching new technologies and products requires intellectual and knowledge assets. Across all sectors - manufacturing and services, high tech and low tech, domestic and international, public and private, large corporation and small enterprise - the businesses that have prospered have highly skilled individuals who can rapidly create tailored products for increasingly sophisticated customers. For the economy, the growth of knowledge-intensive services drove the UK out of the recessions in the 1980s and 1990s; and we expect the same to happen in the 2010s. Public knowledge-intensive industries are less likely to contribute to economic growth in the years ahead, given the scale of the deficit, and this means that private knowledge intensive services will be increasingly important. It is expected that the most significant drivers of growth will be: creative industries, low carbon sectors, business services and "manu-services". Driving these industries and sectors forward will require a fit-for-purpose skills system. Too often skills shortages, gaps and under-utilisation are cited as the main problems facing the system. Many educational and training providers are already embracing this challenge. For example, the University of Hertfordshire, one of the UK's leading business-facing universities has embedded work-based employability units and skills units within all its core undergraduate curriculum. For ongoing development at work, it has a Corporate and Professional Unit offering an extensive range of specialist professional qualifications and vocational skills training - both accredited and non-accredited - aimed at supporting employers and their employees with high level continuing professional development. Without doubt, to move forward, the disconnect between demand and supply of skills must be overcome and the current coalition government has placed a clear emphasis on strengthening the links between education and industry. All of us, employees, employers, universities, colleges, professional bodies and private training providers must strive to work together to create a new skillscape, for a new economy. For more information: Contact cpdu@herts.ac.uk Tel 01707 285407 www.herts.ac.uk

Recent coverage of the Government’s plans to reform the rules on unfair dismissal has sparked great interest for employers. A report by venture capitalist and Conservative party donor Adrian Beecroft (the “Report”), has been leaked to the press and arguably contains extreme ideas to reform the laws surrounding unfair dismissal in the UK. The Report criticises the current unfair dismissal scheme as being “so lengthy and complex it is hard for employers to implement”. The recommendations within the Report are “particularly aimed at lifting the burden on small and medium sized businesses, which do not have the human resources or expertise to deal with complex Tribunals”. It highlights abuse of the current unfair dismissal scheme particularly within the public sector, “where often managers are forced to offer underperforming staff large settlements because they fear costly Tribunal rulings”. It is suggested that changes to the dismissal scheme would potentially minimise the threat of unfair dismissal claims being made to the Employment Tribunals. The Report recommends that an underperforming employee should be “given the chance to argue their case and suggest (but not demand) time to improve, or to be transferred to a less demanding, lower paid job”. Where this cannot be agreed the Report suggests that a new scheme of ‘Compensated no fault dismissal’ should be introduced. This would see underperformers being dismissed with notice and a payment equivalent to that of redundancy. An employee would then be unable to make a claim for unfair dismissal to a tribunal. (Although, all the protections of dismissals for reasons relating to race, gender, sexuality etc would still remain.) The proposals contained within the Report aim to increase economic efficiency and growth for British Businesses. The changes particularly relate to poor performers/employees who “coast along” and “work well below their true capacity, secure in the knowledge that their employer will be reluctant to dismiss them”. A situation which is far too common, due to employer’s fears of costly Tribunal proceedings and rulings being made against them. The Report suggests that the new scheme could encourage growth if underperforming employees were replaced with competent, fully performing staff. It is suggested that the workplace would become more competitive which would lead to higher productivity and in turn stimulate a growth in the economy. However, the Report has been criticised (and even admits) there is a risk that employees may be dismissed by employers simply because their employer dislikes them. It is also argued that such a scheme would have the opposite effect to that which is intended, by creating large scale job insecurity and actually slowing growth in the economy. It is expected that the Government will publish the Report later on this year and although the Government has commented that it is “unlikely” that the reforms will be implemented, it appears that the Government is committed to reforming employment legislation and the Tribunal system. Therefore, both employers and employees alike wait in anticipation for further reforms, if any, to be officially announced. Author: Allison Grant, Partner, for Lester Aldridge LLP