What UK political change means for workforce management

Business and recruitment confidence are closely tied to political and economic conditions. Therefore, it's no surprise that the UK's political uncertainty earlier this year coincided with a drop in optimism and GDP.

Nevertheless, the re-establishment of stability frequently acts as a driver for economic recovery and, in turn, revitalises the labour market. Each party's manifesto prominently highlighted the need to enhance skill levels, meaning shifts in the talent and employment landscape unavoidable.

There has been such growth and evolution in the world of employment in recent years – not to mention challenges and hurdles to overcome – that refocused efforts are welcomed.

What are the main ongoing plans and their implications for the UK’s job market?

The first 100 days

The new Prime Minister and his cabinet have been swift, with the first announcements being issued by Number 10 within a matter of days of Labour’s appointment.

The King’s Speech laid the foundations for the first 100 days of the new Government, with skills and fair employment clearly at the heart of the plans to “Make Work Pay” for the UK. Since then, follow up meetings has seen the government commit to working hand in hand with trade unions and business leaders, beginning ‘a new relationship of respect and collaboration to help deliver the Government’s first mission – to kickstart economic growth.’

There is also a clear investment in a number of key industries that will see further pressures on specialist skills across the country.

Businesses and organisations that are already under pressure from skills shortages and a cost-of-living crisis, need to look at how this upcoming evolution could create opportunities to bring fresh talent into their sector or ensure that they retain the talent they could be at risk of losing.

Here are the core topics that HR, TA and procurement leaders need to stay on top of:

Making work pay

Perhaps the most widely discussed part of Labour’s initial campaign and manifesto was the new Employment Rights Bill. As announced in the King’s Speech, new protections will be afforded to workers in accordance with the Labour party’s “Plan to make work pay” report.

This plan is made up of many aspects, but the key regulatory changes that will have the greatest impact on HR, TA and procurement leaders include:

Prohibiting zero-hour contracts to ensure basic security and predictability for workers, requiring employers to compensate individuals if shifts or hours are cancelled or changed without sufficient notice.

Implementing a ban on fire and rehire tactics, aimed at enhancing job security for employees while eliminating unethical practices and power abuses.

Minimum wage reforms that would mean that the current cost of living is also incorporated into rate decisions.

A new obligation for organisations to inform workers – regardless of the model of their employment – of their right to join a union.

The right of a written contract for the self-employed.

Replacement of the existing three single status categories of worker (employee, worker and self-employed) to two - worker and self-employed.

The Back to Work Plan

Economic inactivity has been a leading news item for much of this year. Data from the Office for National Statistics has shown elevated levels of inactivity that have remained persistent throughout the first half of 2024, with younger demographics often cited as a substantial proportion of this group.

With a view to address this, the new Work and Pensions Secretary, Liz Kendall, revealed further details on the Government’s Back to Work Plan. As with many of the political developments we have seen so far, these plans appear to continuously evolve, however the core aspects of this plan at the time of writing include:

Forming a new national jobs and careers service by combining Job Centre Plus and the National Careers Service.

Introducing new devolved powers for mayors and local authorities to customize skills development on a regional basis. This will encompass health support primarily focused on assisting individuals with disabilities to enter the workforce where possible.

Introducing a Youth Guarantee for individuals aged 18 to 21, aimed at enhancing their opportunities through increased training, additional apprenticeships, and improved employment support.

The finer points of the Back to Work Plan are still being established and there have been calls from parties as well as the British Disability Forum to take a collaborative approach with both employers and relevant bodies in order to “get the plan right.”

Skills England: driving workforce transformation

To ensure effective implementation of an updated Employment Bill and new work initiatives, clear reporting is essential. This will be overseen by a new public body, Skills England.

The composition of this new entity is still undetermined, but experts hope it will involve representatives from business, education, and employment to align actions with modern workforce needs. There is a plan to empower Skills England to address early career training concerns by replacing the Apprenticeship Levy with a growth and skills levy.

This change would expand the Levy's scope, giving employers like local authorities more flexibility in how they invest in their talent pools, including flexible workers. Although the Institute of Fiscal Studies (IFS) noted that employers must adapt to benefit, organizations like the Association of Professional Staffing Companies (APSCo) have emphasized its advantages for modern workforces.

As Tania Bowers, Global Public Policy Director at APSCo, commented: “The commitment to reform the Apprenticeship Levy to deliver a Growth and Skills Levy is more akin to the modern world of work where rigid training routes simply don’t work. Skills, migration, and industrial strategy must be in alignment and employers need genuine flexibility around using their Levy funds to fulfil their potential and help solve the skills crisis. We continue to call for the funding of upskilling and reskilling of all workers, including agency workers and the self-employed, and will work closely with the new government on the detailed implementation of this policy.”

Creating more diverse employment practices

Although the King’s Speech highlighted efforts to enhance equal pay and boost diversity within the workforce, it overlooked a crucial aspect: the initiative to partner with prisons to assist former prisoners in securing employment.

Since the King’s Speech the overcrowding of prisons has escalated, and various initiatives have been rolled out to assist with this. Reducing the number of former prisoners that reoffend will assist in overcoming this growing issue, as those who manage to find and retain meaningful employment following release are significantly less likely to reoffend,

As part of the Impellam Group – who promote this as an approach - we know all too well that this is a notably untapped talent pool, and we are supporting many clients on campaigns to address this. The appointment of James Timpson as Prisons Minister is a move that we fully support in driving change and we’re hopeful that we will see positive changes in rehabilitation very quickly.

Navigating change with an experienced, expert partner

Navigating employment regulation changes can be challenging due to the varied working styles. Despite this, both workers and employers will soon face significant shifts in employment law.

With these changes on the horizon, we are pleased to be able to say that our expert teams excel at helping our clients manage change through major legislative and economic shifts. We provide compliant workforce and talent solutions with diverse skills to help you stay ahead of changing regulations while securing essential skills.

Contact us if you would like more details of how Guidant Global can support your organisation through this period of legislative change.