Mark Goldstone from Leeds Chamber of Commerce tells Channel 4 News why the city is at risk of a ‘skills drain’ to London if businesses don’t create new jobs.
Gross weekly pay – £490.30 / £500 UK average
JSA claimants – 4.7 per cent / 4.1 per cent UK average
Vacancies per 10,000 – 79 / 72 UK average
JSA claimants per unfilled vacancy – 5.9 / 5.7 UK average
Mark Goldstone, Leeds Chamber of Commerce head of business representation and policy: “The news that unemployment fell in the past three months is welcome news and we are hopeful that the upturn will continue into the next quarter.
“Unemployment amongst 16 – 24 year olds also fell, but it is still too high and the Chamber network would like to see the Government’s Youth Contract increased beyond its current £1 billion budget to give more employers the confidence to invest in young people. One of the benefits of the Youth Contract is that it will help employers hire apprentices and we need to see more sectors participating in apprenticeship schemes, as there is still a perception that they are solely for ‘blue-collar’ roles. However, this is simply not the case and in fact a Leeds-based cloud computing company, virtualDCS, has recently taken on a new apprentice as part of its company expansion and are now able to pass on their wealth of knowledge to their new generation.
“Young people’s skills in computing and social media make them ideal candidates for the digital, IT and communications sectors, we just need better support to help these businesses (many of them micro or small businesses) engage with the apprenticeship agenda.”
Mark Goldstone, Leeds Chamber of Commerce head of business representation and policy: 2011 was a terrible year for the labour market statistics. Unemployment reached a 17-year high and youth unemployment broke the 1 million mark, but there are now indications emerging of an upturn in 2012.
The Chamber’s latest Quarterly Economic Survey (QES) for Leeds, York and North Yorkshire shows that the employment balance has improved on the previous quarter (this is the first sign of progress in a year) and it also looks like this upturn is set to continue for at least the first half of 2012, as the number of firms looking to increase their workforce next quarter has also increased. These results are also reflected in the British Chambers’ national QES, which shows improved employment balances for both the manufacturing and service sector.
When the employment data from the QES is broken down by business size, the results are even more encouraging. Around a third of large and medium-sized businesses increased their workforce in the first quarter of 2012, as did 27 per cent of small businesses. Job creation amongst micro-businesses remains fairly weak, with just 15 per cent reporting to have increased their workforce, but this is to be expected due to the level of investment required to take on a new employee in comparison to the size of the business.
This is clear evidence of the private sector’s ability to create new jobs and there are many examples of businesses here in Leeds expanding their workforce to support ambitious growth plans. For example, the Leeds-based budget gym chain, Xercise4Less, recently opened up a new gym here in the city creating 60 jobs and hopes to create a further 360 jobs by the end of the year across a further six new sites.
In the city’s creative sector, Finn PR, have recently created five new jobs and plan to create a further five in the next six months – doubling the size of their workforce from ten to twenty in a year.
The QES also shows a noticeable increase in business confidence, with turnover expectations amongst manufacturers at a four and half year high. We hope that this boost in confidence will eventually translate into job creation; however, with many businesses still operating below capacity there may be some delay before we see any significant change to the unemployment figures.
Manufacturing skills gap
Manufacturers also reported noticeable improvements to their domestic and overseas sales and orders. This is of course a positive, but there is concern that the skills shortage facing the sector will intensify as activity improves. 59 per cent of recruiting manufacturers reported having difficulties finding suitable staff, particularly when recruiting for skilled/technical positions, and it is likely that, in the short-term, we will see more businesses investing in retention techniques to prevent losing skilled technicians and engineers.
To take this forward, more must be done to encourage more talented young people to pursue careers in manufacturing and engineering. There needs to be better engagement between schools and manufacturers to promote to young people how varied and rewarding a career in manufacturing can be and to also raise awareness of higher-level apprenticeship programmes, which are a great route into the sector. Local manufacturers, Surgical Innovations and Sulzer Pumps, both run apprenticeship programmes and young people often find that manufacturing jobs are well paid and offer plenty of career advancement.
Overall, these employment results are encouraging, but if there is one thing that we have learnt since the end of the recession it’s that the only consistency is inconsistency and I doubt that even the most confident gambler would place bets on our economic challenges being a thing of the past.
To read the full Leeds, York and North Yorkshire QES, click here
Mark Goldstone, Leeds Chamber of Commerce head of business representation and policy: The labour market in Leeds – like in most other parts of the country – has struggled to recover from the shock of the global recession. Employment levels are below the national average and in February 2012, the JSA claimant count in the city stood at 4.7 per cent compared to the UK rate of 4.1 per cent. Encouragingly though, Leeds’ employment levels compare well to other seven recognised core cities, with only Bristol reporting a lower JSA claimant count.
Private sector job creation is taking place here in Leeds. Businesses are expanding their operations and there is also large scale development taking place which will generate thousands of jobs. For example, Trinity Leeds, which is the largest retail scheme being delivered in the UK, will create over 3,500 jobs in retail and services. The Eastgate Quarter, a £650m retail development expected to open in 2015, will deliver around 4000 jobs, whilst Ryanair is creating 1,000 additional jobs across Leeds and Manchester.
Medical device company Surgical Innovation’s successful Regional Growth Fund bid means it is on track to create an additional 100 new jobs and apprenticeships and there is job growth taking place within the city’s advanced manufacturing sector. I expect that we will begin to see noticeable improvements in the local labour market towards the latter half of this year and the start of 2013 as business confidence begins to pick up as a result of falling inflation, improvements within the global economy and the ‘feel good factor’ of the summer Olympics and Jubilee.
Leeds at risk from ‘skills drain’ to London
Youth unemployment is a worrying issue for both our local and national policy makers. Here in Leeds it currently stands at 5.2 per cent – better than the national average, but still too high. Strategic action is needed to provide the city’s young people with jobs and optimism; otherwise we may find ourselves experiencing a ‘skills drain’ to London as graduates and other qualified individuals move to the capital where private job sector creation is exceeding that of the north.
Previous recessions have taught us that failing to address high youth-unemployment can have serious repercussions – not just for years – but decades to come. There are communities here in Leeds still feeling the impact of the 1980s recession when over a quarter of 16-24 year olds were out of employment, education or training. For example, the team at Leeds Chamber, which helps the long-term unemployed start their own business, is working with individuals who are ‘third-generation unemployed’ and come from families where neither their parents nor grandparents were employed.
Apprenticeships could address youth unemployment
The Chamber is a strong advocate of Apprenticeships as a way to address youth unemployment and develop a skilled workforce. In Leeds, there was an increase of 93 per cent in apprenticeship starts in the 12 months to July 2011, but the Chamber’s own research shows that less than one in five businesses in our region employ apprenticeships. The problem is that the promotion of apprenticeships – and in particular the higher levels programmes – remains poor and this is something that the Chamber, the city’s MPs and colleges are looking to improve. Specific campaigns should be created to raise awareness amongst parents, teachers and children that apprenticeships are not just for blue collar trades, but are a very real alternative to university in some disciplines.
Leeds needs to nourish’ entrepreneurial spirit‘
However, addressing unemployment isn’t simply about waiting for established businesses to create jobs. More people should be encouraged to start their own businesses and there is a role for both the private and public sector to play in nurturing the next generation of entrepreneurs. Leeds currently has a below average rate of business start-ups compared to the rest of the UK, so efforts must be made to improve this.
So how do we inspire a new wave of entrepreneurialism in Leeds? Speaking at the British Chambers of Commerce’s Annual Conference, the American economist, Bob Litan, suggested that contrary to belief access to finance isn’t the biggest barrier to entrepreneurialism; instead he suggests that it is culture. Currently, too many people think that setting up their own businesses isn’t right for them and we need to change that mindset.
The Chamber is already working with our city partners to encourage more people to explore the idea of becoming their boss, by providing mentoring and other business support. As a result over 100 people in Leeds have set up or are in the process of setting up a new business and are on their way to become tomorrow’s job creators.