Barring a huge geopolitical shock, Sir Kier Starmer’s Labour Party seems set to form the next Government. Whilst the Conservatives could in theory hang on until early 2025, persistent rumours suggest that an election could be called as early as April/May 2024; a date which would mean avoiding the US Presidential election climax.
What is clear is that immigration remains a political hot potato. At the time of writing, Labour hasn’t stated whether it would reverse the recent changes to the spousal visa income threshold. This isn’t surprising – it’s clearly a pre-election trap to build the Tory attack line that Labour is soft on immigration issues. But the silence is telling. The Uxbridge by-election demonstrated that focusing on singular, emotive issues can deliver a shock result.
Nonetheless, immigration will remain high throughout the next decade to maintain the balance between the retired and working age populations. As in Europe and the United States, the ‘Boomer bulge’ means an unprecedented number of people are living to retirement age. The ONS’s census analysis predicts the Old Age Dependency Ratio (measuring the number of people over state pension age compared to the number between 16 and state pension age) will increase from 280 to 352 by 2040, a 25% increase.
This leaves an unsaid, politically unsavoury truth – without a dramatic increase to the pension age (or means testing), the UK workforce (and tax revenue) of the future will be dependent on immigrant labour and skills.
This is set to have a major impact on employers, the distribution of skills, and how employers look at EDI.
It’s a known fact that both young people and migrants tend to gravitate towards urban centres. It’s why cities are more diverse than less urban areas. It’s where opportunities are for people with small or non-existent personal networks, and where they will find cultural familiarity. For employers outside of big cities, this means an even greater disadvantage.
I predict that this will result in a form of virtual reverse commute, where employers located outside of London and other urban centres have to offer increasingly attractive terms to attract the skills they need. Instead of the traditional model of workers in commuter belt dormitory towns travelling into the city, more and more city dwellers will be working remotely either in dispersed teams, or for organisations which have traditionally recruited locally.
This will be a big flip. During the pandemic urban centres were emptied of workers and felt the impact of WFH culture. But long-term, as the working age population in less-urban areas falls, it will be smaller, regional employers who must adopt a national, or even global, approach to talent management.
As talent becomes both harder to find and more expensive to acquire, EDI’s importance and relevance will increase. A challenge in all organisations is to define and measure the business impact of EDI initiatives – something which is rarely realised over the accounting year or even the five year plan. This lack of tangibility is a gift to critics of EDI and its effectiveness, but will, I believe, soon be more identifiable by its absence than its presence. As with IT (a business area where the main success metric is being unseen, unheard and unneeded by the majority of employees), long-term planning and implementation is key.
New metrics for EDI may take their inspiration from technology. We may start to place things like workforce resilience, identifying weak points in skill distribution, and workforce planning, under the banner of EDI. We should certainly expect to see EDI voices become more influential, especially with greater numbers of people approaching 20 plus years in EDI roles. And with this new level of importance we should also see greater financing and prioritisation of EDI.
I suspect that this will lead to some counterintuitive developments. With more money and focus, demand for strategic results will increase. What works will receive more support, whilst activities with low impact on commercial priorities (even if they are successful) will be defunded. Of course this already happens, but this may well mean many activities are subject to an undue level of oversight as organisations pivot from wanting or having to do EDI, to needing to do EDI well.
One other impact we’re likely to see is increased emigration of workers with highly valuable skillsets. I believe this will take two forms – younger, talented, educated, professionals being poached by high wage, high growth countries, and people with connections to developing countries identifying and capturing opportunities in those countries. The UK has become used to emigration being a retiree pursuit – we even give migrants from the UK a different name, ‘expats’. As the pace of global movement increases, we should expect to see the fight for talent become international.
Whilst we are still some way off manifestos being launched, the New Deal for Working People gives us a good sense of the employment policies of a Labour Government.
One interesting policy agenda is around secure work; the banning of zero-hours contracts and strengthened protections for workers and the self-employed. Of course, many workers and self-employed would argue that a reversal of the recent changes to IR35 would be a higher priority than strengthened rights and protections.
I suspect that the zero-hour contract ban will be punted into the long grass should Labour form the next government. Despite the moral panic around the term, zero-hours contracts are a conscious and welcome choice for a significant proportion of workers. And realistically, with claims by Angela Rayner that a ban would be implemented within 100 days of taking power, it’s likely that most zero-hour contracts would simply be terminated rather than converted. The cynic in me suggests that a large increase in unemployment numbers within the first three months of a new Government isn’t ideal.
Another policy familiar to those who follow European employment law is the ‘right to switch off’. This protection has been a feature of French law for some time now. But what’s interesting is the second part of this policy pledge; new rights to work autonomously and be protected from remote surveillance.
‘Work autonomously’ is a vague term and will presumably be fleshed out by the manifesto. But taken together with the mention of surveillance, this looks like a new agenda to protect remote workers and possibly introduce a right to work remotely.
A commitment to reviewing the Shared Parental Leave system is welcome. Shared Parental Leave is an excellent idea on paper but has been undone by its failure to appreciate the many other factors that go into the decision of which partner takes on the bulk of the childcare burden.
In its pledge for fair work, the most eye-catching policies are for the extension of pay gap reporting to ethnicity and disability and addressing inequalities in the workplace by enacting the socio-economic duty in the Equality Act 2010. Whilst pay gap reporting is an obvious and expected policy from the Labour Party, the socio-economic duty is a public-sector only piece of law, and as currently written has no specific workplace or employment implications. It may be that Labour intend to amend that section should they reach power.
If, as expected, 2024 is an election year, and if, as the polls suggest, there is a new Labour Government, it’s clear that HR will be faced with an agenda of fast paced legislative change. As HR leaders it will be our role to navigate that change, being agile and responsive whilst maintaining organisational stability. After 14 years of Conservative government, for many HR leaders this may be the first time they’ve experience big political and legislative shifts in the employment landscape.
Umbrella HR is here to help you navigate the unknown.