Tony Wilson CESI - In-work progression (28 Feb 2014)

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Tony Wilson CESI - In-work progression (28 Feb 2014)

  1. 1. Supporting low-paid Londoners to progress in work Tony Wilson Centre for Economic and Social Inclusion tony.wilson@cesi.org.uk @tonywilsoncesi
  2. 2. The challenge (1) Unprecedented collapse in wages – London and UK Source: Annual Survey of Hours and Earnings -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Annual change in median hourly earnings, 2012 constant prices UK London (residents)
  3. 3. The challenge (2) For first time, most adults in poverty in working households Source: Households Below Average Income 0 10 20 30 40 50 60 70 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 Share of those in relative poverty by economic status One or more adults in work No adults in work
  4. 4. The challenge (2) For first time, most adults in poverty in working households Source: Households Below Average Income 0 10 20 30 40 50 60 70 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 Share of those in relative poverty by economic status One or more adults in work No adults in work
  5. 5. The challenge (3) Big rise in number in involuntary part-time or temp work Source: Labour Force Survey 0 500 1000 1500 2000 2500 2002JAN 2002APR 2002JUL 2002OCT 2003JAN 2003APR 2003JUL 2003OCT 2004JAN 2004APR 2004JUL 2004OCT 2005JAN 2005APR 2005JUL 2005OCT 2006JAN 2006APR 2006JUL 2006OCT 2007JAN 2007APR 2007JUL 2007OCT 2008JAN 2008APR 2008JUL 2008OCT 2009JAN 2009APR 2009JUL 2009OCT 2010JAN 2010APR 2010JUL 2010OCT 2011JAN 2011APR 2011JUL 2011OCT 2012JAN 2012APR 2012JUL 2012OCT 2013JAN 2013APR Number in part-time or temp work because cannot find full-time job
  6. 6. So overall...  Headline economic recovering masks challenges: – Falling earnings – Stagnating living standards – Increasing working poverty – Increasing job insecurity  Ensuring policy and practice supports retention and progression is more important than ever
  7. 7. Key findings – low pay  21% of London workers (625,000 people) paid below LLW  Low pay is becoming more prevalent and entrenched: Change in employee numbers and median hourly pay for occupations with median hourly pay below LLW, London, 2006–11 Bar staff Waiters & waitresses Cleaners & domestics Sales & retail assistants Retail cashiers & check-out operators Labourers (process & plant) Chefs & cooks Market research interviewers -30% -20% -10% 0% 10% 20% 30% 40% 50% -10% -5% 0% 5% 10% 15% 20% Changeinemployeenumbers Change in median hourly pay National median change in pay Rising jobs Falling pay Rising jobs Rising pay Falling jobs Rising pay Falling jobs Falling pay
  8. 8. Some groups more likely than others to be low paid 0% 10% 20% 30% 40% 50% 60% Overall 50-64 year olds Females Disabled people BAME groups Lone parents 16-24 year olds No qualifications Proportion in work earning below Living Wage (London)
  9. 9. Also need to look at persistence...  571,000 Londoners ‘stuck’ in low pay for +1 year, 5.4 million people across the UK  164,000 Londoners at risk of cycling between work and low pay, 1.2 million people nationally – especially young people and those with no qualifications Snapshot of people’s status in the labour market, London and UK, Apr 2012–Mar 2013 912,000 6,913,000 203,000 1,432,000 111,000 733,000 54,000 506,000 571,000 5,406,000 2,358,000 17,635,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% London UK Economically inactive Unemployed, not worked within past year Unemployed, having been employed within past year In employment, earning below living wage, moved from unemployment within past year In employment for more than one year, earning below living wage In employment, earning living wage or above 'At risk of cycling'
  10. 10. Figure 3.8: Proportion of low-paid people whose annual hourly wage growth is less than the national median, London and UK 29% 36% 37% 28% 32% 30% 32% 33% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2006-07 2008-09 2010-11 mid-2011- mid-2013 London UK Many of the low paid progress more slowly  Wage progression more likely for those starting in low pay (median hourly wage growth of 10% annually)  But around on third of low- paid workers don’t see wage progression:  Changing jobs, and receiving on-the-job training, both seem to matter
  11. 11. Poor progression for different groups: 0% 10% 20% 30% 40% 50% 60% 70% Overall Females 16-24 year olds BAME groups Disabled people Lone parents People with no qualifications Proportion of low paid with hourly wage growth below median London UK
  12. 12. Views from the front line  A number of the unemployed people and low-paid workers we spoke to did not aspire to progress, and were satisfied with current (or previous) jobs  Others felt that the industries they worked in did not present progression opportunities  Salary considered the most important benefit of progression, alongside job satisfaction, confidence and job security: Focus group participants’ prioritisation of positive aspects of progression
  13. 13. What may work? We looked at four case studies:  RCT Homes – the transition into work – Focus on soft skills through ‘Can Do Toolkit’ – ‘Progress Tree’ to support progression  Renovo – staying in work – Work coaches and ‘Workfriend’ – multiple channels, personalised  pwc – retention and progression – Employer ownership pilot – Organisational support, mentoring, focus on SMEs  Stafforce – use of career ladders – Building qualification frameworks into own workforce development (‘The Academy’)  Also reviewed range of evidence from UK and internationally
  14. 14. All suggests two key factors in our control: The individual  Effective case management  Training support  Financial incentives The employer  Management and support systems  Staff culture and behaviour  Company factors
  15. 15. Which means...  Supporting people to stick and then stay in work by getting the job match right, personalising support, and supporting people through the transition to work  Supporting people to progress in work by personalising support to the individual’s needs (including job-related training and financial incentives)  Providing the right (business to business) support to employers to grow their workforce and their business
  16. 16. In practice:  Targeting: – Identifying those most at risk – particularly lowest qualified, caring responsibilities, many young people, poor work histories, certain occupations and sectors...  Joining up: – Some opportunity with JCP London, but most of ‘target’ group not on DWP benefits – Engaging through LEPs, employer networks, local contacts – Joining up across skills, employment, employer engagement  Case management led: – Employee – confidence, motivation, networks, goals, skills – Employer – HR, recruitment and retention, leadership, management  Additional support: – Training – scope to use FE loans? – Brokerage – finding a new job? – Incentives to progress – how??
  17. 17. Questions for discussion Does this ring true for you? What do you think works? What are the key barriers to going further or doing more? What don’t we know? How do we take this further?
  18. 18. Supporting low-paid Londoners to progress in work Tony Wilson Centre for Economic and Social Inclusion tony.wilson@cesi.org.uk @tonywilsoncesi

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