CIPD 2014: UK slipping into ‘two tier’ labour market, Pickavance warns

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The UK labour market is becoming increasingly segregated into two tiers, ex-Morrisons group HR director Norman Pickavance has warned.

Speaking on a panel about the UK labour market at the CIPD Annual Conference in Manchester, Pickavance, who reviewed zero hours contracts for the Labour party earlier this year, said business leaders had begun to make a distinction between “people who matter and people who don’t”.

“People who matter are on the talent list,” he added. “People who don’t are in outsourced [low skilled, low paid] jobs. They are not seen as part of the organisation and can be treated differently.”

Pickavance laid some of the blame for treating people badly (especially those in lower skilled, lower paid jobs) at the door of the HR profession. “[People] are seen as assets to be managed; buy them in and let them go,” he said. “There’s a direct link between that and lack of innovation and productivity [in the UK]. The mindset of human resource management is part of this issue.”

He added that companies have actively sought to “engineer out” people and roles, meaning staff cannot progress through an organisation as the jobs in the middle have vanished.

TUC assistant general secretary Paul Nowak called on businesses to work closely with their supply chains to ensure good practices, such as paying the Living Wage, apply to contractors as well as staff.

“Go back and take a look at the people in your supply chain,” he said. “Get leadership to take responsibility for what’s in their supply chain.”

He added that while more flexible and emerging types of employment contracts like zero-hours contracts, short hours work, agency workers and self-employment “have a legitimate role to play, in too many sectors they are being used to drive down wages”.

Also on the panel was UKCES CEO Michael Davis. He called on HR professionals to design jobs where people can progress, however they enter the organisation.

“Work is a key lever for supporting social mobility and putting rungs back in the labour market,” he said. “[HR should] see the workplace as a genuine space for innovation.”

No wage growth

The points of the panel are backed up by a report from think tank The Resolution Foundation, released today. The report, Why 2014 hasn’t been the year of the pay rise, says that a hollowing out of managerial jobs and workforce shifts means workers are taking on low paid jobs. It claims that this has held back wage growth in the UK.

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