Is HS2 on the right track for the UK job market?
Beau Jackson , April 17, 2020
Our cover story this month looks at how HS2 is shaping the job market
In the past decade each element of this argument has been hotly contested. Yet the programme finally received the go-ahead from government in February this year, and work has already begun on Phase One of the line between London and Birmingham.
The UK has been repeatedly promised that travel between all major cities in England will be faster and more efficient than ever, making it easier for talent to spread across the country, create regional skills hubs and reduce the concentration in London.
However, the current route for Phase Two of the project, connecting the Northern-most cities to the line, is still to be confirmed and the forecasted completion date of 2040 is looking even more far flung.
Over the next two decades – or more – businesses will change and so will the job market. Already early figures suggesting rail passenger numbers were on the rise have been mooted, and the demand for remote working is increasing.
If these trends continue could HS2 be creating a network for jobs that will no longer exist? As work and the world itself become more digital, questions remain over whether UK businesses really need HS2 or whether the money could be better spent elsewhere.
Support from the North
Upon his election in 2019 prime minister Boris Johnson promised that his Conservative government would be the one that prioritises devolution of power to local governments.
A large part of this promise so far has been an investment in infrastructure, including the development of HS2 and its connection to the Northern Powerhouse project.
Jonathan Owens, programme director for business and management at the University of Salford, says: “One of the fundamental reasons the UK government went ahead with HS2 was that it would help connect the North and the South to build an economy that works for everyone, to support the growth of knowledge-based businesses by better connecting towns, villages and people to markets.”
And these towns have often criticised the government, arguing they have been ‘left behind’ by the capital.
Luke Raikes, senior research fellow at think tank IPPR North, adds: “It’s worth saying that as a country we don't invest enough in infrastructure.”
Some rail routes, Raikes pointed out, are well behind compared to other parts of the country. The TransPennine Manchester to Leeds connection, for example, is not yet electrified.
Though electricity for rail was first introduced to the UK in the late 1800s (most notably in the London Underground in 1890) it has had a slow rollout nationwide, and it was only in 2009 that Network Rail launched a consultation on large-scale electrification.
According to the Institution of Mechanical Engineers only 42% of the UK’s train lines currently operate using electricity, leaving the majority still running diesel-powered locomotives.
So if linked to the Northern Powerhouse rail project HS2 has the potential to help modernise England’s rail network.
Looking at the bigger picture of what the projects can offer when built, Raikes outlines that the economic benefit is not just about one new train link, but also what happens when people arrive in connected cities.
“You need infrastructure to take people on from Manchester, whether it's to Liverpool, Leeds, wherever it is. That's where you get the big ‘bang for your buck’ with all of that infrastructure coming together.”
In February Raikes authored a report for IPPR North about The devolution parliament: Devolving power to England’s regions, towns and cities. When asked if he thinks HS2 would be a critical factor in enabling devolution in England, he said:
“It will have a big impact, that’s for sure. It's almost impossible to say the nature of that impact, but just know that it will be big and it will have a different impact on different places. There are calculations out there, but with something as big as HS2 it’s just difficult to know.”
Many of the cities connected by HS2 are positive about the contribution the project can make to local industry, and are urging the government to commence later stages of the line in parallel with Phase One.
The city of Nottingham, within the Greater Nottingham urban area, is planned to be connected to the HS2 network by a station in Toton. As a supporter of the HS2 programme, councillor David Mellen, leader of Nottingham City Council, has stressed how crucial the network will be to the Midlands’ economic growth as well as its environmental targets.
And Mellen refuses to let criticism of the project slow it down.
“Travel is important and it’s been something that's held us back in the East Midlands. The actual infrastructure, which I think is almost no more important[TT2] than the speed, is much needed in our rail as we want to encourage people to use public transport,” he says.
Where Northern towns and cities have yet to see construction of the network begin though, one city already seeing the benefits of the project is Birmingham.
As a strategic centre for the line Birmingham has been home to HS2’s headquarters since its founding in 2009.
Verity Stokes is a director at Birmingham-based recruitment agency Katie Bard. She says: “HS2 has had a strong presence in Birmingham ever since it was first announced and there has definitely been an uptick in businesses wanting to create a base here, although this is difficult to solely attribute to the scheme.”
For Stokes, one of the key opportunities HS2 offers is the business organisations could win from London. She adds: “Faster and more reliable travel times to see clients means Birmingham businesses in the service sector are able to split work between London and Birmingham offices and create more jobs in Birmingham.”
For businesses like Jacobs Engineering, an engineering consultancy that has had a presence in Birmingham since the 1980s, HS2 helps reinforce a longstanding commitment to the city and its surrounding region.
Søren Carlsen, Jacobs’ vice president of human resources, people and places solutions EMEA, says: “Birmingham is a major market for Jacobs. Being closer to some of our major clients including the HS2 headquarters, Birmingham City Council and Highways England has
helped expand our presence and service accessibility.”
Historically the career opportunities available in London have meant the city has attracted a wealth of talent from across the country, resulting in a ‘brain drain’ in more disparate areas.
However, in a reversal of the capital’s brain drain, figures collected by Totaljobs have shown that the number of workers leaving London has grown at an unprecedented rate in recent years.
In 2014 the inflow of working-age adults to London was 169,440. In the same year 187,460 working-age adults left the city, outweighing those coming in by 18,020. Yet in 2018 the inflow of working-age adults was 200,846, whereas the outflow was 241,033, creating a net of -40,187.
Though HS2 is not presently the catalyst for this change Stephen Warnham, content and communications manager at Totaljobs, envisions how the project could contribute to this trend in the future.
“Birmingham and Manchester are already two of the most popular destinations for people moving away from London and being part of HS2 will likely see this trend continue. With some one million young people planning on leaving London by the age of 33, better connectivity to regions outside of London could see these parts of the UK open up further to become thriving jobs hubs,” Warnham says.
“For London employers investment in Britain’s transport network will expand the areas from which they are able find talent, so things like season ticket loans and flexible working will become increasingly important.”
So the how and where of jobs will be changing, but what kind of jobs will HS2 create and facilitate?
HS2’s figures estimate that the project will create 30,000 jobs, 17,000 of which will be new positions that require specialist skillsets.
“HS2 will create lots of additional demand, which is good, but not all of that demand is currently available in the supply chain. So we’ve got a gap, which you could see as a problem or you could see as an opportunity,” says Neil Robertson, CEO of the National Skills Academy for Rail.
In terms of economic value the jobs that don’t yet exist within the rail sector stand to generate more than £6 billion, which Robertson says has not been taken into account in the government’s proposal for the project.
“The bulk of jobs are in various engineering and construction disciplines, and incidentally they are already areas of skills shortage,” says Robertson. “The jobs created include everything from welders, steel fixers, project managers, engineers, surveyors, right through to less obvious jobs like archaeologists and environmental assessment specialists.”
Michael Tarrega is communications and media relations manager for HS2 as part of the Costain Skanska joint venture, one of the programme’s leading contractors. He confirms that more than 2,000 firms in the UK are currently contracted to work on HS2, 70% of which are SMEs and 98% of them British.
“Since Royal Assent in 2017 there have been 324 apprenticeships within HS2 and the supply chain,” Tarrega adds.
However, because of the scale and scope of HS2 the question of what skills will be created in response to the project is about more than just construction and engineering.
For Skanska the complex matrix structure of the joint venture with Costain has specifically informed some of its internal investments in soft skills development.
EVP and chief HR officer at the company Harvey Francis says: “We've invested very heavily in trying to upskill our people in collaborative behaviours – which means effectively working together in the best interest of the joint venture and the client, but also recognising the requirements and needs of each of the parent companies.
“From an identity perspective people work for Skanska, but you also want them to identify as being part of the wider team. That’s one of the challenges that we're always looking to manage.”
Beyond those industries directly involved in the undertaking of the project, HS2 also provides promise in terms of employee mobility.
Mark Dexter, CEO at KDR Recruitment, suggests that in the longer term HS2 presents the opportunity to spread areas of expertise more evenly across England.
Using recent relocations by the BBC and Channel 4 as examples, Dexter says: “I think HS2 will enable businesses to set up centres for one particular skillset. They can potentially have a tech centre in Manchester but if they can get to London quickly, to where commercial might be, or where marketing might be for example, then that’s going to be a help to them.”
But these expansions and relocations can’t happen until HS2 is completed.
“I think at the moment there’s an element of catchup to be made,” Dexter says. “Manchester has attracted a number of large businesses setting up their technical hubs. But I don’t think the infrastructure is necessarily there at the moment to be able to support that growth. But that should change as HS2 comes in.”
One of the biggest foreseeable impacts of HS2 will be what it contributes to flexible and remote working.
According to the 2019 Global Workspace Survey from the International Workplace Group (IWG), 68% of businesses in the UK reported that they have a flexible workspace policy in place. Across the country, 73% of people also said they believe flexible working to be the new normal.
The CIPD’s UK Working Lives survey for 2019 also found 54% of UK workers work flexibly in some way. This figure is only expected to rise as two in three (68%) of those surveyed by the CIPD said they would like to work flexibly in a way that is not currently available.
Tailored to the personal needs of the individual, flexible working can mean working different hours, or it might mean working from a location other than the reporting office.
At Ricoh, for example, director of people and CR Rebekah Wallis explains that the company has different categories for flexible working dependent on their roles.
She estimates that around half of the company’s workforce have roles which mean that they are effectively “field based” so they work at home, but travel directly to customers. In roles like this, with dispersed teams, reliable high speed rail infrastructure could be a valuable asset.
Figures for the HS2 network estimate that the majority (65%) of its passengers will be people from classic rail lines. Eight per cent of the network’s passengers will be people converted from traveling by car. At forecasted annual capacity (85 million) car travellers using the network equate to 6.8 million people.
Wallis says, “Our view is that, certainly with a multigenerational workforce, flexibility is just becoming more and more important. And people are moving away from the traditional nine to five to wanting more flexible roles. It is going to be almost essential for employers to offer that agility.”
According to Skanska’s Harvey Francis, the company often uses its projects as microenvironments to trail new working practices before rolling out to other areas of the company.
For workers on HS2, the company is currently conducting a flexible work trial, which is unusual for construction work. “One of the issues that the industry has always had is flexi-working not so much in the offices, that's easier to accomplish, but on site,” says Francis.
Named Flex 40, Skanska’s flexible work program was started as a pilot in the HS2 project last year and has since been extended. The two aspects of construction work that the programme aims to tackle is a long-hours culture (and with that, presenteeism), and a lack of diversity, particularly in terms of gender.
Arranging construction work around, for example, the school run has historically been difficult for working parents. But Flex 40 aims to change this.
“Programmes like Flex 40 and a few other things we have in place are about looking for the opportunity to be more,” Francis explains.
“By doing that we can create a different offer in the employment space and hopefully attract people with different skills and different backgrounds to join us that ordinarily would have discounted themselves because they'd see the organisation and the industry as unattractive.”
Now the company is looking at ways to take key learnings from the trial and apply them more widely.
Advancements in and the proliferation of remote work pose arguments both for and against HS2.
According to ONS figures from 2018, more than 32.5 million people in the UK said they mainly work from home as part of their job. In AirBnb’s 2019 Future of Work report 77% of UK workers said they feel companies should provide more remote working options to attract talent.
In areas that benefit from better and faster connections to company headquarters employees could have more of a case for working remotely given employers would know that, when needed, their people can be in-situ for a face-to-face meeting much quicker.
Journey times from London to Birmingham are expected to be cut from one hour 24 minutes to 49 minutes. In another example, the journey from Manchester Piccadilly to Birmingham would take just 37 minutes, rather than the one hour 46 minutes it currently takes.
Melanie Steel, HR transformation consultant and founder of People Change Expertise, supports the HS2 programme and recognises that more transport infrastructure is needed across the country. She says: “We want in parallel to make it as easy as possible for people to be able to commute, and for people to be able to work wherever.”
But it’s not just from a business perspective that Steel sees the potential of such a project.
“I think we need to think about infrastructure in terms of – yes there is a big push for it in business, but there’s also a big part of it socially. People choose to live where they live, and don’t necessarily want to move. That goes within their personal relationships as well as in their work relationships. So, I think there’s a bigger piece in terms of wellbeing.”
But with more people able to work remotely, some argue HS2 may be an unnecessary spend. The modern workforce has more digital tools at its disposal than ever. Emails, video meetings, online calls, telepresence – all have become or stand to become common office practice, and they are typically more cost effective than a high speed ticket to Birmingham.
Guy Pink, a self-employed portfolio careerist in HR, argues the money for HS2 could be better spent elsewhere.
“By the time the whole network is actually finished are we going to be getting on a train and commuting down to London? Will we be much more likely to be working in some local hub?” he questions.
Time spent travelling, Pink points out, is actually “dead time” in which little to no work gets done.
Yet moving to a wholly-digital way of working comes with its own challenges for HR, for example how to replicate ‘water cooler moments’. Group chats for teams through apps such as WhatsApp or Slack are often being used to replicate such environments.
Fiona Mullan, chief people officer at mobile top-up platform Ding, argues that this digital social connection is much more natural for younger workers.
“A new generation is used to connecting through social media with friends and contacts on a more distributed and online basis, so their experience is online from the get-go. And therefore they bring that into the workplace,” she says.
She believes digital communication platforms can benefit everyone in an organisation. “Generally when you put it at the heart of the workplace it tends to give everybody more, and those who haven’t been considered remote workers before tend to equally benefit from it, at least in my experience,” she adds.
But will technology take over entirely and make connections like HS2 redundant?
No matter how technology progresses, Steel argues that a sense of community always wins.
“There is no substitute sometimes for people that just need to meet face to face. Technology supplements a lot of that but it cannot replace it in totality,” she says.
For Mullan, successfully cultivating personal relationships between remote and site-based workers takes two things. First, there must be an awareness that the needs of remote workers and those based at HQ are different. Second, we need to be aware that “some aspects of face-to-face engagement can be extraordinarily helpful”.
Are the wheels in motion?
Though at the moment we may not be able to quantify the impact of HS2, if the project is successful it will change things in a big way for many regions of England.
Mobile top-up platform Ding is headquartered in Dublin, and while this company, like many others, may not immediately and directly see the impact of HS2, Mullan argues that the project contributes to a wider, global evolution.
“What you see is a rapid evolution in workplace environments with companies and businesses being able to have their organisations distributed, both observing their market needs but equally operating in a more integrated way,” she says.
“Technology is both an enabler and a forcing function of that, and the HS2 project is part of that general evolution across all types of technology, not only in the IT space.”
In light of the current climate, particularly as the world faces mounting challenges due to the spread of the COVID-19 virus, one thing clear to Mullan is the need for adaptability.
“Where and how we work is historically informed by the traditional way of physically operating out of one place. I think that now has well and truly changed,” she adds.
The potential the project could still bring some negatives along with it is what Rebecca Wallis at Ricoh says makes it difficult to include the network in strategic planning. “It is easier for an organisation to make plans when they know more firmly what they're planning around [...] For the positive impact it’s as easy to plan as if nothing is going to happen, but then reap the benefits of it when it does,” she says.
Though the network could contribute to broader trends in flexible and remote working, as well as talent sourcing, KDR’s Mark Dexter reflects how important it is to keep HS2 in perspective.
“I don’t think HS2 is a commuter line. I see HS2 as a connector line. It’s the sort of thing that enables business to say that they are multi-centre, as you’re not going to want to put all your eggs in one basket in terms of one town in some cases, but it enables teams to travel,” he says.
Steel says the only frustration at present is that businesses are eager to reap the benefits of the line as soon as possible. She says, “Business wants it to happen, and it wants it to happen soon.”