Peter Cheese, CEO of CIPD, on why skills utilisation and job quality are key to improving output

Last month I talked about the immediate challenges confronting us as a profession, but also holding on to a longer-term vision and sense of purpose, both individually and as organisations.  

As 2023 unfolds it’s hard to see much resolution in sight. But we are seeing innovation and change. Flexible and hybrid working are being used to attract and retain people, and the wider focus on cultures of inclusion are positive shifts in EVPs. It’s not just about the money.  

Our longer-term challenges are about the so-called ‘wicked’ problems of productivity and innovation, of addressing inequalities and closing skills gaps. These are multi-dimensional problems that require holistic thinking and collaboration between policymakers, regulators, organisations, representative bodies including unions, and politicians.  

Improving productivity is a central economic driver, underpinning GDP and is key to supporting increases in pay. National-level comparisons help show how effectively labour resource is being used, and the operation of labour markets overall. For years the UK has languished in these comparisons, and appears to be around 20% less productive than countries like France and Germany. Many reasons have been given, from poor management practices to a long tail of unproductive smaller companies, and a lack of investment and innovation.  

It's hard to unpick these, and we need to improve measurement of output and productivity generally. However, we also know that availability and utilisation of skills, which many surveys put high up business leaders concerns, are key to productivity. Good reasons to keep pushing on the inclusion agenda, to open up recruitment and resourcing from all pools of talent.  

The World Economic Forum projects that within 3-4 years over 40% of skills needs will have changed. Skills must be invested in, but over the years the UK has fallen behind, both in the quantity and quality of training. And it gets worse when looked at through the lens of older workers lower skill jobs or part time workers. More transparency on what is being spent on training and workforce progression would also help, and our work on the ‘S’ in ESG looks at skills as a key area.  

But productivity and output also comes from skills utilisation. Are people able to use their skills effectively in the roles they perform? This lies at the heart of the principles of job quality and good work. High proportions of low-skill jobs, which are often highly constrained and disempowering, will drive down overall labour productivity. The UK has a disproportionately high level of these jobs, exacerbated by lower levels of technology investment and automation compared to other countries.  

We have to see job design, skills planning and development all as central to our agenda as a profession. We can shape the future of work through designing jobs that are good for people which in turn helps them to be more productive and deliver the longer-term outcomes we all need to thrive.

What’s caught my eye this month 

I love exploring the really big questions about life, the universe and everything. I have just finished a mind-blowing book called ‘What we owe the future’. Mankind is in its early infancy relative to how long the Earth is likely to survive – think a couple of hundred thousand years behind us, but millions of years ahead of us. That creates a sense of huge responsibility as William Macaskill the author describes it, to ensure that those yet to be born have the chance to be born and experience fulfilling lives. Very sobering!

What I’ve been doing 

We had our sixth annual Academic Research Conference in January, attended by almost 100 leading academics and practitioners. A key mantra for us has been ‘evidence based’ and it is always inspiring to hear the great research work that we connect to and want to bring in to practice. Discussions ranged from 4 day working weeks, understanding job quality, to truly understanding bias, and much else besides. It’s vital for both academia and practitioners that we engage together more in shaping the future of work.