March 15, 2018
It may only have lasted 26 minutes, but chancellor Philip Hammond’s inaugural Spring Statement included a number of very encouraging points. Critics were quick to criticise Philip Hammond’s first Spring Statement. But that is perhaps simply the nature of politics. If an impartial party carefully dissects the 26-minute speech, there are undoubtedly many positives to take away. Yes, growth projections still lag slightly behind those highlighted in March 2016. However, it must be accepted that pre-Brexit forecasts are a different story altogether. On 24 June 2016, very few people would have predicted the growth story that was told in the House of Commons today – one of continued economic development with further growth on the horizon. This story is therefore an extremely encouraging one, and a welcome narrative amidst the doom and gloom that so often dominates the media headlines and political debates.
Add to this a falling level of inflation and an increase in real wages, and it makes for a strong picture. Admittedly the Pound is still not great against the Euro, but performance against the Dollar shows that things are, hopefully, starting to get back on track. Philip Hammond himself cited light at the end of the tunnel.
But, growth trajectories aside, what else can employers be pleased about and where do efforts need to be focused moving forwards?
The increase in the living wage will no doubt impact upon organisations employing staff at the lower end of the remuneration spectrum. However, this movement should come as no real surprise. From an employee perspective, the evolution of wages plus the proposed rise in tax-free allowances will have a profound effect on earnings and hopefully, ultimately, consumer spending. To get 4,000,000 people out of the tax system altogether is a phenomenal achievement. I look forward to seeing how this chapter of the story unfolds.
A fantastic HR headline that must be mentioned, is the creation of 500,000 jobs by 2022. Unemployment is falling, and the formation of new roles will prove crucial to maintaining – rather than reversing – this trend. HR teams now need to think about their own resourcing plans, reward models and L&D programmes, if they are to attract and retain the talent they need to thrive in a more buoyant employment landscape.
As the CEO of a HR software company, it was encouraging to hear the UK tech sector receive deserved praise for its global presence. Our country has a staggeringly strong digital economy, and the fact that we rank as the third cashless society in the world speaks volumes in this respect. I hope that, from a skills perspective, the nation will continue to attract the talent it needs to thrive. This is crucial to the onward success of tech firms, particularly niche start-ups. But demand for our tech is certainly there, with overseas interest in UK innovations showing no signs of dwindling.
The chancellor’s proposed investment in skills should therefore be praised, as should the investment in R&D. The UK cannot afford to stand still now, after a period of such significant hard work. But a long-term productivity rise is surely only attainable, if the skills are available to make it happen.
The same undoubtedly applies to manufacturing – another area of industry that attracted worthy recognition. The sector has reportedly achieved the largest unbroken run of growth in fifty years. Let’s hope a skills deficit doesn’t emerge to grind that success to a halt.
It is perhaps a less obvious point to draw attention to, but the nod to transport improvements was also hugely welcomed. There can be no denying that getting around in the UK is hard! It is surely no coincidence that the growing number of people in work and the country’s rising level of activity makes travelling from A to B increasingly tough. It wouldn’t be too extreme a statement to say that the nation’s infrastructure is close to bursting. If something isn’t done soon, this could start to have an adverse impact on British businesses. Candidates surely take their commute into account when exploring new employment options, so this could be jeopardising organisations’ ability to recruit. In sectors where talent pools feel like they are already drying up, this added challenge is far from ideal.
In summary, the statement was far from 100 percent positive. The chancellor admitted, for example, that it will be some time before the UK is insolvent. However, all things considered, it made for encouraging listening. It was even a somewhat playful statement at times, with Hammond himself saying he felt a little ‘Tiggerish’. Hopefully the takeaway points will leave employers with a spring in their step too.
Oliver Shaw is the CEO of CascadeHR