IoD: Positive employment figures but productivity must now be focus

Responding to latest official employment statistics, showing wages rose at an annual rate of 2.9% in the three months to March, Seamus Nevin, Head of Policy Research at the Institute of Directors, said:

“Workers will welcome the slight boost in wages – the first they’ve seen for more than a year – but the rise is nothing to write home about.

“The only reliable way to boost workers’ pay packets is to increase productivity. Investment in training is key but the drop in Apprenticeship starts since the Government’s Levy was introduced shows the system needs reform now if we are to train the people we will require for our shifting skills needs as the post-Brexit economy evolves.

“Yet again we’ve seen great employment figures as the number of people in work increased and the number of people without work decreased. All of this suggests, however, that access to staff may be peaking as the labour market tightens.

“Employers are finding it increasingly difficult to recruit the people they need. Given access to skills is currently one of the highest concerns for IoD members, today’s figures also highlight the imperative for government to reform the Tier 2 visa cap to allow employers to recruit the overseas workers they need to grow in the short term.”