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Item 2 is the continuation of our inquiry into underemployment in Scotland. We have one panel of witnesses, whom I will introduce from left to right: Garry Clark, head of policy and public affairs, Scottish Chambers of Commerce; Jackie Brierton, managing director and policy director, Women’s Enterprise Scotland; Gerry Higgins, chief executive, Community Enterprise in Scotland; and Kenny Richmond, economics director, Scottish Enterprise. I welcome you all and thank you for coming along. Before we get into questions, would anyone like to make a brief introduction?
Good morning. I hope that I am not the token woman here.
Far from it.
I would like to give evidence from a gendered perspective. I apologise that I was not able to provide a written submission, but I hope that I will be able to back up anything that I say today.
Thank you. Would anybody else like to say anything? It is not compulsory; we can go straight to questions.
From our work with the number of companies that we support, we found—especially at the beginning of the recession—that a small number of companies looked at reducing work hours, taking shifts off and reducing overtime as they saw demand decline. We found that many of those companies worked with their workforces on that: there was give and take on both sides, which companies found useful.
Among the companies that are account managed by Scottish Enterprise, have you found more reliance on agency working, zero-hours contracts and temporary workers? Has that been a developing phenomenon?
It has been for some companies. It tends to be sector dependent. In the food and drink sector a number of companies have looked at using contractors or recruitment agencies rather than taking on full-time staff.
Are you aware of any other sectors apart from the food and drink sector where that is happening?
Food and drink and tourism are, I think, the two sectors where it is happening the most.
We are also seeing the same approach in the manufacturing and distribution sector.
So it is very much seen as a temporary tool to deal with economic factors rather than a more permanent shift.
Yes.
That is interesting.
The impact on women over the past three or four years has been more negative than positive, mainly because their jobs have been hit slightly more than men’s as a result of a decreasing public sector. We are also seeing more zero-hours contracts for the sort of low-pay service sector jobs that many women have.
Having spoken to businesses throughout the recession, we know that some businesses have found shorter-hour and part-time working an appropriate means of maintaining their viability and staff skills. Instead of letting staff go, many businesses have tried to retain their staff and their skills.
I am interested in the question whether the rise in underemployment is permanent or cyclical. We have heard quite a lot of evidence that, even before the current economic downturn hit and even when we had a strong economy, the levels of underemployment were rising. Gerry Higgins said that he felt the recent rise to be temporary, and in its submission the Confederation of British Industry Scotland argues that it
To an extent, that is true. Many businesses are working at undercapacity. As they grow, reach capacity and look to expand, they will look to increase either staff levels or staff participation.
On the gender aspect of the issue, we could argue that there has been underemployment among women in the workforce for a long period. That shows up in all sorts of things, such as the occupational segregation that still exists in the Scottish economy and the lack of women in senior positions in the public and private sectors.
Some practices may remain embedded in companies that have begun to use zero-hours contracts and different forms of flexible working for the first time. The real test will come when there is increased market demand. Companies will have to change in order to have the staffing to meet that demand, and flexible contracts and part-time working may not be acceptable. That is the point at which, even in our business, we will have to consider what we need to do to secure and retain good-quality staff.
Good morning. My questions are for all the witnesses, but I will start with Jackie Brierton on the gender aspect.
There is certainly some evidence of that, but many of the women to whom we speak still have issues once their children go to school. In some ways, some of the problems become even greater simply because they have to be at the school at certain times of the day. A couple of women could not even come to the round-table discussion that I mentioned simply because there would be issues if they were not at the school at a certain time.
Has the legislative programme on maternity leave and returning from it been positive for women, or is it having a slightly negative impact?
All the evidence is that it has had a negative impact. You just need to look at some of the comments that have been fed back to some of the business organisations. Their members would probably not say it on record, but many are avoiding employing women of childbearing age. It is a tricky one, because a lot of people would probably not admit to doing that, but we know that, unfortunately, it happens.
Therefore, there is not enough planning for women who go on maternity leave to come back into the workplace and perhaps have a flexible work pattern over a number of years.
It is not just about a company saying that a woman can work part time; it is about looking at more innovative ways of enabling flexible working that would help a lot of people. With regard to big companies, I heard recently that PricewaterhouseCoopers has made great efforts to enable its female staff to come back after maternity leave in a way that suits them, which might be very different from one person to another.
But were you suggesting that that is perhaps one of the prime reasons for women not getting into senior positions?
All the evidence points to that, because women often have a career break at a critical time in their career pattern. If we look at the other end, there has been a lot of discussion and dialogue in the past year following the Davies report, “Women on Boards”. There is a lot of focus on how we get women on to boards, but if we look at where women who might eventually get to board level are in companies’ pipelines, we see that they are missing during the vital period, which is often when they are between their mid-30s and mid-40s, when promotions happen. That means that not enough women go into senior positions in order to be promoted to boards.
So you are suggesting that the underemployment trend is having a greater impact on women than on men.
I was interested to read some of the written submissions to the committee, which seemed to say that the problem was more one for men than for women. However, I would hold quite strongly that it is a bigger issue for women generally.
We will perhaps bring in Garry Clark, given what was said about employers’ organisations and that he represents one.
It is difficult to point to evidence about that. What is certainly true is that different sizes of businesses are differently equipped to respond to changes in personal circumstances and employment patterns. In the early part of the previous decade, we began to see pretty substantial efforts by employers of all sizes to attract and retain staff.
Employers of all sizes and all sectors?
It happens across the sectors. It is easier in some sectors than in others to introduce flexible working patterns. Certainly, employers across the board tried very hard to attract the right staff with the right skills. They looked beyond the traditional labour market and towards people who were not participating as much as they would like or who felt that they did not have the opportunity to participate, and they tried to open up new ways of working, whether that was part-time working, homeworking or flexible hours.
On the question of the gender divide, I would be interested to get Jackie Brierton’s views on a particular hypothesis.
That is probably fair, although it would be worth looking at the figures again in terms of hours underemployment. The figures that I have, which I think came from the Scottish Trades Union Congress, show that the underemployment rate for the past year was 8.7 per cent for males and 11.3 per cent for females. That would seem to undermine the argument that it is more of a problem for males. Of course, the part-time issue definitely skews the figures for females. Undoubtedly, quality part-time jobs that use women’s skills and education are still lacking in the economy.
We are seeing that unemployment rates are, if anything, going down, but the number of people who are “economically inactive”—I think that is the new buzz phrase—is rising. Could it be that a lot of the women who are impacted are just stepping out of the workforce altogether? Is that maybe skewing the figures? Women are maybe saying, “Well, actually, I am not even entering into work”. Likewise, people who are working part time because of issues such as childcare are maybe not answering that they could do more work because they are not available to work due to being affected by structural issues in the employment market that go far beyond underemployment.
That is true. There has been a large increase in self-employment, but the analysis of the figures shows that all of the increase has been in part-time self-employment. Some of that employment is for less than 13 hours a week, and it mostly involves women. Therefore, they are opting out of the broader employment market and perhaps doing some activity so they show up somewhere, but it is the invisible underemployment among women that is very difficult to measure.
I will move on to the impact of underemployment on those affected. Earlier in the evidence session, people were saying that it was good to have underemployment because it means that the workforce are ready to respond to an upturn in the market, for example. However, we have heard evidence that the impact of underemployment on the individual is much the same as the impact of unemployment. There are mental health issues, health issues and issues of esteem—not to mention poverty—in the mix.
The evidence suggests that such levels of underemployment are not sustainable. I think that you are right that, over time, there may be issues to do with skills erosion. Obviously, there are issues of poverty for some people who are affected by underemployment. The current position with the number of companies that have reduced hours and so on is not sustainable.
I agree with that. Underemployment can be used as a means of sustaining a business and retaining staff, but there are effects on individuals. Perhaps they will work at a level below their skill, in which case they may not be very happy in their employment, or they may look for a second or additional job, which might have an impact on their ability to do both jobs. From that point of view, most businesses would not want to have underemployment for a significant length of time.
There is quite a lot of evidence that both unemployment and underemployment can have a long-term scarring effect, particularly on young people who are unemployed or underemployed for the first few years after they leave school, college or university. Obviously, that is really worrying. We saw it in the 1990s: the impact of young people’s unemployment lasted and affected their ability to hold down a job and their health for at least 10 to 15 years after the initial experience. Obviously, the same thing is currently affecting our economy.
I certainly support what has been said. Our particular experience is that many jobs that would traditionally have been filled by young people—entry-level jobs in particular—are being filled by people who are overqualified for them, as an economic necessity. We can understand that but, from an employer’s perspective, that is creating a significant knock-on effect on our ability to get young people into jobs.
We heard evidence last week that sometimes those who are underemployed are financially worse off than those on benefits, and they are trapped in that situation. What impact does that have on the economy as a whole?
I think that it has a huge effect. Obviously, it affects everything from spending in the economy to housing issues, and there is an impact on children. The effect is enormous. For example, some of the evidence that we have seen shows that lone parents are probably the worst off because of the current circumstances and their inability to work in the current economy. We will probably pay in the future for the long-term impact on them and their children.
As well as facing underemployment in the hours that they work, some people have seen their real wages reduced as their wage rates have remained stable while inflation has been higher. Some people have therefore been hit in two ways.
Good morning.
I am not sure about there being a black hole. There is a whole range of initiatives that are targeted at different groups. There are schemes such as the Commonwealth graduate fund and the intern programmes that try to assist young graduates into jobs. There is also the community jobs Scotland scheme, which has more of a focus on entry-level jobs. I guess that every public sector agency has made a commitment to do what it can to provide opportunities for young people but, from our perspective as a provider of services, we do not see that those efforts are necessarily joined up.
How engaged are the local authorities in all this employment activity?
Many authorities struggle because they have limited opportunities to engage a significant volume of young people or people who present with support needs or disadvantages. In some cases, the systems are not designed to take on people with high support needs. Although there may be a commitment to do what one can, sometimes the processes get in the way. However, in general local authorities are introducing initiatives to try to complement national and Department for Work and Pensions initiatives to tackle the issue. Some are doing very well at that, but others probably have significant room for improvement.
Do any of the other witnesses want to comment?
One issue within youth employment is the segregation that still goes on. For example, even when young people get into apprenticeships, segregation still means that more than 98 per cent of engineering, plumbing and construction apprentices are young men, whereas hairdressing, childcare and social care apprenticeships tend to be taken up by young women. That has hardly changed over the past 20 years. Even when young people get an opportunity such as an apprenticeship, they are still being siloed into particular areas. For example, young women who go into those service industry trades may end up in a job, which is great, but they will be on a lower income, be lower skilled and have fewer prospects going forward. That is an education issue that perhaps needs to be addressed much earlier, but its impact restricts the opportunities that are available to young women.
One frustration, or perhaps lack of understanding on my part, is that we have a fairly cohesive economic strategy on which sectors we want Scotland to be successful in, but we are not meeting the current demand for engineers. If we look at the demography of engineers, we can see that it is quite worrying that we are not filling the pipeline. We need something like 60,000 engineers. I know that mobility and location are a problem, but how might we fill the pipeline that is required for life sciences, engineering and, to a lesser extent, food and drink? Where are we missing a trick?
We are finding that a number of companies that are experiencing skills issues are looking at apprenticeship schemes. They are also working with local colleges to develop skills training courses to try to address that problem with the availability of skills, particularly in sectors such as engineering and life sciences. There are good examples of companies that are taking action on that to try to address the skills issues that they face.
Let me attach another question as an addendum to that. When we talk to, as we do, social enterprises and small businesses, we hear that there appears to be a lack of business support and a proliferation of funding mechanisms instead of a focus on supporting that type of activity. Are we missing a trick? Should we be changing something to encourage the type of activity that we want to see? When we last talked about this matter, I said that that will not happen overnight. Should we be looking to move people out of employment at an earlier age so that we can backfill? That is a cultural shift. What is the silver bullet that will enable us to get the balance of employment right and reduce the level of underemployment?
I do not think that there is a silver bullet—
There is always a silver bullet.
It is a case of various actors having to work together. For example, in each of the key sectors that have been identified, skills groups have been set up to specifically consider skills issues. That could be one mechanism by which, at a sectoral level, we identify what the skills needs are and consider appropriate ways of addressing them.
If the answer were easy, we would have come up with it by now. There is a combination of factors. The Scottish Chambers of Commerce, in partnership with the Scottish Government, is working on the graduate recruitment incentive, which is an attempt to create new and sustainable jobs for graduates in small and medium-sized businesses, which has the advantage not only of getting graduates into jobs but of getting them into the right jobs, which frees up some of the jobs that they might otherwise have ended up in for people of an appropriate skill level for those jobs.
With all due respect, we know that we are looking for something like 60,000 engineers over the next eight to 10 years. Why are we not focusing on that to the level that we should be?
We are not focusing careers advice on young people at an early enough age. It is difficult to provide careers advice without significant extended input at an early age from the business community. The other week, I read about a proposal to give people careers advice at the age of 12. It strikes me that we might be better starting a bit earlier than that. Kids are always talking about what they want to do when they grow up. We should help them to make better decisions.
Is it possible that we are going through a cultural shift now, that the whole employment market is changing and that we are fighting old wars with old resources? Given the developments in technology—and the developments that are likely to come—might it be the case that the whole structure of the workplace is changing rapidly, which is why we have underemployment?
You are probably right, to an extent. We have not adapted what we offer to the changes, even to the extent of redefining what sectors businesses are in. A business that is offering something completely digitally that might have been offered in a different way five years ago finds it difficult to slot into an area with regard to business support. Kenny Richmond might have more to say about that.
I have brief supplementary questions to Mr Brodie’s points about youth employment. Is too much reliance placed on Government initiatives instead of employers taking on young people? Employers could provide something like a secondment that upskills a young person and provides on-the-job training. Are employers just looking for productivity from day 1?
There is probably an element of truth in that. Employers certainly need to play their part. In our experience, they are usually happy to provide training to get people into jobs. Many of our members are small and medium-sized enterprises and many of them probably do not recruit enough young people—they look more towards people with experience. As has been said, the current job market can provide difficulties for young people.
A skills academy and so on would help to fill that gap.
Possibly.
Garry Clark talked about giving careers advice when people are 12. I will draw on personal experience—I make no apology for that. When I was 13, I made subject choices. I did not take standard grade biology, so I could never become a doctor thereafter. Right now, I have no particular wish to be a doctor—that is not a great driving force in my life—but, at the age of 13, I could not predict what I would want to do six months down the line, let alone 20 years down the line.
The concept of lifelong learning has become ingrained into the way in which we approach skills issues in Scotland, which is a positive change.
There are great examples of sector-led initiatives that focus on that. For example, the chemicals sector has done work that involves going round schools to promote what the sector does and to try to get across the point that the chemicals industry is not a dirty one and can be quite exciting. There are good examples of industries that are doing that to promote themselves.
As someone who took standard grade chemistry, I am supportive of chemistry.
He wants to be a chemist now.
I am not a chemist—that is one of the many things that I am not.
I am not sure that I know the answer to that. There are pluses and minuses. Someone with a greater degree of hinterland and variation in their career history might in some cases be more attractive to an employer, but that will depend on circumstances. Other factors probably have a bearing on that.
I wanted to ask about underemployment among young people, but Dennis Robertson has already asked the question that I was going to ask. However, I can widen it out a little. I think that Mr Clark said that it seems that most young people who are underemployed are on Government schemes. Did I pick that up correctly?
No—I said that the Government schemes are the most visible mechanisms for getting young people into work.
What are employers doing to attract young people? It seems that the high number of young people with fairly low qualifications are the most underemployed. Is it possible that they are in those jobs because that is the only thing that they can get and that employers are not training them up as they should unless a Government scheme is available?
There are good examples of employers that have not historically employed young people in their businesses changing their way of working. One is Standard Life, which a few years ago looked at itself and said, “Hey, wait a minute, we do not employ anyone under 20.” It now has a scheme in Edinburgh to get young people into employment. It is often difficult to get smaller businesses to consider taking on young people, because the labour market is so flexible these days and businesses have a great deal of choice.
Many young people are caught in a circle in which employers say that they want experience but the young people cannot get experience unless they get a job. That means that they are forced into underemployment, if they can get a job in the first place.
Yes. That is one reason why we proposed the graduate recruitment incentive. Thankfully, the Scottish Government has taken that up and we are getting young people into jobs at graduate level in SMEs. That focuses the employer’s mind by means of a grant, but we need to work with our members to ensure that they are looking at the positives that young people can bring to their company. On paper, a young person might not have the experience of another applicant, but they might have fantastic social media skills that the other applicant might not have, although they might not think that that needs to be on their CV. That is an example of what young people can bring to the table, which we need to encourage our members to consider.
If a young person eventually gets a job with an employer and they are underemployed time-wise, will they get the same training as they would if they were in full-time employment?
I suppose that it would depend on the circumstances. If they are there for less time, I presume that they will not learn as much on the job.
Which means that they will lose out, in that they will never get the opportunity to become fully qualified.
A fundamental issue is that the Scottish economy is largely made up of very small businesses, which means that, proportionately, there are just not that many bigger businesses that can take the risk of taking on young people and investing in them. For very small businesses with one self-employed person or one self-employed person and one other employee that would like to take on a young person, doing so is almost a burden. The bureaucracy involved in employing anyone, regardless of whether it is a young person, often puts off self-employed people from taking on someone. That is the bottom line.
As Garry Clark mentioned, there are some great examples of companies that are looking specifically at apprenticeship schemes. We are finding that that is particularly the case in engineering-related sectors, where companies that cannot find people are proactively developing apprenticeship schemes and are sometimes working together to put on joint schemes. There are some good examples where that is working.
Those people would not be underemployed—they would be in a full-time apprenticeship.
That is correct.
I think that the issue of the time and resources that are required to prepare young people for work also needs to be considered. Many of the current national schemes do not allow for adequate preparation of people. What the employers need are work-ready young people with a good attitude. Sometimes it can take quite a bit of assistance to prepare people for that first step with an employer. Where I have seen that working well, local authorities have put in additional measures to allow agencies to support young people and mentor them through the first steps of their employment. Where it works poorly, people get the minimum assistance, which leads to further problems because they are not able to get jobs.
As has been said, there are good examples out there of employers’ positive work in this area. An example in the engineering field is the renewables skills academy at Steel Engineering Ltd in Renfrew, which is a fantastic scheme. It not only equips young people for a potential career in engineering—they are pretty much guaranteed a job if they complete the course—but provides them with general employment and life skills to enable them to have a better chance of getting a job should they not wish to pursue a career in engineering.
As time goes on and more young people experience the crisis of being unable to find a job because they do not have the skills or of being unable to get a job to get experience, will more courses be available to make young people employment ready? For example, there are courses that ensure that young people get into the habit of getting up for work, learn how to dress for work and know what is expected of them when they get a job. Is that where we are heading, given that more young people cannot find work?
To an extent, that would depend on how the wider economic conditions play out. Some of the evidence that has already been provided suggests that some underemployment is due to wider demand issues. I guess if we see a continued period of weak demand and poor economic conditions, we will still have underemployment issues.
But what we do not want to be left with when the upturn arrives is a pool of people who do not have the talents that would allow them to enter the workforce. Again, it comes back to lifelong learning. Opportunities must be available for such people to get the right skills, which will probably be done through the college sector, so that they can fit into the workforce when the upturn happens.
There is a cost argument that intervention now will be more effective. I do not want to deal with young people in three years’ time who have had five years of unemployment or difficult employment situations with very low aspirations, because the work that it will take to provide good options for such young people will be very difficult.
I have two questions. Last week, we heard evidence from a representative from the women in Scotland’s economy research centre that suggested that out of the 12 most popular modern apprenticeship frameworks, eight were severely gender segregated—there was an 85 per cent dominance of one gender over the other—following the traditional model: there were lots of young men in engineering, construction and vehicle maintenance and lots of young women in health and social care and hairdressing. Obviously, that will have an impact on people’s future economic security.
Do you want to get that, Jackie?
I was hoping that one of the blokes would take that one. [Laughter.]
There is also a role for employers. If we can get more employers to understand the benefits of having a diverse workforce, there will be more demand from employers for, for example, women engineers or women in other sectors that are currently not popular among women.
Providing better information to people at a young age to allow them to make career choices would be one way of trying to tackle those stereotypes, as would providing role models, as has already been mentioned. Twenty or 30 years ago, the role model for chefs was perhaps Delia Smith, whereas now it is Gordon Ramsay—although I am not sure whether that has had a positive impact. We need to try to get the message across that every job out there is for anyone.
Perhaps we have just fallen into that because hairdressing and health and social care may be easier to do on a part-time basis. We perhaps need to emphasise the economic impacts of those choices to young women at an earlier age, as they may not even be thinking like that when they are very young.
Being employed but underemployed is not economically advantageous to certain individuals on a short-term basis. Many of our clients are in that position because they want their kids to see them in work, and they want the work ethic and aspiration to be strong. They are aware that it is not a sensible thing to do economically, but it is what they wish to do. Statements that people must be better off in underemployment compared with unemployment certainly need to be qualified.
In your evidence you highlight the fact that, although many people who are underemployed could fill the rest of their time, it is very difficult, because they are doing shift work. In many of the businesses that we engage with, employees have taken a reduction in hours to maintain employment. In many cases the nature of that employment involves shift work, variable hours or on-call work, and that makes it difficult for the person to fill the other half of their time. Is there more that we could do around that?
In the circumstances that we are seeing, people who have zero-hours contracts or who are on flexible working have available hours that they would like to fill, but they simply cannot do that. Some of them are trying, but it is difficult. That leads to economic hardship in families, because the family income is not what it could be. I am thinking from the perspective of our clients and the employers who are engaging them—I can see both the employer and the client perspectives. Right now, I do not see many people with the option of straight shifts, knowing that they will be employed on a Monday and Tuesday, for instance, in which case it is easier to fill the rest of the week with something. That is the position that we find with our clients.
It is almost as though their flexibility is making them less flexible.
That is so particularly at the lower-value end of the market. At the higher-value end of the market, where people are on consultancy rates, they have far more options, even though there is less demand at the moment. The issue is particularly stark for us in cases of people who have jobs that pay the national minimum wage or just above. It is difficult to balance flexibility and benefits. A young man with autism had to turn down a job recently because it could not guarantee him the length of employment that would be needed for him to come off benefits—and going back on again could have put his housing situation at risk. It can be difficult on an individual basis, and to say that people will be better off in work is not accurate.
Economically, it is better to have underemployment than unemployment but, on an individual basis, for the many reasons that have been mentioned, it might not always be the appropriate choice for the individual, depending on their circumstances. We need to ensure that businesses get the right support to succeed, to grow and to create proper full-time opportunities for as many people as want and need those opportunities.
From a woman’s perspective, the statement that underemployment is better than unemployment cannot be right. We need only take the typical example of a relatively low-paid woman in a part-time job, who is reliant on benefits to top up her income. It just needs a slight shift. It might be that, post-March or post-April, that slight shift could push a lot of women from what might be classed as underemployment into unemployment, but they will be better off because there is such a small margin between the costs of childcare and what they are bringing in. If child tax credits go down by the 10 per cent that they are due to go down by, that could be enough to tip a lot of women into a situation in which it is not worth working. For a lot of people in that situation, the statement cannot stand.
Childcare is one of the barriers to getting women into work. I wonder what employers are doing in that regard. I was fortunate that, quite a few years ago, I was able to get back to work because there were crèche facilities at the place where I worked. Is that happening nowadays? We do not hear about it very much. Is that because of the costs or the regulations? Do you have any thoughts about what employers could do to provide such facilities or to assist with childcare costs? Is it purely down to a requirement for more public subsidy to help with childcare costs?
Does anyone want to deal with that?
The cost of childcare is a major factor in people’s decisions on whether to go into the workplace or remain outside it.
You are talking from personal experience.
There is an element of that. Some employers in Scotland, such as Dell, are flexible and allow home working for their employees to deal with family issues. However, for smaller employers, it is difficult to justify that kind of investment. Any contribution that they make towards childcare has to be factored against staff costs, the costs of running the business and other overheads. It is difficult. For SMEs, we would always look for the state to provide tax breaks, or subsidy where appropriate, to help more people to access the opportunities that exist.
You have all said that we want to attract more women into sectors such as engineering. Is childcare not one of the issues that you should be looking at?
An awful lot of employers were thinking about the issue 10 years ago, but with the current economic imperative, the pressures on margins and the wider labour market situation, the issue has probably gone off the top of the agenda, because many businesses simply cannot afford such measures. However, as the economy picks up, businesses will have to look more and more towards the issue, as they did a decade ago.
I presume that it is much easier for a large employer to do something on that than it is for SMEs, which make up the bulk of the employment market.
Absolutely.
Yes. The costs are prohibitive for smaller employers. Another factor is the legislative burden of setting up facilities, as a huge number of regulations have to be complied with.
We have had a discussion about the gender and cultural stereotypes that are perhaps inhibiting women from entering certain career paths, but is there a more general cultural problem whereby young people are driven towards careers that they perceive to be exciting, glamorous or interesting when in fact the opportunities are limited? The issue was drawn to my attention by a headmaster of a large secondary school whom I met recently and who feels that the issue is a significant problem in trying to direct youngsters to genuine career opportunities. Do you agree that there is a problem and, if so, what can we do about it?
That is undoubtedly a problem, and it has existed for a number of years. An obvious example would be forensic medicine. People watch “CSI” on television and think, “That would be great.” However, although there are plenty of courses out there, there are not too many jobs at the end of them.
I am very interested in and will home in on your remark that educational establishments will run courses if there is enough demand for them. I have talked to a young chap with a PhD who served me at a checkout and to a waiter with a pretty good degree who worked in a coffee shop. I do not like to discourage youngsters, but I was not sure whether the subjects that they chose to study would make it easy for them to find better employment.
There is an issue, but it is extremely difficult, if not impossible, to tell people what they should do. People need to arrive at such decisions themselves, and their demand should drive and be aligned with overall demand.
So if loads of folk wish to be astronomers, we should churn out millions of astronomers, irrespective of the employment opportunities.
The way to address that is through proper careers advice and careers guidance to ensure that, when young people make a decision, they are, as far as is possible, aware of the implications of that decision.
I say with respect that part of my frustration, and why I am trying to take us out of that dialogue, is that I have heard that since I was at school, which really was not yesterday. We need to give kids better careers advice, but my perception is that things are getting worse, not better.
The line of discussion is interesting. When I studied law many years ago, the law faculties of the Scottish universities collectively produced what they thought that the legal profession would require. We have now moved way beyond that to produce a multitude of law graduates. Of course, we are paying for that—that is all publicly funded. The question is the extent to which command and control can be exercised over that element from a Government angle and whether that would work.
At the University of the Highlands and Islands Perth College campus yesterday, I saw a good example of an approach that could work. The curriculum head for media, drama and music there talked about what the college does. People say, “Everybody’s doing media studies—what’s the point?” because they see the glamorous front end. However, when students join the college, they are immediately confronted with many opportunities to learn about other aspects, such as audio engineering, production facilities and project management. They can learn about all the skills that are needed in reality to go into any career in the media. Multiple opportunities are open to audio engineers. It is quite interesting: the students think that they are going to study to be a TV presenter or whatever, but much wider opportunities could open up to them. I presume that a lot of colleges provide a variety of options, once students are there. It sounds like getting people in by the back door, but it may be a way of making a wider choice more attractive and opening up new jobs that people had not even thought about.
We have an audio engineer here, but unfortunately we cannot call him to give evidence, as he is too busy working.
A number of sectors have developed or are developing sector skills plans, which look at future needs with regard to the number and type of skills. Involving the Scottish Further and Higher Education Funding Council in those plans should help provide a link to the supply side and courses. I hope that we will start to see that change.
I have one more question, which is on a slightly different tack. I was interested to read somewhere in the written evidence for this session—I cannot remember exactly where—that SSE plc has a huge shortage of linesmen and cable layers. Given that over the next decade or so we will invest not millions but billions in upgrading the grid, SSE perceives that shortage to be a huge problem. It appears to be looking to Government to solve that problem, whereas in a previous era it would have taken on youngsters and trained them itself. Is there a sense in which certain sectors and big private employers are handing skills and employment problems to Government or the public sector to solve, rather than solving them themselves, which was the previous practice?
In many cases companies are working in partnership with Government. Many companies will take things forward themselves if they have the knowledge and ability to do that. Other companies, especially some SMEs, may look to Government for advice and some financial support. It is great that some companies are doing it themselves, but some companies need support.
I know that some colleges link to employers well, but should employers do more to link with colleges and universities, so that they turn out the right people for the jobs? We have skills shortages, but we heard earlier about underemployment in a sector in which people were being churned out with a PhD in the wrong thing altogether. Those people will end up working behind a till, never reaching their full potential because the jobs just are not there. If public money is being spent, surely we have a responsibility to point people in the right direction and channel them where the skills are required.
Any public investment in providing skills needs to provide people with the right skills, where possible. As the economy picks up we need to support business to take on as many people as possible and we need to ensure that those people either have the skills that business needs or are able to access those skills. The college sector has a major role to play in skills provision and continuing education.
Surely universities should have a similar role.
Yes, absolutely.
I am conscious of time. I would like to cover a couple of points that we have not touched on, but Dennis Robertson has a question first.
I understand that some work in rural communities is seasonal and that some is linked to tourism. We know what some of the obstacles are, but can you tell us about the obstacles that you see in relation to underemployment in rural Scotland, and perhaps some of the solutions?
There are certainly numerous issues with continuous employment in rural areas. Seasonality is one of them; the industries that are still prevalent is another.
All those points are extremely important. In rural areas, businesses often have problems with access to education and training, and with access to markets.
Are those access problems due to connectivity and transport issues?
Yes. We need not only improved transport links but improved digital connectivity, because that can provide solutions for those in geographically remote areas who need to access not only education and training but markets.
I will ask a couple of questions about topics on which we have not yet touched.
Interestingly, the effects of underemployment on productivity depend on the measures that we use. I have seen some evidence that suggests that the impact on productivity has not been as severe if we look at output per hour worked as opposed to output per worker. That suggests that productivity has not really been affected for firms that have looked to reduced hours—underemployment—as a response to the recession. That has not affected their competitiveness in the wider economy. Companies that are able to use their workforces flexibly have not experienced a major impact on their productivity or competitiveness.
Businesses have been trying to manage their productivity and competitiveness over the past few years. However, underemployment represents a potential danger to their ability to maintain productivity, come the upturn of the economy.
Underemployment is not really part of an employer’s strategy for growth; it is part of a strategy for survival.
Should public support for business—for example, in the form of regional selective assistance—be tied to measures of job quality and training? Amazon got quite a large chunk of regional selective assistance to come to Dunfermline—I think that it was more than £4 million—but issues with some of its employment practices have been in the press. Should there be a closer relationship between public support and workforce issues in future policy?
In an ideal world, we would like all companies and support to be focused on high-value activities and high-value jobs because those are the types of jobs that provide productive work for employees. However, it is in the nature of the economy at the moment that companies that are looking for support to invest will provide job opportunities across the range of skills and types of work.
From a gender perspective, there is a real issue with the way that public funds are allocated because the criteria for funding, as Kenny Richmond said, are aimed at high-value and high-growth companies and jobs. Fewer women run companies in those sectors, so a disproportionate number of women do not get that help. Up to two years ago, fewer than 5 per cent of the account-managed businesses that Scottish Enterprise helped were female owned, so there is a big disconnect.
Thank you very much for your answers. This has been a helpful evidence-taking session. I appreciate that it went on for a long time, but we covered a lot of ground. I am grateful to you for your contributions and your time.