What does the new employability strategy mean to small businesses?

Learning and Work Institute will deliver The Employability and Skills Wales Convention on 6th December 2017. This is a flagship event for the sector that will once again address the challenges and opportunities faced by policy makers and providers, but it will also shine a light on innovation and best practice. The convention comes at a critical time. With the all age employability delivery plan announcement imminent, the Work and Health Programme moving closer to implementation, and the new apprenticeship policy being delivered, the landscape for employability and skills continues to change.

Over the coming weeks leading up to the convention we will be publishing a series of blogs which will address and discuss the key issues around the employability and skills landscape in Wales. Our second blog post has been written by Josh Miles, Policy Manager from Federation for Small Businesses. This piece focuses on the importance of developing the role of small and local businesses and boosting productivity in Wales.

What does the new employability strategy mean to small businesses?

The Welsh Government’s programme for government Taking Wales Forward contains a commitment to reshape employability support for job ready individuals and for those furthest away from the labour market. This is an important piece of work for many individuals in Wales. With employment rates on the rise since the recession, it is right that Welsh Government focuses on helping those who have barriers to work, at the same time as helping with high levels of economic inactivity.

However, to think of this reform as important only to individuals is to only tell half the story. For the employment programme to be successful in a longer-term, sustainable way, it’s vital that we’re able to create jobs and grow Wales’ smaller firms at the same time.

This is something the Minister for Skills and Science has herself highlighted in outlining her proposals for the new programme Working Wales stating; “We want to support employers to recruit and develop talent within their business, boost productivity and give local people the opportunity of better jobs closer to home.”

Small firms can play an important role in this aspiration. Previous research by FSB looking at smaller firms’ impact on employment has shown that not only do they create a significant proportion of new jobs but starting up a small business or becoming an employee in an SME accounts for 88 per cent of all movements from unemployment into private sector employment. One of the main explanations for this is that smaller firms have less formalised employment processes and offer more flexible employment relationships.

So how can we make Working Wales function in a way that helps both individuals and the companies they work for? Fortunately, we have plenty of recent experience with employability schemes in Wales. I’m struck when meeting small firms by how often they mention that they took their first employee on through Jobs Growth Wales or Go Wales.

These schemes succeeded because they significantly reduced the risk to small firms of taking on their first employee by providing not just financial but also business support. Our research often shows a strong link between firms that are investing in hiring new staff or developing the skills of existing staff (for instance by undertaking apprenticeships) and business growth.

Indeed, one FSB Wales member I spoke to recently took their first employee on through Jobs Growth Wales seven years ago with that individual now acting as a company director of a fast-growing firm employing over 30 people.

So there’s a clear opportunity for the employability programme to support our local firms. But there’s also clear progression opportunities for individuals of any age.

To get this right, there are other things that we will need to improve. For instance, in our recent report A National Ambition on links between businesses and schools we found Careers Wales to be poorly equipped to build the partnerships that schools needed in order to offer a proper experience of the workplace to young people.

There is a problem in that we’re not properly preparing or advising people about the opportunities that exist around them for employment. We know that Working Wales will be all age and will have a specific youth employment element within it and this has to include elements of career advice and opportunities for work experience. These need to be coordinated, so ensuring Careers Wales is equipped to play that role is vital.

It’s also a problem for many of the parents of young people in schools who themselves may face barriers to work. At the Learning & Work Institute’s excellent Inspire awards for 2017 I was inspired to hear about the adult learning work that Treorchy Primary School had undertaken through their Family Learning Room.

They’re clearly doing an excellent job in breaking down barriers to employment and I’m sure we could strengthen this example and replicate it elsewhere by ensuring employers are involved with their local schools and helping to provide progression opportunities.

For many employers, the number of agencies involved in schemes can be daunting. For instance, on the employability agenda alone a small business owner could speak to the DWP, Jobcentre Plus, Careers Wales, individual institutions such as universities or colleges as well as more local schemes. It’s therefore crucial that we are able to knit this altogether with a clear gateway through Wales’ business support service Business Wales.

Ultimately, we need to create more employment opportunities and that means having an economic strategy or vision in Wales that looks to grow our local firms. We’ve recently pinpointed a lack of medium sized firms as a problem in Wales, and unlocking the potential of these firms could go some way to providing the opportunities we need.

If we get it right, there’s no reason why Working Wales couldn’t help break down barriers to individuals in getting work in Wales and also help to create and sustain thriving small businesses.