The 2020 Labour Cycle

7.1.    Key Finding

Opportunities for UK businesses to attract skilled overseas workers will decrease as emerging markets fully develop to offer home grown talent fantastic local opportunities and prospects.  Outsourcing will continue and will focus on exporting basic jobs.

The lack of in-sourcing, when set against a backdrop of continued outsourcing, will create significant skills gaps.  For businesses this means that they will have to work harder to retain the decreasing pool of elite workers and will need to focus on growing their own talent.  For the excluded group the reduction of in-sourcing represents an opportunity.  There will be more interesting jobs with less people to do them.  For workers with a desire to learn, the 2020 Labour Cycle represents an excellent opportunity.

7.2.    The Global Employment Flow

Our future worker is at a project meeting in the spring of 2020.  The company is smaller than it was; basic functions have long since been outsourced to developing countries while even more sophisticated functions such as the management of supply lines have been outsourced to local specialist companies. Among the project team many are new faces – contractors with specialist skills and knowledge brought in to supplement the core workforce.  It has become accepted that the high (and ever increasing) cost of employing full-time staff means that workforces and management teams are tightly resourced. 

7.3.    The Value of Overseas Talent

“…it’s hard to expand our higher education system and the demographics mean that the proportion of young people at college age is going down.  At the same time we need to consider the importance of the UK economy to carry on acting as a magnet economy for the best and brightest in the world”
Ian Brinkley, The Work Foundation

What will be of great concern to British business in the next ten years is having enough skilled labour to tackle those skilled jobs. The value of overseas talent to this country is hard to understate.

One of our expert panel, Ian Brinkley of the Work Foundation, is concerned about two new and emerging problems.  Firstly, in the short term, the recessionary period here will encourage some skilled migrants to return home to the detriment of our pool of talent.  Secondly, in the longer term, the dynamic growth in Asian economies poses problems here.  As the quality of education offered in Asia improves and as economic growth continues apace, new jobs will open up in those countries and the number of graduates coming here to work will decline.  This is a problem not just in the UK but for many Western economies.

With in-sourcing more difficult, the demand for domestic talent increases and employers are likely to put pressure on government to ensure that the education system is capable of providing more skilled people.

7.4.    Outsourcing Continues at Pace

All the experts on our Delphi Panel agree that outsourcing will continue to be a fact of working life in this country by 2020.

Most of the commentary around outsourcing tends to be negative – that it deprives British workers of jobs and that British consumers get poorer service from foreign-based call centres for example.  However there is another perspective on this and that is that the force of globalisation is inevitable and that Britain is unable to compete on price in markets that require unskilled labour.  On that basis we can argue that outsourcing is to the benefit of many – that mechanical and monotonous tasks are done elsewhere while new and more interesting jobs are created here.  The implications for the unskilled are mixed – some may be able to retrain for other, more sophisticated jobs.  For other people the future will be much more difficult as the pool of jobs for those with few qualifications declining.

7.5.    A Place for Work

Our worker of 2020 is on the way home on a calm spring evening.  They are mulling over an offer that has been made to them to work in the Frankfurt office.  It’s a tremendous opportunity – not least because of the reputation that office has for skills training in Artificial Intelligence. New EU laws make the transfer to that office easy and the HR department has engineered a demanding but satisfying role that has supportive coaching. When he was younger our worker – like many – dreamed of working abroad.  This job in Germany would make advancement within the company easier.  However as with many parents our worker of 2020 puts their children first.  His two children are receiving additional coaching from an accredited tutor.  Tutors are hard to find but many parents believe they provide essential additional coaching to prepare their children for university.

7.6.    Flexible Working

Our Delphi Panel are split on the issue of whether British workers will find working overseas more attractive in 2020.  While our experts are divided, a surprisingly high proportion of our sample of 1,000 representative individuals - 31% - think that there are greater job opportunities abroad than in the UK.

The regions where agreement is highest tend to be those with poorer employment prospects or where there has been a history of people moving away to find work.  The perception of better prospects abroad also varies strongly with age.

Working abroad doesn’t just seem desirable to our sample. A majority (59%) imagine that, in the next few years, more British people will need to seek work overseas.  Interestingly this view is consistent among all age groups and social grades.  Why might so many people think this way?

Britain’s economic performance compared to other countries may explain part of this – we’ve been in recession for longer than other countries after all.  However we also found that many workers believe that the quality of British life (both at work and generally) are in decline and have been for some time.  This view is entrenched in British Society and one which the Future Foundation has identified as the Myth of Decline – the idea that life is getting worse even though, on most available quantifiable measures, it is getting better.  The results suggest that people are open to the idea of working in another country.  However opinions change when workers consider their current situation and their current job.

British workers – while open to the concept of working abroad – show reluctance to move location to stay with their current job.  This inflexibility contradicts the view of our Delphi Panel – four out of six experts anticipate that people will be more willing to move within the UK for work in the future.  Some of this reluctance to move comes from being social animals and worrying about severing ties to friends, family and colleagues.  This very human desire has a bearing on our willingness to work flexibly as we will see in Chapter Two of this report.

For others this reticence to move is attributable to life-stage.

This view neatly articulates the more general picture and goes some way to explaining why 48% of our sample claimed that they wouldn’t move at all to stay with their current job.  While workers may expect more flexibility from employers, when it comes to location they are far from flexible themselves.

“According to our employment survey in July 2009, two thirds of small businesses already offer flexible working.  Employers will encourage flexible working where it is needed by the business.”
Lynsey Brookes, Employment Policy Advisor, Federation of Small Businesses

However the regional picture is more complex.  We can argue that jobs are viewed differently in regions like Scotland and the North East.  Due to differences in local labour markets people are more likely to want to hang on to their current job.  While 55% of people in the South East say that they would not relocate to stay with their current job, only 38% of Scots would remain where they are and the picture in the North East (47%) is similar.  The place that has the lowest score of all is London at 36%.  London’s unique, youthful and more fluid labour market explains this.

“How far would you move to stay with your current job?”

By region

7.7.    Conclusions

All of our experts imagine that flexible working will become a much greater part of working life in 2020.  Employers are keen to be more flexible – even smaller companies.

It’s our view that employers are more committed to offering flexible working than employees are to taking it, especially when it comes to moving location.  While younger people in particular are open to the idea of working overseas, the reality is different.  Even in a recession only one in five of our respondents would consider looking for a job overseas; among the most adventurous age group, the 16 – 24 year olds, the proportion only rises to 37%.

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