Positive Belief is Good for the UK

Why not read our latest blog post, Long-term absence dismissal not always unfair?

Electronics ManufactureThe suggested increase in UK economic growth from the IMF (International Monetary Fund) and others over the past couple of weeks has been encouraging. Such positive forecasts engender positive belief: positive belief by directors and owner-managers that their firms will enjoy future prosperity. And positive belief causes directors and owner-managers to invest. Positive belief is good for the UK.

But care is needed. On the one hand, a 2.4% increase in GDP in 2014 would be very welcome. On the other, the UK economy is 80% service, 20% industrial. And we have what’s called an ‘hour-glass’ jobs market. There are good, highly paid jobs for designers and programmers at the top of the market and a raft of near-minimum wage process jobs in service at the bottom – and very little in between.

If GDP growth comes at the bottom, this favours long-term instability and collapse of sectors like housing that rely on employees having long-term spending capability and high credit ratings.

So, rather than rejoice, government needs to take a long-term view. We need to re-polarise our national strategy towards investment in people. An hour-glass economy spawns inequality and division. Government needs to identify that an hour-glass economy is not good and plan a future that will allow all employees meaningful careers.

To coin a military adage, we look like we might win a major battle this year, but we’re a long way from winning the war. And we need a people and skills-centric strategy for that.

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