Time for hardheaded decisions about Welsh jobs

Kate Shoesmith, Recruitment and Employment Confederation (REC) Deputy Chief Executive

The Welsh economy is going to look different very soon because it is undergoing a generational change in a transition from traditional industries, with a growth in technology and tourism and, its embrace of a shift to a green economy.

Like any region, there are challenges and complexities in making this transition and this makes it the time for hardheaded decisions about how to make the Welsh labour market support this huge transition.

The situation in Port Talbot has likely prompted significant reflection on the future of growth in Wales and the workforce. This moment provides an opportunity to begin shaping a workforce strategy for Wales. It should focus on how Wales can capitalise on the green job revolution, improve transportation for commuters, and encourage more people to rejoin the workforce.

Collaboration

The first thing that the nation needs to achieve a better labour market to drive economic growth is far more collaboration between politicians and businesses. This partnership is essential. Welsh Government must bring industry experts into the decision-making process to better understand current workforce issues, enhance productivity and reduce economic inactivity.

Our sector’s input to Welsh Government is a must because they represent seven out of 10 companies advertising jobs in Wales over the past five years – contributing £8.8 billion to the Welsh economy. They are united in believing that any effort to drive growth must effectively link local, regional, and national workforce challenges – and unified in wanting to keep the best talent in Wales.

Inactivity rates in Wales have been persistently higher than the UK for decades. There were 494,300 people in Wales who were economically inactive in July to September 2024, up 6% from the same period a year earlier.

Flexible work

This makes employers offering flexible work as a way for people to return or rejoin the workforce, absolutely vital. Flexible work offers adaptability for workers and employers, rewards the risks necessary to grow the Welsh economy and reflects the growing mood for a better work-life balance.

Supporting temporary workers and contractors and hybrid working has a double pay off in widening the talent pool and helping to retain talent. Allowing employees control over their working hours and environment boosts job satisfaction, leading to greater productivity. When people can balance work with personal commitments, they are more engaged, motivated, and drive success for businesses and the economy.

This is a message that REC and 16 bosses of talent, staffing and recruitment made to the UK Business Secretary Jonathan Reynolds, in a joint letter last week, in response to the government’s misdirected and undercooked plans to lessen choice over how people work.

Sick

Yet the most overlooked driver of high economic inactivity is the number of people off work sick and the related length of the NHS waiting list. This is what makes the misunderstanding of modern ways of working by NHS and the mismanagement of flexibility within it, so damaging.

Public sector staffing procurement in Wales needs urgent review to achieve better value for money through, we suggest, a review of NHS staffing frameworks, this would limit off-framework spending and save the NHS in Wales more money on staffing in the long term.

This is another example of where open, frank and directly talks between NHS, staffing experts and governments would fix the supply of staff.

Another area where business and Welsh and UK governments must work together is on a more business-responsive skills system. The aim is to make clearer what support is available to firms and provide localised and person specific employability support.

This includes readying new workers and reskilling others for the green job revolution. This is why it is vital that the new Growth and Skills Levy allows for flexible funding for business.

Welsh employers must have fair access to Levy funds, especially where businesses operate across borders and currently must comply with two different sets of rules.

The recent Budget has seen the government seek to balance the books on the back of business. That makes it fair for Welsh business and industry to ask for somethings back in return in the form of improved public transport, such as completing the South Wales Metro by 2026, increase East-to-West connectivity with the Brynglas Tunnels and better North to South connections.

As well as creating local infrastructure jobs, having more robust public transport infrastructure makes not only business sense but also environmental sense, with the Welsh government previously setting out a policy goal to have 45% of all journeys done by public transport or active travel by 2040.

And if we look more broadly at infrastructure to support the workforce, the Welsh Government should consider publishing and consulting on plans to increase the childcare workforce, working in partnership with childcare providers.

These proposals by us will build a better labour market for Wales.