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Recession to recovery, to skill shortages?

Douglas Fraser | 11:31 UK time, Saturday, 17 October 2009

Three hundred more Scots joined the dole queue last month. Does such a small statistic represent another green shoot of economic recovery? Let's hope so.

But it doesn't look so good if you're one of those affected.

It was a personal story from someone who signed on this week that brought a sobering jolt on Wednesday as ´óÏó´«Ã½ Scotland hosted its Big Debate about the nation's economic future - one of the series of broadcasts trying to discern the path from recession to recovery.

Angela Robson from Erskine worked for 25 years in finance, most recently for Lloyds TSB.

But the credit crunch hit home when the bank started axing jobs.

Her husband, also in the finance sector, lost his job in January.

So they've gone from two comfortable salaries and a company car, with one daughter at university and the other at school, they've burned through most of their savings, and they now face getting by on £100 per week.

Of course, it's no surprise that unemployment continues to rise even as the growth figures show signs of turning the corner back into positive territory. Recessions tend to do that.

But this is an unusual recession. Never in modern times has the contraction been so sharp.

And never before have governments and central banks acted with such vigour to spend their way out of trouble.

If those green shoots are any evidence, then that splurge may just be working - and we can worry about paying off the nation's giant credit card bill when it comes in later.

But there are other unusual aspects to this recession.

The threat of a postal strike is a contrast to the rest of the British economy, where there's been remarkably little industrial strife.

It's been for the French to occupy factories, take bosses hostage and, in several companies, to have employees respond to workplace stress with spates of suicide.

Evidence from America shows loyalty to companies has plunged, and so has trust in bosses.

In Britain, on the whole, the workforce has been remarkably co-operative and compliant - this as 40% of private sector companies froze pay this year.

Bosses have hacked away at benefits such as pensions, holidays and sickness entitlements, while putting staff on part-time work.

But there's also evidence that managers have worked harder than before to draw employees into understanding the problems being faced, with more information and at least a sense of shared pain.

This has been illustrated in an extensive survey carried out by Reed recruitment consultancy, in parallel with one it conducted during the last major recession, 17 years ago.

In that downturn, the groups that took the brunt of the job losses were part-timers, middle managers, and those aged over 55.

Two factors contributed to making sure these categories are not featuring in the current recession.

One is that companies in the early 90s permanently changed their management structures, cutting out those hierarchies that had dominated British business.

So there are far fewer middle managers in the so-called headcount, who can be delayered, structurally adjusted and let go.

The other factor is that laws against age discrimination have been introduced since then, protecting those at the upper end of the working age scale.

So who suffers in this recession? Well, the pain's more widely spread. The good news is for those in the human resource departments, and in IT.

The worst news is for those aged under 25. Not having been around long, they're easier to shed. And not having experience, they struggle to compete for jobs with unemployed older people who DO have experience.

So age discrimination now works against the young.

And there's a sting in the tale of this recession, as we look for ways out of it.

While skilled people are now looking for jobs, the Reed survey has registered a clear warning that employers plan on a post-recession recruitment drive to get skills on board.

Through the recession, and having learned the lessons of past ones, many employers have sought imaginative ways to hold on to the skilled workers they value: from extra training to low-paid gap years.

A significant number are already expanding their IT, sales and marketing forces.

While 24% of firms have shed skilled workers in the downturn, 37% hope to recruit them in the upturn.

In other words, even when we're still in recession, it looks like there's a skills shortage looming.

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