Showing posts with label Employment. Show all posts
Showing posts with label Employment. Show all posts

Monday, February 13, 2012

Focus Topic: Migration


Migration into the UK has become a hot topic of the moment mainly because of the low employment rates among UK nationals. Recent data shows that unemployment now stands at 2.6 million, the highest level since 1994 (Source: BBC). Unemployment seems to be particularly troublesome between the ages of 18 and 24. Mayor Boris Johnson has added to the debate by claiming that the youth find themselves in this predicament because they lack the energy, drive and determination that so many of the migrants have. But is it really that simple? Is it just a case of cultural differences and expectations that prevent UK nationals seeking employment?

I must admit that to a certain degree there is a case to be heard here. The different characteristics of migrants and UK nationals do play a role in how they respond to current job opportunities.  Several studies have confirmed this. Migrants have been noted to be more flexible and entrepreneurial, factors which can go a long way in locking down a job. More importantly however, studies also highlight that migrants tend to have a higher level of education, which would explain why migrants have higher paying jobs than UK nationals in some sectors.

In general, most research has shown that migration into the UK has little effect overall on UK resident’s wages. Although if separate industries are put under analysis, individuals in the higher paid jobs tend to benefit whilst those at the lower end of the pay spectrum loose out. I guess this is the main reason why there is much concern about “migrants taking jobs away”. In this instance, where competition is stronger, an increase in the labour supply will depress wages for everyone. If this has the effect of reducing the wages below a point where UK nationals are willing to work, then it could increase unemployment. However, there is also evidence that shows this effect is very minimal.

So what does this all mean for UK nationals? Should we all try and find a new lease of life, become more self-confident and flexible? Even if that was the case, there are still no guarantees that we would get the job. A recent article published in the Evening Standard (23/01/2012) entitled “Why can’t a Brit get a Job at Pret?” (available here)  describes how a  British brand only has 19% of its staff as British. The Evening Standard follows the application of 4 British young workers as they try and get a job within the chain. But they all fall at the first hurdle and none are invited for interview. Joshi Hermann, the writer of the article, gets the opportunity to work in one of the stores and explains quite interestingly that an applicant’s final fate rests in the hands of the current staff. Pret calls this a democratic process. Now, if the majority of staff members are from one region, wouldn’t they tend to side with someone that they have some type of cultural affinity with? Even if it is unspoken.

Without concrete figures, this is all speculation.

For further information see articles by Glover et. al, Dustmann and the UK Border Agency. 

Tuesday, February 7, 2012

Will confidence get us better jobs?


One of the biggest problems that organisations have is finding the right people to do the job. With so many applicants claiming that they have the skills and experience necessary to successfully undertake a given role, how does the organisation know who is telling the truth?

One method that is used, besides the rigorous application processes and assessments now in place, is that of payment based incentives, quite common in the financial sector. Such payment structures tend to link salaries to performance. The theory behind this states that a person is only likely to take on risk to the level at which they perceive it will pay off. That is to say, if you are confident in your abilities, you will have less aversion to taking a salary that is heavily dependent on your performance. By opting for such a salary structure, organisations get information about the candidate and their ability, i.e. that they are more or less likely to achieve results.

In recent times, this approach has met with quite strong opposition because it is believed to be one of the main causes of the financial crisis. Nevertheless, maybe if we showed a bit more confidence in our abilities and are willing to take on non-conventional salaries, we may have a better chance of getting a job.  

In a podcast by Professor Ian Ayres, he refers to Zappos.com where the CEO offers recent recruits $2,000 if they want to leave the organisation.

For further information read The Armchair Economics,Landsburg

Source