Supply, demand, skills and sourcing

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The Chartered Institute of Personnel and Development’s (CIPD) survey released last week opens up an important debate for the outsourcing industry and industry in general. The research, conducted by KPMG, found a “continued increase in foreign workers filling ‘British’ jobs overseas as well as at home”.

This reopens an age-old can of worms in terms of supply, demand and training in the UK. The write-up in the Times highlighted that one in ten respondents planned to outsource work, but also that "employers are continuing to struggle to fill skilled vacancies." The main skills deficiencies are in engineers and medical staff. I’m sure IT positions will have also made their top ten.

The fact is that the government’s unshakable belief in the all powerful ‘knowledge economy’ and current education strategy, is failing to create the skills domestically that are still in demand in this country. The hiring of migrant workers and outsourcing to countries that are skill-rich in these areas is a natural result.

Companies shouldn’t be condemned for this, it as it is not them that are driving it. The government itself is committed to increasing this trend rather than changing the focus of education and training within the UK.

Just this week, speaking at the Global Investment Conference in London Prime Minister, Gordon Brown, announced; "The introduction of a wider choice of foreign internship schemes, making it easier for businesses in the UK to bring over the brightest and best graduates from around the globe, from spring 2010."

The other factor discussed is cost. Obviously this is an area where business sense, especially in PLC’s, often dictates some form of outsourcing and offshoring. The need to cut costs simply outweighs whatever commitment the company might feel towards increasing employment in the UK.

The CIPD suggest abandoning next year's increase in National Insurance contributions and freezing the National Minimum Wage to minimise further outsourcing and curb rising wage costs. Basically trying to make UK workers cheaper. I don’t believe this is the right way to go about it or possible when you consider wage-differentials against India and others.

The debate we need to have is over the changing nature of the global enterprise. The government needs to understand how big businesses are operating nowadays, where work is being done and value being created.

It needs to work out how the UK fits into this mix and how its education strategy caters for what is needed. It needs to work out exactly where the UK will create value, and hence, employment, for its people going forward.

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