The big issue that needs a lot more attention

Working with some of the biggest (and smallest) recruiters in the UK has given me a few interesting insights into the hiring policies that employers and HR Directors are currently using. On the whole, it feels though we’re in a state of paralysis in the job market, with companies reducing capacity and not wanting to be the first to pre-empt any upswing in demand.

With the unemployment level hurtling towards three million people, the casual observer of British politics might be a little bemused by the recent furore over MP’s expenses given the wider cost of such high levels of unemployment on the ecomony. It is firmly my belief that the government needs to take positive action now to arrest the growth of unemployment in Britain.

A couple of weeks ago the UK government launched an incentive scheme to stimulate activity in the new car market. I propose that they use a similar level of stimulus to bolster the job market in Britain. I think that the government should offer a £3,000 bonus to every private sector company who hires a new member of staff in the next 12 months. This ‘new job bonus’ would be payable in the form of a tax credit to the company after the employee has remained in work for more than six months.

Clearly, £3,000 won’t sway all employers. But it may move some of those who are undecided in the right direction. In 1977 the US government introduced the New Jobs Tax Credit that has been judged a success by a series of studies and an upswing in employment levels – particularly for small and medium sized firms, the largest group of employers in the UK.

There’s no arguing that many companies need to reduce capacity in the current market, but there are a large number of firms who should be given the confidence to make hiring decisions and help us to build and sustain a skilled workforce for a post-recession Britain. This stimulus would be one way of improving opportunities for Britain’s unemployed workers and giving employers another reason to hire.

About the author

James Callander is the managing director of recruitment consultancy FreshMinds Talent. He stood as the Conservative candidate in the 2007 Scottish Parliamentary Elections for Hamilton North and Bellshill near Glasgow.