You can understand everything that is wrong with the UK labour market by the news this week that BT is cutting 13,000 jobs over the next three years.
The telecoms giant is axing 12 per cent of its workforce – mainly back-office and middle-management staff – in a bid to survive amid what it called “increasing competitive intensity”.
And it’s probably the right thing to do. The national secretary of the Prospect union has called the jobs announcement “unrealistic” and “a devastating blow”, but BT isn’t at fault.
We constantly hear the mantra that companies must embrace technology to stay relevant. If they don’t, they end up like Maplin and Toys R Us, forced out of business by the relentless pace of change. BT is trying to be “lean and agile”, transforming its model, rather than demanding taxpayer support.
The problem is that 13,000 people, two thirds of them in the UK, will lose their jobs. And our labour market doesn’t necessarily have the capacity to offer them all a warm embrace.
Sticking with BT for now, the company is hiring up to 6,000 new workers in customer service, engineering, and cyber security. So could half of those made redundant simply switch roles?
Quite simply, no. They can’t become engineers or cyber experts without significant and expensive extra training. As for customer service roles, consider that, just this week, Google demoed its new voice assistant, which can book a table at a restaurant and successfully mimic human speech. Anyone who thinks customer service is a viable long-term career is delusional.
More broadly, maybe the whole industry is less stable than we realise. In 20 years, will we even be using phones and broadband, or will other forms of internet provision make cable as superfluous as landlines? Facebook is, after all, aiming to beam wifi across the world with solar-powered drones. It’s not just the jobs that could be redundant, but the entire basis of the telecommunications industry.
The obvious answer to this is that, while technology destroys jobs, it also creates them. An Institute for the Future report from last year estimated that 85 per cent of the jobs filled in 2030 don’t even exist yet. All well and good, until you consider that, the way things are going, those jobs probably won’t go to former BT employees.
It was way back in 2013 that the number of jobs requiring a degree overtook the number that did not. That’s an extremely crude measure (which jobs, and which degrees?), but it does highlight starkly that criteria for a candidate to be considered “qualified” for most jobs start with a bare minimum of three years of intensive study.
The government has made tentative steps to address this with the Apprenticeship Levy – a tax and subsidy scheme to encourage businesses to upskill workers. It isn’t exactly working out – the number of apprenticeships is dropping 24 per cent year-on-year, and it has been called “unfit for purpose” by the British Chambers of Commerce.
This, when it comes down to it, is one of the key causes of inequality facing younger generations.
Millennial insecurity has been a hot topic this week, with the Resolution Foundation’s gimmicky bid to give all young people a handout of £10,000.
But all the talk about housing unfairness misses the fact that we have a cohort of people without the educational foundation or economic security to switch jobs, matched by a growing number of jobs which require – perhaps unfairly – specific experience and qualifications.
Our school system – which belatedly started to teach all children to code in 2014 – just doesn’t keep up with the pace of change. Many qualifications – funded by the individual – are irrelevant by the time they are completed.
Meanwhile, businesses cry out about skills gaps and a shortage of UK talent.
We need to aim towards a labour landscape where enthusiastic people with a strong educational foundation and a wide range of transferable skills are able to switch careers and slot neatly into a new field, with on-the-job training to fill in any specific gaps.
With good enough STEM teaching in schools, flexible training programmes available throughout life, and businesses willing to hire candidates without specific experience but with high potential, it wouldn’t matter that a big firm like BT was cutting 13,000 jobs.
Right now we are stuck either pressuring companies not to innovate when they should, or putting the burden on young people to guess what skills they might need in a decade and spend years training for jobs that may soon no longer exist. Not a good strategy for progress, intergenerational equality, or indeed a stable economy.