Jobs for the boys and girls…..

Another day, another set of statistics to pour over. This time it’s the unemployment ones, including the worrying fact that around one million 16-24 years olds are looking for work.

Interestingly enough on the same day that these statistics were issued another article was published which suggests that an increasing number of graduates are shunning the traditional job route and are going it alone by setting up their own businesses. Self employment in general has also reached a record high, a further sign of the changing nature of the employment that has clearly been given impetus by the current economic situation we are in.

However it is the unemployment story which dominates the headlines. No doubt the usual complaints are already being trotted out such as the educational system and how it fails to prepare young people for the world of work, and the unrealistic expectations of young job seekers.

However I rather think that the system is also failing to educate employers as to how new entrants into the workforce need to be treated, and their understandable limitations when they enter the workplace. It seems that too many employers seem to expect new entrants to be the finished article, conveniently forgetting that we all need to start somewhere.

“Yes but we don’t have time to do this” comes the response. Aside from being false economy it would be genuinely scary if today’s fast moving world simply did not allow organisations the time to induct, train and develop their workforce.

It is also said that today’s school leavers and graduates don’t have the right work ethic. This is rubbish. Leaving aside the question as to whether they ever did (go on be honest think back 30 years or so), school students today are assessed and monitored more frequently and intensely that they were in the past.

Grade inflation is another issue. There may be more As and A*s being awarded but it does not reduce the pressure and effort required to get them. A majority of Bs and Cs might have been acceptable years ago. Seemingly they are not any longer. Changes to exam modules are frequent and it is arguable as to whether there is a level playing field between students of the same generation let alone those of different generations.

The increasing desire of young people to start and manage their own businesses is one of the real positives of the current situation. Older people don’t have the monopoly on the skills necessary to be successful business people. Financial and business education is one area that the school system has yet to fully address and it would be good to see this becoming a core element of what passes for the national curriculum.

You may have gathered from the above that I have children which are at the exam stage of their schooling and that there is an element of self interest in all of the above. Perhaps that is the case but I do genuinely believe that we as members of Enterprise Britain should look at what we can do to improve this situation. This is something we are genuinely “all in together”.

It's a VAT trap......

I tend to count myself as one of life’s optimists (supporting Spurs tends to do that to you), and I have no doubt that sooner or later we will be out of recession, and enjoying a period of steady, if maybe not exciting, economic growth. The creativity, determination and energy that I have seen over the past twelve months, as business people old and new have faced up to the reality of the economic situation and looked at how to improve their way of doing business, and the goods and services that they provide, has left me convinced of that.

However the accountant in me can never stop looking at potential downsides, so that I can ensure that I have some contingency plans in place to cope. One big lurking downside, along with dealing with the government deficit and the requirement to slash (there is no other word for it) public expenditure, with its consequent impact on unemployment, is the end of the VAT rate cut stimulus that the government put in place at the end of last year.

I fear that this has been forgotten among the various sightings of green shoots and the FTSE index rocketing over the 5,000 mark, but come 1st January 2010 VAT will be back up to 17.5% (or even 20%). Once again systems will need to be changed, wasting valuable time and money, but what will be more interesting is how many businesses will increase their prices as a result. I am sure that most of you will have noticed that since the much trumpeted “point of sale” VAT reductions that major store groups put in place last Christmas, prices have more or less drifted back to their pre-reduction levels. Will there be an increase in prices over and above their pre-VAT cut level, or will firms have to swallow the increase putting even more pressure on profits and cash?

Savvy businesses will have used the VAT reduction to squirrel away some cash (something that I advised clients at the time, believing that this was a better use of the rate reduction rather than adding to the discounts that were already in place for bargain hunting consumers), which they can use to support their businesses in 2010. For other businesses the VAT jump is going to be yet another hurdle for them to overcome. Hopefully it won’t be one too many.

Antony on the road (6)

Sunday 22 Nov 08 - It seems that a reduction in VAT has emerged as the favourite for the main weapon to be used by the Government to stimulate the economy. (http://news.bbc.co.uk/1/hi/uk_politics/7744273.stm) I am a little sceptical as to how effective this is going to be as retailers are already falling over themselves to cut prices and tempt people to spend. I still think that lack of confidence driven by fear of unemployment will be the main reason for people not spending and unless firms boost cash flow by keeping the benefit of this VAT cut to themselves (for which they will be castigated by all and sundry) I can't see the cut doing much to address this. Let's see what tomorrow will bring.