Commissioners and providers are right in the mists of gearing up the employment support system to meet the needs of millions of new job seekers. The Bank of England forecasts that the unemployment rate will peak at just under 5.5% in Q3 of 2021 – from a pre-Covid rate of 3.9% – and decrease rapidly thereafter. The challenge with the employment support is that it is building off a low base and may reduce again as quickly as it has been built. So as much as the sector is rightly focused on the immediate crisis, the sector must also keep one eye on the NEXT cycle. A boom-bust cycle does not create a healthy and attractive sector.
Novel application of scenario planning can better prepare the sector
For the sector (and not just individual providers), managing the downswings and upswings requires genuine long-term strategic planning, which analyses the potential impacts of cyclical variation as well as other uncertainties, and identifies the actions that will best enable providers and service delivery to thrive. The virtue of a sector approach to long-term planning is that it gains the collective benefit of the sector taking agency of its own destiny; rather than just responding to circumstances as they arise.
An essential tool for long-term strategy setting is scenario planning. Using this powerful technique, sector leaders, together, can identify alternative visions of potential futures as the basis for making better decisions (for the sector as a whole) under uncertainty. These alternative visions can vary in size and nature. For the employability sector these visions are often built around the economy and government and they manifest themselves as possible global futures like –
- A bumpy ride (weak growth / small government) - The economic recovery is shaky, with higher booms and lower busts. The state retreats from its Covid-era interventionism. At the same time, migration/refugee movement globally, job insecurity and gig work become heightened and long-long learning becomes the norm
- A bullish free market (strong growth / small government) - An effective vaccine rollout sees the economy roar back over 2021. Persistently high GDP growth brings with it inflationary pressures which affect the cost of living. Wealth and income inequality worsen. At the same time the population ages putting further pressure on social care, and resources become scarcer as demand for energy, food and water rise.
- State-cushioned volatility (weak growth / big government) – Economic volatility persists for an extended period. Governments adopt a conventional role in trying to address this through countercyclical monetary, fiscal and social policy measures, such as government-led skills and employability programmes. At the same time, society becomes more inward looking, focused on findings jobs for citizens first. Union membership reverses, with growing focus on worker rights; and the emergence of unions aimed at protecting gig-economy workers. Governments expand access to subsidized education and training for adults young and old, promoting reskilling and retraining
- A very big brother(strong growth / big government) - Governments grow in size and in share of economic activity, with increased spending on social services and heightened economic direction for businesses. At the same time, there is a focus on green jobs, a re-globalised world (and supply chains), and government power is increasingly devolved.
How should the sector, respond in each of these scenarios individually and collectively? Should it establish common, back-end infrastructure (e.g. a universal shared service) that is scalable to need? Could it establish an industry resilience fund to aid sector-wide initiatives? Maybe a different approach to advocacy with government and other funders based on a cross-sector coalition (including employers)? Explicit pivot into other sectors with different operating and models? Or maybe new consolidations should occur, such as between employment services and FE colleges. A range of ideas are out there - and one of them could be the key to unlock sector resilience and sustainability.
Managing the boom and bust cycle will require ongoing innovation and cooperation
As the new Restart scheme takes shape, managing the next bust phase and beyond must be part of the immediate conversation for providers and commissioners. The sector cannot afford to repeat the mistakes of prior cycles where there were assumptions about a longer growth phase or delaying planning until it is too late.
By taking scenario planning seriously and infusing it with innovative thinking, the sector, together, can make better strategic and operational decisions. Concurrently, commissioners can support these efforts by not only documenting a whole-of-cycle stewardship approach but acting upon it with some reasonable funding.
We hope these ideas spark discussion and that creative strategies for managing the employability sector’s boom and bust cycle emerge.
Over the next few months, Nous is working with ERSA membership organisations. We will engage sector leaders though a set of scenario planning workshops and present a synthesis of this work at ERSA Live Week (22-26 November 2021). The workshops will all be delivered online via teams.
Save the dates, and register for the introductory session below.
- Introduction to Nous/ERSA’s Beyond Boom or Bust Workshop series
24 May, 2-3pm
Register your interest here
- Workshop 1 for large employment support providers
14 June, 1-3pm
- Workshop 2 for SME employment support providers
21 June, 1-3pm
- ERSA Live Week
Nous Group is an award-winning management consulting firm. We partner with leaders across the UK and Australia to shape world class businesses, effective governments, and empowered communities.
Zac Ashkanasy, Principal, Nous Group
Zac brings over 21 years’ business and consulting experience across a range of clients and continents. Boards, executives, and staff value his provocative, creative and practical mind-set and engaging nature. Clients voted Zac the ‘Most Client Focused Management Consultant’ in Australia in 2015 as part of the annual Australian Financial Review awards for professional services, and again nominated him in 2017 for the award. His broad expertise covers business strategy and organisational design, public policy, change management and digital strategy, and leadership development.
Jamie Tang, Director, Nous Group
Jamie has extensive experience leading strategy and policy projects in an in-house capacity and as a consultant. His skill-set combines strategic thinking and problem-solving, practical project management to facilitate outcomes; qualitative and quantitative analysis, and sophisticated stakeholder engagement. Jamie is passionate about building effective partnerships between diverse organisations to achieve positive social impact.