Welsh First Minster Must Focus on Fair Work, Skills and Productivity for a Thriving Economy

The UK Government’s “biggest upgrade to workers’ rights in a generation” – announced through its Employment Rights Bill – provides an unprecedented opportunity for Eluned Morgan to drive change in the Welsh labour market, where skills and labour shortages, coupled with economic inactivity, continue to hamper economic growth.

But, to really empower businesses and workers across Wales, any employment law changes must be supported by devolved policies. The First Minster must consider prioritising three key areas; fair work, skills, and productivity to create better outcomes for individuals and organisations.

Fair work for all

The CIPD shares the UK Government’s ambition to raise employment standards, job quality and create a fairer, more equitable working environment for all.

The Welsh Government should be commended for its focus on fair work, firmly embedding it in public policy in recent years. But over this past year, a quarter (24%) of workers in Wales did not find it easy to take time off work during work hours, as revealed in the annual CIPD Good Work Index.

The Work Foundation’s UK Insecure Work Index 2024  also reported that that women are 2.3 times more likely than men to experience severely insecure work, with young workers (18-24) twice as likely as older age workers (50-65) to be in this position.

This demonstrates that raising employer understanding of fair work, showing the persuasive evidence around retention or recruitment, and providing accessible advice for employers, needs to remain high on the Welsh Government’s agenda.

Labour’s Employment Rights Bill should help to tackle some of these problems through the strengthening of workers’ rights.  This includes proposals to strengthen Statutory Sick Pay, improve bereavement leave and to further boost the provision of flexible working.

The First Minister has a unique opportunity to ensure that any changes to employment law not only meet the needs of the labour market in Wales, but also that the changes are well understood and delivered by both employees and employers.

A more skilled and productive workforce

The Welsh Government has introduced a number of reforms and policies over the years to try and tackle skills shortages. This includes the establishment of the Commission for Tertiary Education and Research (CTER), which has the potential to be transformative for Wales, and will create an integrated and coherent post-compulsory education system with pathways and opportunities for learners.

But research from the CIPD’s Devolution and Evolution in UK Skills report revealed that over a third (35%) of Welsh employers struggled with hard to fill vacancies. This demonstrates there is still much more be done to address the mismatch between labour market demand and skills supply.

The First Minster has a real opportunity to deliver a more effective skills system.This needs to include supporting apprenticeships, work-based learning, and lifelong-learning, all of which is crucial in the context of our ageing workforce and looming demographic and industrial changes.

The UK Government’s proposals to reform the Apprenticeship Levy into a new Growth and Skills Levy are an opportunity to ensure it works better in a devolved context to help unlock more apprenticeships for young people. Coupled with this, the Welsh Government must protect apprenticeship funding and establish more support for smaller businesses.

And while the Welsh Government’s Personal Learning Accounts (PLA) have been a success – in allowing thousands of Welsh workers to upskill and retrain – they need improving and reforming into buildable, flexible accounts if we are to foster a true culture of lifelong learning.

A stronger, thriving Welsh economy

As further swathes of employment law changes are likely to be introduced through the Employment Rights Bill over the coming months and years, more Welsh Government support will be needed to support businesses in adopting and embedding these changes.

This is particularly important for Wales’ small businesses that are less likely to have dedicated HR and people management support. The CIPD has launched a HR support scheme to help small businesses improve how they manage people and comply with any changes to the law. With Government support this could be scaled up considerably.

We look forward to continuing to support the Welsh Government and the First Minster to achieve a more engaged, skilled workforce that boosts organisational productivity and delivers a much stronger, dynamic Welsh economy.