In light of the COVID-19 pandemic and its severely damaging effects on the labour market, the Recruitment & Employment Confederation (REC) have called on the Government to reduce employer national insurance contributions. 

The trade body REC have urged the Government to reduce employer national insurance contributions due to the effects of COVID-19. This step is part of a wider plan that aims to create new jobs and head towards a recovery for the job market.

By minimising the biggest business tax that employers have to pay, the REC hopes that this will slow redundancies for businesses and allow employers to take on new staff. It is predicted that will mostly aid businesses struggling to meet their wage bill and set employers up to meet market demand for jobs.

Another crucial step includes opening up the apprenticeship levy to support the retraining of UK people, especially those who are actively searching for work. The REC outlines various sectors which have been hit hardest by the pandemic including hospitality, arts and events. The body states that to find work, it is inevitable that some employees within this industry will force to retrain.

Highlighting the key problem that the apprenticeship levy has seen a £2 billion differential between what businesses have put in and what they have received out from it, the REC state that more must be done.

The body have stated that the only route to making the levy work is if it is broadened out. This will allow employers to offer new starts and temporary workers short courses of high-quality training. The REC suggests that employers should use money to specifically train those who have faced the worst of the recession, namely young people leaving full-time education and those who have faced redundancy.

The REC have also called on the Government to introduce flexible immigration laws from 2021. They state that this will allow key sectors to access the skills and talent that they need.

The REC echo the fears of IPPR which state that sectors like construction, social care, hospitality and more will be understaffed due to the incoming point based immigration system. With a lack of UK workers trained and available to fill these roles, the REC urge the Government to ensure a fit for purpose immigration system, with the Government working in partnership with businesses.

The rest of the plan includes:

  • Funding Statutory Sick Pay (SSP) for all employees
  • Utilising technology to aid recruitment
  • Ensuring key sectors have access to the skills they need through flexible immigration laws
  • Inviting expert opinion and services to aid the job recovery

Neil Carberry, Chief Executive of the REC, said:

Flexible work opportunities will help speed up the recovery – and covering SSP will help REC members provide more of them. For the client business, flexibility helps them navigate through – by creating temporary work opportunities to fill fluctuating demand when permanent positions would not be possible. Temporary work also helps individuals find earning opportunities quickly and gain new skills.

This support is needed now to get businesses and workers through the pandemic. Our six-step plan outlines exactly what needs to happen next to lay the foundations of the recovery, including incentivising job creation and retention by reviewing the tax system including IR35, reducing employers’ National Insurance Contributions and working with the recruitment industry to support people who have lost jobs to transition into new, growing industries.