An increasingly inflexible labour market and significant skills shortagesare damaging the UK’s competitiveness, a report by the Confederation of BritishIndustry (CBI) finds. The report, the first of a series of CBI studies assessing the UK as a placeto do business, compares UK labour market flexibility with the US, Germany,France, Spain and the Netherlands. It claims competitor countries are closing the gap with the UK, which hasthe most flexible labour market in the EU and the lowest unemployment. The study states that a “relentless build-up” of employmentregulation is eroding strengths such as freedoms to change work patterns andworkforce numbers. It warns that key competitors like France and Germany are removing layers oflabour regulation, while the UK has moved in the opposite direction. The report finds that weaknesses – such as “appallingly low”levels of basic skills – are improving too slowly and may take decades toresolve. The CBI study also reveals more than half of the firms that have moved, orare considering moving abroad, report that labour costs are the most importantfactor. The CBI believes this “inevi-table” trend makes other forms offlexibility more imperative as UK firms cannot compete on low wages. Digby Jones, CBI director-general, said: “Labour market flexibility hasbeen a jewel in the crown of the UK economy for 20 years, but other countriesare threatening to steal that jewel. “In areas where the UK is strong, we are moving in the wrong direction.In areas where the UK is weak, our improvement is only patchy. The price couldbe extremely high because our competitors are closing the gap.” Inflexible market damaging UK plcOn 9 Sep 2003 in Personnel Today Previous Article Next Article Related posts:No related photos. Comments are closed.