Over five million more hours needed to tackle under-employment of current workers and bring more people into work

Tackling under-employment holds the key to getting more people into work as it will free up part-time roles for new entrants, according to new analysis published ahead of a major Resolution Foundation investigation into securing full employment published later this week.

The analysis will say that securing full employment – now a key government objective – will mainly involve bringing economically inactive people into employment. This will have far more of an impact in terms of jobs growth than just reducing unemployment – the focus of the full employment drive in the US.

However, bringing the inactive into work is far more challenging, as just 4 per cent move into employment over a three-month period, compared to around 25 per cent of unemployed workers, and the inactive are less likely to be subject to benefit conditionality or actively engaging with employment support than the unemployed. Finding appropriate work to attract economically inactive workers is therefore crucial to boosting employment.

The RF analysis shows that the economically inactive – many of whom have health problems or caring responsibilities – state clear a preference for part-time and flexible work, with two-thirds make their initial move into short-hours employment. The Foundation argues that tackling under-employment by moving workers out of involuntary part-time roles will therefore free up jobs for new entrants, as well as boosting pay for under-employed workers.

Job mobility – the ability and willingness for workers to transition from existing jobs to new ones – will be key to this process of reducing under-employment and generating flexible and part-time opportunities for new workers. The Foundation is therefore concerned that new figures published by the Office for National Statistics last week showed falling job-to-job moves.

After declining dramatically during the downturn, job mobility had been rising but has recently fallen back again and remains one-third below its peak.

The Foundation highlights that job-to-job moves are particularly depressed for young workers, who tend to rely on them most for pay progression and advancement in the early part of their careers.

Laura Gardiner, Senior Policy Analyst at the Resolution Foundation said:

“Many people assume that moving towards full employment simply involves getting the unemployed into work. But the biggest potential job gains stem from bringing in the much larger group of economically inactive people. To do that we need to focus on the kind of work available, particularly for the large numbers with health problems and caring responsibilities to juggle.

“Encouraging people into part-time jobs lies at the heart of boosting employment. The good news is that the UK’s flexible labour market provides plenty of part-time opportunities. The bad news is that far too many of those jobs are already taken by people who would prefer to work more hours elsewhere.

“Finding another five million hours for the UK’s under-employed workers would free up part-time roles that suit many workless people. It would have the added bonus of boosting pay, particularly for younger workers.

“The government is right to make full employment a central target of this parliament. A good starting point for bringing more people into work is to free up roles by improving the jobs market for millions of workers who are simply stuck in the wrong job.”