Advertising Feature: Training and Skills - Skills take Priority

British business is being hobbled by an acute lack of skills among employees. An intensive drive is under way to resolve the crisis. Text by Stefan Stern.

by Stefan Stern
Last Updated: 31 Aug 2010

For British business these are the best of times and the worst of times. The numbers don't lie: fourth-biggest economy in the world, lowest unemployment for a generation (and record levels of employment), low inflation and stable interest rates. What is there to worry about? Plenty.

And here, too, the numbers don't lie. 'Working Futures', the largest-ever prediction of the future of the UK's labour market, shows a skills timebomb on the horizon. Commissioned by the Sector Skills Development Agency (SSDA) last year, the three-volume report shows that, by 2012, Britain will need 1.4 million more professional and technical workers. But 400,000 lower-skilled secretarial and administrative jobs will be lost - many replaced by smarter IT. Can British business find these new skilled workers?

More than a fifth of employers say the skills of their workforce are not up to scratch. One in 10 staff members are less competent than their employers would like (that's 2.4 million workers). As many as 135,000 jobs - a fifth of all vacancies - cannot be filled because of a shortage of skills. An underskilled workforce is the cause of rising costs, and damages the bottom line among 30% of employers. More than a third of businesses have delayed new projects because 'they cannot get the staff', according to data from the Learning & Skills Council's 'National Employers Skills' survey, co-funded by the SSDA and published in February. Weaknesses in the British workforce affect all businesses. Unproductive, underperforming staff undermine supply chains and jeopardise customer relationships. Competition, emerging all the time from the fast-developing Asian economies, threatens to undercut the most well-established businesses. Even where order books seem healthy and medium-term prospects look good, complacency is not an option for any employer.

So is British business ready for the challenges ahead? We do not lack encouragement from political leaders to improve the nation's skills base.

At the recent international Advancing Enterprise summit in London, Chancellor Gordon Brown identified skills improvement as one of the greatest priorities facing the British economy. 'I want us to have the best-educated and best-trained workforce,' he said. Professor Mike Campbell, director of policy and research at the SSDA, says skills are moving fast up managements' agenda. 'It feels a bit like a turning point, in that the competitive argument for better skills and higher productivity is being taken fully on board.' And the debate is unfolding in a fast-changing environment.

From initiatives at primary school level, via the Tomlinson report on reforming qualifications for 14 to 19-year-olds, and now the shake-up of vocational qualifications led by the Qualifications & Curriculum Authority (with SSDA support), skills accreditation is under structural review.

This should, believe it or not, be good news for employers. With nearly 1,000 vocational qualifications available in England alone, the 'alphabet soup' of qualifications - NVQs, GNVQs, HNCs, City & Guilds - will finally be taken off the menu. In its place, simple learning credits - transparent, transferable and comprehensible - are likely to be brought in. 'The debate is now focusing on making sure we get education and training for a purpose,' says the SSDA's Campbell. 'All the new policy development is about meeting employers' needs and building the workforce of the future. Employers understand that even modest rises in productivity could lead to big improvements on the bottom line, and that the quality of their people is the key.'

This MT special report takes a closer look at current thinking on training and development - in particular, the important issues of evaluation, effectiveness and value for money. And there's the question of entrepreneurship: can it be taught, and how can we build more entrepreneurial behaviour into our businesses and organisations? It is time for business to act on skills.

Two-fifths of employers still offer no training to their staff. But if you think training is a cost you can't afford, what will an underskilled and unproductive workforce ultimately cost you?

Find this article useful?

Get more great articles like this in your inbox every lunchtime