Perspectives on Skills and the Value of Training: Trends, Challenges and Priorities

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In this blog, Professor Anne Green and Dr Abigail Taylor discuss their new report  “Workplace Perspectives on Skills” examining employer perceptions relating to skills and the value of training, with the aim of understanding the specific skills and skills investment challenges employers face.

Previous research for the Industrial Strategy Council highlighted that by 2030, 7 million additional workers in the UK could be underskilled for their job requirements. The research predicts more severe skills shortages are predicted in ‘workplace skills’ than in ‘qualifications’ and ‘knowledge’.

Insights from employer surveys

Employer surveys provide insight into employers’ skills needs, the challenges they face in accessing them and their perceptions of the skills system. The Employer Skills Survey showed that 22% of all vacancies in the UK in 2017 were skill-shortage vacancies for which applicants lacked relevant skills, qualifications or experience.

Additionally, employers identify skills gaps amongst their current workforce, mainly attributing these to staff being new to the role, being unable to recruit staff with the required skills, and problems retaining staff. Common skills employers report as lacking include time management and prioritisation of tasks, management and leadership skills, sales and customer skills, complex analytical skills and digital skills. Two-thirds of employers in the Employer Skills Survey with skills gaps reported that the skills gap had an impact on the performance of their organisation.

Recruiting not training

These statistics underline the reskilling challenge facing the UK. Yet analyses of successive Employer Skills Surveys reveal that the duration and total number of training days provided by employers per employee decreased between 2011 and 2017. Almost all sectors have recorded fewer training days per employee and shorter training courses. Compared to employers internationally, UK employers stand out for their preference to recruit rather than train, as the figure below showing the proportion of enterprises recruiting not training reveals.

This figure demonstrates that UK employers stand out for their preference to recruit rather than train
UK employers stand out for their preference to recruit rather than train

Reasons for low investment include uncertainty about returns on investment, poor access to suitable training, and a lack of flexibility in provision. A prevalence of low-skills and low productivity firms in some local areas and sectors contributes to a lack of demand for training. This has implications for regional inequalities.

Insights from employee surveys

Changes in the structure of employment and in working lives mean that there is increased onus on individuals to develop their own skills. Yet financial, temporal, geographical and dispositional barriers prevent engagement in learning. The skills system is failing to reach those most in need of upskilling and reskilling, with those with the lowest skills participating in training least. This has negative consequences for social mobility.

Key evidence gaps in employer and employee surveys

Employer and employee surveys provide limited evidenced on:

  • Timeframes for addressing skill needs and the type of skills providers used to address different skills needs.
  • Current skills development and progression strategies at the organisation level.
  • Looking ahead to improve the skills system.

To start to fill these gaps, the research conducted detailed qualitative interviews with selected employers. Some key findings from these are summarised next.

Timeframes for skills planning

Employers face a balancing act of ensuring practical skills are in place for the ‘here and now’ to deal with ‘business as usual’ operations while also looking ahead to the skills needed for future business development and success. Smaller companies tend to take a more reactive short-term approach to skills development issues whereas larger firms often adopt a mix of long-term and short-term approaches to skills planning. This is partly influenced by the nature of the companies’ work, for example if it is multi-locational and project-based.

Identifying skills needs

Formal and less formal processes are used to identify skills needs, with larger companies being more likely to have formalised procedures in place. The quality of managers and the broader institutional culture is central to shaping the opportunities made available to, and the incentives for, employees to participate in skills development and to utilise their skills in the workplace. This appears to be recognised by both large and small employers who emphasise investment in managerial skills development alongside technical and other skills. However, the extent to which this recognition is translated into investment in managerial training varies.

Formal and less formal processes are used to identify skills needs, with larger companies being more likely to have formalised procedures in place.
Use of different types of skills providers to respond to different skills needs

Companies use different types of skills providers to respond to different skills needs. Large companies tend to use in-house training in conjunction with more formal off-the-job training, including training via local Further Education Colleges. They also value strong relationships with Higher Education institutions where they can shape the curriculum. By contrast, Small and Medium Enterprises (SMEs) tend to use self-directed in-house training. Large companies create online portals for training directed at all employees, whereas the SMEs interviewed use online training materials created by third parties. Overall, while formal qualifications remain important and employers’ desire clarity of standards, there appears to be a trend towards greater emphasis on informal learning and e-learning and on sharing of that learning with peers/ broader communities of practice.

The skills system: now and in the future

The extent to which education and skills providers are able to align with employers’ needs is shaped by the broader incentive structures and frameworks that they operate within. This highlights the importance of taking a holistic view, rather than a partial perspective on the skills system.

Aspects of the skills system identified by employers as working well included: academic knowledge provided by universities, e-learning and degree apprenticeships. Companies value continuity in the type of providers they use to minimise disruption to business systems. Recent flux in the skills system has caused disruption, particularly for SMEs.

Looking ahead employers desire a more agile and flexible skills system which has a clear national vision. There is a need for better quality targeting for smarter skills development, as opposed to an increasing volume of skills development per se. Building quality relationships, notably between employers and education and training providers, lies at the heart of a skills system that meets the needs of employers, workers, society and the economy.

Full reports and project details

Green A. and Taylor A. (2020) Workplace Perspectives on Skills, City-REDI, University of Birmingham – Download and view the full report

This report accompanies an overview report published by the Industrial Strategy Council: Lyons H, Taylor A and Green A (2020) insert full title and link. Download and view the summary of the main conclusion.

Dr Abigail Taylor and Professor Anne Green have published three reports following Abigail’s ESRC-funded secondment to the Industrial Strategy Council. The projects examine the challenges facing the UK’s skill system, employers’ perspectives on skills and training, and how the UK can learn from successful international skills systems. Find out more about the project.

This blog was written by Professor Anne Green, Professor of Regional Economic Development, and Dr Abigail Taylor, Research Fellow, City-REDI  / WM REDI, University of Birmingham.

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The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI / WM REDI or the University of Birmingham

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