Naomi Clayton, Deputy Director, Learning and Work Institute
For all the advances in hiring technologies and data analytics, finding the right person for the job isn’t getting any easier. HR leaders up and down the country are grappling with record numbers of vacancies and a shortage of workers to fill them. And with geopolitical uncertainty, demographic change, technology and environmental sustainability transforming the world of work as much as the world at large, there are long-term challenges to confront when it comes to the jobs and skills.
Our economy is plagued by skills gaps, with real consequences for businesses on the ground. The Department for Education’s latest Employer Skills Survey finds that 36% of all vacancies were skills shortage vacancies in 2022. Yet employer investment in training has fallen in recent years, with the UK’s training spend per employee diminishing to 26% less in real terms than recorded in 2005. The EU average investment in training per employee is double that of the UK, meaning it would take an extra £6.5 billion each year to catch up with our European neighbours.
Headline measures conceal troubling inequalities of opportunity. Graduates are four times more likely to get training at work than people with no qualifications. Over the last decade, low-wage sectors such as retail and hospitality, which employ a higher proportion of younger workers and which were already investing the least, tended to cut the most.
Young people have seen the sharpest declines in participation in job-related training and the fall in apprenticeship starts has disproportionately impacted young people from disadvantaged backgrounds. Overlooking these young people risks severe problems for the hiring managers of the future: 1.4 million more people are projected to retire over the next 17 years than young people will enter the workforce.
Employers will need to play an active role investing in the UK talent pool to avoid greater skills shortages in the decades to come. Economists have observed longstanding shortfalls in our skills base compared to that of other countries and we can’t afford to carry on like this: a poorly equipped labour force will fan the flames of the UK’s productivity problem, harm our international competitivity and opportunities for trade, and lead to a decline in living standards.
As the new year dawns, businesses should be viewing investment in training as an opportunity. From to advances in Artificial Intelligence to reskilling for Net Zero targets, employers that commit to upskilling programmes and in-work training will find themselves better equipped to compete and scale, make the most of new opportunities, and adapt in the face of change.
Drawing on a limited training budget, the temptation might be to focus those resources on high-flyers with a track record of success. But there’s a strong business case for looking beyond the already highly qualified and committing to merging training and recruitment processes – thereby welcoming talent into the sector who might otherwise have struggled to get a foot in the door, improving diversity and innovation, and increasing employee engagement and retention.
There are plenty of examples where this has worked particularly well: in the West Midlands, BritAsia TV, one of the UK’s biggest broadcast channels, has trained over 200 young people in film, content and social media bootcamps, kickstarting careers and providing a pool of talent for the region’s booming creative industry. In London, Greggs partnered with Lewisham College to roll out a groundbreaking Sector-Based Work Academy programme, helping local people return to employment, gain qualifications and fill management roles within the business.
We came across these two case studies when Learning and Work Institute helped develop regional adult learning awards for the West Midlands Combined Authority and the Mayor of London – BritAsia TV scooped up an award for Innovative Delivery, Greggs for Employer of the Year. I remember being struck by the way these big-name brands were not just filling vacancies but investing in the long-term prosperity of the local communities in which they operate.
More recently, the sign making and manufacturing company Nuneaton Signs, was recognised through our national Festival of Learning Awards, winning the Employer Award for 2023. Originally founded as a sheltered workshop to provide meaningful employment and training for adults with disabilities, since 2021, the business has offered supported internships for young people with special educational needs and disabilities in partnership with North Warwickshire and South Leicestershire College. In doing so, they’ve expanded their workforce with young people starting out on their employment journeys and unlocked professional development opportunities for their long-serving employees through mentorship.
In 2024, employers of all sizes should be prioritising investment in training. Between the imperative of a long-term plan for growth and the needs of individuals to flourish and find dignity in work, it really is just good business sense. The Festival of Learning is currently open for nominations for 2024; if, reading this, you think your organisation already sets itself apart through outstanding staff training and development, do take this chance to showcase these achievements.