Working class people paid more when they get training from their employer

Former Education Secretary Alan Johnson calls for system that works equally for school leavers and older workers.

Experts are calling on the Government to do more to get employers investing in training, as research reveals it’s a “boon for people’s pay and careers” – particularly for working class people.

A new report from Learning and Work Institute (L&W) finds that people in routine occupations like cleaners, labourers, and sales assistants who receive training at work are paid roughly 15 per cent more than those who do not. Across the economy, people who receive in-work training receive £3,400 gross monthly salary on average, compared to £2,950 for those who do not. Whilst flatlining pay is a day-to-day reality of many, training also appears to sustain salary progression through the mid-career stage, whilst those who don’t receive it see wage growth evaporate by age 40.

Access to training is also strongly associated with movement into higher-skilled roles where job demand is growing. People in less-well-paid jobs climb two rungs of the occupational skills ladder once they receive training, twice as far as their counterparts who do not. Jobs requiring higher-level skills are forecast to expand by over 2.5 million by 2035. However, with employers spending less on training, and skewing their investment towards people who are already well paid, researchers are arguing people and businesses are at risk of missing out on opportunities of the future.

The Government has outlined plans to “develop a skilled workforce and break down barriers to opportunity” in its recently published post-16 education and skills white paper. L&W together with Multiverse, who supported the research, contend that more robust action is required to ensure workers in shrinking lower-skilled occupations get the investment they need to change careers and update their skills, helping them progress into growth areas. Indeed, despite unprecedented changes in the world of work, sector-to-sector job moves stand at only half the rate of the early 2000s, with too many stuck in a “doom loop” of lower skills and low pay by a lack of access to training.

The report calls on the Government to introduce a Skills Tax Credit to encourage businesses to boost their training spend and to recognise and reap the wider benefits. UK firms are spending half the EU average on training per-worker; the report also calls for cuts to adult skills budgets to be reversed in the upcoming budget, with previous research showing seven million fewer people gaining qualifications than if adult education attainment had stayed at 2010 levels.

Stephen Evans, Chief Executive of Learning and Work Institute, said:

“No train, no gain: our research shows that employer investment in skills is a keystone of opportunity and particularly so for working class people, who often miss out. There is a powerful moral imperative to invest in Britain’s lower-paid workers to help them earn more and fulfil their potential. There’s also an economic imperative here too given jobs needing higher-level skills are forecast to expand by over 2.5 million by 2035. We must aim higher for people and the economy and that requires leadership from the Government and action from firms themselves.”

Euan Blair, CEO of Multiverse, said:

“These findings underline what we know to be true: training pays dividends. With AI reinventing what work looks like, we have been presented with a real opportunity to unlock latent potential and reskill people into the growth areas the UK economy needs. We need to make sure that this AI revolution is for everyone – for all workers, and all employers too.”

The Rt Hon Alan Johnson, former Secretary of State for Education and Skills, and author of the report’s foreword, said:

“The Growth and Skills Levy can help us create a system that works equally for the school leaver starting an apprenticeship and the 45-year-old needing to learn new skills. Training isn’t a luxury. It’s not something to do when times are good and scrap when money is tight. It’s fundamental: to people’s prospects, to productivity, to building an economy that works for everyone.”