With support from the Nuffield Foundation, L&W is exploring employer investment in skills, and how employees are responding to the need to upskill and retrain in a transitioning economy.

Shifts in the UK economy, including advances in technology and the transition to net zero, are impacting job types and skills demand. Employer investment in skills can enable businesses to adapt to changing circumstances and boost productivity. However, UK employer investment in training has fallen by 26% per employee since 2005 and now stands at half the EU average. There are large inequalities in access to training at a time when the UK is falling behind on basic and technical skills.

Despite these headline trends, not enough is known about how UK employers make decisions about training, the reasons for training, wider influences, and the employee and business level impacts of those decisions.

What we’re doing

The research team will address this knowledge gap through a mixed-methods study, starting with analysis of employer investment in training across the whole economy, and then focusing on four sectors that under-train relative to international comparators. The research will be completed in four stages:

• Desk-based review and expert interviews to explore how employers and employees are responding in the UK to changing skills demand and how employer investment compares to other countries. Policy makers in the four UK nations will be interviewed about policy objectives, perspectives on the current situation, and potential policy levers.
• Analysis of existing survey data to explore employer perspectives on the connection between training investment and skills gaps, and the link between participation and demand for training, personal employment characteristics, and perceptions about skills demand and utilisation.
• Business interviews with employers and training providers to explore training and learning opportunities, their motivations and decision-making processes, and how they could be better supported to upskill and retrain staff. Employees will be interviewed about their experiences and perceptions of training
• International case studies carried out with international organisations to explore trends in employer investment, the impact of policy, and wider influencing factors.

How the research will make a difference

The project aims to influence long-term thinking about skills investment by co-designing and presenting workable solutions to policymakers in UK, devolved and local governments, and to employers and training providers.