Learning at work: Employer investment in skills

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The UK entered the deepest recession in history in 2020, following a decade of sluggish growth. Coronavirus restrictions led to a sharp rise in unemployment, vacancies plummeted, and millions were furloughed. The pandemic has also accelerated technological change, with increased digitalisation and firms discovering new ways to harness emerging technologies, increasing demand for new skills.

Job-related training will be crucial in responding to these changes, as well as an important contributor to innovation, productivity and wage growth. It also offers pathways for people to upskill and for wage progression. As our previous research has shown, training significantly increases the chances of escaping low pay.

Employers play a vital role in job-related training and development. Ultimately, the main reason employers invest in skills it to meet business need and deliver their business strategies. But the UK has long suffered from low and unequal employer investment in skills, and declining investment prior to the pandemic was identified as one of the likely contributors to the ‘productivity puzzle’. Low productivity and low skills are interlinked.

This report, written with the support of NOCN, provides an audit of employer investment in skills over time. It explores how training varies by type of employer, categories of employee, and type of training.

Stephen Evans, CEO of Learning and Work Institute, said
The best employers know that investment in their staff is key to success. But employers’ investment in training has fallen over the last decade and the lowest paid and those with the fewest qualifications are most likely to miss out. This is holding our economy back and limiting people’s life chances and the Government needs to do more to change this. This report should be a clarion call for greater action to increase investment in skills and level up opportunity”
Graham Hasting-Evans, chief executive of NOCN, said:
As a progressive educational charity with a social rather than commercial purpose, NOCN is focused on skills investment across all sectors and groups in the UK and internationally. L&W’s new report highlights not only how the pandemic has affected investment in training but also identifies pre-pandemic issues of inequality and declining employer investment for skills. Skills investment from employers and the government is critical to ‘building back better’ from the pandemic and reducing inequalities in access to workplace learning. We look forward to continuing to support the L&W with their research into possible reforms to the Apprenticeship Levy and taxation systems to help boost employer investment in skills and provide sustainable economic growth.