This research, supported by Multiverse, finds that access to training is a boon for people’s pay and careers. People who receive and participate in training are paid more; experience quicker and more sustained salary growth; and are more likely to move into highly skilled roles. The training dividend is greatest for those on the lower rungs of the occupational ladder, helping them go further, faster.

However, reductions in funding for training have been substantial and long lasting from both government and employers. Cuts in public funding have fallen hardest on Level 2 qualifications which most benefit those in lower-paid work and lower socioeconomic groups. The distribution of employer-funded training across sectors and earning categories is also deeply unequal. Those better paid and working in industries with a high graduate workforce are more likely to receive training at work. For those in lower-skilled occupations and lower-paid roles, the absence of training can have an anchoring effect, locking people in a doom loop of low pay – low training – low skills – low pay.

In an environment where training is strongly linked with improved pay and career progression, cuts to training appear to be impacting salary growth and job movements. Real earnings have flatlined for nearly two decades. As well as being an endemic feature of the labour market, pay stagnation also appears to be a major challenge in people’s career journeys, with real terms wage growth evaporating for many by age 40. Despite this, and despite five-decade careers becoming more common and economic change ongoing, career change is not yet the new norm. Last year, moves between sectors fell to almost half the level seen in the early 2000s.

This cannot continue. A decade of labour market changes lies ahead. The sum of these changes will spur job demand in some sectors compared to others, while also increasing demand for intermediate and higher-level skills. Industries increasing or decreasing job numbers cannot rely on new entrants alone. With 80 per cent of the 2035 workforce having already left compulsory education, there is a need for significant upskilling and retraining. Positively, there is strong evidence that access to training is enabling more people to move into growing occupational categories and transition out of roles where demand is decreasing.

Ramping up training can therefore help firms to retain and create jobs, while allowing more people to move into highly skilled, high-value, well-paid employment. However, failure to do so risks thwarting the potential of people, businesses, and the economy, and leading to significant economic scarring and job displacement. The Government and employers both have a key role to play.