The government is offering business a greater say in the content and delivery of training programmes, covered in the latest skills strategy white paper on July 8. Proposals in Realising our potential include giving employers more choice and control over publicly-funded training, aiming to create a more ‘demand-led’ system. The white paper sets up a ‘skills alliance’ to drive forward the strategy, incorporating the CBI, the TUC and the Small Business Council.
The government hopes the proposals will redress England’s long-standing skills and productivity weaknesses. Nearly six out of ten (57%) British workers have low skills or no skills, compared with a third (32%) in France and just a fifth (20%) in Germany. Productivity growth has also slowed in the UK: in 2001, output per hour worked was 25% higher than Britain in the US and Germany and 32% higher in France.
The National Institute of Adult Continuing Education is concerned the paper doesn’t recognise the changing demography over the next decade, neglecting the growing importance of older adult workers, who are already less likely to have access to training than other working age adults. Contact Trevor Cook, DFES, on 0870 000 2288 (http://www.dfes.gov.uk)
Training and development programmes at Tesco, ASDA, Whitbread and McDonald’s are profiled in a new report that suggests “job snobbery” in the UK is hampering efforts to improve productivity. Commissioned by McDonald’s, and published by The Work Foundation on June 19, the report also includes a survey of 2,500 people, which finds that two-thirds would not take a job in a fast food restaurant even if it offered good career prospects. However, the Foundation suggests that jobs in the service sector are those most likely to provide innovative training in the communication and teamwork skills that Britain needs. Contact Memuna Forna, WF, on 020 7730 5575 (http://www.theworkfoundation.com)
Relative wages for skilled workers are a third lower in the South East, which has the highest living costs in the UK, according to All is not Equal, a study published by the Centre for Economic Performance. It finds that companies need to pay more for skilled labour in regions that have a scarcity of qualified workers. Contact Andrew Bernard, Centre for Economic Performance, on 020 7955 7284 (http://www.cep.lse.ac.uk)
Transport workers are the least qualified workers in Britain, according to a government-commissioned study published by Warwick University’s Institute for Employment Research. In one four-year period, only 207 rail workers gained NVQ qualifications, out of a total of more than 200,000 employees. Contact Robert Lindley, Warwick, on 024 7652 3284 (http://www.warwick.ac.uk)
BAE Systems is investing £60m in a new research and training collaboration with Loughborough University, it was announced on June 16. The company hopes the project will help them meet their estimated requirement of 5,500 more qualified systems engineers in the East Midlands region by 2007. Contact Richard Coltart, BAE Systems, on 01252 384 875 (http://www.baesystems.com)
Editorial Comment
The statistics lose none of their power to shock despite constant repetition. Seven million people in the UK lack basic skills. Little more than a quarter have ‘intermediate skills’, compared to half in France and two thirds in Germany. The economic cost is huge, with output per hour between a quarter and a third higher in the UK’s main international competitors.
So what chance does the government’s latest attempt to close the gap have of actually working?
Don’t hold your breath. The problem is that the white paper’s proposals are almost exclusively supply side measures. That is, they attempt to increase the volume and quality of training for employees. In this, they follow a long succession of laudable government initiatives to get both sides of industry working together with government (this time dubbed the ‘skills alliance’).
What’s missing from the new strategy, however, is any substantial investment in the pull side – employers’ demand for and use of new skills. A little noticed Cabinet Office PIU report in 2001 called for “a demand-led system in which the demands of individuals and employers . . . shape the type and quantity of workforce development provision that is available”. More is the pity that this seems to have been quietly dropped.
The problem of low employer demand for high-skilled workers pervades small enterprises in particular- firms with low-cost, low added-value market strategies have little reason to invest in workforce development. Larger companies have a clear incentive in terms of greater efficiency and higher quality to encourage this change of mindset through their value-chains.
So what can socially responsible companies do to encourage the demand for skill development? Firstly, stimulate management interest in improving their own skills. Extending internal executive training programmes to include SME owner-managers or working with employer federations to improve their training opportunities are two good representative examples. Secondly, recognise and encourage efforts by suppliers to invest in human capital. Working with SMEs to achieve external standards, such as Investors in People, or promoting industry specific awards for performance improvement derived from workforce development represent the kind of initiatives we need to see more of.
Working with small businesses to drive up demand for workplace development will not only help the government close the skills gap, but will also result in bottom-line benefits for companies with large- and potentially better skilled- supply bases.
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