Press Release - Employers’ perspectives on improving skills for
employment
14 December 2005
More employers in England need to be persuaded of the value to
their businesses of employment-related education and skills
training, according to the National Audit Office. Today’s report to
Parliament recommends that the ways in which employers get advice
and information be simplified; that the emphasis should be on
flexible and affordable training that employers need; that funding
should be tailored to encourage more employers to invest in
training to meet skills shortages and regional priorities; and
Sector Skills Councils should be helped to develop as genuinely
employer-led bodies, leading on incorporating employers’
perspectives into skills development.
Despite expenditure by employers in both public and private
sectors estimated at £23.7 billion on education and training, six
per cent of employers have skill shortage vacancies and 20 per cent
have skills gaps, costing in total some £10 billion a year in lost
revenue – or £165,000 a year in a typical business with 50
employees. Recent research estimates that, on average, an eight per
cent increase in the proportion of trained workers can lead to a
0.6 per cent increase in UK productivity, as measured by the value
added per hour worked.
Employers want their employees to be literate and numerate, but
may be reluctant to fund or release employees for basic skills or
level 2 training, especially when most people might be expected to
become proficient in literacy and numeracy before they leave
school. Employers generally acknowledge the economic benefits from
training and skills development at level 3 and above and expect to
bear at least a proportion of the costs.
The Department for Education and Skills spends around £6.7
billion, through the Learning and Skills Council, on
employment-related education and skills training in England. The
government’s Skills Strategy is designed to fill the gaps left by
market failure in education and training. In rolling out the
National Employer Training Programme – to be known as “Train to
Gain” – the Learning and Skills Council is extending the
availability of skills brokers (advisers who provide advice on
training opportunities and suitable providers) who can add value
and reduce costs by bringing together different small employers
seeking the same or similar skills development, and different
colleges and providers who can, together, provide the best and most
cost-effective training solutions.
Further education colleges and private training providers have a
lot to offer. But it is innovative, partnership working between
colleges and private sector providers that could potentially
provide a rich stream of future skills development that is
especially attractive to employers. Colleges also need to work
closely with employers to address barriers such as qualifications
not directly meeting employers needs, shortages of skilled trainers
in particular geographical areas, and the availability for training
purposes of expensive capital equipment.
In general, employers want incentives to train their staff more.
In rolling out the National Employer Training Programme, LSC funded
skills brokers need to be responsive to the needs of employers;
communicate to employers the benefits of skills development; and
create and offer packages of training with costs shared
appropriately between public funding and the employer, and that are
attractive in terms of business benefits. A particular imperative
is to engage the ‘hard to reach’ employer, rather than subsidise
those who would have trained their staff anyway without government
support.
For employers wishing to influence skills training, the biggest
barrier is shortage of time, but achieving genuine input from
employers is a challenge which has to be met if greater ‘employer
engagement’ is to become a reality. The Sector Skills Councils,
some of which are relatively new organisations, are required to
develop Sector Skills Agreements. As awareness of the Councils
increases, there is a risk that they will become overstretched,
unwieldy or both. If this happens, they risk losing the ‘buy in’ of
the employers in the sectors they represent. The Councils need
sufficient time and capacity to develop as genuinely employer-led
bodies providing sector expertise in developing skills training and
formal qualifications.
Sir John Bourn said:
“A more skilled workforce is vital for national
productivity and the delivery of public services. Better skills are
also important for the country to maintain its position in an
increasingly competitive global economy.
“The doubts that some employers have about the value of
skills training must be addressed by more streamlined communication
with employers, by developing flexible and affordable training
genuinely targeted on business needs, through incentives to
employers, and effective channels through which employers can
influence skills training”.
Notes for Editors:
- There are almost 400 further education colleges (including
general colleges, sixth-form colleges and specialist colleges)
which deliver a wide range of qualifications from basic literacy
and numeracy to vocational qualifications, professional
qualifications and preparation for degree level courses.
- Full Level 2 qualifications are those equivalent to 5 GCSE
levels A*-C. Level 3 is equivalent to A level.
- Sir Andrew Foster’s review of the future role of further
education colleges is available on www.dfes.gov.uk/furthereducation
- Press notices and reports are available from the date of
publication on the NAO website, which is at
www.nao.org.uk. Hard copies can be obtained from
The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 68/05
All enquiries to Barry Lester, NAO Press Office: Tel: 020 7798
7937
Mobile: 07748 181 962