As we emerge out of the pandemic, it is becoming clear that many businesses will need to focus on improving their productivity over the next few years if the UK economy is to not only recover but also grow substantially.
A key part of any improvement in productivity is that of increasing investment in skills and that is why this month’s survey from the CBI’s annual education and skills survey provides useful reading as to the future intention of businesses.
The good news is that as we slowly emerge from economic downturn caused by the Covid-19 pandemic, most businesses will be increasing their investment in training and skills over the next twelve months. In fact, four out of ten will have a higher rate of investment in this area than prior to the start of the pandemic suggesting that owners and managers of firms are seeing this as a way of developing competitive advantage in the future.
Whilst there is demand for skilled people at all levels, there is a greater need for those with higher-level skills rather than entry level skills which indicates that, contrary to expectations, there could be demand for graduates to fill posts over the next year.
Whereas there are regular headlines in the news about the problems some sectors are having in filling vacancies, businesses are confident about being able to access the skills they need at every level in the next three to five years although there remain a number of challenges. These include strong competition for candidates with appropriate qualifications (51%), a lack of candidates with appropriate industry relevant qualifications (50%) and poor careers advice aligned to sectors (37%).
More specifically, industry-specific technical knowledge (60%), leadership and management skills (58%) and digital skills (44%) are the three main priority skill areas for development over the next three to five years. And as this column has suggested on numerous occasions, these trends which have been rep provides opportunities for universities to help develop those specific skills gaps that employers have recognised as being critical to their future. Indeed, such training no longer needs to be face-to-face with nine out of ten firms rating online learning as an effective form of training for developing their employees’ knowledge.
Whilst there remains concern amongst politicians and policymakers that young people will bear the brunt of any economic downturn due to the pandemic, more than eight out of ten businesses are confident in their ability to support young people over the next 12 months. In fact, a third indicated that they had already applied (or are intending to apply) to the government's Kickstart scheme which provides funding to create new jobs for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment.
But it’s not only young people that are the focus of skills development with half of respondents having increased their investment in adult education and lifelong learning and this set to increase further over the medium term. However, there remain significant barriers in currently achieving this, most notably the continuing challenges of Covid-19, lack of funding and prohibitively expensive training, difficulty in finding time for employees to be training and a lack of local high-quality provision.
In addition, employers have noted that they have had challenges engaging in the education system in the past year with a decrease in those having links with schools, colleges, and universities as compared to 2019. For those that were engaged with the education system, they mainly provided work experience placements, careers advice and motivational talks.
More than four in ten respondents plan to increase engagement with educational bodies over the next year although the biggest barrier was finding the time to meaningfully engage with the education system.
Whilst technical skills are important, seven out of ten employers rated soft skills and behaviours as a top-three factor when recruiting school and college leavers, with eight out of ten ranking attitudes and aptitude for work as a top-three factor when recruiting graduates.
This reflects the findings of other research studies, most notable those from the World Economic Forum which also noted that the skills that are in demand over the next five years will not be technical but in areas such as critical thinking and analysis, problem-solving and self-management skills such as active learning, resilience, stress tolerance and flexibility.
Therefore, the CBI study shows that employers are preparing to make considerable investments in upskilling their workers as the economy starts growing over the next twelve months. However, it seems that the challenge is on the supply side and for providers of training such as colleges and universities to only develop the right type of programmes to meet the requirements of employers but, more importantly, to ensure that their graduates have the work-ready skills required by many employers.