Employers who are ‘lazy’ fear that their trained staff may be stolen – an inquiry

The UK lags behind other countries when it comes to having a culture of employer-led learning. Companies are afraid of investing in training for fear of losing their staff.

The House of Lords Industry and Regulators Committee, in its inquiry into future skills requirements for the UK, found that employers have become “very lax” since Brexit.

Baroness Taylor of Bolton is the chair of the House of Lords Industry and Regulators Committee. She wrote to the government on 23 October, urging it to ensure that training and apprenticeship programmes are designed to meet future skill needs of the UK economy.

Taylor wrote a letter addressing Baroness Smith, Skills Minister, to warn that the current system of skills is short-term, complex and lacking in strategic direction. In the letter, Taylor also outlines widespread dissatisfaction about the apprenticeship levy that will soon become the Growth and Skills Levy. This raises concerns that the levy is disadvantageous to young people.

The report also revealed that apprenticeships are increasingly used to train workers of all ages, and fund the training of current staff. This reduces opportunities for young people and those who move into new industries.

Baroness Taylor stated: “Our investigation has raised fundamental concerns about the fact that training and apprenticeship programmes do not meet future UK skills needs. Our inquiry also revealed that young people who don’t go to university are missing out on many opportunities.

We look forward to the future plans of the government in this field and invite them take our findings, recommendations and suggestions into account as they develop their initial proposals.

The committee found that some apprenticeships were too academic and bureaucratic, both for employers and for training providers.

The report also concluded that devolution can add value to the system of skills by linking local employers with educators. However, it was important “to avoid reinventing Whitehall on a local level” through separate programmes and new processes.

The government said that the proposal to create a new organization, Skills England, would provide “a greater focal point for skills system by its role as convenor”, bringing information about the skills system’s needs to inform government policies.

Employers’ role

In an annex of the letter, Sammy Shummo summarized some of the evidence heard during the inquiry. He is the group director for apprenticeships at London South Bank University.

He explained, along with other witnesses, that employers play a “crucial” role in the system of skills by identifying skill needs, designing programmes together with education and training providers and providing opportunities for work-based learning.

Despite the importance of this role, some witnesses compared UK employer’s investment in training with that in EU and OECD nations, leading to a “system underfunded by both government and employers”.

Robert Halfon, former skills minister of the UK, said that there was a “cultural problem” when comparing UK employers’ approach with German employers whom he visited. They believed it was their “duty to train the next generation”.

Sian Elliott is the head of organizing, services, and skills for the TUC. She argues that the UK “is quite unique internationally” in the fact that it does not have a place where unions and employers, as well as education providers, can meet and discuss the UK’s skills system.

David Hughes, Chief Executive of the Association of Colleges suggested that the UK had a “very liberal labour market” before Brexit but that “employers became very lazy” because of a “buoyant graduates market”.

Halfon said that employers’ cultures “are changing”, and witnesses noted that “there are fantastic examples of employers doing the right thing”.

Poachers’ fear

Many witnesses spoke of the “poachers’ fear” which makes employers “hesitant” to invest in training, if they are afraid that trained employees may leave for other jobs.

UKHospitality, for example, explained that businesses in the hospitality industry fear “not seeing a return on investment” because they are “one of most mobile labour market”.

The fact that other witnesses told the inquiry that investing in staff development improved retention was not surprising.

The committee stated that the government, Skills England, and local institutions must take a leading role in communicating to employers these benefits of training.

The letter stated that “if the government wants employers to invest more in training it must provide immediate and obvious incentives.”

“Given the fact that the cost of training is short-term, we think there’s a good case for the government offering financial incentives to employers who invest in it, such as a tax credit for skills.”

The government is called upon to:

• Develop a simple skills system with its strategy for education after 16 years, and provide greater funding on a long-term basis for a smaller set of priorities.
• Ring-fence substantial amounts of the growth and skills levies funding for young people, first time starters or those with lower qualifications.
• Review current content criteria for apprenticeships, including the functional skills requirements that can be restrictive.
• Use the creation of Skills England as a focal point to improve the system for skills
• To ensure that local institutions are equipped with the necessary resources to make local plans for work, health and skill development a success
• Introduce financial incentives to encourage employers to invest their money in training. For example, a tax credit for skills.
• Make sure that the funding for further education is sufficient to provide a youth warranty, and consider a higher level of demand-driven funding.

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