From education to employment

How research can help meet the training challenge

Not for nothing is the phrase called “putting your money where your mouth is”. It’s something that holds with training investment – a good measure of the training employers really value is whether they spend money on it. Through the UK Commission’s Employer Skills Survey, we ask over 91,000 employers about their skills and training needs. We also ask 12,500 how much they invest in training. This gives us some fascinating, detailed, and occasionally unexpected results.

In the last year UK employers spent £42.9 billion on training their staff. Though this is clearly a large sum of money, it represents a decrease since we asked the same question in 2011. The figure then was £45.3bn. Counterintuitively, in 2013 slightly more employers overall were training their staff, and indeed were training more staff – but they were being thrifty about it. Almost 17 million employees were trained over the last year, compared to just under 15 million in 2011. We’ve already written about employers training smarter, and this would seem to be borne out by these figures.

What’s really interesting is where this £42.9bn goes. To make it clear – this headline figure includes all the costs associated with training – things like the trainees’ wages and the cost of backfill if necessary. But we also ask employers how much they spend on course fees. To try to understand the training market better, we now ask specifically what type of provider these fees go to. Of the £3.3bn that employers spend on external fees, 13 per cent goes to further and higher education providers – in other words, to colleges and universities. Clearly employers will put their hand in their pocket and pay for training, but what more can colleges be doing to get access to this market?

One thing colleges could do is look at the types of employers that provide training for their employees. For instance, employers with more sophisticated product market strategies are more likely to provide training and spend large sums of money on it. Although they spend more on external training providers, they spend a smaller proportion of this on FE and HE than the average employer. The data shows that there are enormous potential markets and by using the information available, colleges can make the most of it.

Rich data sources such as the UK Employer Skills Survey give providers the opportunity to gain a better understanding of local skills demand and their training market, and when combined with ‘bottom up’ intelligence could be a powerful business development tool.

Given the burgeoning recovery, we anticipate the appetite to train will increase. Like the landscape after a snowmelt, skills shortages hidden by the recession are being revealed as growth returns and the vacancy count increases. Employers will need to train more and will be looking for solutions at the time and place to suit them. There is a real opportunity for training providers to capture this market.

It won’t necessarily be easy. Finding out what employers want (and how much they are prepared to pay) demands perseverance, flexibility and possibly a change of mindset. But the benefits – for colleges, learners, employers and ultimately the UK economy – surely make this a challenge worth accepting.

Michael Davis is chief executive of the UK Commission for Employment and Skills, a social partnership that aims to raise skill levels to help drive enterprise, create more and better jobs and economic growth

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