From education to employment

FE colleges, business innovation and meeting employer skills needs

David Hughes

There are 163 further education colleges in England. They work with around 130,000 employers – an average of 800 employers each. There are around 2.4 million businesses in England. And so, for every single business a college works with, they don’t work with another 17. It is easy, perhaps, to understand why we hear too often that colleges are not doing enough to meet their needs.

A wrongly presented solution

The solution being presented to employers and colleges today is that we need a stronger ‘match’ between what colleges offer and what businesses say they need, in real time. The presumption is that any ‘skills shortage’ is because of a deficit in the education and training system and that there is a pool of people waiting to gain skills and ready and willing to work in the jobs which are vacant.

This simplistic view is frustrating, because we know it is far more complex than that. Many employers have, over the last couple of decades, been able to simply recruit the people they need, with the skills they need, from an open and vibrant labour market.

When employers start to find it difficult to recruit people, the finger is often pointed at colleges and other education providers for not meeting their needs rather than thinking about pay, working conditions, flexible working, recruitment practices and so on.

Workforce development and business strategy

And yet, the best employers know that the skills needed today will be different tomorrow and see workforce development as going hand in glove with business strategy, technological change and innovation.

They view skills as part of what they need to invest in if they are to stay productive and viable, and as their business changes. They know that attracting diverse talent, offering skills development in the workplace and productivity are strongly linked.

Because of that, they work closely with their local college to ensure a strong pipeline with the right skills, through influencing the curriculum, helping develop learning materials, doing some teaching as well as offering work placements, taking on apprentices and offering interviews for suitably qualified students.

That link between business change and skills demand is central to the opportunity colleges present for stimulating and supporting businesses to innovate and for helping more students to develop relevant and up to date skills for those innovating businesses.

Business innovation and colleges

In ‘FECs, innovation, and skills: A literature review (2022) Nelles, Walsh, Papazoglou & Vorley argue that ‘skill mismatches are a key factor in inhibiting productivity growth’ but they go on to recognise that overcoming them is not a simple matter. Their conclusion is that there is a need for “intensive local and regional collaboration of FE colleges (FECs) with business and other education institutions (including HE institutions)”.

In a second report, ‘Rethinking the role of further education colleges in innovation ecosystems’ (2022), Vorley, Nelles & Baxter explore this wider role of colleges. The report concludes that colleges need to develop their capacity to support business innovation, based on a deeper understanding of the needs of existing local/regional businesses within the ecosystem of innovation and business support which already exists.

Innovation advice to SMEs

Despite not being resourced to do it, many colleges offer advice to SMES on innovation and business change as part of their service, and then back that up by delivering the skills that are needed in the existing workforce and for new recruits. As public sector anchor institutions, colleges are well-placed to offer SMEs advice and support to innovate, to improve their productivity and to grow.

Working in partnership with the college, they can help ensure the curriculum is relevant and that students get the skills that will help them find good jobs and progress in those businesses. A perfect partnership of interests supporting an inclusive and thriving economy.

Recommendation 1

DfE and the new Department for Business and Trade should collaborate on a Further Education Innovation Investment Fund round to support colleges to build their capacity to help businesses innovate in priority sectors.

Recommendation 2

DfE should work with the new Department for Energy Security and Net Zero to develop a development fund for colleges to be able to work with businesses to re-skill their workforces to be ready for the drive to net zero.

Recommendation 3

DfE should review the progress of LSIPs against the ambition of developing intensive local collaboration between colleges, businesses and universities.

By David Hughes, Chief Executive, Association of Colleges

This article is part of Campaign for Learning’s series: ‘Driving-up employer investment in training – pressing the right buttons’.

Part One: Employer investment in context

  1. Louise Murphy, Economist, Resolution Foundation: Investment in the round
  2. Dr Vicki Belt, Deputy Director, Enterprise Research Centre, Warwick Business School: UK enterprises and investment in capital and training
  3. Becci Newton, Director, Public Policy Research, Institute of Employment Studies: Employer investment in training in England

Part Two: Drivers of employer investment in training

  1. Neil Carberry, Chief Executive, Recruitment and Employment Confederation: Derived demand, British management and employer investment in training
  2. Ewart Keep, Professor Emeritus, Education Department, University of Oxford: Strategies to drive-up employer investment in training
  3. Sam Alvis, Head of Economy, Green Alliance: Transitioning to net zero, green skills and employer investment in training
  4. Dan Lucy, Director of HR, Institute of Employment Studies: Job quality, job design and driving-up employer investment in training
  5. Natasha Waller, Policy Manager, LEP Network: Local inward investment, business support and employer demand for training
  6. Jovan Luzajic, Acting Assistant Director of Policy, Universities UK: Universities, R&D, business innovation and meeting employer skills needs
  7. David Hughes, Chief Executive, Association of Colleges: FE colleges, business innovation and meeting employer skills needs

Part Three: Increasing employer investment in training

  1. Paul Bivand, Labour Market Consultant: Why should employers invest in training in a flexible labour market?
  2. Aidan Relf, Skills Consultant: Why should employers invest in training with large net worker migration into the UK?
  3. Stephen Evans, Chief Executive, Learning and Work Institute: Raising employer investment in training
  4. Robert West, Head of Education and Skills, CBI: Increasing employer investment in training
  5. Lizzie Crowley, Skills Policy Adviser, CIPD: Encouraging employer demand for training
  6. Anthony Painter, Director and Daisy Hooper, Head of Policy and Innovation Chartered Management Institute: Increasing employer demand for management training

Part Four: Raising employer demand for publicly funded post-16 education and skills

  1. Jane Hickie, Chief Executive, AELP: Increasing employer demand for post-16 apprenticeships in England
  2. Mandy Crawford-Lee, Chief Executive, UVAC: Increasing employer demand for level 4-5 technical education in England
  3. Ian Pryce, Principal, The Bedford College Group: Increasing employer demand for higher technical education in England

Part Five: Raising employer demand for work placements

  1. John Widdowson, Board Member, NCG: Increasing employer demand for work placements for level 3-5 vocational courses in England
  2. Stephen Isherwood, Joint Chief Executive, Institute of Student Employers: Increasing employer demand for undergraduate work placements in England

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