Unlocking UK Talent: What the May 2025 Skills Gauge from The 5% Club Reveals About the Future of Earn-and-Learn Schemes

The Spring 2025 Skills Gauge – a new, rapid-fire, and agile Employer and Skills pulse survey from The 5% Club – provides a vital snapshot of employer sentiment towards the UK skills landscape. Drawing on insights from 370 employer respondents, from the 1,200 members of The 5% Club – a membership movement who collectively employ nearly 2 million people, including 120,000 in earn-and-learn roles – the report highlights cautious optimism about workforce growth alongside ongoing concerns about system complexity and economic pressures.

Employers Remain Committed to Skills Development

Despite a challenging economic backdrop, over two-thirds of employers expect their workforce to grow over the next year, with 16% anticipating considerable expansion. At nearly three-quarters of participating organisations, more than 5% of employees are already in structured earn-and-learn roles such as apprenticeships, graduate programmes, or sponsored training schemes. This underlines the importance of these pathways as a core component of workforce development and future talent pipelines.

Confidence in Talent, Not the System

While 79% of employers express confidence in their ability to recruit, train, and retain the skilled workers they need, only 12% believe the UK’s skills system meets their needs “very well”. A further 28% say the system fails to meet their requirements entirely. These figures point to a system that many find difficult to navigate – especially small and medium-sized enterprises (SMEs) – and which is often misaligned with employer demand. A more coherent, streamlined approach is essential.

Reforms Welcome, but Impact Limited

Government reforms – such as the creation of Skills England and greater flexibility in apprenticeship delivery – are generally welcomed, with 75% of employers saying the changes will bring some improvement. However, just 12% believe the reforms will significantly boost confidence to invest in skills, while 42% expect no real difference. This suggests that while policy is moving in the right direction, further work is needed to ensure these changes translate into practical, employer-facing benefits.

Economic Conditions Cast a Shadow

More than 60% of employers feel that the UK economy and business confidence have declined since the July 2024 General Election, with 17% saying conditions have “worsened considerably”. Meanwhile, 63% expect the October 2024 Budget to have a negative impact on their organisation and workforce. These concerns pose a serious challenge to training investment and underline the importance of linking skills policy to broader economic and fiscal strategy.

What Should Happen Next

For Policymakers:

• Simplify the skills system to improve accessibility – especially for SMEs.
• Monitor and adapt reforms based on employer experience.
• Introduce targeted measures to support young people entering earn-and-learn roles.

For Government Officials:

• Increase visibility and understanding of Growth and Skills Levy flexibilities.
• Reduce bureaucracy and streamline compliance processes.
• Engage directly with employers to address gaps in support and delivery.

For Employers:

• Align earn-and-learn activity with workforce growth strategies.
• Engage in Local and Regional Skills Initiatives and with sector bodies.
• Partner with training providers to develop tailored, localised talent solutions.

Conclusion

The Spring 2025 Skills Gauge paints a picture of an engaged and ambitious employer base – one that values earn-and-learn opportunities but needs clearer, more efficient support. With economic headwinds persisting, it is more important than ever for government, education, and industry to collaborate in building a skills system that is responsive, streamlined, and fit for the future.