The independent Commission on Sustainable Learning for Work, Life and a Changing Economy was established in June 2018 to explore the UK skills problem. The Sonnet team (then known as Bates Wells Advisory & Impact) was invited to contribute to the commission, first by undertaking a wide-ranging literature review, then by working to estimate the potential economic gain for the UK if we were to ‘get skills right’. The work was published as the Commission’s Interim Report in September 2018 and is available here.
Our findings were stark, starting with acceptance that the UK currently ranks 11th out of the 30 OECD countries in terms of productivity (outside the top quartile), with two-thirds of UK workers employed in businesses whose productivity lies below the industry average. Why is productivity so relevant to a review of skills development? Simply put, our competitiveness in the future will be determined far more by how we develop and use human skills than on ownership of dwindling natural resources.
Accepting that starting point we need to design a skills system that is fit for the future – yet the future needs of our workforce and economy are uncertain, with multiple drivers of change ‘in play’ – and will almost certainly not be stable. Instead the skills system itself, and the resilience of the workforce it helps to develop, need to respond to a changing and largely unknowable future. We need a much stronger ability to anticipate future skills needs and plan to fill them. In an effective and engaged system, labour market intelligence is vital, including employer voice in course and qualification design. Employers cannot realistically expect the skills system to produce what they need if they are not sufficiently clear and vocal about that need in good time.
We need also to recognise that people are working for longer and will change jobs more often. With continuing change and an extension to people’s working lives comes a greater need than ever for individuals to periodically retrain, perhaps radically, in order to stay ahead. Training needs to be viewed by employers as more than just an entry requirement. It needs to be seen as a fundamental part of investment in a valuable workforce.
More fundamentally we need to think about the human factors of work. Working is not just about having a job: good jobs generate worth and self-esteem, enabling individuals to enjoy better health and avoid health problems. A snapshot of the British economy today shows a high degree of imbalance. An estimated 1.1 million people work in the gig economy, 55% of people in poverty are in a working family, 21% of all employee jobs pay less than the real Living Wage. 51% of UK employees report that their skills are being under-utilised, among the highest levels in the EU.
There is an upside to this situation however – our research suggests that there is a clear potential for improving UK productivity, and with it a range of positive outcomes for businesses, employees and their families. Economically, if we can strengthen the UK’s skills base such that we achieve a top quartile position for Low, Intermediate, and High skills in the OECD’s ranking of countries by adult education level, this could translate into an improvement of £108bn in GDP over a 10 year period (or £21bn a year by 2026). This is undoubtedly a prize worth having, but to achieve it we need:
- An organised, long term, stable skills system – able to grow, respond and develop according to demand;
- Transparency of information about needs, including regional variances;
- Effective engagement with and between employers, training providers and exam awarding bodies;
- Acceptance that the workforce should be one that continually learns and strives for self-improvement;
- Proper, focused and accessible funding – both for technical skills and embracing the wider workplace social and interpersonal skills that make a worker effective.
