By the year 2025, according to the World Economic Forum, 44% of the skills that employees need to perform their roles will have changed, and nine out of 10 workers will need some form of reskilling. However, the results of two recent UK surveys reveal that 61% of employees say they do not have the skills they need for the next five years and 26% have not participated in workplace training for a decade.

Our new evidence paper - Upskilling and reskilling adult workers - the problem of employer demand - finds that there is an urgent need to upskill and reskill adult workers to enable the UK to meet new challenges facing its future prosperity and productivity.

It sets out the challenges – including the narrow focus of Levelling Up, inequality in the skills system and the risks of continuing as we are – puts forward solutions, and explains why employers have an important role to play in tackling the issue.

The paper analyses existing evidence to highlight the factors that are contributing to this ‘low-skill’ economy, including:

• An increase in ‘narrowly-designed’ jobs – more roles are being designed to be ‘worker-proof’ with routinisation and automation giving workers less and less opportunity to use their existing skills or develop new ones.
• A drop in employer-funded training – between 1997 and 2017 employer investment in training fell by 60% with 30 percent of employees saying that they have received no workplace training at all the last five years. Overall, UK employers invest just half of the EU average in training.
• Drastic cuts to FE meaning that spending on work-based learning for adults has decreased by about 25 per cent in real terms since 2009-10.

Despite the increase in individual skills and qualifications, job design has failed to keep pace with these changes with many workers in the UK reporting that their skills are under-used and their level of autonomy has fallen dramatically.

Report author, and ReWAGE co-chair, Professor Irena Grugulis (Leeds University) explains why employers are important to reskilling and upskilling, and why they need to recognise the challenges ahead:

"We need to have an honest appraisal of the systematic problems - there is an enduring problem of a lack of employer demand for skills and an increasing trend for employers to 'retreat' from training - preferring to solve skills shortages through recruitment rather than training their existing employees.

“Successive governments and employers have all agreed that training is valuable, but as the statistics demonstrate, this is not backed up with practical action. Employers are choosing to compete by designing jobs that require few or no skills meaning that training can be minimised or omitted.

“While this may cost employers less in the short-term, limiting workers’ progression and development is alienating and will make companies that will allow employees to develop and use their skills more attractive. Looking at the bigger picture, it will also decrease the UK’s ability to adopt new work practices and technologies, hampering its ability to keep pace with international competitors.”

ReWAGE's recommendations

1. Policy – use Local Skills Improvement Plans (LSIPs) to extend employers’ involvement beyond simple links to colleges and local providers to stimulate further skills-based training within their own organisations and measure employers’ increased numbers of apprenticeships and adult training.
2. Job design – even small improvements can make meaningful differences to workers. Engage local and national stakeholder groups in actively upskilling jobs (perhaps via LSIPs) and improve HR practices so that employers can engage in upskilling and reskilling. Fund ACAS to play a role in maintaining and expanding this activity.
3. Learning support – introduce qualifications for experienced workers to both boost their technical competence and train them in how to train and develop others in work. Improve links, collaboration and co-operation between adult training and education, private training providers, FE colleges and universities.
4. Using independent advice on skills to drive policy – the Unit for Future Skills (UFS) in the Department for Education is already actively improving the quality of information on skills. It would be helpful to build on this through an independent body, working closely with the UFS but outside Government and modelled on the lines of the Low Pay Commission, to provide policy recommendations.

The report was commissioned and funded by the Gatsby Foundation.

Daniel Sandford Smith, Director of Policy at Gatsby Education, said:

“This report echoes findings from previous Gatsby research on the quality of apprenticeships that some employers are not using apprentices to improve their businesses, but rather to fill existing roles of a narrow scope at the minimum training cost.

“As the report identifies, changing employer demand for skills – through employment-based training and job design, will not be straightforward. That is why current work at Gatsby includes a project with the Association of Colleges to explore how colleges and employers can work together to support business improvement. We believe this could be a win-win approach for skills and productivity.”

A summary of the findings and recommendations can be found in our related policy brief.