Skill gaps threaten the future of business

Citation

(2003), "Skill gaps threaten the future of business", Journal of European Industrial Training, Vol. 27 No. 7. https://doi.org/10.1108/jeit.2003.00327gab.009

Skill gaps threaten the future of business

Skill gaps threaten the future of business

Almost a quarter (23 per cent) of companies report a skill gap – up 7 per cent on a year ago, according to the latest Skills in England report by the Learning and Skills Council.

The report shows that skill gaps are occurring because of organisational change, the introduction of new technology, the lack of training and changes in products or services. The authors claim that skill deficiencies, as well as limiting existing business effectiveness, also threaten England's long-term competitiveness.

Learning and Skills Council chairman Bryan Sanderson warned: "Skill gaps are not just a problem now, they are a problem that is building for the future. This is just the tip of the iceberg, as latent skill gaps are widespread. Many employers are unaware of the skills needed, not only to improve their performance but also to enable them to move into higher-value-added markets. A key challenge facing us is working with employers to break the vicious circle of low-skill equilibrium into which many organisations have slipped."

The report reveals that:

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  Skill gaps – in all industries – are being felt particularly at a customer-service level (24 per cent), closely followed by shortages of operatives (16 per cent) and administrative and secretarial staff.

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  Key sectors experiencing skill gaps are manufacturing (20 per cent), wholesale, retail and hospitality (29 per cent), and finance and business services (17 per cent).

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  Large employers notice the skill gap most, with 21 per cent of organisations with 5-24 employees citing it as a problem, compared to 33 per cent of organisations with 500+ employees.

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  Communication skills were mentioned in relation to 61 per cent of skill gaps overall.

Skill gaps are resulting in difficulties meeting customer-service standards (57 per cent), difficulties meeting quality standards (54 per cent), loss of business or orders (30 per cent) and delays in developing new products or services (28 per cent).

The survey reveals that workplace training has increased, but remains too focused on health and safety (78 per cent) and induction (58 per cent) rather than directed at increasing productivity or efficiency. Access to training remains concentrated on the trained, highly qualified or skilled, with manual and service workers, part-time and older workers least likely to receive training. Training needs to be targeted more at enhancing the work skills of those who receive it, if a real difference is to be achieved with regard to economic performance.

Smaller organisations train least frequently and least intensively. They are less likely to provide off-the-job training or training that leads to a qualification. With fewer than ten employees, they represent a significant 80 per cent of all establishments.

Bryan Sanderson commented: "If businesses, large and small, are to succeed in this increasingly competitive environment, employers need to play a greater role and look to the development of their existing workforce rather than the external labour market. This is particularly true for companies faced with the challenges of meeting replacement demand and staff retention. In both cases, employers need to recognise that part of the solution may be to adapt jobs to the individuals available."

He concluded: "Employers are, of course, a crucial side of the skills equation, but the report also highlights the need for education and training providers to become more innovative and flexible in meeting the demands of business. Aligning training provision to employers' needs is fundamental to the LSC's role and our aim is for the whole skills area to become much more demand led. One size simply cannot fit all if we are to close the skill gaps, truly enter a skills revolution and increase the country's productivity and international competitiveness.

"We are already seeing this approach pay dividends through our workforce-development strategy and initiatives such as sector pilots, employer-training pilots, centres for vocational excellence and our work with Investors in People."