LLAKES, Institute of Education, University of London

UK companies respond to recession by ‘training smarter’, study finds  

Fears that most UK companies would slash investment in skills training as a result of the recession have proved to be largely unfounded, researchers say.

Although some employers have cut spending to the bone, the total fell by only 5% in real terms between 2007 and 2009. Many employers are also “training smarter”, according to a new study from the Centre for Learning and Life Chances in Knowledge Economies and Societies (LLAKES), at the Institute of Education, University of London, and researchers at the University of Cardiff.

The recession has caused companies to focus their training on key business needs, organise more in-house courses, and use their own staff as trainers. They have also renegotiated contracts with external trainers and increased their involvement in e-learning.

The study’s authors interviewed 52 public and private-sector employers representing large and small organisations. “A majority of these employers believed that they would persist in ‘training smarter’ when the economy recovers,” they say.

The researchers also examined responses to several surveys that gather information on staff training: the CBI’s Industrial Trends Survey, the British Chambers of Commerce Quarterly Economic Survey, the National Employers Skills Survey, and the Quarterly Labour Force Survey, which questions 60,000 workers about a range of issues including recent job-related education and training.

At the outset of the recession many employers were anticipating sharp cuts in training expenditure, judging by the CBI data. The British Chambers of Commerce survey responses were a little more optimistic while the National Employer Skills Survey (NESS) provided further evidence that the reduction in training was not as severe as many feared. “Although a minority of NESS employers had cut spending in the previous 12 months, most reported no significant change and some had even increased their commitments,” the researchers comment.

The findings of this new study, however, suggest that the UK has seen a slow decline in training from a peak in 2001/2, rather than a recession-related crash.

The study concludes that an “overwhelming majority” of employers recognise that some types of training are essential, even in a recession. These are called “training floors”. Such “floors” include training that helps firms to:

• comply with legal requirements
• meet operational needs
• counter skills shortages
• address market competition
• fulfil managerial commitments, and
• satisfy customer demands.

Some companies also believe they now need training that ‘multi-skills’ their workforce. “If anything, the recession has taught me that we need to make sure that our whole workforce is trained in several tasks,” one industrial employer told the researchers. “If we do have to make redundancies in the future we will then have the people to fall back on if we lose key employees.”

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“The impact of the 2008/9 recession on the extent, form and patterns of training at work”, by Alan Felstead, Francis Green and Nick Jewson, is one of the latest research papers to be published by the Centre for Learning and Life Chances in Knowledge Economies and Societies (LLAKES), Institute of Education, University of London. The research work for the paper was funded by the ESRC/UKCES Strategic Partnership.

Professor Felstead and Dr Jewson are based at the Cardiff School of Social Sciences, Cardiff University. Francis Green is Professor of Labour Economics and Skills Development at the Institute of Education. Their paper is downloadable from the LLAKES website www.llakes.org from 9 am on 9 February 2011.

Further information

David Budge
d.budge@ioe.ac.uk
020 7911 5349
07881 415362

Francis Green
f.green@ioe.ac.uk
0207 911 5530
077919 42164

 

Notes for Editors

The new LLAKES study examined CBI Industrial Trends Survey data gathered between 1989 and the second quarter of 2010. The CBI survey is carried out among manufacturers only, who are polled quarterly.

1. The British Chambers of Commerce survey asks members in manufacturing and services what has happened to investment plans for training in the previous three months. It is larger than the CBI survey, attracting around 5,000 responses compared to the CBI’s 2,000. The LLAKES study analysed BCC data on training gathered between 2002 and the third quarter of 2010.

2. The National Employer Skills Survey (NESS) is the largest of the three employers’ surveys and is the most comprehensive source of information on current skills issues affecting employers in England. The March-July 2009 survey questioned more than 79,000 employers about the effect of the recession on various aspects of training. Its overall aim is to provide robust and reliable information from employers on skills deficiencies and workforce development activities to serve as a common basis to develop policy and assess the impact of skills. Since March 2010 the UK Commission for Employment and Skills has had responsibility for hosting and commissioning the NESS series.

3. The Quarterly Labour Force Survey responses that were examined in this new study related to education and training that employees had undertaken in the previous four weeks.

4. LLAKES is funded by the Economic and Social Research Council (ESRC), the UK’s largest organisation for funding research on economic and social issues. It supports independent, high quality research which has an impact on business, the public sector and the third sector. The ESRC’s planned total expenditure in 2009/10 was £204 million. At any one time the ESRC supports more than 4,000 researchers and postgraduate students in academic institutions and independent research institutes. The training research reported here was jointly funded by the Strategic Partnership established by the ESRC and the UK Commission for Employment and Skills.

5. The UK Commission for Employment and Skills is a social partnership led by Commissioners from the private, public and voluntary sectors. Its mission is to work with employers, trade unions and leading public organisations to raise skills and drive growth, enterprise and job creation across the UK.  For more information, visit www.ukces.org.uk

6. Cardiff University is recognised in independent government assessments as one of Britain’s leading teaching and research universities and is a member of the Russell Group of the UK’s most research intensive universities.  Among its distinguished staff are two Nobel Laureates, Academicians of the Academy of the Social Sciences, Fellows of the Royal Society and other acclaimed scholars and award winners across numerous fields. www.cardiff.ac.uk

7. The Institute of Education is a college of the University of London that specialises in education and related areas of social science and professional practice. In the most recent Research Assessment Exercise two-thirds of the publications that the IOE submitted were judged to be internationally significant and over a third were judged to be “world leading”. The Institute was recognised by Ofsted in 2010 for its “high quality” initial teacher training programmes that inspire its students “to want to be outstanding teachers”. The IOE is a member of the 1994 group, which brings together 19 internationally renowned, research-intensive universities.  

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