Last updated: 26.09.17

UK businesses ‘wasting potential’ of employees

The Centre for Social Justice has reported that businesses across the UK are failing to invest and train their workforces, wasting the potential of one-fifth of employees.

The potential of the bottom 20 per cent of the UK workforce is being wasted as businesses are failing to invest in training and developing their employees, relying on cheap labour instead.

According to a study by the Centre for Social Justice and backed by former work and pensions minister Iain Duncan Smith, who founded the centre, this is the cause of the UK’s sluggish productivity growth.

The thinktank argues that the lack of investment and neglect of vocational training in schools has stopped workers - often those from disadvantaged backgrounds - from making the most out of their natural abilities.

Economist Gerard Lyons, who was an advisor to former Mayor of London Boris Johnson, told the BBC: "In the UK, we've got a great position on employment - it's high, unemployment is very low, but what we need to do is get the productivity side up.

"What this report really highlights is companies don't invest enough, we're not innovating enough. It also highlights a big regional divide. It also calls for inclusive productivity growth, so all the people even at low incomes can really benefit."

How can the apprenticeship levy make a difference?

If businesses make the most out of the apprenticeship levy which was introduced earlier this year, there is opportunity to unlock the potential of young people. Launched originally by George Osborne, the levy requires companies of a certain size to create apprenticeships in return for funding.

While getting a new system to accommodate this will take time and commitment, it will certainly be beneficial in the long run. Clear financial management is paramount in ensuring efficiencies and teething issues around the levy are solved, claims Sandra Kelly, head of education at Whitbread.

She believes that instead of shying away from the levy, companies should embrace it. “Collaborative meetings between the management and internal tax and internal finance teams have been useful in keeping the right people informed always and achieving transparency,” she wrote in an article for TES.

In addition to the levy, the government has pledges to introduce a new form of vocational education in schools in the form of ‘T-Levels’.


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