Trimming skills budgets might seem like a regressive move, but it might be the catalyst needed to prepare staff training for the demands of the 21st century, says Jane Scott Paul, CEO, Association Accounting Technicians.

The economic turbulence over the past few years has led to training budgets being trimmed across the board. Consequently there will be concerted pressure on HR managers to justify every penny in their training budgets.

Yet to help us recover from the protracted recession and an ageing workforce we will need a well-skilled and well-trained workforce that can mix ability with agility.

This situation seems paradoxical: reducing training budgets while making the workforce better skilled. The way we address this problem may well be just the catalyst skills training needs to make it ready for the demands of the 21st century.

With less money to spend it stands to reason that businesses will expect to see firm results for the investments they make; in short, we need to make training pay. Over the past fifteen years billions of public pounds have been spent on skills initiatives, the legacy of which has not been a better-trained workforce, but rather a situation where training is measured by the boxes ticked and the hours spent studying. Now more than ever we need to urgently challenge this situation so that skills programmes demonstrate tangible outcomes and benefits.

With ‘efficiency savings’ the rallying cry in both the public and private sectors there is a genuine opportunity for employers – as well as learners and training providers – to demand training programmes that work. Lord Leitch’s 2006 review of long-term skills needs found that less than 10 per cent of training funded by employers takes place in further education colleges, emphasising the broad irrelevance of many current training programmes. The need to trim the fat from skills provision is a chance for HR departments to assess training to ensure that it is both worthwhile and well-delivered.

The way businesses have reacted to the demands of a depressed economy show that organisations are able to adopt creative solutions to work with reduced budgets, with many companies reducing working hours, introducing sabbaticals or adopting four-day-weeks. Similarly creative approaches can be applied to HR policy and skills training.

The new government’s focus on the need to develop more apprentices is a welcome reminder of the business benefits of training people on the job. While apprentices have traditionally been seen as the domain of craft skills, many businesses now run schemes for the professions – such as accountancy – and it is an area businesses of all sizes should consider. We run a programme with P&G who report that the school leavers they take on often out-perform graduates. The benefits of such schemes are manifold, with apprentices coming in to the profession having learnt on the job which makes them better motivated and able to apply theory in a practical way.

A more radical creative approach would be to develop a market-based approach to skills, which encourages individuals and businesses to invest in themselves by contributing to their own skills development. This practice is commonplace in less prosperous countries, as AAT has found in its own work in South Africa. It helps put a stop to learners signing up to courses which add little value to their employability while wasting company time and money. We already adopt this approach for paying for university provision and such an approach to training would encourage a more ambitious and better-qualified workforce to face the challenges of the century ahead.

Of course, there is only so much that companies and organisations can do themselves to make the most out of their training spend – the time is also ripe to change the structure of the way skills are delivered in the UK. The Government needs to create a more streamlined system to deliver skills funding and regulation as the present system with over-lapping roles and responsibilities is bureaucratic and acts as a brake on innovation. Such change would provide the foundation for a skills sector fit for the needs of business and the individual.

It is clear that moving forwards the UK skills system will have to do more with less. While it would be counter-productive to cut training schemes that work, the reduced budgets are an opportunity to focus on what matters most: giving the learners the skills they need to benefit the economy. By doing this we can give business a workforce that is capable of meeting the demands of the coming century.

Jane Scott Paul is Chief Executive at AAT, one of the UK’s largest professional bodies representing nearly 123,000 members.
 

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