There can be few people who don’t recognise the fact that the UK is facing serious productivity and recruitment challenges. The number of reports about these challenges has been growing month by month, and colleges are ready to address them.
This week, the Financial Times (FT) has launched a series of articles exploring why the UK is suffering from weak productivity growth and it cites, amongst other things, the poor skills levels of younger workers as a barrier. At the same time, the Chartered institute of Personnel and Development (CIPD) reports on a “supply shock” in the labour market due to the decreased numbers of EU nationals moving to work in this country.
The FT uses my favourite indicator of the productivity problem in stating that workers in France could stop work on Thursday and produce the same as a UK worker in a full week. It also quotes the Resolution Foundation analysis showing that if productivity had stayed on-trend in the past 10 years, it would be 25 per cent higher now than it is. Both are stark statistics.
The CIPD quarterly labour market report provides more evidence of the probably inevitable slow-down in EU nationals moving here and the consequent increase in hard-to-fill vacancies, at all skills levels, across all sectors. That slowdown could very easily become worse, with more EU nationals potentially departing our shores as Brexit uncertainties persist and Sterling levels fall.
Colleges must take action
So, what are the solutions? What needs to be done? What’s happening already? The good news is that the government has fully supported the analysis and accepted the evidence, so there is no need to persuade them that there is a “burning platform” for change. The bad news is that there is still little agreement on why productivity has stagnated, what can be done about it and how much skills and education contribute to the solutions.
The government’s Industrial Strategy sets out five areas for action: ideas, people, infrastructure, business environment and places. In a very long document, the strategy presents decent analysis of the challenges and issues in each of these, but for me it offers too little by way of solutions and concrete actions.
There are three areas in which colleges can act, with the right investment and support from others. All three are based on the largely local labour market impact colleges have and their relationships with both employers and students. All three require changes in behaviours to work effectively and all three will need better partnerships between colleges, employers and others to be sustainable.
Partnerships with employers
The first area is to support more employers to develop a whole-workforce strategy that centres on better skills development and progression for existing staff. If recruiting people with the right skills is getting tougher, then the best employers will work with colleges to grow their own people, as well as supporting pathways from college to meet their needs. This works well with many larger employers, but all too many still focus far more on recruiting skilled people at higher levels rather than on developing people to progress from within.
The second area is to support more small and medium-sized employers to adopt new technology and new business techniques, and for the necessary skills training to be provided at the same time. Colleges are well-placed to do this, and in other countries they are funded to have the capacity. The results are straightforwardly impressive, with SMEs improving their productivity and success through change programmes which focus on both technology transfer and skills development.
The third area is to persuade more adults to take part in training and education at all levels to support their skills, adaptability and relevance to the labour market. The investment we make in higher education does help with this, but hits only half of the population; the apprenticeship levy helps but works only for people with good employers. For large numbers of adults, the night classes of the past no longer exist, and precarious employment requires flexible study patterns. Colleges can provide this if the investment is available, but sadly, adult funding has reduced greatly in the past decade. Investment would help colleges to link people with the jobs available, offering flexible training and education that fits in with people’s lives.
Ready and willing
Colleges are ready and willing to lead on these three areas, partnering with mayors, combined authorities and LEPs, working with employers, helping to change attitudes and behaviours. The best types of national policy will support a devolved approach, enabling the right demand for the right skills by the right people to come to the fore. It’s only through stimulating demand that we’ll ever start to address the twin challenges of productivity and skills.
David Hughes is chief executive of the Association of Colleges
