Training: going out of fashion for a decade

The Resolution Foundation’s report on wage growth and productivity yesterday notes the ongoing decline of training. Time spent on all training has been falling for the last decade or so but the deterioration has been sharper for off-the-job courses.

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Source: Resolution Foundation Earnings Outlook

The decline in off-the-job training has been most marked for the younger age groups. As the Resolution Foundation comments:

The ongoing deterioration in training rates has been mainly felt by employees aged under 50. While training intensity has always declined with age this gap has narrowed: training rates are over 30% below their 21st century peak for 18-29 year olds and 30-49 year olds, but only 16% down for those aged 50 and over.

The maintenance of training for older workers is a positive trend: boosting productive work among the over-50s will be key to ensuring our economy keeps pace with demographics. But falling training investment for the under-30s – when workplace skills are least developed and productivity gains are usually most rapid – raises concerns about long-term skills and earnings potential, with both individual and macroeconomic implications.

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Source: Resolution Foundation Earnings Outlook, Quarterly Briefing: Q3 2015

The figures would almost certainly look even worse if they included the self-employed. There isn’t much data on training and the self-employed but this UKCES report from four years ago found that they spent considerably less time on it than employees.

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Source: Skills for self employment, UKCES, August 2011

It is likely that this pattern has persisted over the past five years. The increase in the proportion of the workforce in self employment almost certainly means that training per worker is even lower than the ONS figures suggest. If it were possible to calculate an all worker training measure it would, like the all worker earnings measure, look worse once the self-employed were included.

Last month, Nigel Meager, Director of the Institute for Employment Studies and one of the UKCES report’s authors, remarked:

[I]n an economy in which rapid change puts a premium on skills acquisition and lifelong learning, the question of how the self-employed (who, the evidence suggests, have much lower levels of training in work than employees) update their skills and human capital is a challenge which few policy-makers have even begun to address.

Vicky Pryce made a similar comment last year when she told a conference of the self-employed:

You [self-employed Britons] tend to work below your skill level, you tend to find it quite hard to make ends meet and very often you just don’t employ anyone additional.

You are not usually compensated for what you lost before, with the result that there is very little productivity growth. Very often it means that firms will not grow, and very often society has lost quite a lot of potential.

Skills gained at employers’ expense are often not updated when people leave the corporate world. As the skills of the self-employed gradually ossify, the country’s stock of human capital diminishes.

None of this bodes well for productivity. The productivity increase we will need to sustain the current rate of wage growth is unlikely to come from a workforce where, each year, less and less time and money is invested in skills development. This might seem odd, in a country where employers are constantly complaining of skills shortages but as UKCES said earlier this year, some of our firms are free-riders, preferring to buy rather than build. An increased supply of freelancers, migrants and older workers, already trained by someone else, make freeriding that much easier. This will only ever be a short-term fix though. Eventually the skill base will start to shrink, especially if fewer younger people are receiving training. Politicians and business leaders keep talking about a productivity boost sometime soon but if investment in skills development continues to fall, they could be in for a long wait.

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13 Responses to Training: going out of fashion for a decade

  1. John says:

    This report simply confirms what I have suspected for a long time – that the decline in part-time vocational education is undermining the future of this country. The days when young working people could access vocational training and certification through part-time day release and/or evening class study are seemingly over for now.
    If central government is serious about increasing skills and productivity levels of Britain’s future work force, they need to invest heavily in FE Colleges all round the country and subsidise further education for all those desirous of acquiring worthwhile professional qualifications.
    As a former Diploma-holding Member of the Institute of Purchasing & Supply who gained my qualifications through part-time study in the late 1960s, I can recall a good friend of mine undertaking a similar type of education course, leading to the award of A. M. I. Mech. E. status.
    How – if at all – is it possible to pursue a similar course today at an individually affordable cost?

  2. hrpotential says:

    Great blog as always. I just wonder whether it’s being measured in the right way in general. How is the effectiveness of the training being measured? Number of hours spent in training isn’t the only measure of improvement in skills, just like skills aren’t the only contributing factor to productivity.

  3. Dave Timoney says:

    I wonder to what extent changes in training delivery are affecting the numbers, specifically the shift from classroom to self-directed online (which may be at-desk and therefore not classed as “off the job”)? In other words, might an improvement in the productivity of training as a sector be showing up as a reduction in training days?

    Also, how much of this decline reflects changes in job composition, e.g. the contnuing retrenchment of manufacturing and the growth of “social skills” roles where formal training may be replaced by informal coaching?

    That said, we can be reasonably confident that a shift to self-employment will, ceteris paribus, be depressing the aggregate investment in training, on the grounds that people are either electing self-employment because they already have marketable skills or because their self-employment is involuntary and they lack the capital for training investment.

  4. colinnewlyn says:

    Whilst we are quibbling about the composition of the numbers, the increase in compliance requirements will cause an upwards pressure on training but this is likely to be ’empty’ training with a minimal contribution to productivity. I suspect that this is actually what is moving to online, self-packed learning.
    Given the different pressures, it still seems to me that the number of training days is a reasonable metric and the trend is undeniable. A reduction in training throughout the economy is causing productivity growth to stall. How soon before it starts to drop?

    • Dave Timoney says:

      I’m not quibbling about the numbers, merely wondering whether structural factors are exacerbating the decline. If this was a simple matter of businesses deciding to rein-in expenditure on training for budgetary reasons, we would expect to see a similar decline across all age cohorts. In fact, the decline is correlated to age.

      One possible explanation for this is that off-site training is still seen as a “perk”, hence it is more likely to be preserved for more senior (and thus older) staff, while induction and basic skills training (how to answer a phone etc) has moved to online (and cheaper) media.

      As regards the low levels of productivity growth, this is likely to be more the result of the low levels of capital investment (which we have hard data for) than a reduction in training. One of the things that reduces training days is a lower frequency of changes to equipment and systems – i.e. a decline in training is an effect of productivity stagnation as much as a cause.

  5. rogerh says:

    Certainly you need training to fly an airliner or perform surgery. But consider what happens when you buy a new product – computer, smartphone or car. You don’t need any training or even a manual, you just use it right out of the box, any everyday product that needs training or a manual is a failure. So it is with most jobs, if the job needs more than an elementary ‘five minutes with Nelly’ then the job design and surrounding systems are a failure. This view does pre-suppose new candidates have some basic skills – but any lack there is a failure in the education system.

  6. Gerald says:

    I understand that this blog is written from the point of view of large organisations and very good it is too but something about article jarrs with my personal experience and observation from ground level.

    For the last 30 years I have been a self employed acupuncturist (is there any other kind?) and although I do some study it is essentially refreshing my memory and honing my diagnostic skills. The basic job has probably not changes much for centuaries. I do however seem to treat quite a few self employed people

    You quote:

    “[I]n an economy in which rapid change puts a premium on skills acquisition and lifelong learning…..”

    I would suggest that a large number of people, employed as well as self employed, work in situations where there is very little change and apart for changing regulations very little need for training, none of which will make them more productive.

    I suspect that the training you refer to is a formal and external thing where money changes hands. Clearly there is a place for this but in so many of the occupations where there are high levels of self employment learning and development comes through practise, experience and watching others.

    Examples: Window cleaners, JCB drivers, plasteres, carpenters, brick layers, hair dressers, taxi drivers, gardeners, dog breeders

    Electricians and heating engineers have to do some training but not because anything has changed in the laws of physics but just to be allowed to continue to do their jobs by the essentially parasitic organisations like Gas Safe, Hetas, etc

    I am sure there are indeed occupations where formal training really does make a big difference to a persons usefulness in the job but it seems to me clear why this is less likely to apply to many of the self employed

  7. baldranger says:

    I have experienced cultural differences within the public sector. For nearly 30 years I worked in the NHS as a nurse, health visitor and then in public health. During all this time I attended regular on & off the job training, including post-graduate study. With the fragmentation of the NHS through the Lansley reforms I was moved into the local council. Local government places much less emphasis on professional skills and knowledge, we found signficant skills gaps in the council in both role related training and management training. Things we took as normal parts of practice (reflection, stakeholder mapping, different management styles etc) seemed to be very new to many in the council. With the pressures on local government funding training and attending conferences to keep updated are rapidly becoming things of the past.

  8. Needs2Cash says:

    What happened to Lifelong Learning?

    http://www.niace.org.uk/lifelonglearninginquiry/docs/IFLL-summary-english.pdf

    Particularly useful when you know your globalized industry is uncompetitive.

    And a lifelong essential for matching your competencies to future opportunities to serve others.

    • John says:

      Very interesting report summary, much of it still relevant and applicable today.
      The RSA are currently investigating FE provision.
      I will see if I can feed some of this information into their efforts.

  9. JohnR says:

    Very interesting. I note the comment containing “the essentially parasitic organisations like Gas Safe, Hetas, etc”.
    I have no doubt that there are a large amount of training courses which could be considered useless. Gas safe is not one of them. With around 30 deaths annually in the UK, and thousands of cases of ill health due to unsafe and installations/repairs by unqualified “engineers” I see the training as essential. Similarly for electrical installations. Many people are trained ONLY because it is legally necessary and not because their employer decides it is a good idea, indeed, many employers try to get away with “tippexed” training certificates, where a name on a certificate is altered to allow another person to do work they are not trained for…indeed, most small employers need to be threatened with either closure or insurance withdrawal before they train anyone. The amount of untrained lift truck drivers is legion, as are the accidents involving them.
    Legislation, such as PUWER, requires training…by law.

    “PUWER requires that equipment provided for use at work is:
    suitable for the intended use
    safe for use, maintained in a safe condition and inspected to ensure it is correctly installed and does not subsequently deteriorate
    ##used only by people who have received adequate information, instruction and training##
    accompanied by suitable health and safety measures, such as protective devices and controls.

    There are around 150 deaths/yr in industry. Annually, around 2500/yr die from exposure to asbestos, many exposed at work. Road accidents account for 1700/yr…not relevant?
    Well, around a third happen to people driving due to work.
    Sorry, my life spent at work, in industry not accupuncture, has convinced me, and the government/HSE, that training is ESSENTIAL. Unfortunately, many employers are not convinced. The gov is convinced, and has started to imprison employers found liable for employee deaths. The more the merrier. Not to mention fines creeping into the millions.

    • Gerald says:

      The point I was trying to make was that ‘training’ for the self-employed often does not really translate into something that increases productivity – one of the main points of the article. The thrust of it seems to be that training leads to greater ‘skill’ and that translates into greater productivity – a Good Thing.

      The nature of much of the work that the self employed do means that this does not usually follow.

      I certainly don’t think that all training is useless and my use of Gas Safe and Hetas as examples was not meant suggest that they had no merit. However, both organisations operate in areas of building that had operated satisfactorily for a centuary of more before regulation was thought necessary.

      By parasitic I meant that all the cost of ‘membership’ of these bodies falls on the self employed person as yet another cost, in time as well as money, of just being in business. No productivity gain here.

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