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Businesses plan to spend more on training this year

The CBI /EDI survey of 566 employers shows 42% are not satisfied with the basic use of English by school and college leavers, while more than a third (35%) are concerned with the basic numeracy skills in this age group. To address the weaknesses in basic skills, almost half (44%) of employers have had to invest in remedial training for school and college leavers.

The survey shows that young people are not in a position to make informed choices about their future career because of inadequate advice in schools and colleges. Only 6% of businesses are confident that advice is good enough, while 64% think advice must improve. There is an appetite among employers to play a greater role in delivering careers advice, with 54% willing to do more, rising to 66% of large firms.

Companies also found school and college leavers lacking in important employability skills, with 69% saying they have inadequate business and customer awareness, and over half (55%) experiencing weaknesses in school leavers’ self-management skills. Two thirds (70%) want to see these made a top priority at school and college.

John Cridland, CBI Director-General, said:

“It’s alarming that a significant number of employers have concerns about the basic skills of school and college leavers. Companies do not expect them to produce ‘job-ready’ young people, but having a solid foundation in basic skills, such as literacy and numeracy, is fundamental for work.

“These findings are echoed in the OECD PISA survey which shows that between 2000 and 2009 secondary school pupils in the UK fell in international rankings for reading, maths and science.

“Students need better careers advice early on, so they can make informed decisions about what subjects they choose, knowing what types of jobs they could lead to.

“Employability skills are crucial to making the smooth transition from education to the workplace, but companies are finding that school leavers lack many of these essential competencies. The best way to overcome this is to embed the teaching of these skills into curriculum and course structures.”

Employability skills

Employability skills are the single most important consideration for 82% of businesses when recruiting graduates, followed by degree subject (68%) and relevant work experience (67%).

Levels of employer satisfaction with the employability skills of graduates are higher than for school and college leavers, but 70% of employers say that university students need to do more to prepare themselves to be effective in the workplace.

Business investment in skills
The survey reveals a positive picture of businesses’ intentions to invest in skills. More employers plan to increase investment in training during the coming year, 41% compared to only 14% last year. Over half (55%) are already involved in apprenticeships and 17% say they will become involved in the next few years.

Nigel Snook, EDI Chief Executive, said:

“Businesses know they need to play their part in investing in skills as the economy begins to recover to drive sustainable long-term growth. As a result more employers plan to increase their staff training programmes over the next year.

“Because the basic skills levels of school and college leavers are often insufficient, many employers have to redirect their resources to provide remedial training to get these areas up-to-scratch.

“If school leavers do not have a sound base in English and Maths, then employers will find training staff in more advanced skills increasingly difficult.”

Skills in the recovery
Sustainable economic growth will require reshaping of the UK economy putting more emphasis on high-value, export oriented goods and services, but there is a shortage of people with the right type of high-level and intermediate skills to support this.

· 66% of employers consider skill levels among their employees satisfactory for current activities
· But 52% are not confident of meeting future needs for increased numbers of high-skilled employees, particularly in science, engineering and maths.

Shortages in science, technology, engineering and maths (STEM) skills are widespread with 43% of employers currently having difficulty recruiting staff in these areas, rising to 53% who expect to have difficulty in the next year. According to 62% of businesses, the Government must tackle these shortages by promoting science and maths in schools, and supporting STEM-related apprenticeship programmes (54%).

Companies understand that they too have a key role to play with 31% of employers currently offering STEM related work experience. Employers are also willing to pay a premium for staff with STEM skills, with 40% of companies in science and IT and 33% in construction reporting that STEM graduates earn more than other graduates over the course of their careers.

Mr Cridland said:

“With UK businesses looking to win a larger share of global markets as we rebalance the economy, the skills bar is constantly being raised by international competition. Higher-skilled employees, especially in science, technology, engineering and maths will be some of the most in demand.

“The Government must improve the take-up of science and maths in schools and support the development of STEM apprenticeship programmes so that employers are able to recruit the right people to drive growth.”

Barriers to investment in skills and apprenticeships
According to Eurostat, levels of training in the UK compare well against our international competitors with 90% of UK employers providing training, well above the EU average of 60%.

But the survey shows that bureaucracy is still a barrier to companies’ involvement in apprenticeships particularly for smaller firms. SMEs represent a large untapped market in terms of the potential for up-skilling through apprenticeships.

· Only 14% of smaller firms currently provide apprenticeships, compared to 83% of organisations with over 5,000 staff
· 56% of respondents want more financial incentives for recruiting and training
· 56% of businesses want a reduction in levels of red tape associated with accessing Government funding and support for training.

Mr Snook said:

“Apprenticeships are a valuable way of improving skill levels and it’s encouraging that so many large companies are already involved in these schemes, but more small firms need support to take on apprentices.

“There is huge potential for up-skilling in smaller companies, but the Government must cut bureaucracy, because without dedicated human resources, smaller firms struggle to deal with constantly changing processes.”

Businesses and the education system
Many companies already have links with universities (80%) and encouragingly this growth is set to gain pace.

· 42% of businesses plan to expand their engagement with universities
· 8% expect to forge connections for the first time
· Smaller firms have fewer resources available to dedicate – 20% have no intention of forging links (compared to only 11% of larger companies)

This engagement can take several different forms including businesses providing sandwich years for work placements (46%) and partnering with universities on research and innovation (40%). When asked about priorities for higher education, 64% of companies said that courses should be made more business relevant.

Engagement with secondary schools is a clear priority for employers:

· 67% of businesses have already established links
· 36% have increased their engagement over the last year through work experience, supporting careers advice and providing school governors
· Schools also need to provide more high-quality vocational options for 14-19 year olds according to 43% of businesses.

Priorities for public investment
Business investment in training outweighs funding from the public purse, but Government funding does have a targeted impact and is being cut by 25% as part of deficit reduction measures. Apprenticeships should be the priority for public training and support, according to 65% of employers, followed by basic literacy and numeracy skills, highlighted by 52% of companies.

External training providers
Many firms use external provision (89%) to deliver part of their training to staff:

· 80% of companies use private providers
· 36% work with further education colleges
· 26% work with universities

Private providers performed more strongly on method and delivery and the need to fit in with the day-to-day running of the business, 73% of employers said training was delivered on time and at a convenient location and 72% at a convenient time. Further education colleges performed best on costs, with 52% of employers satisfied with value for money. Companies were most satisfied with the quality of training (60%) and the relevance of course content (59%) provided by universities.

Languages
Weaknesses in foreign language skills have been exacerbated since the requirement to take a language at GCSE level was ended in 2004, 76% of employers are not satisfied with the level of these skills among young people.

Only 27% of businesses say they have no need for foreign language skills. Languages are particularly important in sectors such as manufacturing and banking, finance and insurance, reflecting the globalisation of these organisations. The greatest single demand for these skills is in building relationships overseas, cited by 21% of companies. The core European languages are still most in demand from employers – French (61%), German (52%) and Spanish (40%), followed by Polish (29%) and Mandarin (23%).

A full copy of the CBI / EDI Education & Skills survey 2011 is attached.
Notes to Editors:

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