This March we revealed our most recent skills research in the Essential Skills Tracker 2023. We launched our report at KPMG in London earlier this month, and held a virtual briefing session this week for those who couldn’t make it.
If you’ve seen anything about the research, in partnership with CIPD, Edge Foundation and KPMG, it might have been the enormous figure that low essential skills is costing the UK economy.
Why has productivity in the UK been stagnant since the 2008-09 financial crisis?
We can’t quite answer that one, but we know that there are many theories from industrial strategies to education. It’s a complex picture, with significant variances in productivity across regions and the UK facing a looming recession. One of the more promising angles to boost the UK’s productivity, and find that elusive ‘missing piece’ to the puzzle, is human capital. Human capital is largely based on people’s skills, so this is where we come in, and present findings on essential skills that can inform how policy-makers and practitioners address the issue.
Before we go further, let’s take a look at how we define essential skills in our Universal Framework: Essential skills are those eight highly transferable skills that you need to do almost any job, including teamwork and leadership, problem-solving and creativity, speaking and listening, or aiming high and staying positive.
Essential skills are a key part of a whole ‘skills taxonomy’ or ‘skills portfolio’ nestling between basic skills, like numeracy, literacy and digital skills, and technical skills that you might encounter in the workplace, like dentistry or design.
These skills are of huge importance at an individual level, as people with higher skill levels experience improved social mobility, employment, earnings, job satisfaction and life satisfaction. Critically, these skills work as a platform for developing other skills, including the basic skills literacy and numeracy as well as technical skills. Scaling to an economic level, the cost of low essential skills to the UK in 2022 was £22.2bn – comparable to the cost of low numeracy. Overlooking essential skills means overlooking a significant potential driver of UK productivity.
The cost of essential skills to productivity
“The issues of skills and skills gaps is top of the strategic agenda for organisations and increasingly seen as a constraint on growth and in productivity.” Peter Cheese, CEO, CIPD.
In our research we asked participants a range of questions to understand why essential skills boost productivity.
We also used some proxies to understand the impact of skills on productivity. One of these explored employees who have taken a fake sick day in the past year. Fake sick days result in big losses for businesses, but also reduce productivity between teams and for individuals. We found that the strongest link between a person’s likelihood to take a fake sick day, or their motivation at work, was the essential skill of teamwork.
Teamwork was also found to be fundamental to managers, with those who manage 100 people or more scoring three steps higher than those who manage fewer employees.
Then, in the context of an ageing workforce, we also see that skill scores begin to drop off after the age of 40.
However, employers investing in quality opportunities for skills development actually reverses the decline and can make lifelong learning a reality.
Takeaways for employers
Our Trailblazer report, published September 2022, found that providing opportunities to build essential skills in the workplace can drive productivity: 89% of employees who benefited from learning & development that had embedded the Universal Framework believed that the experience improved their performance in role with 75% feeling more engaged in their work. Their managers reported a similar phenomenon.
The Essential Skills Tracker 2023 is now another piece of growing evidence that demonstrates the value of essential skills to productivity. With teamwork being a skill that correlates with high motivation and leadership qualities, employers with aspirations to boost management potential should consider building teamwork as a cost-effective investment.
For older workers, there is a real driver for improving and building essential skills. As the UK government Office for Science put it: “The productivity and economic success of the UK will be increasingly tied to older workers''. The Tracker data, however, presents an important uptick for productivity. Employers have a role to play here in reversing the skill ‘decay’ of their staff.
For productivity to become fully unlocked, employers need to go beyond providing isolated training opportunities – embedding essential skills throughout management practices, job design, and recruitment.
At Skills Builder we partner with a range of employers to apply a structured approach to skills in order to boost their recruitment, staff development and outreach. If you’re looking to take a step toward embedding essential skills into your business, or within a specific programme, download a prospectus, book a free consultation, or browse our website to find out more about what we do.
You can also read the full Essential Skills Tracker 2023 research online.
