UK Companies are 'wasting potential' of 20% of workers

According to The Centre for Social Justice, there are too few alternatives into employment through education, and the bottom 20% of the UK’s workforce potential is wasted by businesses, which may be one of the reasons for the UK’s ‘sluggish’ growth in productivity.

These revelations come from a report called Productivity: The Great British Breakthrough, which is backed by Iain Duncan Smith (former Work and Pensions Minister), who founded the CSJ think tank back in 2004.

The report itself suggests that a lack of investment in ‘neglected’ vocational training schools may have prevented people from disadvantaged backgrounds from, “making the most of their natural abilities”.

The report also states that, “The education system is failing a majority of disadvantaged students, many of whom are not reaching the basic level of attainment at GCSE level, and… there are too few alternative routes through education and into employment for school leavers today.”

In the conclusion of their findings, which can be read here, the CSJ state that wage stagnation at the bottom of the income scale has created long-term decline in productivity amongst disadvantaged workers. And that the effects of globalisation, technology and a poor education system have conspired to create, “classes of winners and losers”. With the ‘winners’ being well educated and working in high-value industries like finance or real estate, and the ‘losers’ on low wages, working low skilled jobs with little hope of progression.

Whilst globalisation and technology are fundamentally forces for good, the report states that, “UK public policy has been slow to react” and adapt, creating imbalances that are felt hardest by the lower wage earners.

Regarding the problem of education, there is a growing skills gap in the UK, exacerbated by the education system’s inability to produce people with appropriate skills – especially in more technology based fields. Instead, many secondary school leavers are herded into university degrees which can promise neither a good job nor a decent wage at the end of it, and instead deliver a practically insurmountable debt for most.

As such, the CSJ suggest that the UK government and its investments focus on readdressing the imbalance between university and technical education. This is good news for businesses too, as the same survey found that companies found better value in apprentices as opposed to university graduates.

Finally, the report suggests, we need to be improving the current workforce we have through continuous education; the UK itself spends the least amount of time on professional development courses compared to all other EU nations.

So whilst the government has a part to play, businesses themselves need to be investing on creating better employees rather than simply relying on someone else to do the job. By encouraging employees to develop new skills and improve and adapt upon their current skills, we can not only help ourselves, but help the economy too.

Economist Gerard Lyons, who advised Boris Johnson as the Mayor of London, told the BBC’s Today programme, “In the UK we’ve got a great position on employment, it’s high, unemployment is very low, but what we need to do is get the productivity side up.

“What this report really highlights is companies don’t invest enough, we’re not innovating enough. It also highlights a big regional divide.

“It also calls for inclusive productivity growth, so all the people even at low incomes can really benefit.”

Professor Alison Wolf, of Kings College London said: “The authors are absolutely right to highlight the country’s shameful neglect of vocational education, and the extent to which businesses have, in recent decades, walked away from training their workers.

“Better vocational training is enormously desirable, but it wouldn’t be a magic bullet, any more than our huge expansion in graduate numbers has been.”

Former schools minister Lord Knight also added, “Government needs to do an awful lot better and urgently.”

“Many employers are doing their best. What I don’t see is enough coherence and enough investment from government itself in adult skills generally and in a coherent offer in schools in developing the whole person rather than just the academic person.”

He added: “Young people are forced into a narrower diet in the curriculum at the expense of the more creative, technical and applied parts of the curriculum.

“Design and technology which is a really important skill for economy has had a 43% fall in those taking it to GCSE in last six years.”

So: invest in education. Continuously.

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