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With skills shortages increasing across multiple sectors and widespread productivity levels reportedly declining, many organisations are looking to develop the skills of their existing workforce and the wider talent pool. But could more be done to support this process?

Getting skilled workers back in the workplace

In his budget in March 2023, Jeremy Hunt announced the launch of a returnerships initiative intended to ease the labour shortages that the economy has been facing following the double impact of Brexit and the Covid pandemic. In this context, returnerships are intended to encourage adults over the age of 50 to get back into work or seek a career change. Since then, employers have been expecting more fanfare about what sounds like a worthwhile initiative, but other than an update to the government’s Education Hub on 17 March, there has been little additional material.

According to the Education Hub, the plan includes “Skills Bootcamps” (flexible courses of up to 16 weeks designed to provide skills which employers are looking for and which come with the promise of a job interview on completion) and “Sector-based Work Academy Programmes” (SWAPS – the opportunity to learn new skills and gain experience or working in a particular sector/industry). Both could provide employers will access to the skilled workers they need.

However, while the government’s announcement included a pledge to spend £63.2m on the project, it is not obvious that those costs address the most obvious barrier – how do returners earn during their period of training? Without financial support, it is difficult to see many being encouraged back to work.

Developing new and existing talent

Apprenticeships are another part of the puzzle, both in terms of training younger workers through traditional apprenticeship routes but also training for existing workers that can be funded through the use of the apprenticeship levy.

However, the picture is unclear regarding how easy (or otherwise) employers find it to spend the funds that are tied up in the levy.  Some bemoan the rigidity of the scheme and others have no such concerns. In an open letter of February 2023 to The Department for Education and the Treasury, business leaders from the British Retail Consortium, UKHospitality, techUK and the Recruitment & Employment Confederation called on the government to reshape the apprenticeship levy by allowing employers more flexibility about how the levy is spent. According to their letter, £3.5billion of levy funds have expired since 2019 because businesses were unable to spend it. By contrast, in a speech to the House of Lords on 25 April 2023 Baroness Barran said that of the £2.5bn that was gathered by the levy last year, only £11m (0.44%) of that went unspent. It could be said that employers are becoming better at spending the levy or last year might be an outlier – only time will tell.

Labour has outlined plans to reform the apprenticeship levy by rebranding the scheme as a “Growth and Skills Levy” which would allow any underspend to be used on non-apprenticeship training.

However, does that plan go far enough? Given that most of the training funded by the levy is paid on developing and upskilling the current workforce, it seems sensible that the fund should be rebranded to something that is more relevant, and which is not confused with the excellent route into work which is offered through more traditional apprenticeships.

With the levy under criticism from business and politicians, it seems that the time is right for an overhaul of this scheme. With returnerships on the training agenda, why not throw these into the mix to ensure that money which must be set aside by business on training can be applied as widely as possible?

Demanding change

With skills shortages increasing across many sectors and productivity levels reportedly declining, is this the time for the business community to shout with one voice and demand change? A failure to address the skills shortage is only going to undermine the future-proofing of our workplaces. More needs to be done now to ensure this doesn’t happen.

 

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