How upskilling can be the key to boosting productivity

Companies across sectors and throughout the UK are facing challenges on multiple fronts. With inflation having repeatedly reached its highest level for 40 years towards the end of last year and still currently standing at 10.3%, both costs and prices remain under extreme pressure.

At the same time, pay growth across the country has remained stubbornly stagnant with the average pay rise recently recorded at being 3.2% below the impact of inflation, placing additional strain on an already stretched workforce.

In order for these challenges to be overcome, and for growth levels to rise above the current stagnant level of 0.3% of GDP as recorded in January, both the country as whole and individual companies will need to find a way to boost productivity.

Upskilling and unlocking the potential of the workforce offers a clear and critical route to delivering greater productivity by enabling employers and employees to produce in either higher volumes or at greater quality in order to achieve growth.

As Lee Arthur, CEO of the digital training and learning platform Avado, explains, companies are aware of the skills they need to develop within their workforce.

“Leaders will know what the business needs to get better at and what is holding the company back,” he tells HRD Connect. “Teams will also know what they are missing in the department and on a personal level. Mix a top-down and bottom-up strategy, as both priorities need to be met.”

However, as things currently stand, there are a number of concerning findings to suggest that many across the country and across sectors are struggling in this area.

Unfilled roles and untapped employees

In London, a vital economic growth engine for the country as a whole, almost four out of five businesses (77%) have reported that they have open vacancies, while 65% have stated that they are struggling to fill the roles, according to a survey by BusinessLDN.

On a national scale, there remain more than 300,000 more vacant roles than there were in the early stages of the pandemic in 2020 despite the fact that things have gone back to relative normality.

And on top of the jobs that remain unfilled, the ability of those lower down internally, to rise up and fill them, appears to be significantly constrained.

Recent research by HRD Connect found that the majority of HR leaders are not confident that they would be able to replace effective staff with internal candidates within a period of 1-2 months.

This is mirrored by the fact that almost a fifth more (17%) SMEs are reporting that they are suffering from a shortage of skills than was the case three years ago.

As a result, businesses both large and small and across sectors are finding their ability to become more productive being hampered by a lack of skills and a lack of upward mobility.

This was made clear in the Institute of Engineering and Technology’s (IET) recent Skills for Digital Future Report, which revealed that 49% of respondents believed the shortage was reducing productivity, while a further 35% stated it was harming innovation.

Finding a new way to invest in skills development

If the tide is to be turned, and that greater potential productivity is to be unlocked, then one of the key areas where changes must be made is in the approach to training and developing internal staff.

This is made all too clear by last year’s finding from the Learning and Work Institute that the amount invested in training by businesses on a per employee basis has declined by 28% in the years since 2005 and currently spend just half that of the current EU average.

So greater investment in skills development, training at all levels, and upskilling will be a critical factor in enabling both greater productivity but also innovation, while benefitting those receiving it the most.

Explaining that part of the problem around companies not investing sufficiently in skills development is due to it being overshadowed by other business needs, Arthur says: “Often companies will focus on their short term, primary work pressures, and won’t see where they will ‘fit training in’,” he says. But as the ever-greater impact of the shortages has and continues to prove, overlooking such things is no longer an option.

In terms of transitioning away from this outdated mindset and towards a more proactive approach to upskilling, it is important to note that while investment in training budgets may have declined, investment in the resources themselves and the way they are delivered has changed things significantly.

From the most in demand areas such as digital skills and data literacy to the more traditional disciplines of finance and project management, training modules can now be carried out on-demand, remotely, and in a variety of other ways that maximise ease of participation while minimising disruption.

They are also available and customisable for people at all levels of work and stages of career, meaning that companies can roll out schemes that are specifically suited to their needs.

Contrasting the old approach with the new, Arthur claims that the return on investment on training a team would typically pay itself back within 4 months through the additional productivity gained through it.

“Constant training and learning is now the essential way of working,” he says. “Things are moving too fast to not train your teams constantly.”

For more information about Avado’s Fast Futures, please click here.