Why retraining could be a game changer for British business

Productivity, productivity, productivity. Business Secretary Greg Clark didn’t actually say that when he unveiled the Government’s Industrial Strategy last month. Still, he might as well have done, such was its focus on finding solutions on this matter.

The strategy has come not before time; Britain’s productivity levels pose an immense challenge to businesses at a time when we need to be more competitive and efficient. But what worries me is that retraining was only briefly mentioned, even though skills were a major focus. This strikes me as a missed opportunity – the two are inextricably linked.

True, the strategy did reference the proposed establishment of a National Retraining Scheme in partnership with the TUC, the CBI and the new Skills Advisory Panels, which was initially announced in November’s Budget. This is of course a positive step. But it is narrowly focused on digital and construction training. Really, we need this replicated in every sector if we are to truly see a change in our national productivity and make sure employers can recruit people with the right skills.

This is because retraining is the cornerstone of skills utilisation, which is key to enhancing productivity. This is something we’ve seen directly via our Princess Royal Training Awards. These awards recognise businesses that have used training to make a difference to their bottom line, and linked their skills development needs to their business models. In almost every case, staff have become more productive as a result of their skills base being improved.

Crucially, it’s not enough to ensure that those entering the workforce have the right skills. This must happen alongside a concerted effort to upskill those already in employment. We need to get to a point where retraining is given the same priority as training by Government and by employers. It’s also worth noting that, as experts have shown, retraining prior to redeployment delivers better return to businesses and individuals – it’s a long-term investment in all our futures.

Being realistic, we know that budgets are tight and we are unlikely to see more money for a National Retraining Scheme in other industries, at least right now. But that doesn’t mean there aren’t affordable steps Government can take to make a difference.

Not least, the Government has a cost-effective opportunity to ensure retraining remains a priority for business, by broadening the remit of the apprenticeship levy to cover funding for shorter and more intensive programmes that upskill and reskill existing workforces. The latest figures showed a 59 per cent fall in the number of workers starting apprenticeships in England since the introduction of the levy, so we need to think about how to make a success of this going forward. Businesses are crying out for it to be a broader skills levy and if it means retraining gets the focus it needs – surely it is a win-win?

In addition to funding, for retraining to have the effect on our economy that it needs, we need it to work for businesses and individuals alike. In the Matthew Taylor Review, he considered how to create good working conditions for everyone. One of the key steps he called for was around retraining, with a recommendation for a new approach to learning accounts which initially focuses on those with long work records who need to retrain. We need businesses to see retaining as a worthwhile investment, as part of them being responsible in wider society.

Put simply, retraining could be a game changer for British business, boosting the productivity of individuals in all sectors and at all stages so the country can better compete on the world stage. And it matters now more than ever. Just last week, McKinsey released a report warning that as many as 700 million of us could be displaced from their jobs by 2030 or may need to switch occupations as a result of automation. The challenge for advanced economies will be to retrain mid-career workers, and to date there are no precedents of which societies have successfully retrained such large numbers. This serves to highlight why retraining is so vital.

Ultimately, retraining employees so they can be redeployed into the workforce and their skills utilised as the economy shifts is vital. In light of Brexit, with most of us staying in work for longer and thus needing to keep our skills current, it’s no longer a nice to have – it’s a must.