Nearly two-thirds of small businesses lose out on increased productivity, profitability and retention of staff by ignoring free or low cost training according to new research from the Learning and Skills Council (LSC).

The research, which examined the training policies of more than 450 small businesses, found that 57% of small business do not use the further education (FE) sector to train their employees and 43% of companies are not aware they could secure subsidised employee training at their local FE colleges.

It also found that companies that had used FE to train staff reported positive impacts:

• 87% of small businesses said using an FE college to train its employees had benefited the company.


• 45% of companies claimed it had increased productivity.


• 11% claimed it had directly increased turnover.


• 58% said it had boosted employee motivation and job satisfaction.


• 47 per cent believed it had helped employee retention.

The research, which was carried out by YouGov and covered large and small companies from a number of sectors, revealed that many businesses have a narrow perception of the FE sector and lack a clear understanding of the vast range of vocational courses and qualifications available at FE colleges.

It found only 18% of small businesses immediately associated FE colleges with vocational training, whereas 55% felt it was primarily for adult education, evening classes or academic studies.

The findings are reinforced by new research, by Synovate, which explored employers' attitudes to Train to Gain. It found that half of all employers polled were unaware that the Train to Gain Skills Brokerage Service is free. However, 82% of respondents would trust the Train to Gain brokerage service to provide realistic and actionable advice. While 63% of employers polled agreed that the Train to Gain service tailors training to businesses specific needs.

Bill Rammell, Higher and Further Education Minister said: “The findings clearly highlight the competitive benefits to employers of using Further Education training. Since 1997, FE funding has increased by £2.5 billion, a rise of 48% in real terms. The challenge for FE providers is to engage with business so they make best use of this, and be aware of the choice, value, and relevance of training on offer. Providers must adapt to meet the needs of employers.”