British workers are wrongly branded as low-skilled because the national qualification system does not recognise the training schemes many undertake at work, the CBI has said.
It is urging the government to reform the qualifications framework to ensure that the training given to staff is recognised.
Allowing companies to award their own nationally recognised qualifications would be a vital first step to achieving this, the group said in the report Shaping up for the future: the business vision for education & skills.
The CBI said that UK businesses invested £33bn on staff training last year - as a share of payroll the highest in the EU – however just one pound in three was recognised with a formal award. The UK ranks poorly in the international league table of staff with intermediate qualifications, like NVQs. Just 40% of British adults have such a qualification compared to 57% in the USA and 63% in Germany.
This is not because UK workers are less skilled than their overseas counterparts, the CBI said, but the primary focus of employers is on developing their staff's abilities, rather than acquiring qualifications.
John Cridland, Deputy Director-General of the CBI, said: "You don't need to be a rocket scientist to understand the UK will only maintain its place in the leading group of world economies if it has a skilled and flexible workforce.
"But UK workers are wrongly branded as laggards in the skills stakes even though employers are spending more on training than in the rest of the EU, the US and Japan.
"Our best schemes deliver results on a par with anything the rest of the world can offer, yet too much of what employers currently do just is not measured in the national qualification statistics
"The qualifications framework must give official recognition to the training provided in many firms and ensure that the skills of UK employees are accurately reflected, as both Lord Leitch and ministers recognise."
The CBI highlighted the Australian approach of licensing firms to award nationally recognised qualifications as a good model for the UK to emulate.
As a first step towards recognising in-house training, the CBI wants the government to set up pilot schemes to test the best training methods and discover how self-accreditation could best be implemented.
The national cost of administering the self-accreditation process has been calculated at £470m and the CBI has included this in its submission to the Treasury for the forthcoming Comprehensive Spending Review.
To help smaller firms, the CBI wants the government to re-establish the Small Firms Initiative, which offered small companies help to conduct a skills and develop an achievable training plan.
It also wants the government to help smaller businesses obtain 'Investors in People' status which revolves around establishing a training and investment programme.
