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Small Companies Failing To Invest In Training


A new report has revealed that small companies are failing to invest in employee training.

The research, carried out by Skills for Business, looked at 13,000 companies and found that over a third of SMEs admitted they don’t provide training for their staff, rising to 40 per cent of the smallest employers.

According to the report, Skills for Business network: Phase three Evaluation, the barriers to providing training include:

  • Financial cost – almost 50 per cent of employers are put off training because of fears of costs.

  • Worries about demands for higher wages – a third think that training could mean their staff will ask for higher salaries.

  • Work disruption – more than half of employers believe that training would provide disruption to work.

In addition, 11 per cent of small businesses, in comparison to just 3 per cent of larger businesses, see no benefits to training staff at all.

Mark Fisher, chief executive of the Sector Skills Development Agency which funds and supports the network of employer-led Sector Skills Councils said: “These are worrying findings for the UK economy. SMEs have not got the resources of larger companies and feel they have less to gain from training staff.

“Our research also finds that when further education colleges have experience of providing training for local employers, these partnerships tend to be almost exclusively with large companies, who can put forward enough trainees to justify the college’s effort.

“Most colleges are reluctant to invest time in developing relationships with SMEs who can only offer small numbers of trainees and who are seen as unlikely to be willing to pay the full cost of training in any event.

“The impact this attitude is having on our productivity levels is now evident as the UK fails to gain significant ground on its competitors. We believe that effort needs to be put in to address this situation, including providing SMEs with incentives to pool their resources to pay for training.”

The UK’s productivity levels are already nine percentage points lower than the EU average and many experts predict they will fall even lower if employers do not develop the skills of their staff.

The report also notes that whilst the levels of productivity in China and India are still significantly below those of the UK, increasing investment in skills and technology in these countries means that the gap is likely to be narrowed in the near future, with many organisations, including the CBI, believing the UK is likely to be overtaken within the next generation.


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