North East employers need better support to invest in skills and tackle low productivity levels, urge senior business leaders

Senior business leaders in the North East are calling for more measures to tackle the region’s low productivity levels and boost employer investment in skills.

The CIPD’s new ‘Skills policy in the North: recommendations for levelling up’ highlights the need for a fundamental re-think of skills policy, after bringing together perspectives from regional policy makers, employer representative bodies, Further Education providers and northern employers.

Tackling low productivity & weak investment in skills

The report emphasises that the region’s low productivity levels is, in part, due to inadequate leadership and people management capability in too many firms, and a consequently weak demand for investment in skills.

While the North has a higher concentration of low skilled adults (NVQ 2 and below)^[i] compared to the national average, research in the report reveals the region also has a higher amount of low wage work, skills gaps and poor utilisation of people’s skills in the workplace.^[ii]

This demonstrates that more needs to be done to improve the skills and qualifications of the region’s workforce to tackle the longstanding productivity disparities, and consequently weak demand for investment in skills.

In response, the new CIPD report recommends a range of measures to boost employer investment in training, ensure people’s skills are better matched to local jobs, and used more effectively in the workplace.

Recommendations include:

• Increase employer understanding of the benefits of engaging with vocational education and training and improve their capability to do so. CIPD research found that four in ten northern employers do not have any links with local colleges (rising to almost 60% of SMEs).
• Strengthen regional partnerships, local referral networks, and improve coordination between institutions, particularly between business support and skills providers.
• A long-term vision and flexible local funding, rather than centrally designed pots of competitive funds.

• Share examples of where skills and training initiatives are working well, so that good practice can be learned from, and scaled and spread across other areas.

Other recommendations to build employer capability, capacity and appetite to invest in skills, is the need for a step change in the quality of regional business support, in particular on HR and people management and development.

Lizzie Crowley, CIPD Senior Policy Advisor, Skills said: “Too often, business leaders lack the capability and knowledge to manage people, or develop their staff effectively, which leads to low workplace productivity and skill levels.

“A business support offer on HR and people management would help employers – of all sizes – develop their staff and improve the quality of their jobs. It would also allow organisations to better understand their skills gaps and shortages, making them more likely to engage with further education colleges and other training providers.”

Zoe Lewis, Principal and CEO of Middlesborough College – who helped contribute to the report – added: “The collective insight and evidence in this new CIPD skills report demonstrates the urgent need for government to provide more support to employers to help them engage with education and training providers to support the development of their current and future workforce. If it fails to do so, the north and other regions of the UK, will stand little chance of transitioning to a high-wage, high-skill economy.”

Download the CIPD Skills Policy in the North report at www.cipd.co.uk/levelling-up