When it comes to productivity, the UK is lagging behind the rest of the G7. We are yet to recover from the financial crisis.
Typically, we attribute this to a lack of investment in infrastructure and poor access to capital. Yet the single largest cause is one of our own making: bad management.
The UK invests less money in training managers than its competitors do, and as a result performs poorly in this area by comparison.
Thanks to this endemic lack of training, we’ve become a nation of “accidental managers,” where four out of five first-time managers have not received proper training.
The result? Low productivity, absenteeism and a host of other issues that cost the UK economy £84bn per year.
In the coming years, with Brexit approaching, the productivity of home-grown talent is more important than ever. And if left untreated, it is likely to get worse.
A new report from the Centre for Social Justice has found that businesses are effectively wasting the potential of the bottom 20 per cent of their workforce, by failing to invest in staff training and apprenticeship programmes. CMI research has shown that both boost productivity.
Indeed, businesses employing apprentices increase their productivity by £214 per week on average, while chartered managers deliver £391k of added value to their employers, and well-trained managers boost productivity by over 30 per cent.
Despite these facts, businesses often overlook investing in management training, with less than 30 per cent offering training for their first-time managers. The result of this is that we have 2.4m untrained managers
in the UK.
To address this, businesses need to be investing more in apprenticeship programmes and leadership training. The Apprenticeship Levy should be seen as a “skills investment plan”, and the funds used to invest in programmes for school leavers and existing employees. Businesses may not even be aware that they can use the levy to train managers and leaders at every level.
If educators and employers can start collaborating better on these programmes, then schools and colleges can shift some of the focus away from traditional degrees.
This will help to maximise the potential of our school leavers, and improve the prospects of every young person, including the bottom 20 per cent that the Centre for Social Justice report refers to, by instilling them with workplace skills at an earlier age, thereby boosting their employability.
The government also has an important role to play, and must invest in a school syllabus which teaches practical skills and smooths the transition from education to work.
Indeed, our surveys show that practical and people skills are often exactly what employers say young people lack. So this training will benefit not only young people themselves, but also employers, who will get work-ready employees.
This in turn will benefit the wider economy.
Investing in apprenticeships and in management training is the only way to cure the UK’s “accidental manager syndrome” – and could be the most effective approach to boosting productivity. It’s a no-brainer.