Chief Executive, New Economics Foundation
New research reveals how companies need to invest in capabilities as well as technical skills if they are to grow in a world that is rapidly changing.
The last 12 months have brought about monumental economic change. Our economy has been shut down, lives have been put on hold and governments across the world have taken extraordinary measures to control the pandemic, with the global economy shrinking by a staggering 4.4% in 2020.
The organisations that grew last year increased their training budgets and they continue to invest to ensure they have the capabilities they need to recover from the pandemic.
Research from professional academy Avado has identified a ‘capability chasm’ across different sectors and how this is harming productivity, growth and employee mental health.
Impact of training on business
The highlights of the Beyond Skills report illustrate the impact COVID-19 has had on organisations’ attitudes to training and ultimately their business. The report shows that 71% of the business that grew last year had increased their training budget with 40% investing in upskilling using external training pre-2020. Businesses requiring specific capabilities chose to hire rather than train which resulted in 45% cutting training budgets. From the data, 61% of companies that saw a decline had no training strategy or a poor one.
“We have learned during the past year that this is not just about a lack of investment in technical skills,” says Avado’s CEO Mark Creighton. “It’s also about mindsets and behaviours. People are working differently and they need to be more collaborative and innovative. Workers are also having to adapt to changing consumer behaviours.”
He adds that companies should not use recruitment as a quick fix but assess where their specific capability gaps are and how training can help.
Employee mental health in post pandemic recovery
Employee mental health is crucial for economic recovery and training will be important to retain and support talent as furloughed workers have returned and some people worry about redundancy. Other workers are taking it upon themselves to upskill to protect their current job status and create new career opportunities.
Research ambassador, Miatta Fahnbulleh, Chief Executive of the New Economics Foundation says organisations that have reduced their investment in training during the pandemic need to catch up quickly
“All the evidence shows you must invest in your people and think about capabilities as well as technical skills,” she says. “Companies need people with the competencies to negotiate a world that is changing incredibly fast. The UK needs to spend more on training.”