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4 March 2016 | By Steve Hill Community

Improving productivity: a new focus for skills

Businesses and education providers need to work together to integrate quality education with the practical needs of the workplace

This month saw the latest indication that the UK is lagging seriously behind the productivity levels of G7 counterparts. Figures from the Office for National Statistics (ONS), showing an International Comparison of Productivity, confirmed that output per hour in the UK is 17 percentage points beneath the average among fellow G7 nations. This rises to a worrying 36 point gap between the UK and Germany.

The reasons for this gap are causing concern for decision makers in business and government alike. One factor which is attracting attention is that growth in the job market has been overly reliant on low-skilled jobs. ONS figures for 2006 to 2015 show a decrease in the number of people employed in high-skilled jobs: from 70.9 per cent to 66.4 per cent of graduates and from 22.7 per cent to 21.3 per cent of non-graduates.

At the same time, many employers are struggling to find individuals with the skills they need in order to expand their business. This skills gap is particularly acute in high-skilled areas such as the engineering sector.

Meeting business needs

It is clear that businesses and education providers need to collaborate further to integrate the quality of university education with the practical needs of the workplace. The high quality education available in this country has much to offer employers, and educators and businesses need to work more closely to develop the skills that the UK needs to power business growth and boost productivity.

In order to bridge the gap between universities and businesses, there needs to be a much clearer dialogue around training and skills, one which gives businesses the opportunity to articulate their key areas of concern. Educational institutions need to align the content they provide to these business needs, ensuring that academic theory has outlets in practical application. In addition to this focus on skills, there remains a greater capacity for business leaders to recognise the potential of education to boost productivity through its impact on employee engagement as well.

In my role at The Open University, I am closely engaged with corporate leaders, who emphasise that their priority is to see their investment in training deliver return. Another perception is that academic education will not have an immediate impact on real work problems. Businesses need part-time, practice-based training solutions, in which education is delivered alongside application, to ensure that learning has practical relevance for individuals in their job.

Advances in education technology have made training increasingly flexible: learners have the power to choose when, where and how to study, enabling them to study while in work. The ability to deliver high quality learning to employees without removing them from the workplace for long periods of time has an impact not only on their productivity but ultimately enriches the skills they learn too.

The skills gap is increasingly causing problems for employers, with 23 per cent of jobs now going unfilled due to shortages in key skill areas. If the UK is to create the high-skilled, high-productivity jobs that will boost British businesses, decision makers across government, business and education must all take action to re-train and up-skill employees in new, innovative ways.