Churn, change and the importance of upskilling

There are few things on which Britain’s major political parties agree, but one point on which an unusually firm consensus has emerged of late is the need for companies to upskill their workforces. The message from policymakers is becoming increasingly clear: firms must cultivate a culture of continuous improvement if they want to survive and thrive.

This outlook has recently assumed particular significance for a number of reasons. Perhaps the most noteworthy is the very real fear that the country will suffer a “talent exodus” in the wake of Brexit, with some of the best employees unconvinced that the UK will be able to re-secure an integral role at the heart of European business and trade after leaving the EU.

A related worry is the challenge likely to be posed by potential restrictions on migrant flows, which could further shrink the pool from which companies seek to draw their talent. Let’s not forget, too, the whirlwind of accelerated technological change and the prospective mismatch between the skills that workers possess now and the skills that they might require in the future.

So there are several arguments to support the case for upskilling; and there’s no doubt that they apply to small businesses, whose growing pains almost invariably stem from the difficulties of adapting to ever-changing market conditions. Yet upskilling is usually the stuff of HR departments, and most small businesses have no such division.

Maybe the first question that small businesses need to ask, then, is whether upskilling actually makes a difference. After all, why go through the motions if there are no tangible benefits to be enjoyed afterwards? And if upskilling does make a difference – and, as we’ll see shortly, there’s strong evidence in its favour – then the next question must inevitably revolve around how best to introduce, incorporate and inculcate it.

The Workplace Employment Relations Survey (WERS) contains information representative of all UK companies with five or more employees. It’s widely regarded as the most authoritative and comprehensive data source of its kind. If you know where to look – and how – you can unearth some fascinating insights about British business.

For example, WERS includes a wealth of data about elements of on-the-job training – computing, teamwork, leadership, problem-solving and the like. It also reveals whether a company is accredited by the government-backed Investors in People (IiP) scheme, which has helped thousands of firms to upskill since its launch more than a quarter of a century ago.

Combining all of the above information allows us to explore a possible relationship between the decision to upskill and key aspects of how a business performs. This is what we did in our new research, which focused on almost 900 organisations in the 2011 and 2014 editions of WERS. We found a clear and positive link between IiP accreditation and enhanced on-the-job training in the private sector.

From this we can conclude that upskilling does make a difference. By extension, we can also infer that companies miss out if they choose not to upskill – and this, not least in light of the concerns outlined above, leads us to some uncomfortable realities.

IiP is a purely voluntary programme. Yes, thousands of firms have participated, but there are millions of businesses in the UK. Rightly or wrongly, no company is forced or ordered to augment its workforce’s capabilities. No sweeping edict has been handed down from on high, and the chances are that it never will be. The bottom line is that upskilling isn’t compulsory: as a business owner, you have to take the initiative.

For small businesses – especially those in the earliest stages of development – upskilling is frequently a matter of resources. As stated previously, the luxury of delegating responsibility to an HR department is seldom an option.

This is why the first task is to try to determine precisely how and where you should be strengthening. How might you most usefully future-proof your company? How are you most likely to stay ahead of the curve? Do you need more “hard” skills, more “soft” skills or a mix of both? A solid idea of the way forward should reduce the threat of wasting effort, energy and expense.

Then you need buy-in. Engagement and flexibility are key here. Employees have to grasp why upskilling is crucial to the company as a whole and, just as vitally, to them as individuals; they have to be able to fit their training around the day-to-day demands of their jobs; and they have to derive personal and professional satisfaction from the exercise.

In addition, of course, you need to understand who can help you. The fact that you’re visiting these pages suggests you fully appreciate the importance of continuous improvement and are commendably aware of the many forms of valuable assistance available to growing firms. Be sure to make the most of what’s on offer.

Small businesses know only too well that it’s dangerous to stand still. The issue of upskilling further underlines this truth, which is why it makes sense to take action as soon as possible – and, indeed, to keep taking action. With the road ahead liable to be defined by ever-greater churn and change, the merits of getting better and better are pretty much impossible to deny.

Dr Getinet Haile is an assistant professor of industrial economics at Nottingham University Business School and the author of ‘Organisational Accreditation and Worker Upskilling in Britain’, published by the Institute for the Study of Labour, Bonn, and available at http://ftp.iza.org/dp11479.pdf.