Recruitment difficulties fuel training budget rise

Apr 21 2004 by Brian Amble Print This Article

The economic upsurge and fears of skills shortages is leading many UK employers to increase their investment in training and development, according to new research, with private sector firms leading the way.

The latest Chartered Institute of Personnel and Development (CIPD) Training and Development Survey has found that while training budgets stagnated in the lean years of 2002 and 2003, one in three private sector training managers expect to see their training budget increase in 2004.

The survey also shows a surprising disparity public sector and private sector training managers. Thirty per cent of public sector training managers reported that their training budget had decreased last year (as compared to 27 per cent in the private sector), and over a quarter (26 per cent) expect the budget to decrease next year (compared to only 17 per cent in the private sector).

Eighty-one per cent of organisations have a training budget – ranging from £600 to £900 per head – a figure that the CIPD says indicates an acceptance of the “training means business” case.

According to Jessica Rolph, the CIPD’s Learning, Training and Development Adviser, current skills shortages could translate into wage inflation if these anticipated increases in training budgets do not materialise, leading to adverse implications for interest rates, growth and the economy as a whole.

"Economic uncertainty has led to a ‘wait and see’ approach to investment in training, but there is a danger that employers have not invested nearly enough in anticipation of impending skills deficiencies,” she said.

"A failure to invest now could leave employers in many sectors short of skilled labour, or needing to offer unsustainable salaries in order to fill vacancies for skilled workers.”

Unsurprisingly, then, more than six out of ten respondents to the survey said that the main benefits of training lay around immediate job demands, such as improvements in competence, behavioural skills, technical skills and quality of service.

The general organisational benefits of training such as job satisfaction, staff retention and raised commitment were rated as important by fewer than half this number.

But in contrast to the private sector, the public sector’s tendency to divert money away from training and in to pay awards in order to tackle recruitment and retention difficulties is “a short-term approach which could store up problems for the future”, according to Jessica Rolph.

"As the private sector recovers, competition in the labour market can only increase, so reductions in public sector training budgets are ill advised,” she said.

"It would be ironic if the Government’s investment in public services were to be undermined by a focus on pay rather than training, leading to services suffering because the public sector is failing to equip staff with the skills to do the job.”