People and their skills provide the X-factor for business success

Dr Parves Khan on the importance of vocational education and training.

Reading time: 5 minutes

The focus on skill gaps and the pressing need to strengthen the workforce skills pipeline has never been sharper.

More than two-thirds (68%) of UK employers struggled to find skilled workers last year and not meeting the skills needs of employers in the UK could lead to a loss of £120bn in economic output by the end of the next decade.

SMEs suffer the most; for them the impact on productivity is felt more acutely than bigger businesses. In terms of pure financial impact, skill shortages cost SMEs on average £145,000 a year.

The stakes are high. The future productivity gains in the UK will require a workforce with the skills relevant to the business needs of today and tomorrow. But dissatisfaction with formal educational approaches among both employers and employees is growing.

The need to get equipped with “job ready” skills is driving demand for learning solutions that are tipped in favour of more applied, work relevant learning. This is great news for the UK’s vocational education and training sector.

Skills-based learning to drive employability

Vocational qualifications like BTEC play a critical role in providing skills-based learning that drive employability for young people. Pearson’s research among BTEC students shows that two-thirds of them feel that by doing a BTEC they’ll have the skills employers are looking for to fulfil their chosen job role once they qualify and are feeling confident about their future.

Pearson also found that former students now in their 20s and 30s are more likely to feel that their qualification better prepared them for employment, compared to those who pursued a more traditional academic route.

But skills-based learning doesn’t stop at the college gates. Given the pace of innovation and automation sweeping through our workplaces, continual learning is a career-long imperative for employers, employees and our societies in general.   

Take the fact that the shelflife of skills is shortening rapidly; nearly half of the knowledge acquired during the first year of a technical degree is out of date by graduation. Another is that 42% of all skills required to perform a given job are expected to change over the next couple of years.

To drive adoption, learning has to be purposeful, engaging, and available at the point of need

To compete and win in the future, upskilling the workforce will be key in determining future business success.

Skills-based learning to drive competitive advantage

Although nearly all employers agree upskilling is essential, only around a half or fewer are taking significant steps forward to address their needs.

Pearson found that 45% of UK employers say they will be significantly investing in retraining employees on the new skills required for their current role, and 38% will be focusing on retraining employees for new roles over the next decade.

More worrying is that only 24% of employees in the UK said they participated in some type of upskilling in the last two years as a result of their job changing.

Even when employee training is made available, lengthy and inflexible schedules, lack of clarity over the purpose of the training and its relevance, are key reasons for low adoption.

The value of learning is certainly not being missed by employees, however. As many as two-thirds want to improve their technical STEM-related skills and soft skills like critical thinking, problem solving and creativity as part of their professional development.

What this all points to is the acute need for more applied learning, where people can amass a wealth of real-world skills that are directly useful to their work.

For employers this is not simply about developing skills in preparation for a tech-enabled future state. The “future of work” is happening right now!

This means employers need to look at upskilling the entire workforce at scale and speed on an ongoing basis, ensuring that all workers, across all levels and roles have the skills, confidence and ambition to continually adapt.

But that doesn’t mean a one-size-fits-all approach where the company trains everyone. The message here is that an employee’s upskilling programme should be aligned both with business needs as well as their own development and career progression plans.

Put simply, to drive adoption, learning has to be purposeful, engaging, and available at the point of need.

Upskilling efforts work best when they are targeted, so think apprenticeship and vocational training programmes, bootcamps, on-the-job training and partnership with universities/local providers for management training.

In our world of “anytime, anywhere”, we also need less structured, formal learning, and more on-demand learning opportunities accessible in the flow of work.



One way to accomplish that is by making more use of digital and mobile technologies to deliver training.

Pearson’s research on preferred learning styles reveals that, for the modern day learner, learning has to be a multimedia experience – including written word, interactivity, tests, videos and audios, gamification and social elements.

Joined-up approach needed

Research shows that employers recognise the role they play in the investment of skills, but they can’t solve the skills gap issue alone. In fact, nine in 10 people in the UK believe the government should play a more active role in offering training or credentials to help people learn new skills.

Moving forward solutions have to be joined up – built on and driven by strong collaboration between government, industry, and learning providers.

Skills are the new currency

We live in an era shaped by constant digital transformations and businesses need the speed and agility to respond to the pace of technological change. This means they need to have a highly skilled, motivated and adaptable workforce, ready and eager to meet the challenges to come.

Skills – technological and soft skills – are the new global currency and vocational education and training play a key role in setting its value.


About the author

Dr Parves Khan is global research and insights director at Pearson


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