Training and Development Deficiencies in High Skill Sectors by C.Lloyd Analysis - Article Example

Training and development deficiencies in `high skill’ sectors by Caroline Lloyd Introduction Skill shortage in the United Kingdom is not a new reality. In fact, research has shown productivity in the UK has persisted since the post-war period (Yiu and Saner, 2004). There exists productivity gap because of the skill composition (or the lack of it) in the UK workforce, and the low investment in training by the employers. Although, the government has introduced the IIP (Investors in People) programme, its success in upgrading skills is another matter. Academics, employers, employees and the government alike are concerned over the deteriorating high-skill human capital and its impact on the UK economy. One such academician is Caroline Lloyd. In her article "Training and development deficiencies in high skill sectors" (2002), Lloyd raises concerns over the lack of training and development, and its impact on the UK’s competitiveness in the new knowledge economy. How grave the situation is, and what implications do Lloyds concerns have on the future of the UK labour market shall be analyzed in the following discussion. Analysis In Lloyds article, she presents the thesis that there is an acute need for emphasising on centrality of skills and training for the UK to compete in the new knowledge economy. Companies need to create learning environments so that employees will be able to adapt to the changing work requirements. This can be achieved through internal training and continuous vocational training. However, the current work environment does not meet these requirements. There are two explanations for the lack of training and development in organisations. Lloyd claims that one reason could be the market failure to provide individual training. This could be improved by providing a central incentive program for training employees, motivation for employers to develop their human capital and set up of best practice to influence employer behaviour. The second reason, as other academics provide, is because the UK is a relatively low skill economy. Employers are not competing in high end products in standardized markets. For this reason they are not motivated to develop their workers for higher progression. To alter this status quo of skill deficit, the government needs to implement policies to restructure the market and industries By using two companies from high value-added product markets, Lloyd establishes that despite the companies success in their product markets, they are constrained by their industrial environment. They are not motivated to invest in training and development, or set best practice standards in their organisations. Lloyd blames this on the regulatory changes that had taken place during the 1990s which diverted the attention of organisations to address issues like certification and health and safety regulations, instead of skill development. Training for development therefore had become secondary in budget decisions at organisations (Lloyd, 2002). However, this view is narrow and is based on the assumption that training is the responsibility of either the government or the employers alone. In fact, according to Tregaskis and Brewster (1998), the UK has one of the highest numbers of large multinational companies. These companies are renowned for their training and development investments. They account for significant investment amount in vocational education and apprenticeship programmes. What have changed over the years are the changing business strategies which have grave implications on training requirements. Lloyds case studies have not addressed the reason why companies are reluctant to invest in training and development of their people. Tregaskis and Brewster (1998) explain that companies in the UK have started to emphasise on differentiation strategies which means adding value to their products. This has resulted in less skill demand as compared to cost leadership. Since the national education and training system reflects the principles of free market, this is why Lloyd finds policies reflecting low level skills because high skill jobs have become low in demand. Lloyd points out that this has grave consequences in the future because organisations, and subsequently the economy, would operate at sub-optimal level, thereby costing the nation much financially. The government needs to develop policies which encourage training and vocational programs to be integrated in the industrial infrastructure. In reality, the government has been struggling to sustain high skill human capital in the country for the past few decades. As recently as 2006, the Leitch Review of Skills (2006) published on behalf of the government, indicates that the government acknowledges there is a risk of high skill workers shortage in the future, if not in the immediate future. As the UK population is aging, also indicated in the case studies (Lloyd, 2002), the gap between high skill and low skill workers widens making it difficult for employers to fill it. To have continuous productivity, Leitch recommends stakeholders in the business community, namely, employers, employees and the government as well as private investors to address the problem of high skill deficiency. While the educational institutions, vocational training centres and organisations have strong bases for training workers for high skill jobs, individuals themselves are not equipped to meet the challenge. The crux of the matter is that individuals in the UK are not educated enough to join the workforce. It is compulsory that workers have at least basic school education before they can join a work force, get trained and/or even get higher qualifications. This is perhaps why Lloyd finds employers reluctant to induct professional training programmes at the work place for individuals who do not even have basic qualifications. In the course of her research Lloyd finds that there is some level of underinvestment in training and development. This means that the UK workforce would eventually lose out in the competitive global market; they are less trained for high skilled jobs; and they will get relatively low wages. This scenario will have three folds consequences. First, the individuals would continue to get low wages because of lack of career development, and they will enjoy poorer lifestyles as compared to other global workers. Secondly, firms will get sub-optimal level of productivity, and will not be able to compete in the global knowledge economy. And lastly, from the macro perspective, the UK as a nation will have less to compete in the global industries and will fetch comparatively less revenue (Forth and Mason, 2004). Lloyd also concludes that the UK does not have a strong base for high skill training institutions and education system which is required for implementing policies for expanding high skill sectors. In the end, Lloyd puts the responsibility of lessening the productivity gap on the government to establish standardisation, best practice and high skill vocational training. These conclusions are to some extent bias, and put the burden of skill development on one entity alone. In the authors opinion, the high skill human capital status quo, and the business environment are made up of rules and multiple stakeholders. As Lloyd has pointed out early in the article, the market is short of high skilled workers and at the same time, there is an underinvestment in skill development. The UK has reached this stage due to a combination of market demands, competitive environment, and changing business strategies. There is no one at fault really but a chain of events that has led to the current scenario. Furthermore, Lloyd argues that the lack of a competitive education system, and regulated best practice, due to policies being focussed on other aspects of business operations have resulted in under- investment in training and development. This has not been true based on her case studies, and the same could be said for other companies. To use her studies companies as models for other companies is presumptuous. Other line of arguments should be adopted based on facts to establish this factor. Despite these aspects, Lloyd has effectively argued the case for investment in training and development for high skill workers in the UK. It has been acknowledged that there is a skill gap due to an aging population and future competitive markets. There is an acute need for improving on the current skill pool by developing human capital through education, skill training and vocational training for current as well as future employees. Conclusion Having evaluated the above article, the author agrees with Lloyd that there is a need for policies to be established to motivate stakeholders in the business community to invest in skill development and training. Since the current skill deficit is due to a chain of events, it is only prudent that elements responsible for it should be addressed. This means re-evaluation of policies relating to human capital, education, vocational training, best practice, competitiveness and competency. By inviting all concerned to participate in this exercise would help to eradicate the deficiency, perhaps faster. In particular the high skilled sectors like pharmaceuticals, information technology, communication and engineering or similar fields would benefit through collaboration. On the other hand, the author does not agree that the government should take the sole responsibility of educating the workforce, train them to compete in the world market or develop them for career progression. The initiative should be taken by all who is concerned because every one stands to benefit from a change of attitude, perception and approach to rectify this national deficiency. References Forth, J. and Mason, G. (2004) The Impact of High-Level Skill Shortages on Firm-Level Performance: Evidence from the UK Technical Graduates Employers Survey. National Institute of Economic and Social Research, London. NIESR Discussion Paper No. 235. Leitch, (2006) Prosperity for all in the global economy - world class skills. Leitch Review of Skills. Online available at: http://www.dcsf.gov.uk/furthereducation/uploads/documents/2006-12%20LeitchReview1.pdf Lloyd, C. (2002) Training and development deficiencies in `high skill’ sectors. Human Resource Management Journal, Vol 12 No 2, pp. 64-81 Tregaskis, O. and Brewster, C. (1998) Training and development in the UK context: an emerging polarisation? Journal of European Industrial Training. Vol. 22, No. 4/5, pp.180-189 Yiu, L. and Saner, R. (2004) ISO 10015 and “Investors in People”: Two complementary policy instruments for VET. CSEND. Read More