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Recrutiment & Employment Confederation

In the spotlight: Investing in upskilling and training

Advice for employers

Thalia Ioannidou avatar

Written by Thalia Ioannidou Research manager

The coronavirus pandemic has had an unprecedented impact on the UK jobs market. From businesses having to shut down operations and millions of workers put on furlough, to a great proportion adjusting to work from home, the UK labour market has changed drastically since March.

As the Coronavirus Job Retention Scheme winds down and initial lockdown measures ease - although the future still looks uncertain with new local lockdowns and measures in place - the focus turns towards getting the workforce skills-ready to support new business activities.  

Sectors such as retail and hospitality have been affected more than others. Retail accounted for the largest number of workers furloughed through the Covid-19 crisis with an estimated 22% of all jobs at risk following the crisis being in retail and wholesale (approximately 1.7 million jobs). Meanwhile, UK Hospitality warned that at least 900,000 hospitality jobs are at risk unless Government offers a sector-specific package of employment support.

But, encouragingly, job posting activity in certain sectors, locations and occupations has improved in recent weeks. Indeed, talent shortages persist with businesses looking for candidates to meet the requirements for new roles. This has become ever more pertinent as companies look to speedily diversify operations in response to the economic crisis. At the same time, those individuals who are at a high risk of losing their job or have already been made redundant will be looking to transition into new roles, often in other sectors. But this requires a new set of skills and qualifications.

In July 2020, as parts of the economy were reopening, the REC conducted a survey on training and upskilling opportunities for staff and those looking for work. Employers identified offering short training courses to learn new skills (42%) and hiring apprentices (40%) as having the greatest positive impact on their business in the near term.

We already have the apprenticeship levy which incentivises employers to provide quality apprenticeship places. Ample evidence suggests that well-designed apprenticeships deliver productivity gains for employers and a significant uplift in potential earnings and job security for apprentices.

However, apprenticeships are not the only solution. The results of our survey are clear - employers also want to have a mechanism for providing shorter more flexible training, particularly when an apprenticeship is not best placed. This reinforces calls to broaden the apprenticeship system in order to allow those on more flexible and temporary contracts to benefit from additional training. Because of prohibitive funding rules, in 2019 it was estimated that there were £104 million of combined unused funds in the pot of REC levy-paying members that could have been used to train more than half of all agency workers on the payroll at the time (Training for temps: Broadening the apprenticeship levy to benefit flexible workers). Considering that 2.5 million people could be out of work by the end of 2020 - as suggested by a recent Bank of England Monetary Report - shorter, targeted training courses would help individuals to upskill, thus allowing them to transition into new positions and towards business growth areas more quickly.

Meanwhile, one in five employers surveyed (21%) were of the opinion that taking on work placements would have one of the greatest positive impact on their business. In early September the Government launched its £2 billion Kickstart scheme to help young people into work and spur Britain's economic revival. As part of the Chancellor's Plan for Jobs, employers can offer young people aged 16-24 who are claiming Universal Credit a six-month work placement. Although employers wishing to take part in the scheme must be able to create a minimum of 30 job placements there are opportunities for SMEs to go through an intermediary.

Figure 1: Thinking of training and upskilling opportunities for staff and those looking for work over the next three months, in your view which three of the following will have the greatest positive impact on your business?


Source: REC, July 2020
Base: Employers/HR decision-makers (n=200)

As the jobs market specialists, recruitment professionals are best placed to:

  • advise clients on new opportunities in sectors and regions where demand is strong
  • support businesses in accessing the talent and developing the skills of existing and new workforce, which they need to thrive
  • advise candidates on the specialist skills required in order to transition into resilient industries and emerging roles.

Subject to all the challenges of a second wave, retraining and upskilling policies must be a part of the economic recovery response. This can be in the form of subsidies to businesses for the cost of retraining, investment in innovation and digital skills, a flexible training levy scheme, or incentives to support Individuals who cannot afford retraining themselves.​​​