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When will an improved economic outlook trickle down to training?

17th Apr 2014
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I admit to being a bit of an old lefty so yesterday’s news that wage rises have finally caught up with inflation does not inspire unalloyed joy.  In fact many of the apparent recent economic advances leave me a little cold as things still seem to be pretty tricky for very many people and organisations.

The CIPD’s most recent Labour Market Outlook  shows that the proportion of private sector businesses that are recruiting in the first 3 months of 2014 is the lowest it has been since the Labour Market Outlook reports first started to be compiled.  The  CIPD’s most recent Learning and Talent Development report (from 2013) shows the training economy on a downward trend with 8% of respondents expecting an increase in available L&D resources, 42% anticipating no change on the previous year and 47% expecting lower learning and development spend in the coming year.  This last figure is significantly worse in both the Public and Voluntary sectors.

So, there is a disconnect it seems between the relatively bullish pronouncements from the Treasury and the recruitment and training information from businesses across the UK.  Why? Here are a couple of reasons which may mean that increased training and development activity may still be some way off.

The South East Bubble

It is regularly reported that there is an imbalance in the economy as London and the South East sees strong growth. As other regions stagnate or – at best – manage a slower recovery, this geographical imbalance skews national figures. According to some reports London alone is responsible for 48% of the economic growth achieved in the past year.  This means that 25% of the population are responsible for half the growth – leaving the remaining three quarters of us to scrabble over the rest.  As L&D is essentially a numbers game – that is, the more people you need to train the more training resources you need and the more buoyant the L&D economy - this numerical imbalance means L&D practitioners are likely to see a continuing reduction in spend and training activities despite George Osborne’s confident predictions about the economy.

Not real jobs

The number of people unemployed has reduced below 7%.  But tellingly, Mark Carney at the Bank of England has now moved away from his commitment to review interest rates once this magical figure was reached.  Might this be because in actual fact these are neither high quality jobs nor real jobs at all?  Most are certainly in low pay sectors and/or part time opportunities.  Many are so-called zero hours jobs. There is a growth in people being expected to work on a freelance basis – and not always by choice. 

TUC research shows that 44% of jobs created since 2010 have been self-employed, mostly part time.  As the excellent TUC General Secretary, Frances O’Grady says: "These newly self-employed workers are not the budding entrepreneurs ministers like to talk about. Only a tiny fraction run their own businesses, while the vast majority work for themselves or another employer – often with fewer rights, less pay and no job security."  (See here.) 

Numbers for ‘real’ self-employment, where someone runs a business as a sole trader, partner or director – have actually dropped by 52,000 since 2010. 

This continued job insecurity – part-time, temporary, casual, fake freelance and/or zero hours  - is a real issue for those of us in L&D.  Will employers who want to avoid providing other benefits such as sick leave, paid holidays and pensions, be that keen to pay for training programmes? Are they going to invest in people’s development, pay for improved qualifications or help people build their capability and competence for the future? I seriously doubt it.

My own business is on the up – I’ve secured more projects in the past year or so and these have been of higher value and more long term.  But so far in 2014 I have delivered two programmes for UK based staff (both in the South East).  Every other project has been delivered for global businesses and targeted at staff based in Europe, Asia, the USA or Africa. 

When L&D teams are more confident and home-grown training demand shows a positive investment in our collective future, perhaps then we can say we have truly turned a corner.

What do you think?  Has your experience been similarly to mine?  Is there a real recovery or are we a long way from sustainable, nationwide growth?

Robin Hoyle is a trainer and consultant.  He is Senior Consultant at Learnworks Ltd which designs and implements major training projects for global firms.  He is the author of Complete Training: from recruitment to retirement published by Kogan Page.  It is available with a 20% discount and free UK P&P from Kogan Page.  Enter the code M4W2 at checkout here.

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