Time for a right to retrain?

30 June 2020 -

Person studying in low lightThe Covid-19 crisis is having severe effects on those entering the job market or who’ve been made redundant. But truly imaginative policies could trigger an renaissance in upskilling

Will Smith and Daisy Hooper, CMI

Last week, CMI published its latest policy paper on Future Skills and Retraining. The paper, including recommendations and case studies can be found online here.

The Coronavirus pandemic has had a significant impact on the UK economy. While much of the debate around skills in recent weeks has been understandably focused on the scarring effects of unemployment for young people, we think that the government must not lose sight of the significant retraining needs of older workers, particularly those recently made redundant or who are at particular risk of losing their jobs.

As we enter the recovery phase of the crisis, we are calling on the government to ensure sufficient policy focus is placed on skills and retraining, underpinned by dedicated new investment to guarantee that everyone who wants to has the right to retrain. The crisis has deepened the need – and created a moment of opportunity – to unlock the full potential of the UK workforce. We’d like to see the government work closely with chartered organisations – such as CMI – in this endeavour as we have ready-made networks and ready to roll-out training and resources we can use to upskill and reskill the nation, at pace.

The scale of the task

When the furlough scheme ends in the autumn, we are likely to see a portion of those furloughed workers made redundant and a spike in unemployment. A recent CMI survey found that 34% of managers are set to lay off staff, of which 26% expect to do so in 2020.

Some jobs will no longer be viable, while others will open up, creating an immediate retraining challenge to ensure those redundant workers have the skills necessary to quickly take on new roles.

The need to invest

The crisis has demonstrated the importance of good leadership and management skills: managers have needed to respond quickly and effectively to a rapidly changing landscape; transforming operations, restructuring workforces, reforecasting budgets, and adapting supply chains in response to challenges they have never faced before.

We know that strong leadership and management practices, including setting effective strategy, communication and agility in managing change, as well as a commitment to continuous improvement, are strongly correlated to firm-level productivity. CMI research has found that, on average, firms that invest in management and leadership development programmes see a 23% increase in organisational performance and a 32% increase in people performance.

Supporting Employers and Employees

We believe that the UK’s retraining and upskilling system will not be able to cope with the current or future skills demand. Significant new investment is needed to ensure we can equip workers with the skills they will need to remain competitive in the Fourth Industrial Revolution.

CMI is calling on the government to implement a number of recommendations, including:

  • Accelerating the roll-out of the National Retraining Scheme (NRS), offering a Right to Retrain to anyone who wants it.
  • Using the tax system to better incentivise employers to invest in training.
  • Retaining the employer-led principle for all skills policy interventions, to ensure a close link between training and employment.
  • Making greater use of bite-size courses and modular learning to meet employer demand for greater flexibility to fit their needs.
  • To support an apprenticeship guarantee (which means a job creation scheme as well as training) employers, especially SMEs, should be supported with the initial non-training costs of employing an apprentice with incentive payments and grants targeted up-front, where employers need it most.
  • There should be continued job retention support, which must be more explicitly linked to retraining and skills.
  • To receive this support, employers should commit to a social contract, asked to make firm commitments to embed a culture of retraining and professional development, and build capacity to retrain, to access support.

For more detail and to see all of our recommendations, read the Future Skills and Retraining policy paper online here.