According to Skills England’s inaugural report, employer investment in training is in steady decline and has been over the past decade, with training expenditure at its lowest level since records began in 2011 and investment per employee down by 19% in real terms. Cassie Gasson, Co-CEO of Thrive, believes upskilling is no longer optional but essential. She urges businesses to invest in their workforce to stay competitive and embrace the future.
Here’s a stat that should make every business leader pause: employer investment in training is at its lowest since records began in 2011. According to Skills England’s inaugural report, published in September, spending on workforce training has fallen by 19% per employee in real terms over the past decade.
This trend isn’t just worrying, it’s dangerous. In a world of rapid technological change, tightening skills gaps and evolving job markets, failing to invest in people isn’t a money-saving strategy; it’s a shortcut to stagnation.
At Thrive, we see this as a wake-up call. Upskilling is no longer ‘nice to have’ or something businesses can kick down the road. It’s essential.
The skills crisis in black and white
The Skills England report underscores what many of us in the learning and development (L&D) world have been shouting about for years: businesses are falling behind, and the talent pipeline is drying up.
Think about the challenges we’re all navigating. Automation, Artificial Intelligence (AI), sustainability targets and the green economy are reshaping industries at lightning speed. Roles like data analysts, AI ethicists and climate risk officers didn’t exist a decade ago, yet they’re now critical to business success.
We’re not equipping people with the skills needed to thrive in these emerging roles. According to the Open University’s Business Barometer, 70% of organisations say skills shortages are causing recruitment struggles, with many reporting it’s stifling innovation.
This is the paradox, while the future demands adaptability, businesses are cutting back on the one thing that guarantees it, training.
Why the ‘do nothing’ strategy will fail
Training budgets can often get slashed when economic headwinds hit. But what’s the cost of inaction?
Research consistently shows that companies investing in upskilling see far better outcomes. For instance, a McKinsey study found businesses with strong L&D cultures are 1.5 times more likely to outperform competitors. Conversely, organisations that neglect training face disengaged teams, higher turnover and diminishing innovation.
If you’re worried about retaining your best talent, here’s some food for thought: LinkedIn’s Workplace Learning Report revealed that 94% of employees would stay longer at a company if it invested in their career development. That’s almost everyone.
Failing to invest doesn’t just hurt your current workforce; it impacts your ability to attract new talent too. In a recent report from Deloitte, it was found that Millennials and Gen Z workers, who make up a growing share of the job market, prioritise learning opportunities above all else when evaluating potential employers.
Businesses cannot afford not to invest in training.
Upskilling: A strategic advantage
Upskilling isn’t just about plugging gaps; it’s about future-proofing your business for transformative technologies like AI. It’s the difference between struggling to adapt and seizing the opportunities change brings.
Take AI as an example. While automation might replace some responsibilities, jobs requiring specialist AI skills are growing at 3.5 times the rate of others, with these professionals commanding salaries up to 25% higher. Even in roles directly impacted by AI, job growth remains steady and productivity within these roles has skyrocketed, increasing nearly fivefold.
For businesses, this underscores the critical importance of upskilling. Those that prioritise equipping their workforce with the skills to harness AI’s potential won’t just adapt, they’ll lead. On the flip side, companies that neglect training risk falling behind, unable to keep pace in a rapidly evolving market.
Training gives your workforce the agility to pivot when industries shift. It keeps you competitive when markets evolve and it ensures that when challenges arise, you’ve got the people with the skills to tackle them head-on.
The mindset shift: From cost to investment
We believe the conversation around workforce training needs to change. Too often, it’s framed as an expense, merely a line item on a spreadsheet to be minimised.
But training isn’t a cost. It’s the best investment you can make. For every pound spent on training, research shows businesses see £4.70 in return through higher productivity, increased engagement and reduced recruitment costs.
And let’s not forget the ripple effects. When you create a culture of learning, you unlock innovation. Employees feel empowered to try new things, share ideas and push boundaries. It’s a win-win – for them and for you.
Practical steps to bridge the skills gap
If you’re ready to turn words into action, here are four steps to get started:
- Start with a skills audit
What skills are critical to your business today, and what will you need tomorrow? A thorough skills audit helps identify where the gaps are and sets the foundation for a targeted upskilling strategy. - Invest in personalised, ongoing learning
Forget one-size-fits-all training. The most effective programmes are tailored to individual needs and learning preferences. It’s vital to champion a blend of microlearning, collaborative tools and on-the-job training to create a holistic, engaging experience. - Leverage technology
Modern learning platforms make it easier than ever to deliver impactful training at scale. AI-powered tools can personalise content. The best part is that these tools allow employees to learn in the flow of work, ensuring minimal disruption and surfacing knowledge, information and answers when it’s needed. - Harness AI for cost-effective training
AI-powered tools are revolutionising how businesses approach upskilling. By automating time-consuming tasks and delivering personalised learning experiences, AI makes training quicker, more cost-effective and highly scalable. It can also analyse progress and adapt content dynamically, ensuring employees receive relevant support at every stage of their development.
A role for leaders
Creating a culture of learning starts at the top. Leaders need to champion upskilling, not just with words but with actions. That means allocating a budget, celebrating learning achievements and even taking part in training themselves.
When leaders model continuous learning, it sends a powerful message: growth isn’t just for entry-level employees; it’s for everyone.
Turning the tide
The Skills England report may feel like bad news, but it’s an opportunity, a call to action for businesses to put people first and rethink how they approach workforce development.
The companies that embrace upskilling will be the ones shaping the future, not reacting to it. They’ll be the ones leading innovation, attracting top talent and creating cultures where employees thrive. Upskilling isn’t just a trend; it’s a necessity. It’s how businesses stay competitive, resilient and relevant in an ever-changing world.
At Thrive, we’re passionate about helping businesses build a culture of learning. We’ve seen how investing in people transforms not just organisations, but also the lives of employees.
As you plan your strategy for 2025, ask yourself ‘what are you doing to future-proof your workforce?’ Because in the race to adapt, stagnancy isn’t an option. It’s important to look at this not as a challenge, but an opportunity to flourish, ultimately closing the skills gap and building a workforce ready for whatever the future holds.