Skills an investment, not a cost

David Fox is chairman and CEO of PP Electrical Systems Ltd, which he started as an assembler of electrical control panels. After many initial struggles, since 2000 the business has achieved strong business growth, even during the recession. Fox links this success to the company’s work in training the workforce, as well as it going through the pains of a comprehensive culture change programme. As a result, PP now offers training to external industrial companies via PP Business Improvement.

If UK manufacturing firms want to improve their business performance, they need to start viewing training as an investment rather than a cost to the business. We have to halt the UK’s slide down the international training and skills leagues.

It’s a national scandal that the UK is the sixth largest manufacturing nation in the world in terms of output but has now fallen to 17th in the world in terms of workshop skills. And the situation will deteriorate unless we all do something about it now.” documented in a report published in May 2009 by the UK Commission for Employment and Skills (UKCES). The report warns that the UK’s relative international position is set to worsen by 2020, with the UK sliding from 17th to 23rd position on Level 2 workshop skills, and from 18th to 21st position on intermediate Level 3 skills.

While the UK will move up from 12th to 10th place on higher level skills, even this, the report said, will not be enough to place the UK in the upper quartile of the OECD rankings, as other countries are progressing at a faster rate. Indeed, the UK will not be in the top eight countries of the world at any skill level.

It’s a national scandal that the UK is the sixth largest manufacturing nation in the world in terms of output but has now fallen to 17th in the world in terms of workshop skills. And the situation will deteriorate unless we all do something about it now

As business leaders, we have to stop relying on financial help from the Government and start to recognise that investment in training should be an everyday part of running a successful business. Contrary to what many firms may believe, improving the skills of employees does more than pay for itself and will actually have a positive impact on the company’s bottom line.

There is no easy shortcut to success. It is essential to train every person in the company, not just isolated groups. And training must be a continuous process. That means training admin and office-based staff, as well as production. If you don’t get buy-in from all areas of the business, any performance initiative, such as a Lean or 5S project, is likely to fail. Everyone has to be pulling in the same direction.

Training of all employees is critical in ensuring that there is good communication across the business and that any business-wide performance improvement initiatives are sustainable. Companies need to formulate a very clear strategy for training.