The Role of Business in Addressing Education System Gaps
In the realm of business discussions, the importance of bridging the skills gap is frequently emphasized, as is the necessity for assembling teams equipped with future-ready skills. This matter is intrinsically tied to the productivity challenge facing Britain and the potential for economic growth. It’s a pressing issue, one that raises concerns about whether our education system is adequately prepared to equip students with the essential skills for the workforce.
This concern became particularly evident during a recent visit to a secondary school in Birmingham, a practice I engage in regularly as the chair of The Rigby Foundation, an organization dedicated to supporting disadvantaged youth in the West Midlands.
The school I’ve been visiting has a student body that is entirely composed of minority groups, including individuals from Somalia, Yemen, Bangladesh, and Pakistan. I attended lessons in mathematics, history (focusing on the Russian Tsars), and French. As I left, I questioned whether, apart from mathematics, we are truly providing these students with the life and workplace skills they require.
During another visit to a college, I learned that students can dedicate two years to a bricklaying program. While such skills are vital, and the course offers substantial practical training, one may wonder how much bricklaying theory can genuinely be absorbed within a classroom setting.
These instances underscore a broader issue that businesses encounter, especially in the wake of Brexit. There exists a deficit of skilled candidates ready to fill essential roles that drive economic growth and generate tax revenue. The Department of Education acknowledges this issue, revealing in a recent report that nine out of ten businesses in England face challenges in addressing skills shortages, particularly in entry-level roles.
While this dilemma fundamentally concerns the education sector, it also calls for active participation from the business community. Addressing the skills gap is a critical yet often under-discussed avenue toward fostering a robust, thriving economy.
On a positive note, there is abundant raw talent capable of meeting the demands of businesses. For instance, Birmingham boasts the youngest demographic in Europe, with a quarter of its residents under the age of 15 and 40 percent under 25. However, these young individuals must acquire skills valued by employers to successfully advance their aspirations.
As business leaders, we must collaborate with local and regional authorities to synchronize employment opportunities with the skills needed for the future, aligning this with when individuals transition from educational institutions, vocational training, and higher education. The rise of artificial intelligence further complicates this matter, necessitating not only a current strategy but also foresight for future needs.
Every time I visit urban schools, I am consistently impressed by the dedication and talent of their leadership teams. These educators contend with constant financial constraints, rigid curricula, and a burdensome regulatory environment. They shine in the face of socio-economic challenges related to deprivation, crime, and other issues. Many of them exhibit solid business acumen as well. For instance, an average secondary school generates around £7 million in revenue, serving about 1,000 students with a staff of 70. When these institutions form Multi Academy Trusts, they create substantial business entities. This instills hope that solutions exist to enhance student outcomes and assist in bridging the skills gap for employers.
What can businesses do to effect change and contribute to a system that is clearly in our collective best interest to improve? A crucial starting point is to revamp apprenticeships, which, when implemented effectively, serve as a tremendous pathway for nurturing skilled labor.
Despite the prevailing narrative surrounding apprenticeships, these opportunities are scarce, primarily because companies often prioritize attracting older, highly skilled individuals. Alarmingly, only 25 percent of apprenticeships are designated for individuals under 19. I advocate for apprenticeship guarantees, where local governments and businesses partner to ensure a specified number of positions. Nonetheless, it is vital that business is included in these discussions rather than being sidelined while relying solely on the taxes generated from skills and employment.
Furthermore, to mitigate the issue of theoretical training in bricklaying, we must pursue a reformed financial model that effectively supports the college and apprenticeship programs we urgently need. Currently, the Growth and Skills Levy, which enables businesses to finance their own apprenticeship and training initiatives, and college funding, both rely on government backing and inadvertently compete against each other. Unfortunately, young people often bear the brunt of this disorganized system.
Remarkably, since 2019, over £3 billion in Growth and Skills Levy funds have been returned to the Treasury due to the use-it-or-lose-it policy. It would be more prudent to redirect these resources to local authorities for providing targeted skills training aligned with employer needs. Additionally, we should expand the scope of the levy to include funding aimed at offering genuine work placements and valuable work experience.
Ultimately, the solution to closing the skills gap resides in fostering a more effective collaboration between the business sector and the education system, tailored on a community-by-community basis. This approach will enhance outcomes for businesses, bolster the economy, and better prepare our youth for future challenges.
Steve Rigby is co-chief executive of Rigby Group, a family-owned technology company, and serves as chair of Family Business UK.
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