Lord Hunt says firms must focus on developing existing staff to maintain their competitive edge.
Fifteen years ago this month I was appointed as Secretary of State for Employment and, ever since then, skills have been central to my professional life. As China and the tiger economies of Asia have developed, our traditional employment patterns here in the developed world – manufacturing, mining, shipbuilding – have struggled to remain competitive. To defend our way of life, we have had to develop new ways of maintaining and developing our customary, high levels of added value.
As we have become more service-based, perhaps the single area that has done most to help the UK maintain its standing has been financial services.
There have been problems, of course, but my recent stint preparing a report on the Financial Ombudsman Service (FOS) brought home to me, yet again, that for every bad apple in financial services, there is a blossoming orchard of first-rate customer service. The problems and the scandals must always be kept in proportion. There is, however, no room for complacency.
The end is now near for my year as president of the CII and I am truly proud of my continuing association with such an innovative organisation. The CII is both the largest professional financial services body in the world, with over 92,000 members in 150 countries, and also one of the UK’s largest examination bodies. As we strive to spread the message of professionalism and to improve the reputation of the industry, promoting skills development is the other side of that same coin.
It is 18 months since Lord Leitch published his landmark report into UK skill levels and future needs. I am delighted that the House of Commons Innovation, Universities, Science and Skills Select Committee is going to audit the follow-up to the report, bringing parliamentary scrutiny to bear on ensuring necessary reforms are carried through. Indeed, everyone has a part to play in this process – professional organisations, employers, employees, schools, colleges and universities, as well as parliament and government.
The last few weeks have seen a lot of activity aimed at achieving the challenging, and very necessary, targets set by Lord Leitch. Proposals have been put forward for: a restructured learning and skills system; a
14-19 qualifications strategy; plans to create an innovation nation; and a push on high-level skills.
These reforms cannot come soon enough, for our sector is already beginning to feel the bite of skills shortages. A survey of CII membership, published only last week, found that 76% of employers were suffering from technical skills shortages, with 57% feeling that the education system does not adequately meet their needs. What we desperately need is an education system that produces individuals who are strong in the basics – skills that we, as an industry, can then build on to meet our particular needs.
I have no doubt that truly visionary companies must nurture their employees, and we must all take care not to concentrate our efforts exclusively on new entrants, for the majority of our 2020 workforce is already in place.
Firms must look to focus on developing their existing personnel. As a recent City of London report showed, talent is the hot commodity of international competitiveness and people are now more mobile than ever.
In this period of economic instability, it is vital we do not take our eye off the skills issue – tempting though that may be. Cuts to training budgets in order to make a quick saving will, in the end, prove to be a false economy.
Who trains, wins.
Lord Hunt is chairman of the financial services division at law firm Beachcroft and president of the CII.