The panel

Neil Bentley, founder and managing partner, AOM International
Richard Cree, editor, Director
Mary Curnock Cook, director of qualifications and skills, Qualifications and Curriculum Authority
Mick Durham, co-founder, UKE Learning
Matthew Griffiths, chief executive, PLASA
Dave Hudson, head of Aero-Academy, Marshall Aerospace
Frances O'Grady, deputy general secretary, TUC
Jo Owen, founder, Teach First, and author of Tribal Business School
Dick Palmer, principal, City College Norwich
Paul Statham, managing director, RNM Systems
Stephen Uden, head of skills and economic affairs, Microsoft  

The last year has seen a dramatic shift in the UK economy. We have been hit by a financial crisis that Professor Chris Higgins at London Business School calls "a meteor out of a blue sky". Although there may have been a few clouds gathering in the sky, he is essentially right about the scale and nature of the devastation to financial markets.

Yet amid all the doom and gloom, there are still some constants that business leaders face. And while rapidly rising unemployment has changed the jobs market, the importance of the UK developing and maintaining a skilled workforce remains an imperative for future growth. This macro-level, national skills agenda requires employers of all sizes and across all sectors to recognise the importance of training. As Mary Curnock Cook, director of qualifications and skills at the Qualifications and Curriculum Authority (QCA), explains: "The economic picture has bumped skills as a political and social issue towards the forefront." This has been reflected by employee attitudes as well, as Frances O'Grady, deputy general secretary at the TUC, adds: "Learning and skills has soared up our agenda. Our membership is hungry for learning."

So how can employers make sure that the training they offer meets the needs of staff as well as the needs of the business? The Employer Recognition Programme (ERP) and the Qualifications and Credit Framework (QCF) are examples of the work the QCA is doing to address these issues. Through the ERP, employers of all sizes are able to bundle up in-house training into qualifications that are recognised within the national system. So far, several large employers, including McDonald's and Flybe, have been granted awarding organisation status. This means McDonald's can award national qualifications to its employees. It has started with a nationally recognised Basic Shift Managers qualification for restaurant managers.

Smaller firms, too, can benefit from the scheme, either by working with a trade body or professional organisation, or awarding organisation. Whichever route they take, the result is that even in small firms, properly accredited and recognised in-house training can build into a major, nationally recognised qualification.

This gives employees a major incentive to train and allows employers to enhance both the performance of their company and its reputation in the recruitment market. And the ERP is flexible enough to meet any employer's needs. As Curnock Cook says: "My challenge is that any employer can come to us and explain their needs and we will find a way to meet those needs within the ERP."

This flexibility is made possible thanks to the adoption of the QCF, which for the first time allows units of training to be built up into a single, recognised qualification. "A decade ago you could have any colour of government-sponsored training scheme as long as it was NVQ," says Curnock Cook. "This scheme allows employers and employees real flexibility and transferability in training."

Director and the QCA gathered together a panel of employers, employee representatives and educators to discuss these issues.

Richard Cree: Why does training matter in a downturn?
Frances O'Grady The killer fact is that companies that don't train are two and a half times more likely to fail. When companies are under pressure, often the training budget is the softest target. We want companies to keep investing in training, to survive the downturn, but also to prepare for recovery.
Stephen Uden I know one company that cut back on graduate recruitment during the last recession and took five years to get back to the position they were in before [they made the cuts].
Mary Curnock Cook Different companies in different competitive circumstances will take a view about essential training, which helps them meet customer needs, and investment training, which is about long-term strategy. There's no doubt the red pencil comes out on the training budget in hard times. But companies must not give up essential training.
Matthew Griffiths The benefit of training in a recession is that
in hard times everyone is looking for more value for money and having a skilled workforce will give you that edge. It's an opportunity to grab market share. 
Mick Durham This is no time to be mediocre. When there was a lot of money and a lot of growth, you could be mediocre. Now companies have got to be the best they can to survive.
Neil Bentley Even in a recession you want to retain talent. You need to attract, retain and motivate people who are going to maintain customer service.

RC: Is there evidence that people are cutting back?
Dave Hudson One of our competitors has cut its training department by 60 per cent. But they are an airline and their bottom-line costs are critical at the moment.
Jo Owen Around this table we're preaching to the choir. We all believe in training. But plenty will take the red pen to training and marketing budgets. On the marketing side there is evidence showing that brands that invest in a downturn succeed. We haven't made the same case for training.
DH The message has got out a bit. There is awareness you need to make smart adjustments. Rather than just take a red pen to it, you have to look at how you can do things more efficiently.
Dick Palmer You also have to offer incentives. It is about encouraging people. A lateral way of looking at this is through the banks. If the real issue is about access to funds, why not make training a pre-requisite of getting a loan?
MC Funded training a decade ago meant an NVQ. That put a lot of firms off government schemes to support training. Now you can have a customised offer either by using the Qualifications and Credit Framework to build up small bits of learning, or going for the customised route that PLASA has taken on behalf of its members and larger employers such as McDonald's and Flybe have done themselves.
Paul Statham If you can attract people who want to go on a course and take that back to their work it's better than forcing them to go on a course. It's got to be marketed so that people want to go on the training. You've got to entice them so they come to you and say, "I really need this". The best person to send on a training course is someone who comes to you and says, "I want to do this training, find the money". 
DH What you are talking about there is HR management. How you go through the whole process of establishing the performance and motivation.
FO Training works for good employers. But a third of employers don't train. They didn't train in the good times, let alone the bad times. That's a drag on our economy. Why should good employers invest, only to find staff poached by bad employers that don't?
SU We all agree that training is a good thing, yet a third of companies don't believe in training. So have we done enough to convince people of the business case for training? At Microsoft, we have produced some hard economic data showing that if you invest in skilled Microsoft-certified people your business will make more money. It made a substantive difference. We need the businesses that do invest in training to come together and make the business case for training. 
DP The Learning and Skills Council has come up with a new standard called the Training Quality Standard. Over three years [to get the badge part of the criteria] for every training intervention, you have to establish the business gain to the organisation. So working with Lotus we've proved that on business improvement techniques the training we've done has made a £1,200 per employee difference. About 28 national organisations have signed up to the standard, so there must be a body of evidence as to what difference training makes.

RC: But are non-believers ever going to be converted?
MD Yes they can be. The one-third of hard-nosed employers that don't train are at the vocational end. Those guys are saying, "I didn't need training, so why do you?" These are entrepreneurs who climbed the ranks through experiential learning. They didn't go to college or university, so why train? One way is to focus on value for money and the bottom line. We don't say "train your people because it will motivate them". They've heard that a million times. A lot of managers in small businesses don't care if they retain people or not. 
PS We are growing and recruiting people. Part of that is putting a training plan together for recruits at interview stage because it helps to get better people. To date we have looked only at people with masters or above. Now we can look at first-degree graduates and put them on an accredited qualification. The big training structures tend to be aimed at the untrained, rather than the highly qualified. To put a course together that isn't an MBA or a degree course but that will turn my guys on is hard. These guys know about science, but they need to know about business management. But they don't want to do an MBA because they haven't got time. We have highly intelligent people struggling to do the practical work because they never trained. There is a gap between the theory and practice.
JO The question is how that gap gets bridged. There are formal management qualifications, but I wouldn't hire someone because they've got a tick in the box. How do you grapple with those very smart people who can't manage? At Teach First we get some very bright people and throw them into the most challenging schools in the UK and they learn very fast about dealing with adversity and conflict. We give training as well, which is valued and is why we can recruit so many. So there is some training, but it is the experience that is crucial. If you can bottle it and quantify it, that would be great.
DH You can bottle it, by setting up training within the workforce where you utilise the mixture of skilled and unskilled people, so that the knowledge and experience gets spread. I put graduates and apprentices on the same programmes.
DP Isn't there an opportunity to send out a different message? I agree with Mick because we face those sorts of companies on a daily basis. But now there is an opportunity to go out there and say "train to survive the recession". This is not about nice things like motivating staff, this is about keeping your business into next year. One of the ways to keep it alive is to access these funds and become part of an accredited programme.
FO I accept you can, but we haven't so far. That's why we need a few sticks as well as carrots to encourage people.

RC: Are qualifications the right way to measure skills?
MC It's no good having highly qualified employees who can't manage. You need a mixture of skills and experience. You don't just hire someone because they've got a qualification, but you look at their CV and see they have some good training and skills underpinning their experience. Most people, through CV reading and interviewing, can figure out that experience.
JO Clearly you can measure explicit or technical knowledge, but when it comes to something like managing people, can you certify that? Is there a limit to what you can and should certify?
MC Yes. Let's certify outcomes you can validate. Most of us have a mixture of things that are measurable—you've got an A level or you've got a degree—and then there are value judgements you make on other sorts of experience.
MD I work more at the vocational end of the scale and I disagree with comments about validating experience. It is important to the employer, the industry and the individual. Look at PLASA. That's an example of how vocational experience has been validated. I operate at the end of the scale where people have got on well without training. They've got no certificates and they are proud of it. You have to engage in a different way.
DH You also get firms who say, we won't do training, we'll just poach other people's people. We'll allow them to spend the money developing people and we'll buy those staff.
MC Anyone who's every tried to sell training knows all those stories. In the end the enlightened employers know that the underlying benefit is that you get employees who are loyal to the employer.

RC: Does a national framework for accreditation really make a big difference?
MC There is all this good training going on and it makes sense to have some of it validated at a national level, so people can see it is equivalent to something already known. We've tried to be flexible about how different companies can engage with the Employer Recognition Programme. But if employers are investing in training, they may as well give staff something tangible and themselves kudos in the recruitment market.
JO There is a huge range of challenges in terms of skills in the UK and there are also lots of existing initiatives. Which bit of the market does ERP address, what gap is it filling?
MC It is the role of the government and the Sector Skills Councils (SSCs) to look at pan-sector needs and fundamental skills needs. But companies also have bespoke needs. The Leitch Report called for a demand-led system. I prefer to call it market-led. Market-led training meets demand, but also creates and stimulates it. There are all these firms training for their own purposes and we have to find a way of allowing that training to be recognised.  
DP But we have to be careful about creating a proliferation of qualifications. We've got enough qualifications that have been around for a long time.
MC There is an important difference between content and context. Take McDonald's. It was the first organisation we accredited as an awarding body. A lot of the training it does is not about new content, but about the McDonald's context. The trick to avoid proliferation is to make it clear what is new and what is about context. We don't want qualifications that nobody understands.
FO You have handled that well from a business perspective, but as an individual worker you also have to know that you can move from company to company. Where is the currency for the worker as well as the company?
NB From a national perspective, flexibility and transportability is crucial. I work with insurance companies and a team leader from underwriting wouldn't have a clue about being a team leader in claims, let alone being a team leader at Jobcentre Plus. This is the same set of skills and it would be good if we got those skills portable.
SU The ERP programme isn't the only game in town, although it is a very important game. We have yet to see if someone who has got a shift manager qualification from McDonald's is successful in getting a job elsewhere. But the SSCs are also creating training that applies across whole sectors. Microsoft is involved with e-skills and it is trying to build qualifications that are recognised by all employers in the sector. 

RC: Is transferability the same for small firms?
MC It doesn't have to be difficult for SMEs. In fact, it can work the other way. A lot of us recognise the value of having been trained by M&S or British Gas. The big names don't need a recognition programme, although some are choosing to go that way. But recognition gives smaller firms the opportunity to show they have met a set of documented national standards.
DP Smaller firms are also likely to take a different route and go with a third party, such as a college. Your local garage is unlikely to set themselves up as an awarding body.
MG PLASA has had great success with the rigging industry in that as soon as people realised what we were up to, lighting and sound rental companies have been asking if they can do the same. That makes our life easier in terms of spreading the word and converting that third of employers that don't train. 

RC: Does transferability also lead to "poachability"?
NB There is a paradox there because you are more likely to keep someone because they value transferability of the skills they are learning. On the whole it's a bet worth taking that you will retain more than you lose through training.
SU The evidence is that training increases retention by about 10 per cent.
DH The best defence against poaching is to have a big enough pool in the first place. The areas where poaching becomes an issue is where you have a shortage of the necessary skills.
MC This is so new and this is a bit of a paradigm shift to say that company training can be fed into the national system. My guess is that in 10 years, any organisation that is investing in training will want to have its training recognised within the system. For years we have had government training in this box and employer training in another box not recognised, accredited or standardised.
FO Part of the problem in this country is that we are heading for this hour-glass labour market. There are plenty of relatively low-skilled, service sector workers at the bottom, but then there is this real shortage compared to our competitors at the technician level and a growing number of managerial jobs at the top. We have massive skills for life issues at the bottom, vocational shortages in the middle and then this growing managerial and professional group, with a constant need for professional development. The national skills strategy is stretched to be able to meet those needs.  
MD One of my worries is that we could be creating learning silos for industries that might not exist. I met this young Yorkshire lad who told me he was an unemployed miner. Although the mines had shut before he was born, he still thought he was a miner. I worry about sectors where we do vocational training and people say, "I'm a this now" or "I'm a that". What are we doing to make sure these skills are transferable? 
MC I am not a qualifications wonk, but the flexibility of the QCF framework is that you have building blocks and integration of bespoke training units—whether it's PLASA or McDonald's—with sector-wide qualifications such as NVQs. You can combine these elements to build up a qualification. If you can get sectors designing qualifications with gaps for employers to fill with their own training, then we start to get an integrated qualifications strategy and can build that flexibility. 
DH It comes back to the concept of it being demand-led. It's not a single, standing demand from one organisation. Because organisations are different, you've got to look at the organisation's driver and the individual's driver. The flexibility you've got with QCF allows you to drive it forward. 
JO A lot of employers are up on the need to get training done, but a lot of the problem is with employees. According to the CIPD, there are five reasons why people don't train; they are too busy at work, family or personal commitments, they are insufficiently motivated, resistance from managers and an insufficient culture of learning. This means, it's not a priority for me, it's not a priority for the boss, it's not a priority for anyone.
PS The point around the technical skills is that if you can't do those things you won't get a job. If you can't rig you won't get a job as a rigger and if you can't cook you won't get a job as a chef. It's down to employer and employee-or the HR department-to analyse and appraise, and say someone's people skills aren't great. If you just focus on technical skills you end up with a company that has amazing skills but where the middle tier isn't as sharp as it could be.
FO For some people the resistance to training is based on fear. When redundancy is on the cards are you going to put your hand up if you've got a problem with reading, writing or maths? I have met workers who say the only time they ever see a training officer is when redundancies are due. They call them the undertakers. But there is a huge untapped demand for learning and training. There are real issues if you work shifts, or long hours and the only option is to train in your own time.

RC: Would you employ someone who had a McDonald's qualification?
NB I don't know enough about it, but if the skills are generic, I'm interested in ability not qualification.
DH When you look at people, you are not looking at qualifications you are looking at attitude to learning and development. Are these people who want to extend their capabilities? 
JO You can always develop the skills but you can't train values. If people don't have the values you can't start. If they have the values you can put in all the training and all the development, and they can be outstanding individuals.