Press release

Small and medium employers setting the standard for maximising skills, new research shows

A new report from the UK Commission for Employment and Skills (UKCES) shows many small and medium sized businesses are forging a path when it comes to maximising the talents of their employees, but a gulf exists between the best and those found lagging behind.

Pockets of small to medium sized businesses are leading the way when it comes to maximising the talents of staff to boost productivity, new research shows.

The research also finds a significant gap between businesses which thrive on the talents of their people, and those which fail to do so – despite the UK having one of the most highly skilled workforces in Europe.

The study, released today by the UK Commission for Employment and Skills (UKCES), looks at the way small and medium sized businesses - accounting for over 13 million UK workers – are managed, placing them into seven categories.

The groups, Developers, Freeriders, Organisers, Plodders, Recruiters, Survivors and Trainers, are based on how employers approach five elements of ‘high performance working’ - planning, organisation, skills, rewards and autonomy.

The research finds that almost a quarter (24%) of businesses in the study fall within the top two categories, Organisers and Developers – with both showing many indicators of ‘ideal’, high performance working companies.

Results of the research feature in a new report, Growth Through People: Evidence and Analysis, which takes a comprehensive look at the state of the UK labour market, and the skills of the UK workforce.

Over 2.2 million employees are currently working for Organisers, the study finds. These companies show exemplary planning and organisational ability, as well as being highly likely to train staff and share the fruits of their labour.

More than 1.6 million workers are employed by Developers, businesses which are better than average at planning, and not only specialise in building the skills of employees but also allow them the space and autonomy to add value in their workplace.

However, despite these signs of good practice, the report highlights a significant gap between those at the top and bottom of the spectrum, with large numbers lagging behind in the remaining five groups.

Employers classed as Freeriders were the most common, with over 143,000 establishments falling into the category - employing nearly 3 million UK workers.

Such employers are not only unlikely to train, but rely on others to be training the workforce and developing skills they require in staff. Freeriders also offer low levels of autonomy to their workers – meaning many may feel their work has little variation and that they are not given much control over how they carry out daily tasks.

Though the least common, nearly one in 10 employees (8%) are stuck working for Plodders. These companies underperform on most fronts and have poor planning and organisation.

They are typically found in wholesale and retail sectors, and show little inclination to reward staff through pay and bonuses.

Whilst the findings show the UK is generating more high skill jobs than any other European nation, many employers are not maximising the talents of their employees - with productivity, profits and growth suffering as a consequence.

Examining the wider state of the UK economy, the report also found that:

  • The UK has generated more than 2 million high skill jobs since 2006, even during the recession - more than any other country in the EU.
  • Those without advanced skills face tough prospects, especially young people - where increasing numbers are finding themselves in low-end jobs with few opportunities to move up.
  • Outside high-skilled jobs, many roles require only low level skills - leaving people with few opportunities to apply the talents they have and progress.

Lesley Giles, Deputy Director at UKCES said:

This research shows big differences in the ways that businesses of all sizes make use of the skills of their staff.

Whilst it is welcome news to see many employers, and employees, finding themselves in favourable groupings here, these findings do raise concerns over the gulf between those nurturing and developing their staff to boost productivity, and those that aren’t.

There are good indicators for the UK here, however – whilst we may have seen productivity struggle to recover from the recession in contrast to other nations, the UK has seen a growth in high skilled workers which outstrips all other European nations.

The priority now is to look to employers here who are implementing good management practices, and see what others can learn from them. With such significant growth in the skills of our workforce, it is more important than ever to ensure we are harnessing these talents, turning skills into productivity, profits and, ultimately, growth.