The Impact of Recession on Adult Training: Evidence from the United Kingdom in 2008–2009

Publication Date01 Dec 2015
AuthorGeoff Mason,Kate Bishop
DOIhttp://doi.org/10.1111/bjir.12057
The Impact of Recession on Adult
Training: Evidence from the
United Kingdom in 2008–2009
Geoff Mason and Kate Bishop
Abstract
Analysis of longitudinal data from Employers Skills Updating Surveys in the
United Kingdom suggests that in many establishments training plans were
blown off course by the 2008–2009 recession, with reduced coverage of adult
training and especially of off-the-job training. The effects of such cutbacks on
skill levels have been partially alleviated by more precise targeting of on-the-job
training on meeting skills improvement needs. However, in a sizeable proportion
of establishments, future productivity and competitiveness are likely to be
impaired by failure to upgrade adult workers’ skills to standards which employ-
ers themselves perceived as necessary prior to the recession.
1. Introduction
Adult training has been at the heart of recent UK policy debates concerning
economic competitiveness. A series of government papers and reports in the
last decade have argued that future growth in competitiveness depends in
part on improvements in workforce skill levels (DfES 2003; Leitch Review of
Skills 2005; DIUS 2007; BIS 2010). This policy aim is consistent with research
evidence of training contributing positively to economic performance at both
firm level (Zwick 2005) and sector level (Dearden et al. 2006). Since adults
constitute a large majority of the workforce, there is a strong case for edu-
cation and training policy to give high priority to improving the skills of adult
workers, and not confine itself to initial skills training at the start of indi-
viduals’ working lives.
In this context, it is of particular interest to explore whether adult training
in the United Kingdom was in any way jeopardized by the recent sharp
Geoff Mason and Kate Bishop are at National Institute of Economic and Social Research,
London, and Centre for Learning and Life Chances in Knowledge Economies and Societies
(LLAKES).
British Journal of Industrial Relations doi: 10.1111/bjir.12057
© John Wiley & Sons Ltd/London School of Economics 2014. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
53:4 D ecemb er 2015 0007–1080 pp. 736 –759
The Impact of Recession on Adult Training
recession of 2008–2009. For a number of reasons, it is hard to predict what
the overall effects of recession on employer-provided training will be. In some
cases, employers may respond to reductions in sales revenue and profits by
cutting spending on training; in other cases, employers may see recession as
an opportunity to devote more time to training. Forward-thinking employers
seeking to develop new business strategies for surviving the recession may
identify raising skills as a key ingredient in those strategies. Others may lose
strategic direction as they become caught up in day-to-day survival issues.
Research evidence suggests that, in the last major UK recession in the early
1990s, the loss of skilled jobs had more significant effects on the stocks of
skills than any reduction in training (Felstead and Green 1996). Indeed, some
forms of employer-provided training held up fairly well during that recession
partly because of regulatory requirements in some sectors, and partly because
of some employers’ strategic responses to intensified market competition
(Felstead and Green 1996). In a survey of UK firms’ reactions to the early
1990 recession, Geroski and Gregg (1997) found that firms were much less
likely to cut expenditures on training and product and process innovation
than they were to cut spending on other forms of investment such as plant
and machinery, buildings, and advertising and marketing.
During the 2008–2009 recession, the decline in output was much greater
than that occurred in the early 1990s but, in contrast to the earlier period,
employment levels did not fall in line with the percentage drop in output (Bell
and Blanchflower 2011; Gregg and Wadsworth 2010). If employers tended to
hoard labour during the 2008–2009 downturn, this raises the possibility that
more time was available for training. However, analysis of Labour Force
Survey data suggests that the proportion of adult employees (aged 25–64)
receiving job-related training — which fell from 30 to 28 per cent between
2005 and 2007 before levelling off in 2008 — declined by only 0.3 percentage
point between 2008 and 2009 and then increased by a similar small amount in
2010.1On the face of things, therefore, the recession had very little effect on
medium-term trends in adult training.
In order to examine the impact of recession on adult training in more detail
— and in particular to assess some of the sectoral variation lying beneath the
aggregate story for the UK economy — this paper analyses evidence from
Employer Skills Updating Surveys carried out in five different sectors at two
different points in time: in mid-2008 just before the recession began to bite,
and in mid-2009 when the recession was well under way. Although other
employer-based surveys, such as the biennial National Employer Skills
Surveys, cover a wider range of sectors (Shury et al. 2010), these larger
surveys are not longitudinal in nature and thus lack the key advantage of the
Employer Skills Updating Surveys, which is that we can compare training
plans in mid-2008 with what actually took place in the same firms over the
next 12 months. The same survey data also enable us to explore the impact of
recession on different kinds of training, for example, training carried out off
the job and involving external training providers as compared with on-the-
job training provided by employers themselves. In addition to the two
© John Wiley & Sons Ltd/London School of Economics 2014.
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