City & Guilds teams up with the Lifelong Education Institute for National Productivity Week

City & Guilds has long championed productivity as a key factor in determining living standards in the UK – and skills development as a solution to the UK’s ongoing productivity challenge. Addressing this challenge is pivotal to raising living standards and improving public services - a priority reflected in the Government’s mission to promote productive growth.

28 January 2025

Last year, together with the Lifelong Education Institute (LEI), we published Making Skills Work: The Path to Solving the Productivity Crisis, which explored the UK’s own learning journey in tackling the productivity crisis - and placed the link between skills and productivity high on the national news agenda.

In recognition of National Productivity Week, which aims to raise awareness of the importance of productivity to the economy, we have again worked with LEI on their new paper, Skills and Productivity: Why They Matter for Economic Growth and Prosperity. This expands on the research featured in our report, and explores how employers and employees perceive productivity and the relationship with skills development.

Understanding productivity

Higher productivity allows businesses to create more value with the same or fewer resources, translating into higher wages, economic growth, and improved national prosperity.

However, City & Guilds’ recent survey, conducted by Opinium Research, reveals that many UK employers lack a clear understanding of productivity. Only a small fraction (4%) identified skills or workforce development as key drivers of productivity.

Skills and their role in productivity

Skills gaps and limited access to training remain significant barriers to growth. According to the survey, 31% of job seekers feel they lack the skills required for employment, and over one-third of employees report that a lack of skills has hindered career progression or salary growth. 

Employers recognise the importance of skills development, with two-thirds planning to invest in upskilling initiatives in the next year. However, junior staff receive training more frequently than senior staff, and access to training varies across regions and sectors. For instance, lower-income regions like the West Midlands and Wales report lower confidence in workforce skills, while industries such as construction and energy face unique skill challenges over the next decade.

Bridging the skills gap

Our survey findings suggest that productivity shortfall requires a multi-faceted approach to workforce development:

1. Increasing awareness: Employers need a deeper understanding of productivity and its drivers, including the critical role of skills. Tools like the ONS online productivity calculator can help businesses assess their performance and identify areas for improvement.

2. Investing in upskilling: Employers and policymakers must prioritise targeted training programs, especially in under-resourced sectors with high growth potential. Modular and accessible learning options can help workers overcome barriers to skill acquisition.

3. Regional and sectoral focus: Since productivity and skills challenges vary by region and industry, tailored solutions are essential. For example, addressing the needs of the automotive industry in the West Midlands or the construction sector in the South West requires place-sensitive strategies.

4. Bridging generational gaps: Younger workers generally feel more confident about their skills aligning with career opportunities, while older employees often face challenges adapting to new demands. Customising training programs for different age groups can enhance workforce confidence and capability.

5. Promoting inclusive growth: Skills development is central to achieving inclusive economic growth, enabling individuals to participate in and benefit from economic opportunities. Training initiatives that support inclusivity—such as unconscious bias training or programs for neurodivergent employees—can foster a more equitable and productive workforce.

6. Enhancing flexibility: Providing modular, accessible training options can address barriers to skill acquisition among the existing workforce.

The way forward

The findings of City & Guilds’ survey underscore the intricate relationship between skills, technology, and organisational culture in shaping productivity. The journey toward productive growth must focus on empowering individuals, businesses, and communities to thrive. By addressing skills gaps, fostering regional and sector-specific solutions, and aligning training programs with future workforce needs, the UK can unlock significant productivity gains.