Boost for budgets as firms take action on skills gaps

Organisations are boosting training budgets as confidence in the private
sector rises and fears of skills shortages grow.

The Training and Development Survey 2004, released today by the Chartered Institute
of Personnel and Development (CIPD), shows that while there was little change
in the size of training budgets between 2002 and 2003, one in three private
sector training managers expect to see their training budget increase in 2004.

Of the 531 organisations surveyed, 81 per cent have a training budget. The
CIPD said this was an indication that organisations accept the ‘training means
business’ case.

In a third of organisations, employees receive more than five days training
per year. However, nearly one in five (18 per cent) receive less than three
days training per year.

Despite the positive signs in the survey, the CIPD warned that anticipated
increases in training budgets must materialise for the sake of the overall
economy.

Jessica Rolph, CIPD learning, training and development adviser, said:
"If anticipated increases in training budgets do not materialise, current
skills shortages could translate into wage inflation, leading to adverse
implications for interest rates, growth and the economy as a whole.

"Economic uncertainty has led to a ‘wait and see’ approach to
investment in training," she said, "but there is a danger that
employers have not invested nearly enough in anticipation of impending skills
deficiencies.

"A failure to invest now could leave employers in many sectors short of
skilled labour, or needing to offer unsustainable salaries in order to fill
vacancies for skilled workers," she said.

The survey also shows a surprising disparity of experience between public-
and private-sector training managers. Thirty per cent of those in the public
sector reported that their training budget had decreased in 2003, compared with
27 per cent in the private sector, and more than a quarter (26 per cent) of the
public-sector training managers expect the budget to decrease further in the
coming year, compared with only 17 per cent in the private sector.

The survey will be launched today at HRD, the CIPD’s annual learning,
training and development conference and exhibition, which takes place at London’s
Olympia on 20-22 April.

By Quentin Reade

Average training spend per employee

Size of firm                  Average training budget         Spend per employee

25-49 employees          £33,833                                   £884.06
50-99                           £58,504                                   £878.82
100-249                       £111,658                                 £660.62
250-499                       £212,132                                 £602.45
500+                            £970,429                                 Not
available

Source: CIPD – Training and Development Survey 2004

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