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Training in a Cold Climate: The Effect of 2008-09 Recession in the UK

Training in a Cold Climate: The Effect of 2008-09 Recession in the UK. Alan Felstead, Francis Green & Nick Jewson. Paper presented to the LLAKES Conference, 18-19 October 2012. An ESRC/UKCES Strategic Partnership Project. Outline of Paper. Popular discourse and theoretical predictions

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Training in a Cold Climate: The Effect of 2008-09 Recession in the UK

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  1. Training in a Cold Climate: The Effect of 2008-09 Recession in the UK Alan Felstead, Francis Green & Nick Jewson Paper presented to the LLAKES Conference, 18-19 October 2012 An ESRC/UKCES Strategic Partnership Project

  2. Outline of Paper Popular discourse and theoretical predictions Evidence from surveys of employers & workers Qualitative explanations from employers

  3. Fears of Training Cutbacks ‘In an economic downturn, there is always a temptation … to cut spending on staff training’ Calls for Restraint ‘But it’s a false economy’ ‘We must not pay the price of failing to invest in the talent on which our future will be built’

  4. Popular Perceptions of Training Cuts

  5. But Little Serious Analysis So Far • Economic and Labour Market • Trendscarried 12 articles over a • period of a year (Sept 09-Aug 10) • on the effects of the recession, but • training was barely mentioned • The academic literature has more discussion • (notable contributions here come from Mason & • Bishop, 2010; Brunello, 2009), but given the policy • concern we might have expected more

  6. Any Theoretical Pointers? Reasons for a rise, a fall or little change: • Up: labour hoarding, reduced opportunity costs • & changing product market strategy • Down: deep recessions alter cost-benefits & all • recessions led to recruitment freezes and/or • redundancies • Little change: ‘training floors’ make some forms • of training a ‘must have’ activity Overall, theory offers an ambiguous answer to the question ‘how does training fare in recession’

  7. What Do Surveys Tell Us? • Analysis of secondary data collected from • employers (CBI, BCC & NESS) • 2. Analysis of secondary data collected from • individuals (LFS)

  8. Collapse in Employers’ Training Expenditure Intentions CBI Training Expenditure ‘Balance’ Index, Manufacturing, 1989-2012 Q3 1990-Q3 1991 recession Q2 2008-Q3 2009 recession Q4 2011-Q?2012 double dip Balance (% increase minus % decrease) Source: supplied to authors by CBI.

  9. Collapse Greatest for Large Manufacturers CBI and BCC Training ‘Balance’ Index, 2002-2011 Balance (% increase minus % decrease) Source: BCC data taken from website reports.

  10. But Actual Experience More Optimistic Reported Impact of the Recession on Training, 2009 % of employers Source: own calculations from NESS2009.

  11. No Evidence of a Recession Effect on Incidence of Training Source: own calculations from QLFS 1995-2011 (year averages across 4 quarters).

  12. Similar Patterns for Sex, Age, Off-the-Job Delivery and Intensity

  13. Some Evidence of More, Albeit Modest, Change in the Public Sector Sharper, but still modest, reduction in training incidence in public sector – LFS measure ----- 2008-09 recession Evidence in NESS series of public sector training infrastructure under more threat – establishment-level planning and budgeting falling a little quicker

  14. What Do Employers Say is Going On? • Interviewed in mid-2010 105 employers drawn • from NESS2009 – 45 in the public sector, 25 in • private manufacturing & 35 in private services – • 77 re-interviewed in 2011/12. • Most are carrying on as before because of: • ‘training floors’ • operational issues • market competition • managerial imperatives • funding arrangements

  15. However, ‘training smarter’ is common – making • training expenditure go further by: • focusing training on business need • shifting to in-house provision • training more staff to become on-the-job trainers • renegotiating prices and terms of delivery with • external providers • organizing on-site group training sessions • making greater use of e-learning • As a result, employers are finding innovative ways • of maintaining training coverage, sometimes with • less resource

  16. Conclusion • We have not found evidence of a dramatic • decline in training, despite some early concerns • In fact, data based on expectations and predictions of what will happen are overly pessimistic when set against what is reported to have happened in practice • Nevertheless, we have found evidence of • ‘training floors’ and an increased emphasis on • ‘doing more with less’ – both have served to • maintain training coverage despite the severity of • the recession

  17. Contacts alanfelstead@cf.ac.uk f.green@ioe.ac.uk nickjewson@cf.ac.uk http://www.cardiff.ac.uk/socsi/research/researchprojects/traininginrecession/index.html

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