New research by the Essential Skills Tracker 23 from the Skills Builder Partnership together with the CIPD, Edge Foundation and KPMG, has revealed that low essential skills cost the economy £22bn in 2022.

This missing piece in the UK productivity puzzle is transferable skills such as  communication, interpersonal, problem solving and self-management skills which act as a scaffold, enabling people to unlock the potential of other skills and expertise.

The research, with fieldwork conducted by YouGov, found that in addition to the cost to the economy, people with higher levels of essential skills experience have improved social mobility, employment, earnings, job satisfaction and life satisfaction.

Minister for Skills, Apprenticeships and Higher Education, Robert Halfon, said: “This research demonstrates the fundamental importance of essential skills to unlocking our potential as a skills and apprenticeships nation. Being equipped with high-quality essential skills is key to boosting your earnings, improving job satisfaction, and addressing social mobility. That’s why we offer a range of free literacy, numeracy and digital essential skills courses for people of all ages and stages of their career, so that no matter what your background, you have the tools you need to climb the ladder of opportunity.”

Key findings of the report:

  • Wage premium: people with higher levels of essential skills earn significantly more than their peers.
  • Essential skills valued: UK workers overwhelmingly (92%) recognise the importance of essential skills for success within their career.
  • Job satisfaction: people report higher levels of essential skills equals higher job and life satisfaction.
  • Lifelong learning & ageing workforce: employers play a central role in lifelong learning by providing opportunities to build essential skills,
  • Education: an ostensibly “good education” that builds literacy and numeracy but omits essential skills leaves 18% of workers with above average education level, literacy, and numeracy, and yet a very low essential skill score.
  • Low skills trap & social mobility: 13% of the population that experience real social mobility (enjoying strong income, job satisfaction and life satisfaction) have a portfolio of good essential skills, literacy, numeracy and education.

Peter Cheese, chief executive of the CIPD, said; “This significant research highlights the potential of boosting essential skills to improve workplace performance and UK productivity, as well as workforce mobility. It also underlines the critical role that HR and people managers can, and should, play in supporting people to develop essential skills across their working lives. Having a shared language and framework for these skills and ways of assessing them is critical to making progress in this space, as well as reinforcing them through key processes; from recruitment, learning and development, to performance assessment and progression.”

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