Ireland runs the risk of becoming a two-speed economy if current productivity trends continue into the future. One of the key underlying factors causing the issue is the low take-up of training by Irish SMEs, according to Paul Healy, chief executive of Skillnet Ireland, the national agency charged with the promotion and facilitation of workforce learning.
“An issue which has been emerging in recent years is a general stagnation in the productivity and competitiveness of indigenous SMEs,” says Healy. “On the other hand, the large multinationals and corporates are advancing. There are around 240,000 enterprises in Ireland and 220,000 of them are SMEs which employ a total of around 680,000 people. The stagnation in productivity has the potential to create a polarised enterprise base as well as a two-tier workforce. This could also impact on society and economy.”
While there is no single reason for this stagnation in productivity, training – or rather the lack of it – has been identified as central. "One critical factor identified by the National Competitiveness Council and the OECD is the low rate of uptake of training, upskilling and management development among Irish SMEs," says Healy. "The extent to which adults engage in lifelong learning and training is in the lower quartile of OECD and EU countries. It's not a pretty picture."
Healy believes this is understandable – to a certain extent at least. “There are reasons why SME owners don’t engage in training for themselves and their employees. The distraction factor is probably the key one. Business owners are focused on other priorities, filling the next order, making the next sale, survival.”
Questionnaires
Skillnet Ireland commissioned Amárach to carry out research into the issue earlier this year. “More than 300 SMEs took part, they completed questionnaires and took part in half-hour conversations. It was quite intensive,” he says.
A number of different reasons were given for lack of engagement in training. “Number one was awareness. They didn’t think there was a need for training. The next reason was cost, they said they couldn’t afford the cost. After that they said they can’t afford to release the staff, that the money would be better spent elsewhere, and then there was a reluctance to spend on someone who might leave anyway or take their skills to a competitor. On the other hand, 61 per cent of the respondents said they were likely to undertake training for staff in the next 12 months.”
That encouraging finding leads him to believe that the problem is not beyond resolution. “Some jurisdictions are better than others, but it is a challenge faced by many other countries. There is the potential to have two tiers of enterprise, but we are not there at the moment. The gap is not that wide yet. We have to create a dialogue among the stakeholders, including Government, the companies and the workers concerned,” says Healy.
“Last year we supported 15,000 firms. That may sound like a lot, but we are only reaching 5 or 6 per cent of the base of around 220,000 firms. We have a long way to go before we reach enough firms. Last year we had 55,000 trainees go through – half of them came from microenterprises employing nine people or less, with 95 per cent of the remainder working for SMEs. We are making real progress on the training and upskilling agenda.”
Nuances
There are other nuances to it as well, he points out. “The biggest disruption coming our way is technological. This is not new. We had the agricultural and industrial revolutions. What’s different about this one is its pervasive nature and speed. Artificial intelligence and automation are moving into areas not seen before. The positive irony in all of this is that global employment has never been as high in the history of humanity. But we have to promote the uniquely human skills of strategic thinking, leadership, commercial awareness, collaboration, communicating and influencing, forming relationships, and so on. The real prize is the co-creation of value out of technology and uniquely human skills. That’s the way we can continue to grow employment.”
The organisation is working with employers to prepare for this next wave of disruption. “Everything we do has companies and workers at its heart,” says Healy. “We are helping them with workforce development. We are working with sectors and groups on workforce planning to ensure they have the supply of skills available to enable them to continue to grow and be competitive. We are also helping with workforce innovation in areas such as technology-enabled learning.”
And progress is also being made on the wider training issue. "The Government has already responded to this in both word and deed," Healy concludes. "There has been a significant reform of the National Training Fund [NTF] to dedicate more resources to upskilling those in employment. There is also a commitment to giving employers a greater voice in how the NTF is directed. Support is being channelled to the areas of greatest need."