According to a report published this month by The Work Foundation, employers are underusing workers’ skills, resulting in lost productivity both for businesses and the economy as a whole.

The authors of the report, “The Skills Dilemma: Skills under-utilisation and low-wage work”, argue that this could partly explain why the UK is lagging behind comparable countries in terms of labour productivity despite efforts to improve the skills of its workforce.

It shows that the problem is especially prevalent at the lower end of the labour market, where jobs too often provide little autonomy, progression or support. This, says the report, “can leave workers feeling underused and demotivated, with accompanying effects upon performance and productivity”.

The report identified a number of core drivers underpinning this under-utilisation, including:

  • Corporate strategies and business models competing on cost rather than quality.
  • Forms of work organisation and management techniques adopted by low wage employers.
  • Poor concept of work.
  • High turnover of staff.

 

It also found a number barriers to improving skills utilisation, including:

  • Lack of public awareness of skills under-utilisation and policy gap in England.
  • Lack of intermediate level economic development and business support agencies in England.
  • Lack of employee voice over work conditions and skills issues.
  • Poor management and understanding of skills needs.

 

The report draws on case studies in the retail and hospitality sectors and asks experts from government, trade organisations, unions and other leaders in the field to give their opinions as to why they think it is happening, as well as what they think should be done.

The report calls for wider recognition of the issue and urges policymakers to implement measures to begin tackling the problem. Among the report’s chief recommendations is the implementation of measures aimed at promoting better job design.

It concludes (among other things) that in order to improve the working lives of low-wage workers, employers need to introduce specific policies to improve ‘bad jobs’ and to create better work.

It admits this may not be easy so it also recommends the establishment of a workplace innovation fund that could provide small-scale funding for skills utilisation projects and support for employers taking steps to address the issue.

To read the full report, go to the Work Foundation website to download their pdf (653 KB)