The UK is still grappling with what economists call the “productivity puzzle.” Since the 2008 global financial crisis, growth in output per worker has been sluggish when compared with international competitors such as the United States, Germany and France. Weak productivity holds back wages, dampens economic growth and limits our ability to fund vital public services.
The government has rightly recognised the need to kickstart growth. The Industrial Strategy identified eight key sectors with the highest potential, from clean energy to life sciences. More recently, the creation of Skills England signals a renewed national effort to boost technical and sector-specific expertise. These moves are essential, but they are only part of the puzzle.
The case for upskilling
Jules Bennington – Senior Policy Officer, Chartered Management Institute, explains that a dynamic economy depends on a workforce that can adapt, learn and innovate. Yet employer investment in training has struggled, falling by 28% since 2005, even as demand for employability skills continues to rise. Without decisive action to close skills gaps, the UK risks missing its growth ambitions.
Crucially, the challenge is not only about technical know-how. The National Foundation for Educational Research (NFER) has shown that essential employment skills such as collaboration, communication, organising, problem solving and decision making are fundamental to future success. These are the very capabilities that enable technical knowledge to be applied most effectively, unlocking productivity gains across every sector.
Core skills: The foundation of good management
These essential skills mirror the attributes of effective managers and leaders. They are embedded in the Chartered Management Institute (CMI) Professional Standard for Management and Leadership, which sets out the behaviours, skills and competencies required to lead teams, drive innovation and manage change.
Strong management is not a “nice to have.” CMI analysis shows there are 8.4 million managers in the UK – around one in four workers. Yet most have never been trained. Our Better Managers research found that:
- 82 per cent were promoted without formal training, becoming “accidental managers.”
- Half hold no management or leadership qualification.
- One in three managers – including a quarter of senior leaders – have never received any formal management training.
International comparisons underscore the cost of this gap. Analysis shows that the UK lags behind countries such as the US, Germany and Sweden in management practices – a deficit linked to lower productivity.
Why management skills matter for everyone
Management and leadership skills are consistently identified as high-demand skills in Skills England’s assessment of where the need lies across priority sectors. The benefits of these skills extend across the economy – from advanced manufacturing to health and social care.
But good management is not just about hitting growth targets; it is also about creating good work. CMI research shows that having a supportive manager is the most influential factor in employees feeling valued and included. Effective managers are key to workforce development, staff retention, the adoption of new technologies such as AI, and the coordination of complex supply chains.
Wherever people work together, essential employment skills and good management are the glue that turns technical knowledge into tangible results.
Shared responsibility for action
Employers have a vital role to play, but they cannot close the gap alone. The steep fall in employer-funded training highlights the need for strong public policy. At the same time, businesses are calling out for higher-level skills, especially in management and leadership.
That is why CMI is urging the government to keep core transferable skills front and centre as the Apprenticeship Levy evolves into a broader Growth and Skills Levy. We need a system that allows employers to access high-quality, modular, accredited training – flexible enough to meet immediate business needs and rigorous enough to raise national standards.
A skills agenda for growth
Technical expertise will always be critical to economic progress. But without the essential employability and management skills identified by NFER and embedded in CMI’s Professional Standard, technical skills alone cannot deliver the productivity leap the UK needs.
If we want an economy that is globally competitive, resilient and inclusive, we must invest not only in people’s technical knowledge, but in how they work together to apply that knowledge. It is now time to ensure that core skills are recognised as the bedrock of productivity and good work.
NFER’s final report in the Skills Imperative 2035 programme will be published on Tuesday 25 November.
Read more:
Building core skills for a productive, high-growth economy