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THE NATIONAL MINIMUM WAGE AND EMPLOYERS' TRAINING DECISIONS
Research report commissioned by the Low Pay Commission >>Back to main index Part 5 - Conclusions It should be remembered that, in both stages of the research, the participants effectively selected themselves. In both the telephone survey and the case study phase of the work, only the views of those employers who were willing to give time to speak to the researchers were obtained. The extent to which these individuals are representative of their sectors cannot be determined with complete certainty. However, in most cases, the views reported here had been expressed by several respondents, either within one sector or across sectors, and so there can be some confidence that the viewpoints and actions depicted are not completely idiosyncratic and are to some extent representative of employers across the three sectors. The main findings of the research are summarised below: Some employers are using training as a pragmatic response to severe recruitment difficulties. This ‘grow your own’ approach was seen (primarily within the retail sector) as the only way to resolve difficulties arising from demographic and educational changes that had seen large-scale reductions in the numbers of younger people willing to work in this sector. In hospitality, it was seen as the way to resolve skills shortages deriving from the greater ability of international hotels to attract qualified staff. Factors encouraging employers to increase training. Where employers had increased training, this was typically seen either as a way to maintain their market position/share against competitors, to improve business or to increase staff flexibility. Only two made any direct link to the impact of the minimum wage. Factors prompting employers to decrease training. Out of the three employers that had cut training, two had done so in response to financial difficulties brought about by introduction of the NMW. Cutbacks in staff arising from NMW. Some hairdressers had been forced to cut the number of trainees/apprentices as a way of coping with NMW. There was evidence too that hairdressers in particular were seeking to recruit younger people as trainees as a direct response to difficulties arising from NMW. Few employers were using the Development Rate for Adult Workers. The few people that had used the Development Rate for Adult Workers reported no problems with using this. However, the great majority had not used the Adult Development Rate, because they had not heard of it. There is a need for some clear and positively-worded information to publicise this wage category to employers. Perceived problems with use of Adult Development Rate.
Research questions The findings reported here indicate the answers to the research questions to be as follows: Is training increased or decreased as compensation for the NMW? There was evidence that employers had both increased and decreased training effort since introduction of the NMW. A minority attributed changes to training effort directly to the NMW: two out of the seventeen that had increased training compared with two out of the three that had decreased training. Mostly though, changes to training provision were not viewed by employers as a direct consequence of the minimum wage, but rather as a response to straitened business circumstances, of which one contributory component was increased wages arising out of introduction of the NMW. Where training had increased it was typically in order to improve productivity or quality of performance, in line with the suggestions of Heyes and Gray (2001). Has the NMW made employers reluctant to employ older workers? There was evidence that, in the hairdressing sector in particular, the impact of the NMW had led employers to seek younger trainees when recruiting. The Development Rate for Adult Workers was not being utilised to any great extent, and there were reservations about the extent to which the Development Rate could be used without exacerbating existing recruitment problems. Have employers changed their mode of training to reduce costs? No employer reported having changed the way in which training was provided in order to cut costs. The main ways in which costs were being reduced were by restricting employee access to external courses and by reducing the numbers of trainees employed. Are different opportunities provided to different groups of employees to gain skills and qualifications? Training towards formal qualifications in the hairdressing sector was mainly restricted to younger people, although there was encouragement for older stylists to work towards higher level qualifications. Where qualifications were offered within the hospitality and retail sectors, these tended to be offered across the board to all, or at least most, staff. There was some limited evidence that certain jobs were perceived as not requiring much training. In these cases, it was the jobs, rather than the people, that were seen as not requiring any particular skill development, and it was this, rather than the people undertaking the role, that made employers disinclined to train the incumbents. However, in these cases employers also believed (probably correctly) that some employees prefer jobs that do not require them to undergo any training. Is there an association between recruitment, retention and training? There was no association between reported recruitment difficulties and increased training. However, there was a statistical association between rates of staff turnover and training. Given that in some cases employers reported that training had been introduced as a response to turnover difficulties, this indicates that turnover had caused employers to increase training, rather than vice versa. | |
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