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 compared with international competitors such as the United States, Germany, and France. Weak productivity holds back wages, dampens economic growth, and limits the government’s ability to fund vital public services.
The government has recognised the need to boost growth. Its Industrial Strategy identified eight key sectors with high potential, from clean energy to life sciences. More recently, the creation of Skills England signals a renewed effort to develop technical and sector-specific expertise. Experts say these initiatives are important, but they address only part of the problem.
Jules Bennington, senior policy officer at the Chartered Management Institute (CMI), said a dynamic economy relies on a workforce that can adapt, learn, and innovate. Yet employer investment in training has fallen by 28% since 2005, even as demand for employability skills continues to rise. Without decisive action to close these gaps, the UK risks missing its growth ambitions.
New research highlights the importance of essential employment skills, including collaboration, communication, problem-solving, organising, and decision-making. These skills allow technical knowledge to be applied effectively, driving productivity across all sectors. They also form the foundation of strong management.
The CMI Professional Standard for Management and Leadership outlines the behaviours, skills, and competencies required to lead teams, manage change, and drive innovation. Analysis from CMI shows there are 8.4 million managers in the UK—around one in four workers—but most have never received formal training. Research found that 82% were promoted without formal preparation, half hold no management or leadership qualification, and one in three managers, including a quarter of senior leaders, have never received any formal management training.
International comparisons underline the cost of these gaps. The UK lags behind countries such as the US, Germany, and Sweden in management practices, which is closely linked to lower productivity. Strong management benefits all sectors, from advanced manufacturing to health and social care, and is also crucial for employee engagement, retention, and the adoption of new technologies.
Experts say addressing these gaps requires shared responsibility. Employers alone cannot close the skills deficit, especially given the long-term decline in employer-funded training. The CMI is urging the government to ensure that core transferable skills remain central as the Apprenticeship Levy transitions into a broader Growth and Skills Levy. High-quality, flexible, accredited training could help both meet business needs and raise national standards.
Technical expertise remains critical to economic progress. But the essential employability and management skills highlighted by the CMI and the National Foundation for Educational Research (NFER) are key to unlocking productivity gains. Without them, the UK risks falling behind international competitors.
NFER’s final report in the Skills Imperative 2035 programme is set to be published on 25 November, offering further insight into the country’s skills gaps and how they affect economic growth.
