European businesses slash training spend, despite global skills shortage, according to Accenture


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Almost nine out of 10 European employers have cut or frozen spending on skills and training in the last 12 months despite a continued concern over skills shortages, according to report from consultancy Accenture commissioned by the Federation of Enterprises in Belgium (FEB) for the European Business Summit 2012.

The survey of 500 senior decision makers from European businesses, government agencies and civil society organizations reveals 18% of companies and bodies plan to increase spending on skills and training over the next 12 months. But 43% face at least moderate skills shortages and 72% of respondents say Europe's businesses, policy makers and civil society organisations need to increase investment in this area.

Mark Spelman, managing director, strategy at Accenture, said: "There's a double paradox in that European businesses are cutting back on skills development at the very time when they should invest more; and skills shortages are persisting in spite of a very large pool of unused talent here and across the world. Employers recognize the need for counter-cyclical investment in Europe's human capital, but are struggling to find solutions. Getting Europe's skills markets to work better would unlock new enterprise, economic growth and job creation."

According to Accenture's analysis in the report, if Europe's annual GDP growth rate was 0.5% (more than the zero growth forecast by the European Commission for the EU in 2012), it would take until 2019 for Europe to restore employment levels last seen in 2008.

It would require 2% annual GDP growth to reach pre-crisis levels of employment by 2014.

The Accenture report found employers are not sufficiently exploiting the available skills of many of Europe's 25 million unemployed people or the additional 15 million who would like to work but who have withdrawn from the labor force owing to a lack of opportunity (including older people, mothers and youths). The report claims that employers tend to treat these very different groups as a largely homogeneous group and are therefore failing to recognize or address the variety of skills challenges. For example, 67% of decision makers surveyed think that employers undervalue the skills of older age groups.

While 47% of organisations surveyed admit they utilize the skills available within their country to a great or significant extent, this figure falls to 28% for those exploiting the wider European labor market. Cross border mobility is not the only problem. Many employers struggle to lower their own internal barriers and do not effectively measure or track skills within their own organizations.

While almost two thirds of respondents agree that Europe's skills challenges can only be solved through collaborative solutions between multiple stakeholders, only 29 percent collaborate with other organizations in their sector and just 18 percent with those in other sectors.

Rudi Thomaes, chief executive officer of the Federation of Enterprises in Belgium, said: "Europe may have been facing constraints on financial capital, but it does not need to face a similar constraint on human capital. Europe can improve the value, liquidity and the efficient allocation of its human capital if it takes urgent action that centers on collaboration between all sectors and players."

The need for all sectors of business, education and government to work together is reinforced by the fact that 63% of surveyed decision-makers say that Europe needs to recognize that skills challenges will be solved only through system-wide collaborative solutions. Fifty five percent of businesses believe that they need to take a key leadership role in convening multi-sector skills initiatives.

The survey was conducted by Accenture in February 2012. It gathered responses from 500 senior decision makers from business, government/public sector and civil society.

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