MUCH OF the training for work currently funded by the state is inappropriate and could even prove damaging to profits and the success of business, according to a new study by a leading government adviser.

The Government’s skills strategy, which gives priority to training demanded by employers, is based on two popular myths, says Professor David Ashton, head of the Centre for Labour Market Studies at the University of Leicester. The first myth is that training is always good and that the more people who do it, the better it is for the economy. Ministers see themselves in the role of St George slaying the skills shortage dragon in the workplace. The second myth is that small firms offer less training for skills than big companies.

Such beliefs drive employer demands for formal training courses they think will meet their needs, he says. Ministers also see such courses as essential to provide the qualifications the Government says workers must have if they are to improve their career prospects.

Following a detailed analysis of more than 15 years of labour market research into work training in the UK, Australia and Japan, Professor Ashton concludes that there has to be a radically different approach to support for training.

While small firms offer fewer formal training opportunities than big companies, their informal training is often “more appropriate and relevant”, he says, but firms are forced to change their approach because formal training is “easier to capture and measure”.

Big firms tend to have more formal training structures - including release for college courses - because senior managers have limited personal contact with their workforce and less time for informal attention to skills training.

The research reveals two distinct types of small company, each demanding different approaches to training. First, there are those at the cutting edge of new developments - information technology, biotechnology and advanced engineering - that require high-level and rapidly changing skills.

Then there are businesses in the service sector, driven by financial considerations. These may find themselves at a disadvantage if they invest in training because the cost makes them uncompetitive.

Professor Ashton said: “These companies providing low-cost goods and services in industries such as food processing, call centres, fast food and cleaning represent a substantial proportion of jobs in the expanding service sector.”

If training is to be of benefit to these businesses, the Government must persuade employers to take a different approach. The firms must be encouraged to develop the skills of workers and help them expand the business into new markets.

In a briefing paper for the Scottish government - currently carrying out a training strategy review similar to the Leitch review of skills for England - Professor Ashton cites the example of Bacardi-Martini, the drinks company. It trained staff for deeper involvement in the business, nurturing their skills to develop new products and create a very successful market niche.

He also advises strongly against assuming that formal training is always superior. He said: “You can have very poor training delivered through formal courses in large firms and very good training delivered on a one-to-one basis in micro firms and vice versa.”

Logically, small companies will never have the capacity for full formal training, he argues. Across the countries studied, there was a consistent pattern to training. Only 7 per cent of companies employing fewer than 10 staff had supervisors equipped to train the workforce, whereas in firms with 100 or more workers, over 70 per cent had such supervisors.

Fewer than one in five small businesses employed anyone to design and teach courses, whereas almost eight out of 10 large ones did so. Hence, learning becomes synonymous with attendance at formal courses or, increasingly, with e-learning as a separate activity.

“This then reinforces the tendency among policymakers and academics, who also work in large organisations, to see learning and training as a separate activity that is subject to formal evaluation, certified by qualifications,” Professor Ashton said.

The need for qualifications is crucial to workers wanting opportunities in the wider labour market, he said, suggesting that the Government is on the right path.

“Here, the new Train to Gain programme is a step in the right direction because it tailors training to the specific requirements of employers, through the use of brokers, while providing low-skilled employees with the opportunity of certified training. We must remain clear that, just because the skills are certified does not mean they are of a higher level,” he said.

He added that the way forward is not to force formal training regimes on small companies but to improve the informal training already in place.

“Instead of trying to force formal training on micro and small firms, for which it is often impractical, we could start to identify which type of training is appropriate for which type of organisation,” he said.