As economic analysts and commentators poured over the recent Spring Budget, there was one number that they would have missed. That figure is £28.9billion[1] and it represents the cost to the UK economy of low numeracy. At a time when economic performance is under scrutiny, the £28.9billion speaks to the very real challenge facing the wider economy. As employers and individuals struggle with finding the right balance of skills, what part does numeracy play in building the foundations for an economic revival?
If numbers matter, then numeracy matters more.
In an address to the London Screen Academy last April, the Prime Minister, The Rt. Hon Rishi Sunak MP, stressed the importance of improving maths attainment amongst young adults. The context of the speech was economic growth and listening to the needs of employers and industry. While this is a welcome step, it is important that the distinction between maths and numeracy is understood, and the focus is applied to the right area.
If maths is the knowledge that deals with shapes, patterns and numbers, then numeracy is the understanding of how maths is used in the real world. More importantly, numeracy develops real-world analytical thinking and reasoning, problem-solving and critical judgement. It is these functional skills that can prove transformative and why employers are crying out for candidates who possess them.
With an estimated 8 million [2] adults having numeracy skills below those expected of a 9-year-old, there is an untapped talent pool that is available to employers with a minimal investment in numeracy skills. These skills, however, not only have to be taught, but they also need to be developed, practised and honed so that candidates and employers alike are in lockstep.
Plugging the £28.9billion hole
While the spotlight of the budget was undoubtedly the £ 20 billion in personal tax cuts, the Chancellor also announced a Public Sector Productivity Plan. The proposal suggests a 5% increase in productivity in the public sector would equate to £20 billion in extra funding. Setting the figures to one side, driving greater productivity has been a watchword for successive governments. This is true of both the public sector and private sector. How best that is accomplished remains an ongoing debate, yet the importance and impact of numeracy skills have not truly been embraced or realised.
We Brits work amongst some of the longest hours in Europe and yet productivity remains behind some of our European neighbours. Working longer is not the answer. Productivity is as much about ingenuity as it is effort. Working smarter rather than just working harder or for longer is the way forward but that requires two critical things – confidence and functional skills. Numeracy delivers both in equal measure. For employers and individuals alike, mastering these skills and capabilities is an investment that brings both short-term benefits and longer-term career and growth opportunities.
The View from Employers
Research by the Skills Builder Partnership suggests that 28% of UK workers have low numeracy, which costs those individuals on average £1,952. Projected across the broader population, this equates to a cost to the UK of £28.9bn a year (with 95% confidence intervals at £3.9bn and £55.7bn). This is the figure that Governments of all persuasions need to focus on, as there is a relatively easy path to improve an individual’s earning potential whilst directly contributing to the overall economic revival.
Equally, for employers, the £28.9billion figure represents not just an untapped labour market but a talent that can be developed, nurtured and honed in a way that supports their commercial and business needs. Indeed, an ongoing frustration for many employers is the lack of practical skills that potential candidates possess or demonstrate during the hiring process.
This was established in a comprehensive study by the Education and Training Foundation in 2015[3]. The report, the first major study of employers' views on non-GCSE qualifications in maths and English, found that employers want their new recruits to have strong practical and applied skills in maths and English and they value skills over qualifications.
Employers do, however, value qualifications as proxies for the skills they require. This is an important point because it means that a successful vocational qualification must not only give students the skills that employers want and need but also clearly and reliably signal that it does so.
Critically, the study found that when employers encounter deficiencies in maths and English, around a third use in-house mentoring, external courses, in-house training and make use of e-learning materials.
Subsequent studies, both in the UK and abroad, reinforce the importance and value that employers attach to functional and soft skills. A 2023 survey[4] found that a shift in the demand for workplace skills as employers looked for candidates that could demonstrate a range of soft skills. Problem-solving was rated the second most important skill employers valued.
A study by the University of Birmingham[5] on workplace perspectives on skills surveyed both employers and employees, to understand specific skills and skills investment challenges employers face. It found that, in terms of timeframes for skills planning, employers face a balancing act of ensuring practical skills are in place for the ‘here and now’ to deal with ‘business as usual’ operations while also looking ahead to the skills needed for future business development and success. Smaller companies tend to take a more reactive short-term approach to skills development issues whereas larger firms often adopt a mix of long-term and short-term approaches to skills planning. This is partly influenced by the nature of the company's work, for example, if it is multi-locational and project-based.
Confidence and Numeracy – the thread that binds Functional Skills and Productivity
While academic and work surveys all point to the importance of functional skills and the value employers attach to them, how individuals can develop those skills is less clear. The further education system can prepare individuals for the workplace but it is the choice of subject that can impact how these functional skills are developed.
Unlike other skills, numeracy is a foundational skill set and a gateway to other skills and abilities. Numeracy develops a range of skills, such as analytical thinking and reasoning, problem-solving and critical judgement. Crucially, it also develops confidence which is essential in the workplace.
Organisations often talk about empowerment and responsibility, taking ownership, stepping up and such like. All these traits rest upon the ability and capability of the individual employee. Fundamentally, that begins and ends with confidence, confidence in themselves, their knowledge and skill set. Confidence drives personal and professional development but more than that, it opens up many more avenues and options for individuals and organisations alike.
Numeracy is both a foundational as well as a gateway skillset that underpins many of the asks and requirements employers have of their employees. For further education colleges and employers alike, an investment in a numeracy course represents a far greater return on the investment, as it links to and impacts personal productivity and output. That in turn contributes to and drives company performance and profitability.
How Investing a little now can tap into the £29billion opportunity
Set aside the fact that we are in an election year; the Spring Budget should provide a springboard to kick-start economic recovery. As studies have shown, there is an untapped talent pool that, with the right investment, can provide the necessary skills employers are crying out for.
As demands for increasing the national minimum wage continue, a simple investment in numeracy can deliver a £1,952 increase in an individual’s earning capacity. Indeed, an effective numeracy programme, whether that is run by a further education college or an employer, can not only address the wage premium, it can produce talented individuals and employees who are equipped with the functional skills that companies now demand. Indeed, learning and development professionals are now focused on finding solutions that address and impact performance.
Numeracy is unique in that it is a foundational and gateway skill that delivers so much more than a simple understanding of how to use numbers. It lays the bedrock for analytical thinking, critical thinking as well as judgement and reasoning. Moreover, it builds confidence in individuals and employees that can permeate throughout the organisation. Numeracy is a life skill that is the real springboard for economic revival, a springboard that is worth £28.9billion.
To learn more about the issues raised in this article, or to share your thoughts, please contact us at: info@numeracyforlife.com
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