It’s clear there are obvious benefits for society at large from investing in better education. But there are also explicit benefits to businesses, highlighting the need for education to be on their radars.

Fundamentally, your organisation depends on well-educated, talented individuals to operate and thrive. A strong and healthy skilled workforce creates a pool of talent for you to access when looking for people to support your business aims.

Studies have highlighted the importance of education in enabling business – and particularly SME – growth. According to the OECD, despite the need for SMEs to maintain and expand their access to talent, this can come in short supply – particularly when it comes to digital skills. Many SMEs rank finding employees with the right skills as one of their biggest concerns. Despite this, recent years have seen employers continue to underinvest in education and underutilise technology that could help with learning, despite the continuing skills gap.

Human capital

Small and medium-size businesses constitute a large part of the economy, and through their activities are actually responsible for a significant degree of education for a sizeable proportion of the workforce. Indeed, such firms have been described as an “untapped force for global education”.

There are direct benefits to an organisation from taking education and training seriously. Investing in human capital will result in increased productivity, motivation and efficiency, but it can also increase the loyalty of employees, and firms that invest in training their staff will also look more attractive to future employees.

It’s also important to note that investing in training and education is a very direct way you can have a tangible impact in the communities in which you operate. This will make a real difference, and it also demonstrates your social commitments to investors that are increasingly focused on ESG.

How can you help?

There are plenty of opportunities and schemes available to help with investing in human capital to help power your business. Options include apprenticeships, tutoring, job shadowing, career mentoring, supporting educational establishments and advocating for effective educational policy.

Certain organisations also make non-profit investments in education in developed and emerging markets – this allows a business to live its values and also results in social gains in the communities targeted. Such activities could in turn benefit businesses themselves down the line by increasing the odds of breakthroughs in technology and R&D, for example, while also empowering individuals and reducing poverty – something that is inherently good for businesses generally. Studies have indicated that $1 invested in education returns $53 in value to an employer when an individual begins working.

There is also a significant opportunity for SMEs specifically to engage in the youth labour market.

What’s available?

As the OCED states, for smaller organisations there can be higher direct and indirect costs when it comes to training the workforce. Governments have attempted to provide support to address this, for example through financial incentives including grants and subsidies. There is room for more take up here – around four fifths of employers in the UK did not seek information or support for skills and training in 2020.

Alongside looking for corporate training providers, in the UK a number of grants and loans are available to help small businesses with training staff.

Funding is also available for apprenticeships, which can help with team expansion and add new skills into a business. The Supplier Skills Programme provides grants of up to £18,000 for businesses in certain areas of the UK to upskill existing and new employees. Elsewhere, the Kickstart Scheme provides funding to create jobs for 16- to 24-year-olds who are at risk of long-term unemployment. In Wales, the ReAct programme is focused on supporting businesses in recruiting individuals who have been made redundant.

You could also look at whether there are local business training networks to join, enabling a pooling of resources to address common skills requirements.

Finally, the OECD also highlights that attitudes within an organisation are crucial when it comes to education, and so investing in competencies like coaching, mentoring and peer learning for managers and entrepreneurs to enable an adequate understanding of the importance of human capital and the need to invest in it is a key measure to undertake.

Indeed, this can help realise the benefits of investing in people and skills, and to enable “managing human capital as wisely as financial capital.”