Why cutting training budgets is holding Welsh employers back 

A recent article by People Management highlights that training investment from UK employers has fallen to its lowest point in more than a decade.  
 
According to the latest Employer Skills Survey by the Department of Education, total employer training expenditure dropped by around £6 billion between 2022 and 2024 - a 10 per cent decline. What’s more, average training days per employee are at their lowest since records began. 
 
These figures are concerning. As businesses navigate an increasingly competitive economy and complex landscape, the skillset of our staff remains one of our greatest assets. Employers who cut training budgets risk weakening their staff retention rates, stalling productivity and falling behind when it comes to adaption of new technologies.  

Investment in training is no longer a ‘nice to have’, it’s what can set a business up for success. Workplace skills are the engine of creativity and innovation. As CIPD’s recent Skills Development factsheet mentions, the skills businesses help employees develop underpin both individual and organisational success.  

Rather than being a cost to be factored in, effective learning and development is an investment that contributes to increased productivity and performance, engagement and retention, as well as a nurturing of skills that ensure employees are equipped with the knowledge and adaptability to navigate the many changes of the modern working environment.    

In the factsheet, the CIPD emphasises that organisations should understand current and future business needs before designing skills strategies, this helps align training with long-term goals not just immediate tasks. This ensures they get the most from their training investment.   

One of the most effective ways employers can build skills is through work-based learning, which seamlessly integrates learning into the flow of work. Apprenticeships allow employees to develop real, actionable skills while contributing to business outcomes.  

For Welsh employers, there’s a significant opportunity many do not realise - work-based qualifications can be fully funded through the Welsh Government, helping remove direct training costs for employers. There are also a wide range of funding pots available to businesses looking to train their staff in anything from basic digital skills to green qualifications.  

In addition, businesses that employ apprentices under the age of 25 may benefit from National Insurance relief, meaning they do not pay employer NI contributions on qualifying earnings for those apprentices.   

Combined, this funding and tax relief removes one of the most frequently cited barriers to recruitment – cost. This leaves employers free to prioritise focus on the progression of their workforce, not only improving performance but enhancing their reputation as employers of choice in a difficult labour market.  

Organisations prioritising learning tend to build stronger leadership capability, with managers better equipped with the interpersonal, strategic and communication skills needed to lead a successful team. Continuous upskilling also helps businesses stay competitive, encouraging fresh thinking and the adoption of new technologies that drive productivity and growth.  

If you’re looking ahead to your training budget and unsure how you can maximise its impact within your organisation, ACT can help. ACT works with employers to find the qualifications that fit your workforce.