The Unofficial British Royal Family Pages

The Duke of York makes a speech at the Jeddah economic forum
Investing in people: A UK perspective

Ladies and gentlemen, good morning. I congratulate the organisers of this year's Jeddah Economic Forum on organising this important event, and on their initiative in selecting such an important theme for business throughout the world - that of capacity building and human resources development.

Whilst I am grateful for the opportunity to say a few words on this important theme this morning to a distinguished audience with such varying interests. You have challenged me to talk about the importance of investing in people, and of developing a strong skills base to support future economic growth. I was a Royal Navy officer for 22 years and have now moved away from the cloistered environment of an employer who continuously develops its people and whose mantra was that the "Man was the single most important thing" to a life where growth, productivity and profit are the mantras most often heard.

Whilst I am the personal beneficiary of what I can only describe as the best example of investment in people I know. I will also be drawing on some other successful UK commercial models, showing how employers in the UK have responded to important market and business changes as well as social pressures and changing expectations. In recent years we have been engaging people from a broader background in the workplace, and thereby fulfilling more potential from our national human resources.

The biggest economic challenge for every country is to maintain its position and prosperity in an increasingly competitive global marketplace.

Governments work hard to create the best environment for business success in their country, to maintain their competitive advantage and to provide prosperity for all their citizens. Creating a highly skilled and inclusive workforce able to compete in the global economy is a key factor in ensuring the success of any economic policy.
All governments face difficult choices:
. how to introduce new skills for the developing economy;
. how to adapt to different national and international demands on business practices and the workforce;
and
. how to lay strong foundations for future prosperity.

The UK is no exception to these trends: a myriad of policies are in place to help companies and individuals become more productive by promoting an inspired and motivated workforce. And, in our case, in an increasingly knowledge-based economy, there is recognition that the skills of the employees will be of growing importance to business productivity and profitability, and that the skills required are constantly changing.

Regardless of the size, type of organisation or industry sector; people are an organisation's most valuable asset, as I have already said of the Royal Navy. For an organisation to succeed, and to remain competitive, it must nurture its people and harness the skills of each and every one of its staff. Just as a lack of finance can restrict investment in a company's infrastructure, so a lack of skills can put a brake on opportunities to grow into new markets, or expand within existing ones. Developing and training staff help an organisation improve performance, differentiate itself from its competitors, and realise its objectives.

To succeed, leaders, managers and workforces need the skills that:-
. match or exceed market pressures,
. enable businesses to implement new technologies
. innovate;
and
. ultimately improve business performance.

Companies recognised for their leading position on staff development, such as HSBC or Shell and in my personal case the Royal Navy. They put decisions about investing in their workforce at the heart of their business strategy. As employers, they keep abreast of the latest developments, to help them make informed decisions about training employees and developing their businesses. Best practice is to ensure that training and development is properly targeted, that it has a defined set of objectives, that it is measurable and that it is put in the context of improving service to customers.

Some of the UK companies recognised as being among the most modern, forward-thinking companies often have very novel and innovative approaches to the challenge of staff development. For example, the company which came out top of this year's annual London Times survey of the best companies to work for, the Scottish-based company W L Gore (which makes Goretex water-resistant fabric), enjoys an 85% approval rating from its workforce. I visited them last year and it was made very clear to me that employees understand the value which training can have for them personally and professionally. For example progression within the company is decided by an individual's peers: there are no managers as you would understand them. Staff feel that they are properly judged on their worth to the company and their colleagues. The benefits package and access to training is the same, no matter what your job is.

Now not all companies are as innovative as W L Gore, research in the UK shows that there is much work to be done in investing in people. While 75% of senior managers believe effective staff development is vital or important to future productivity, only 30% actually put this at the top of their list when faced with competing priorities, such as new technology, knowledge of competitors and research or development. This suggests that commitment to staff, despite being recognised as a fundamental route to improving productivity, is often diluted in the face of day-to-day priorities and investment choices. In all these cases the knowledge that there is a discrepancy is helping them to make staff development a priority.

There are often other obstacles to companies successfully developing their staff. Companies are reliant on the education system to provide them with the right "raw material" in terms of staff resource. Governments can set priorities, aims and objectives but they have to be done with a time frame of what is going to be required in 25years time rather than in the immediate next few years. Government can tackle skills shortages through listening to employers and investing in the education infrastructure to deliver those skills in the near term.

By the same token employers need to have a mechanism to relay their needs and concerns to government. In the most successful cases, government, business and the education sector working closely together will produce a workforce ready and suited for current and future business needs, be it intellectual or industrial. This holistic approach is essential. Apprentice and skills education must, above all else, be rooted in current industrial practice and needs. These can be modified or changed with much greater ease than changing the longer term priorities. We all need the people with the right skills at all levels of the workforce. The trick is to invent a system that is able to respond swiftly to changing priorities. It is a big challenge: but one with huge rewards, giving people skills to meet the demands of a global economy.

It is not just for governments to stay ahead of the game, continued improvement requires sustained effort by the team of Government, business and education. Where there is insufficient grasp of key skills among young people, employers are left unable, or struggling, to fill a void. Inevitably, in the UK for example, where we have an immensely strong and stable economy; productivity still suffers from some imbalances in the skills available and needed in a number of key areas. This does not just apply to technical skills, but also to management.

It is interesting to look at how bench-marking, best practice and greater experience in skills development in one country can be used to help develop and deliver a robust system in another, even when market and social conditions are markedly different. I know that the Saudi Government recognises the need to create a deeper and wider skills pool. It is devoting considerable resources to developing a skills and vocational training system that meets the needs of the nation, students and employers; and which will help support future economic development.

Of course I would say that I am pleased that the UK has considerable experience in this field, and is helping in this process. There is active co-operation between Britain and the Kingdom to provide for Saudi qualifications which meet international standards and gain international recognition. Two leading UK educational standards, examination and award qualifying bodies are working with the General Organisation for Technical Education and Vocational Training (GOTEVOT) to this end. This will add value to the awards gained by students by there being tradable internationally: they will be quality controlled, thoroughly assessed and respected by global employers.

Probably the most important challenge for business is the management of change. The relentlessness of this change, the constant need to keep people motivated and also to maintain the skills to deliver evolving business strategies in order to meet changing customer demand and to work in new industries is the current dilemma that business faces today. The UK, like many other post-industrial countries has had to re-invent itself in recent years, moving away from traditional core industries. Challenges abound in business and one such challenge is to adapt to the changing labour market. This is where a well-developed, responsive and high quality skills and vocational education and training system truly comes into its own.

The UK has also witnessed rapid social change in recent years. Many people sadly face uncertain futures and new challenges, as the economy and industrial base changes. Tackling these dilemmas has required a shift in thinking about the ways we work, and introduced the need to replace old skills with new ones, as old industries have closed.

The impact of one of these social changes on the workplace has been pretty revolutionary. Over the past decade, the number of women in employment in the UK has grown exponentially, and women now make up more than half the workforce. The average age of the workforce is rising too: in just seven years only a third of the workforce in the UK will be male and under 45. For business, the lesson is clear. Companies need to accommodate the impact of such major social shifts; and the failure to use the workforce to its full potential will be damaging to business.

As the social environment has altered dramatically, so has the relationship between work and family life. The world of work is constantly catching up with changes of expectation and lifestyle. Many more people now work part-time. Others work for a number of different employers at the same time. The concept of one job for life is now defunct, except in the case of my family. Against this background, employers have had to work hard to find ways to allow staff to work in a sensible way to balance their commitments to suit their own particular circumstances. The benefits of doing so are generally recognised: family-friendly policies are considered to be business-friendly as well.

Diversity and equality is about more than simply complying with the law in the UK. You do it because you think it is a good idea. If a business does not employ a diverse workforce, it can miss out on valuable skills and experiences. A recent trend in the UK has seen many companies successfully introduce flexible working practices: almost 10 million UK workers now benefit from one or more flexible working initiatives.

These benefit the employees enormously, deliver tangible business benefits by helping the company stay ahead of the competition, as well as helping to unlock the true potential of the wider workforce and to bring different skills into play. 75% of employers say the introduction of family-friendly, flexible policies are often free or of negligible cost. Most consider these practices to have been cost-beneficial for their business. And, in a competitive labour market, a company's positive attitude towards personnel requirements can pay real dividends. Staff retention is another important benefit seen by many companies such as the banks offering flexible working. In the UK, employees are increasingly saying that the scope to work flexibly is as important as salary when making important career decisions. Employers are increasingly using flexible working to target recruitment at key demographic groups.

Creating growth and profitability while developing a more flexible, loyal and motivated workforce is good for any business. To give an example, a recent survey by the UK phone company British Telecom has found that its employees working from home can be up to 15-30% more productive than their office-based counterparts. There are some useful parallels to be drawn from this experience for those in societies with different attitudes towards working practices, such as including women in the traditional workplace. There are a growing number of organisations helping women to enter work, both here in the Arab world but also in the UK. The fact that such participation can deliver economic advantages is a bonus to providing greater economic participation for a key part of the nation.

Whilst I am here I am taking the opportunity to visit a number of local companies and organisations. BUPA, the UK health insurance company, is an example of how women have been integrated into the company structure in a culturally sensitive and business friendly way. The College of Business Administration, featured a mixed group of young people, eager to discuss how young people in the UK are equipped to take on the challenges that lie ahead.

To succeed in a challenging and competitive environment, these young Saudis, like their UK counterparts, will need to be personally motivated, have a commitment to their professional choices be innovative and above all creative. Once in the workplace and doing a real job they in turn will have a vital role in developing their future new colleagues in the workforce. The development into managers of quality, which is needed in any country to get the best out of people, is a progression not a right.

The partnership between government and people is important in this process of economic and staff development; as well as between business and education. Partnerships between countries will also be important in this process: there is scope for us all to learn from best practice elsewhere in the world. I am heartened that the UK is a key partner in this and I know that our diplomatic and British Council teams across the Kingdom and globe will continue to build on this as we seek to work together in mutual respect.

Governments can only provide a framework for the investment in people that is fundamental to business. The need for government to provide the opportunity in excellence in learning and skills is probably the single best investment we can make for the future. Employers should then provide opportunities for their employees to grow and develop, as they are more likely to see their business grow and develop. Investing in people is truly a worthwhile investment.