Construction and leisure companies spend the least on training, according to a study of 600 small and medium sized businesses carried out by City & Guilds.

And up to 8% of respondents in the construction industry admitted that they do not spend a single penny on training.

Chris Humphries, director general of City & Guilds, said: “The UK cannot expect to compete with China, India or Eastern Europe as just another low skill, low value-added player. It needs to use its advanced knowledge and innovation to escalate rapidly to a highly skilled, high value-added economy.”

City & Guilds believes that better training would reduce recruitment and labour turnover costs by retaining the knowledge and experience of staff who are already familiar with the networks, culture, behavioural and ethical standards of the organisation.

It recommends that employers conduct regular audits in order to identify skills gaps in their business and employee base to help prioritise training needs.