Businesses could reclaim £416 million per year by streamlining basic and mandatory staff training and stepping up “high-value” skills development in their workforce instead, new research shows.

An estimated 21m working hours a year are “lost” on training that only enables employees to meet the minimum requirements for their job – costing an estimated £416 million per year, or 11,147 full-time equivalent roles.

Of the 11 sectors analysed by compliance training provider Skillcast, business services topped the list, spending 3.3m hours – or £65.3m – on basic and mandatory training. Hospitality ranked second at 2.8m hours (£55 million), followed by wholesale and retail at 2.6m hours (£51.4m).

In contrast, the primary sector, which includes farming, forestry and mining, loses the fewest hours per year at just over 359,000 (£7m), then transport and storage 506,666 (£10m).

The figures were compiled by Skillcast as part of its Lost Hours Report – a sector-by-sector study examining where mandatory training is eating up working hours, and how they can be reclaimed.

Training on health and safety, or preventing financial crime in financial services, may be non-negotiable – but the report argues that it could be delivered more efficiently without compromising quality and effectiveness. This would free up staff to focus on building “high-value” supervisory, managerial or technical skills that help businesses be more productive, innovative and profitable.

Separate data from the government shows that UK businesses invest more than £50 billion a year in training and development, yet the nation continues to lag behind the US, G7 and EU on productivity.

Vivek Dodd, CEO of Skillcast, said:

“Inefficient training comes with a hefty price tag for businesses, and the UK economy.

“It’s not just the time and money spent on training itself but the missed opportunities to develop employees’ skills in a way that delivers value.

“Essential training doesn’t have to be time-consuming – in fact, it’s often better when it’s not because employees are more likely to engage in it. Targeted sessions, based on an individual’s skills requirements and role, ensure they’re meeting the standard while also giving them back time for building their professional and specialist skills.”

Commenting on the sector disparities, he added:

“Business services, which includes compliance-heavy sectors like accountancy and legal, appeared top of our list, suggesting that the bulk of training time is taken up with mandatory rather than value-added sessions.

“Others, like hospitality, tend to have high staff turnover so there may be less time to go beyond the basics, especially if people are working in potentially risky environments like kitchens. That’s why efficient training is even more important in sectors like these – no business can afford for employees to lose time covering the same ground.”

Skillcast’s researchers also measured the skill gap density across 11 sectors to find out the proportion of employees who are not fully proficient in their role.

The national skills density gap stands at 4%, which means one in 25 UK workers lack the skills to do their job as effectively as possible. Hospitality has the biggest deficit at 6.2%, followed by the public sector at 6%. Information and communications has the smallest shortfall at 2%, then charities at 2.9%

Dodd said that the research uncovered an interesting pattern between mandatory and value-added training:

“As the time spent on mandatory training increases, so too does the proportion of staff who are not considered fully proficient in their role.

“We developed FastTrack, a pre-course assessment, to help employers understand specific compliance training needs within their team. Those who pass undertake a shorter, focused version of the course, while those with gaps are directed to the full course. This ensures organisations stay compliant, redistributing training time skill-specific training and avoiding employee fatigue.”

View the full research in Skillcast’s Lost Hours Report.