In Fall 1992, 400 telephone interviews established levels of basic skills difficulties among the work force as encountered or perceived by employers in the United Kingdom. Costs to employers of poor basic skills and the effect of these on their operation were quantified and described. Respondents were mainly personnel/training managers or officers. Findings indicated respondents believed poor basic skills affected how well all levels of staff undertook their duties. Only a minority had a formal policy that addressed the issue of basic skills among employees; 39 percent offered basic skills training. Reasons for not offering training focused on a belief that staff had adequate basic skills for their jobs and further training was unnecessary. Little assessment was made at time of recruitment or interview. Although most respondents did not perceive that basic skills problems among staff had an effect on their own organizations, they agreed that poor basic skills contributed to reduced efficiency, poor image among customers, inability of the work force to adapt quickly to changes in technological processes, and higher costs. Many had difficulty giving specific figures relating to the actual costs of basic skills problems among staff. Industry cost estimates were calculated at 4.8 billion pounds. Despite survey findings that demonstrated basic skills difficulties at all staff levels resulting in additional costs for companies, companies were unlikely to view poor basic skills as contributing to financial losses. (YLB)