Mid-sized companies need to plan for future talent
The UK’s new apprenticeship levy came into effect in April 2017, creating opportunities for thousands of young people. The levy was introduced to help meet the government’s promise of three million new apprentices by 2020. The levy (0.5 per cent of the pay bill) applies to employers in England who have an annual pay bill of more than £3million. All employers will receive a £15,000 annual allowance towards this.
A report from Universities UK earlier this year is predicting a significant increase in the number of students choosing degree apprenticeships, allowing students to continue living in the family home and getting their fees paid. While students seem to be embracing the idea, it’s clear that an attitude shift is vital in some sectors for real, meaningful change to take place.
In the AIB (GB) Steps to Growth research, 60 percent of companies do not run any graduate, intern or apprenticeship schemes, with the notable exception of hotels and leisure (where 64 per cent run an over-sixmonth scheme). Jill Whittaker is MD at HIT Training, which provides apprenticeships to the hospitality industry. She says, “In the hospitality sector, which is the UK’s fourth largest employer and has grown quicker than any other sector since the 2008 recession, apprenticeships are becoming the norm and are providing many development opportunities for people to enter this fast-moving industry.”
Positive Outcomes research shows that 77 per cent of apprentices are offered full-time employment with their apprenticeship employer, and one in three receive a promotion within a year of completing their training. Whittaker says, “The government led changes provide employers with greater control and improve the overall quality of the training. Apprenticeship structures, now referred to as standards, have greater flexibility for both employers and learners, and instead of multiple assessments, apprentices will work towards one end exam that is independently assessed. Each qualification is also linked to different educational levels, starting at intermediate level 2 right the way through to degree level equivalent.”
Ann Watson, chief executive of Semta, the engineering skills body, agrees that the apprenticeship levy brings new opportunities for organisations. She says: “We are seeing larger corporates completely rethinking apprenticeships to make the most of the levy. As well as introducing new recruits, employers can maximise their levy return by upskilling existing employees and linking to a full training needs analysis of the organisation.” Moreover, she adds, “There is no longer any age limit on funded apprenticeships.”
Research from the Industry Apprentice Council shows that 98 per cent of engineering apprentices are happy in their jobs – citing good pay and no debt, fulfilling work, qualifications and career progression. The research was carried out with 1200 apprentices, made up of apprentices from the advanced manufacturing and engineering sector and supported by national engineering skills body Semta.
John Coombes is an IAC member and toolmaker at Ford Motor Company Ltd. He says: “Governments have created what must be the world’s best career route for young people – where else would we get 98 per cent saying they are happy with their career choice?”
Superior is a manufacturer of high-integrity O-rings and seals. The company has its own academy programme, offering apprenticeships to students as young as 16, through to graduates. Back in 2009 the company recognised an ageing workforce and increasing skills shortage in engineering and material science in the local area, and decided to invest in offering an apprenticeship programme in order to remain competitive in the industry. Owner Tim Brown says, “I knew I had to create a platform for a secure and sustainable business. If a business is not growing, it is impossible to re-invest. We use the business growth to fuel and fund in our investment programmes. The academy’s goal is to provide a succession and talent pipeline to ensure skills are not lost. Investment into the future of the academy demonstrates that we have a strategy for the future.”
And it’s paying off. The company relies on highly skilled, trained scientists to formulate rubber compounds. Twenty-six-year-old Callum Shaw, former engineering apprentice, used knowledge and practical experience from his degree apprenticeship to implement the company’s first ever robot in 2016. Superior now has eight installed, resulting in a reduction in cycle time of 25 per cent, in downtime of 15 per cent, and in rejects of 10 per cent. Another of the company’s apprentices increased portfolio spend by 6 per cent (in 2016), and has already increased this further by 10 per cent in 2017.
Despite these benefits, in the IAC report careers advice was highly criticised by the apprentices. Only 22 per cent received good or very good advice from schools, with 5 per cent receiving no advice and nearly 40 per cent saying their advice was bad or very bad.
Philippa Dressler-Pearson, IAC member and advanced technical engineering apprentice at Southco Manufacturing Ltd, Worcester, says: “There’s a massive skills shortage of engineers and technical staff in the UK, but you don’t hear anything about this in schools. Teachers don’t have enough information about apprenticeships, why they are important and what they offer.” Ann Watson agrees: “We need all the engineers we can get, yet the apprenticeship route is not understood or promoted in schools. We need nearly two million more engineers and technical staff by 2025.”