In some areas, there’s an almighty battle raging between large manufacturers and SMEs to secure good apprentices. Even with easier funding, smaller producers complain they can’t compete.
Despite more attention and funding from government than ever, all is not well in the world of apprenticeship. Industry leaders like BAE, Airbus and Rolls-Royce may celebrate the enthusiasm and achievements of their own intake, but a poll by IMechE reveals that 40% of manufacturers say apprentices, graduates and new recruits don’t have the work ethic to succeed in industry. The Manufacturing Advisory Service’s Rachel Eade says the drop-out rate of apprentices is one of the biggest problems faced by SMEs.
Take Brandauer. This West Midlands-based contract manufacturer of precision presswork and stampings has celebrated its 150th year. This is a good SME, employing 50-plus, whose success is founded on fostering and maintaining skills. Yet last year it reluctantly suspended its apprenticeship programmes.
It did it with open eyes, knowing it could stall the hard work already put in to reduce its average age from 57 to below its current 49. It still values apprenticeship; director Rowan Crozier says he is only too aware of the need to develop advanced skills to gradually take over from the experienced people at the upper end of the age range.
So what happened? Basically, bigger employers in the region kept poaching its apprentices. “Our policy is two new apprentices every year, generally in technical or quality areas,” explains Crozier. “But in consecutive years we lost newly qualified ones. The nail in the coffin came when we took on a guy from a pool of those who didn’t quite make Jaguar Land Rover intake.” JLR created a secondary stream of good candidates available to local SMEs via an assessment centre. Within four weeks, JLR decided to widen its intake beyond the initial cadre and he went back to them.
“He had come and gone before his first scheduled meeting with the MD,” explodes Crozier. “At that point, we thought this just isn’t working. We’ve got retention and recruitment issues, and we need to take a hard look to make sure our scheme works for both the apprentices and for us.”
Brandauer had lost others, although not in quite so brutal a fashion: “People had gone through our apprenticeship scheme and been sponsored through a degree, then left immediately they’d qualified. They went off to a bigger employer, too.” Crozier admits it was expensive, but what really infuriates him is losing part of Brandauer’s platform for future growth.
He hasn’t given up. Brandauer will restart both its apprenticeship programme and its university sponsorship in September, this time with more confidence of success. More later of what will be different this time round.
Many SMEs have real concerns about their ability to match what’s on offer from the household names in engineering. Some privately admit to feeling incredibly bitter about what they see as an insuperable handicap. So let’s look at this perceived disparity: is Goliath really giving David such a tough time or, in fact, can David fight just as convincingly as the big chap?
First of all, SMEs often complain that they just don’t have the resources, facilities or plain clout to compete with the OEMs. Big companies often have apprentice programmes custom-built for the demands of their own business, whereas they just have to make do with general programmes from local training centres.
Elizabeth Bonfield of EAL, however, hotly denies that this leaves SME apprentices with second-best qualifications or employers with something that doesn’t fit their needs. As the specialist awarding organisation for the engineering, manufacturing and building services sectors, about 80% of engineering qualifications come through EAL. “We measure every single apprentice against a national standard. Many employers, small and large, add extra elements – whatever else they feel their own apprentices and their business need. But EAL isn’t measuring the add-ons; it is making sure that every one meets the standard of the same sound engineering framework,” she maintains.
She is adamant that EAL – which is owned by Semta, the sector skills council for science, engineering and manufacturing technologies – hears the voice of small as well as large employers. “There’s never been a better time for a company to say, ‘the qualifications aren’t working for us because we make things in a particular way’. We are focused on taking what’s on the shelf nationally, finding the missing bits and turning it into a fully-fledged qualification that attracts funding. We can look at smaller numbers and find other people interested in developing in the same area. We work with manufacturers to help them sort out what they need to grow.” Many of its qualifications have been developed to answer under-represented needs. For instance, it developed Business Improvement Techniques to support the increasing focus on lean.
David often pleads poverty but, in truth, there has never been so much public money poured into training. Jaine Bolton, director of the National Apprenticeship Service (NAS) says new funding – in particular Age 16-24 (see box, right) – is definitely helping to take apprenticeships to new employers. Slightly against NAS’s original expectations, many businesses taking it up employ fewer than 10. And around two-thirds are recruiting 16-18 year olds so the scheme works two ways, bringing both young people and new companies into the apprenticeship fold.
The current scheme runs out in December, but Bolton is hopeful that the evaluation will show it is reaching parts that other schemes haven’t reached and that support will be continued. Nonetheless, she does admit the stop-start funding pattern doesn’t help: “It’s always a challenge for smaller businesses who dip in and out of the system, and the next time they come back it’s entirely different.”
It’s likely to change even more. Last year’s review of the future of apprenticeship by entrepreneur Doug Richards produced certain key recommendations that the government is taking on board. Among them is the principle that government should contribute to the cost of training along with employers, but that employers should have direct purchasing power to ensure relevance and drive up quality. In essence, it means that funding should flow through the employer rather than, as now, the majority of money going to a provider first. Radical long-term changes look likely. For some this is long overdue; but you may also hear a long drawn out sigh from those facing yet more change.
The process of finding the right training and funding, advertising and recruiting apprentices, and supporting and mentoring them within the business can be daunting enough. It’s interesting that virtually every organisation I interviewed recommended a different start point for the novice employer of apprentices. The choice includes: your local college; NAS’s website and its small business team; Semta’s managed apprenticeship service; your local chamber of commerce; or a relevant group training association (GTA). “The quality of what GTAs offer their employers still remains top dollar,” reflects Bonfield. She thinks most newcomers would be better served by going directly to an organisation that helps with the actual running of apprentices, including drawing down the money, rather than simply signposting them to possible choices.
There is also a new kid on the training block – your customer. There’s been talk for years about large companies training suppliers and a few examples of tangible progress. The Midlands Manufacturing Apprenticeship, a remarkable joint venture between Rolls-Royce, a local college and Training 2000, sets the bar so high that it is often described as “harder to get into than Oxbridge”. Last year, however, saw the launch of the government-funded Employee Ownership of Skills pilot. This competitive fund invites employers to develop and submit proposals to raise skills, create jobs and drive growth. The winners get a share of £67 million provided they make a substantial investment themselves. Among the successful first-round projects are proposals from Siemens, Arla Foods UK and BAE Systems to train employees within their supply chains as well as their own company.
Programmes like this may cancel out the perceived disparity between what the OEM and the SME can offer. They may even swell the pool of talent to benefit a whole industrial region. On the other hand, they may make it easier for Goliath to poach from David – or even for David to steal from his brothers. Bonfield sounds a cautionary note. A few years ago she researched why few small Sheffield companies took on apprentices. It boiled down to decades of dependence on British Steel and British Coal, both of which massively over-trained. They still preferred to poach rather than training for their own future, even though the pool was rapidly running dry.
There will always be poaching or drop outs – even JLR loses a few. But SMEs can do more to help themselves. Rachel Eade points out that many apprentices work alongside someone on minimum wage for £2.65 an hour: “Frankly, you won’t get great, especially as many OEMs are paying a training salary not an apprentice wage. Better to take them on for a trial period on the basis that if they are here in three months’ time, you’ll up it. And if they are still here in six months, it proves some commitment and it’s worth moving them up the scale. You also have to offer training that is structured and interesting, with clear plans to move around departments. Value your apprentice.”
Which brings us back to Brandauer. This time, it will not compete on the same turf as the OEMs. Instead, it intends to build a clear understanding of the differences between working for an SME and a big company into the recruitment process. And it is not aiming to portray itself as a poor relation. “Working for an SME can be much more rewarding for a certain type of person. You get a much more rounded experience of the business,” explains Crozier. “You get a chance to make a name for yourself quickly and the opportunities are much greater – our own MD started here as an apprentice.”
Crozier hopes to find youngsters as excited by the SME environment as he still is. But he admits it won’t be easy. The training provider will probably still handle the advertising, but Brandauer’s own HR people will focus interviews on ensuring that candidates buy into the benefits of working with an SME as well as having a hunger for learning engineering. They are also giving a lot more thought to mentoring the next intake: “Mentoring doesn’t always come naturally; you need patience, a willingness to give time, and a bit of drive and enthusiasm.”
It is also taking steps to retain apprentices moving on to degrees. They have a real success story – a tool-room apprentice about to embark on a degree course in manufacturing and operations. Brandauer has made new contractual arrangements, tying him to the business for a certain period in return for sponsorship. If he wishes to leave, he will repay a proportion.
“The onus has to be on us to recruit the right people and manage them well to give them a reason to stay,” says Crozier. “It’s great that JLR is investing in the region – I mean it – but we can’t ignore the fact that it could drain supply chain resources. And an engine plant won’t work unless the supply chain is in a healthy state. So they have to take on a bit of the responsibility.” Are the Goliaths listening?
- Training costs: 100% for 16-18 year olds; 50% for 19-23 year olds. From August, funding for over-24s on Higher Level Apprenticeship ends. Employers or apprentices themselves will have to pay for all the training, although loans are available.The money comes from the National Apprenticeship Service (NAS), in most cases directly to the learning provider. This, however, may soon be changing (see main feature). Large employers who contract with NAS can be funded directly.
- Wages: Employers must pay apprentices at least the apprentice minimum wage for time at college and in the workplace. Currently set at £2.65 per hour but many employers pay above this.
- Incentives: Until December (and possibly longer) NAS will grant £1,500 per apprentice to qualifying employers. Called AGE 16 to 24, the scheme is restricted to employers with up to 1,000 employees who have not recruited an apprentice in the last 12 months or never taken one on. Covers up to 10 apprentices per employer.Author
– Copied from: Works Management