20 May 2009
Don't let training take a back seat
In the teeth of a recession, what’s happening to the apprenticeships and training programmes that were supposed to guarantee our manufacturing future? Annie Gregory finds out
By the end of this year, it is projected that some 140,000 manufacturing workers will have lost their jobs. In the face of this, who can blame companies for being reluctant to take on and train young people when they can promise them only an uncertain future? And what about the skills programmes for existing workforces that have transformed our industrial profile over the last ten years? Is it worth continuing with them when it may only result in a well-qualified dole queue?
"Last year saw a boom in apprenticeship," says Phillip Whiteman, chief executive of Semta, "but early indications are that as the recession bites employers are cutting back on this key skills investment." He added that research from the Learning and Skills Council (LSC), shows that 224,800 young people started apprenticeships in 2007/08, up 21.9% from 2006/07 and the highest level ever recorded. However provisional start figures for August to October 2008 (Q1 2008/9) show a 14% decrease in 16-18 year olds starting apprenticeships.
There's a miserable irony here. For years, manufacturing has been fighting to attract talented, motivated youngsters. Often it has been a losing battle against the greater attractions of the City. Given a choice, it takes a very calm, determined young person to ignore quick riches in favour of rewards earned through steady endeavour. Yet, just when good school leavers and graduates may be turning away from fools' gold, manufacturing is thinking twice about soaking them up. It's a double tragedy because slashed headcounts and closing plants mean a parallel loss of the skilled workers that have, until recently, been in such short supply.
But is the situation actually as bad as it first appears? Let's look at the apprentice programmes first. A quick gallop round the industry reveals some perhaps surprising facts. No sector is finding it tougher than the automotive industry. Yet, with all its problems, Jaguar Land Rover is still going ahead with recruiting and is currently preparing its assessment centres for the next intake. And Nissan confirms that, despite redundancies and short-time working at its Sunderland plant, it has not only maintained its current apprentice programmes but is also recruiting for the next intake. In the aerospace sector, Goodrich operations manager Simon Cardell explains that there is an active apprenticeship programme running in three of its Midlands sites in conjunction with EEF's Technology Centre, and "we are not intending to turn that off even with the downturn. It's pretty much the lifeblood of the future for technician intake into the factory. I know times are difficult, but we need a steady flow of young talent into the business and that's one the most important streams for providing it."
So are these flashes in the pan? Peter Winebloom, EEF's manager for apprentices and skills, sees the daily reality. "The manufacturing sector is trying to protect the apprentices it's taken on – it will only make them redundant as a last resort." EEF's Tech Centre manages apprentice programmes for a number of companies. In its 250-strong apprentice group, only four have been made redundant and one of those would probably have gone anyway for performance issues. Winebloom says that although most of the employers recognise they have a moral commitment to the youngsters, some may also be wary of breaking the legal contract governing apprenticeship. Both LSC and the training providers are supportive of those that do lose their places and EEF will do its best to keep them on a scheme, either retaining them in the Tech Centre or, ideally, finding them a new job. "Where, however, we struggle is that we can't actually give them a wage subsidy. If they have been employed, especially in the second and third years, they are probably earning a reasonable salary. Some apprentices are on £150 even in their first year. All the state can offer is putting them back on education maintenance allowance (EMA), which is family income tested and only amounts to £30 a week."
The automotive industry is holding on to its apprentices tenaciously, but Winebloom admits that other forward bookings aren't looking too rosy: "There is good evidence that some employers – SMEs and larger – are considering giving it a miss for a year." This prospect really disturbs him; it will mean one whole year of lost skills further down the line. "We did this in the last recession – we missed more than one year – and it led directly to the skills gaps we have now." He would greatly prefer to take on reduced numbers but keep the whole thing going. If people stop entirely, it will have a knock-on effect on those coming up from below. The businesses will also lose some of the infrastructure they have built up to support apprentices. And he fears the message manufacturing has spent so many years building up – that there are good, exciting careers and prospects – will just be lost. "People have recognised we can no longer build a sustainable economy on finance and banking. And the potential hike in university admission fees is making young people look for other routes. We should actually be reaping a harvest at the moment, not giving up."
Radshape Sheet Metal in Birmingham has 52 employees but MD Keith Chadwick is vehement that size is no excuse to take a back seat: "Canning an apprenticeship scheme would be my very last resort. If I do that, I haven't got a business." Although the majority of its work is in the automotive sector, Radshape is bucking the general trend. It has just broken £4million turnover for the first time, a 33% growth from 2005/6. A large part of that is due to its fanatical focus on continuous improvement for all age groups. Once a Rolls-Royce apprentice himself, Chadwick believes the government's neglect of apprenticeships in the 1990s was one of the worst things ever to happen to this country: "Without a proper apprenticeship system for manufacturing, the opportunity to pass on the great skills and experience learnt from generation to generation will die."
When he took over as MD of Radshape in 2005, he inherited a major problem. Of the 40 skilled, knowledgeable people on the shopfloor, 20% would be retiring in ten years. And, without an apprenticeship programme, there was no-one coming through to replace them. "So we wound the clock back and replicated what I had at Rolls-Royce." To do it, Radshape linked up with City of Wolverhampton College and also uses the skills of employees past retirement age to train the new generation. The whole programme is designed not just to engender high levels of technical competence, but also to develop people who understand the business as a whole, who work on their own initiative, have their own innovative ideas and take responsibility for their actions. "If I take one or two people on each year, in 20 years' time I will have 40 people who have come through my apprenticeship scheme and are the future of my business," reflects Chadwick. Last year, out of 62 entries for the ISME Sheet Metal Skills Competition, Radshape apprentices won top prizes in three separate categories.
The apprentice programme dovetails with the ongoing drive for upskilling. Every Friday morning the whole company stops for an hour and each employee and section looks at how they can improve, through problem solving or re-organising the area. "This training flexibility gives our labour force the mindset for change. Then when a customer asks us to look at a new process, we are able to respond quickly and easily." Six months ago, Radshape did some work in aerospace. Although its welders are good, Chadwick spotted that they weren't as good as BAE. "So we put them on a training course. Whether we won the business was irrelevant – we needed to raise our level and we did it. You have to continue to invest in the people you've got."
That raises an interesting point. Just what is happening to all those other improvement programmes that were such a feature of UK manufacturing until the recession?
Again, the picture is uneven. Undoubtedly, some companies have cut right back but, in some cases, layoffs are actually resulting in more training. Take the pharmaceutical industry, which has experienced huge cuts as the entire sector gets to grips with overcapacity. Despite reductions in overall manning levels, a senior manager told me there is still a big void in key talent, particularly in engineering. People are taking on extra responsibilities as others leave and many are learning new skills to bridge the gap. The overriding necessity for regulatory compliance makes the situation even more pressing.
In his plant, everyone is retrained every year in GMP (good manufacturing practice) across the company. There are big operational excellence programmes running too, with an increased training load since the start of the economic decline. There is a major search to locate and retain key abilities but it is on an individual basis. Everyone has a development plan as part of their objectives covering formal qualifications and peer training to extend experience. "It puts people under pressure but most are glad to take it because they need to do it to ensure both their own job stability and the outlook for their plant."
This is producing an unexpected problem for a recession: all the extra training is making people very attractive to other employers. "There is a temptation to take the good redundancy packages on offer and get another job quickly." The prospect of retirement is also pretty appealing for those who have turned 50 with long service and therefore a sizeable pension.
This raises an odd possibility – skilled people laid off by other companies may well find employment in those that are still downsizing. The drive for fresh blood is also still strong, even in shrinking plants. Like many industries, pharma faces the demographic black hole. It may want to cut labour costs but it doesn't want to set the scene for suicide when the market picks up. So apprenticeship, graduate and career development paths are still very much a feature of an industry widely perceived to be adding to the dole queue.
This manager is noticing that not only his own company but also many of its suppliers are actually widening their apprentice programmes. Like Winebloom, he sees the abandonment of apprentice programmes in the 90s as one of the root causes of his current skills crisis and he has no ambition to perpetuate the problem.
Elsewhere, companies are using training as a weapon to fend off the recession. Landis + Gyr, the Stockport-based manufacturer of energy meters is achieving 15% year-on-year productivity improvements. Believing this is down to continuous staff training, it is currently taking advantage of government Train to Gain funding to tutor a quarter of its workforce in lean manufacturing techniques, working with lean experts from Manchester's Manufacturing Institute to pursue the Business Improvement Techniques (BIT) NVQ programme.
And Power Panels, winner of both the Best Factory Award and the Skills Development Award, has not only increased the amount of training it gives its own people, but has also opened its training centre to other organisations. It is aiming to teach them the techniques and skills that underpinned its own success and to help them adapt and apply them to projects in their own business. Like many others, it has had some degree of restructuring to weather the recession. Chairman David Fox says, however, that the training budget remains sacrosanct: "In a recession, the first thing most companies do is close the training department and the second is the marketing department – the two places you should be putting extra resources into. How else are you going to beat the rest? Every time we increase training, the customer gets a better job. Turning away from that would be the last thing we do. That's the way we retain our sales base and stay profitable."
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