Keep on running
Don’t stop training your firm’s key people when times get hard. They’ll need those skills to help you stay ahead of the game when the upturn comes, says Lucie Carrington
Date:
07 May 2009
Source:
Guide to Surviving the Downturn
Page:
4
When production levels fall you have to be careful to ensure that highly skilled people don’t see their skill levels deteriorate,” warns Tracey Wilson, HR manager at construction equipment firm Komatsu UK.
Like many other businesses, the manufacturer understands the importance of retaining and developing expertise through a recession. And that means using downtime to train staff. Development budgets aren’t immune to cuts, but employers have a heightened understanding of the importance of enhancing the skills of their key people.
A recent survey for the Confederation of British Industry (CBI) confirms that businesses are getting the skills message. As many as 57 per cent of firms admit to being worried about having enough people to fill highly skilled jobs when the upturn comes. It could explain why only 9 per cent say they intend to cut training investment, with 51 per cent revealing that they will target the spending more effectively.
To some extent, employers are playing for time and putting off the day when redundancies become inevitable. But Chris Humphries, chief executive of the UK Commission for Employment and Skills (UKCES), thinks this is only half the story. He believes that their response marks a sea change in firms’ attitudes towards skills and training. “This is unlike previous recessions. Business has started to believe that training really does work,” he says.
Humphries dates the change to the turn of the century, when skills shortages were much more challenging for firms. The impact of IT advances and the pace of change also meant that businesses could not keep up if they didn’t continually develop their workforce. But he recognises that some organisations still need a little help to stop them falling into old habits. In response, the UKCES is spearheading a campaign to encourage employers of all types and sizes to continue investing in skills.
“Now is the time” began as a modest advertisement in the national media last November. The campaign encouraged employers to tap into government assistance for training and development. It was signed by all the major employer organisations, including the CIPD, the CBI, the Institute of Directors and the TUC.
“We were surprised by the reaction. It was amazing. Other business organisations called up wanting to get involved and put their names to it,” Humphries recalls.
The campaign is now sponsoring a National Training Award. As well as celebrating good practice, this should enable the campaign to find some first-class case studies of employers that have taken the message to heart in the recession.
It’s not only employers whose attitude to skills has changed, Humphries says: so has the government’s. In 2000, HM Treasury at last accepted that the skills agenda was a key influence on the economy.
“Until then, government use of training policy had been poor. As a result, the nation emerged from the downturn of the early 1990s with the largest number of long-term unemployed people and the highest level of skill shortages,” Humphries says. “This time round, there is an understanding between government and business that we must aim training funds at the skills that we’ll need after the recession.”
One of the biggest changes in the government’s approach to skills concerns its use of public money to fund in-work training. The primary vehicle for this is the Train to Gain programme. Set up in 2006 under the auspices of the Learning and Skills Council (LSC), the scheme was initially aimed at training employees who lacked basic skills and/or five GCSEs. Employers could obtain advice from a qualified skills broker and use an approved training provider to secure free training for qualifying employees. To gain the maximum benefit, employers were encouraged to sign up to a skills pledge. This is a voluntary public declaration of their commitment to support all employees to develop basic literacy and numeracy skills and work towards at least an NVQ level 2 – deemed the equivalent of five good GCSEs.
To date, 127,000 employers have used Train to Gain, which will receive more than £900 million in funding by 2010. In a recent survey by the LSC, 76 per cent of employers stated that their employees had gained useful job-related skills using this approach. The number of organisations using the scheme has rocketed in the past eight months, with companies such as Komatsu taking advantage of the training programme to improve their employees’ skills and help them emerge stronger from the recession.
Since January, organisations employing up to 250 people have been able to access funding for shorter courses in business-critical areas such as sales or new product design. There is also support for leaders to invest in personal learning and development. In addition, firms employing fewer than 50 people can get a contribution to wage costs to cover time off for training.
Apprenticeships are high on the government’s skills agenda too. Through the new National Apprenticeship Service, more employers are being encouraged to offer apprenticeships as a means of training either new recruits or existing employees. As many as 130,000 employers already offer apprenticeships aimed at securing participants’ high-quality vocational training at levels 2, 3 or 4. In return, the LSC will fund up to 100 per cent of the cost of training an apprentice.
There is evidence to show that employers are using government support as a springboard to reach a bigger proportion of the workforce. For example, Sainsbury’s is using an in-house training programme called “You can” to attract older workers into apprenticeships, despite the fact that there’s no guarantee of funding. It has also opened its employment-based training to all staff, even those who don’t attract Train to Gain funding. The reason is simple, according to Gary Tovey, qualifications and skills manager at the supermarket chain: “‘You can’ is part of what we do rather than something we switch on or off simply because the budget is getting tight.”
Not all employers believe the government has got its training policies right for the recession. For example, although the CBI survey found that employers were keen to maintain the level of investment in training, 42 per cent of respondents involved in Train to Gain said they had seen no impact on their business as a result.
“The government has made some important steps in the right direction, but it needs to be even more responsive to what business needs,” says Richard Wainer, the CBI’s head of education and skills.
For starters, the CBI would like to see the flexibility of Train to Gain extended beyond SMEs to companies of all sizes.
In addition, Wainer argues, employers want qualifications that better reflect their skill needs and, at least during hard times, there should be incentive payments for companies that take on apprentices. “Firms want to stay committed to training young people, but this is much harder in a recession,” he says.
Inevitably, some organisations must cut payroll costs, freeze recruitment and make redundancies. But there is a wide range of support available. For example, employers can now access incentive payments of up to £1,000 through Jobcentre Plus to recruit someone who has been unemployed for more than six months. As with any other new or existing employee, eligible employers also qualify for up to £1,500 towards in-work training.
In addition, Jobcentre Plus’ rapid- response service helps organisations that need to make redundancies. The service provides a skills analysis to help identify individuals’ transferable skills and training needs, plus the training itself. Jobcentre Plus will help people who have lost their jobs to write CVs and find alternative work. There is also an action fund available to help them overcome short-term barriers to taking a particular job, such as travelling expenses. More than 1,000 employers have used the service, which has seen its budget double in 2009 to £12 million.
One of the biggest complaints that employers make about government support is the bureaucracy surrounding it and the lack of joined-up thinking among government departments and agencies. Since January 2008 the LSC has been implementing the recommendations of the government’s Bureaucracy Reduction Group to address this and several further initiatives are afoot. For example, the Train to Gain skills brokerage service has recently been integrated into Business Link as the main channel for employers seeking a range of business support and advice.
In addition, the National Employer Service (NES), which operates out of the LSC, provides a fully integrated training service for multi-site businesses employing more than 5,000 people, including representing the needs of these organisations in the government’s decision-making process. As part of its service, the NES is working more closely with Jobcentre Plus, sharing information about clients and organising joint meetings.
Lastly, employers and employees can find information on the full range of government support in the recession via the Real Help Now website.
For the moment, both government and employers remain upbeat about their ability to continue investing in the workforce. But how long this can continue is uncertain – as with any investment, spending on training follows the business cycle quite closely. The important point, argues Mike Emmott, employee relations adviser at the CIPD, is that employers don’t take fright and hunker down.
“It’s about maintaining trust and confidence within the organisation,” he says. “This means that managers must behave positively, setting a direction that’s believable and keeping up communication, even when there’s no news.”
It’s vital, then, that the government and employers stay on their toes and remain flexible with an eye firmly on the future.
Komatsu engages its redundancy survivors
Komatsu UK started to experience a decline in business in April 2008. By September it was serious. Three months later the firm was making compulsory redundancies.
“Shopfloor workers feel it the hardest,” says the company’s HR manager, Tracey Wilson. “Back-office staff can always get involved in improvement activities.”
The business has used the slowdown to ratchet up training for production staff. This ensures that highly skilled employees retain their expertise, Wilson says, but it is also about keeping those who remain engaged in the business.
Komatsu has linked up with Gateshead College and local training provider NAC, and used the Train to Gain programme to deliver a BTEC certificate in organisational management techniques and an NVQ level 2 in business improvement techniques. So far the company has 183 people enrolled on the programmes.
The business is also piloting a level 5 management qualification for supervisors and professional staff. And it is offering some catch-up IT training for any employees who feel they need it.
“It is difficult for people who are used to building and making things,” Wilson says. “But we hope that by investing in training we are keeping staff motivated and helping them to feel that they’re doing something useful.”
Taking the skills pledge at Sainsbury’s
Sainsbury’s was among the first 50 businesses to sign up to the government’s skills pledge in 2007.
“We did it because it matched our core value of being a great place to work and because it gave us a vehicle for expanding our skills programme,” explains Gary Tovey, qualifications and skills manager.
The company had already experienced the benefits of offering qualifications to staff via its bakery apprenticeship. “This had delivered some key successes,” Tovey says. “It was helping us to plug a recruitment gap in bakery and giving us a new cohort of team leaders.”
Sainsbury’s delivers its skills pledge commitments through the “You can” programme, which offers staff a choice among three separate qualifications programmes.
“We have just finished recruiting an extra 200 apprentices into the business and our target for this year is to have one apprentice in every store,” Tovey says.
In addition, employees can now use existing in-store training to gain a level 2 qualification. According to Tovey, this has enabled the business to strengthen its commitment to training across the board, as well as making the training more relevant for staff.
The final “You can” offering is an online “Skills for life” programme delivering basic maths and English in level 1. “We have more than 600 people registered on this programme,” Tovey reports. “The feedback we are receiving about this suggests that we will be extending the programme to level 2.”
Sharpening the tools of engagement
Investing in the workforce to survive a recession is only partly about training. Employers need to ensure that their remaining employees stay motivated.
Engagement was largely a product of the war for talent, but David MacLeod, who is leading an independent review of employee engagement for the government, thinks it is even more important in a recession. “In this environment, unless people are engaged, what you get is presenteeism – people turn up and work longer hours but they don’t necessarily give of their best,” he argues.
MacLeod has been given the task of looking at what employee engagement is; why it matters; the characteristics of engagement; and what enables it – and prevents it. He will be making his recommendations to the secretary of state for business in the summer.
He already has evidence that it works. One company he came across was faced with a 50 per cent decline in orders. It immediately went out to the workforce, involving everyone in conversations on how best to cut costs, retain the right skills, develop new markets and so on.
The tools of engagement are largely the same whether you’re in a recession or in a boom, according to MacLeod, but he adds: “You have to communicate more when times are tough, because you want people to have a sense of which bit of the wheel they should best put their shoulders to.”
Real Help is on its way
No employer likes laying people off, especially in a tough business climate when work is hard to find. But HR teams can direct staff who are losing their jobs to numerous sources of state assistance:
Housing. Homeowners who are worried about keeping a roof over their heads can access the “Support for mortgage interest” scheme and the “Mortgage rescue” scheme through their local authority, or try DirectGov Real Help Now. People who rent should contact their council to see whether they are eligible for housing benefit.
Income. Families with reduced wages may also qualify for tax credits. Call the tax credits helpline on 0845 300 3900.
Debt. People who are anxious about getting into debt as a result of being out of work can contact the national debtline on 0808 808 4000 or the Citizens Advice Bureau.
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