Apprenticeships: restating their skills and productivity role

Apprenticeships are in the eye of the storm. Over the next 18 months we are going to witness huge changes to the way they look, and how they are delivered and funded in England. There is a long and rich tradition of apprenticeships in both the hospitality and retail sectors and in many respects these changes should give us an apprenticeship that is much closer to their original incarnation. Apprenticeships have seen successive governments spend decades re-shaping them, trying to ensure greater parity of esteem with academic qualifications, addressing numeracy and literacy, and providing progression to higher education, etc. In essence, they have been the victim of a succession of education and welfare policy interventions, but as a result they have lost their original purpose, which were around skills development and productivity.

In recent years both hospitality and retail have seen huge growth in apprentice numbers, with approximately 57,000 people completing a sector-specific apprenticeship in the past year. Apprenticeships have become much more than a way to develop the skills, knowledge and competence for someone to enter a professional occupation. Instead, they have become the main route to access government funding since the demise of Train to Gain. Unsurprisingly, this has meant that they have become so stretched and contorted that they have lost their original purpose.

While employers have welcomed the most recent changes warmly, they are likely to mean that apprenticeship numbers will fall dramatically across hospitality and retail. This is because the recommendations are likely to restrict apprenticeships to those in new roles and the government is looking for a much greater financial contribution from employers. In the immediate aftermath of these changes, we project that numbers could drop as much as 70-80 percent, so what impact would this have?

A recent paper by the Edge Foundation suggests that apprenticeships have taken on the ‘dead weight’ – or training that would have taken place anyway – that was previously in Train to Gain. Figures suggest that about 85 percent of apprenticeships could be classified as dead weight and it is likely that a large proportion of these are in hospitality and retail. If that’s the case, these changes will not have a significant impact on skills development as the same quality in-house training would still be delivered.

So while we are likely see a significant fall in the number of apprentices, what impact might these new apprenticeships have on the sector? For a start, they are likely to be broader and much more demanding, enabling someone new to the sector to develop the full breadth of skills, knowledge, behaviours and competence to become a professional. One of the recommendations has been that apprenticeships should focus on what someone needs to achieve rather than become obsessed with pinning down the various qualifications or training programmes that could make up one. The view is that employers should set the appropriate standards that apprentices need to achieve.

People 1st has been working with employers in aviation, retail and hospitality to develop and test these new professional standards and see what impact they would have on future apprenticeships. They are already suggesting more ambitious and robust frameworks and have generally been enthusiastic and supportive of this new consensual approach. They see the simplicity it brings, the fact that it is a real industry standard, and like the consistency that it brings.

The introduction of professional standards also helps address the needs of those existing staff that need development by recognising the critical role of in-house training. Sector employers are making a significant investment and this is most likely to be offered in-house. For too long the perception has been that qualifications are better than in-house training and, as a result, there has been no parity. For the first time, however, professional standards allow them to stand on an equal footing. To support this People 1st has developed a quality mark with employers and is currently assessing and recognising quality training through its Quality Mark process.

There is still huge uncertainty about how these changes are to be introduced. If the government gets it right, they could be a good thing for the sector as apprenticeships will regain their primary skills and economic crown and carve out a clearer role to develop skilled professionals in the sector. If successful this will enable the sector to tackle its skill shortages, but also help tackle the lazy assumption that the sector has nothing to offer but low skilled roles. Overall it’s clear that the sector is gearing up for the change and there are some exciting opportunities ahead.

Flexing our professionalism

It’s not often that a workforce issue becomes a big media storm, but few can have escaped the ongoing attention on zero hour contracts. The debate highlights not only the changing labour market, but also the fact it has largely gone unnoticed; until now!

Greater flexibility in the labour market is nothing new and has been increasing gradually over the past forty years. A recent report from the Work Foundation suggests that across our sector, an estimated 20 percent of the hospitality workforce were on zero hour contracts, compared to eight percent across the economy as a whole. Retail came in slightly lower at six percent. What the report also highlights is the broader picture of flexible working that is largely being ignored and which, in some forms, may have more serious implications for the economy and society as a whole.

Much of the tourism and visitor economy has come to rely on a flexible workforce to cope with fluctuating demand and seasonal patterns. Today, in hospitality half of the workforce is part-time. A flexible workforce is not necessarily a bad thing if it meets the needs of the employer and individual. The issue is more about how that flexibility is achieved.

The problem lies with the transient workforce that makes up a high percentage of sector jobs. Transient labour, such as students and international workers, make it easier to fill vacancies, but it also increases staff turnover. As staff are not staying very long in post, they are not developing the required skills and experience to make a full contribution to the business. It is unsurprising then that the sector’s productivity levels are lower than they should be, as staff are not fully proficient in their jobs and training is instead being targeted at new starters.

This trend is not new and the concerning thing is that given this huge cost, many employers are not looking at a more efficient approach given the cost of constant recruitment and initial training. And that does not even touch on the loss of business because an organisation does not have a full cohort of skilled staff.

It also impacts the sector as a whole, as the perception of a low skilled, unprofessional sector begins to stick in some people’s minds. As a result, it is harder to attract people who are looking for a career in the sector. After all, how does someone who wants to pursue a career in front of house in hospitality or a sales position in retail tell the difference between one job that can offer them a career and another that is being filled by transient workers? It’s no wonder that many higher skilled roles in the sector are difficult to fill.

The irony is that one of the ways employers are tackling this problem is by attracting skilled workers from outside the UK and the debate about ‘UK jobs and UK workers’ is another workforce issue that is liable to attract media attention.

Find out more by visiting www.people1st.co.uk/news/policy or by following Martin-Christian on Twitter

Is it right to assume that growth and employment are natural bed fellows in the government's industrial strategy?

Western governments are coming out of the financial crises with a sore head and the realisation that they need to think afresh about how to get their economies back on their feet. The result is often a debate about the best way to boost growth and employment, but while ‘growth' and ‘employment' are often used in the same breath, to what extent are they natural soulmates?

The past 30 years has seen huge changes to the composition of most Western economies, with the UK at the forefront of many of those changes. During that time we have witnessed the gradual erosion of the UK's manufacturing base and the growing dominance of the service sector as we become a greater consumer society.

Many manufacturing jobs have moved to countries that can produce the same goods at a cheaper rate. Some professional service jobs have also gone the same way and have moved off-shore. Many of the people who were formerly in these jobs have found their way into other sectors.

Despite the fact that this labour outsourcing is now fiercely debated, at the time this trend didn't go unnoticed. During that late nineties and noughties, successive UK governments implemented policies to try and stimulate the demand and supply of higher value skills and jobs to ensure we could compete globally.

Today, the government's industrial strategy identifies sectors such as aerospace, advanced manufacturing and creative media, as it believes they will boost the UK's growth and employment. I don't think any sensible person would critise the government for trying to focus limited resources on the sectors that will provide the greatest return. The challenge is more about the assumed link between growth and employment. Most of these sectors are indeed high growth areas, high value and dependent on skilled workers, so it is surely right to be stimulating their growth – but what will be their impact on jobs?

There is increasing evidence that the historic relationship between productivity and employment is breaking down. No longer does higher productivity mean an increase in employment. One reason for this is the impact of technology, which is reducing the demand for jobs – an analysis sagely outlined by Erik Brynjolfsson and Andrew McAfee in their book ‘Race Against the Machine'. How the government manages this change could have significant implications on the rest of the economy.

There are large parts of the economy not included in the industrial strategy. Despite their exclusion, they are still contributing to the economy in terms of both growth and jobs. Critically, under the right conditions, that contribution could be increased to create more jobs and greater growth.

The sectors making up the tourism and visitor economy are among those not included in the industrial strategy. It's true that their productivity rates are smaller than high value sectors such as aerospace and advanced manufacturing, however, they employ one in five jobs and its employment projections are higher than that of the econonomy as a whole. The need to boost productivity is critical and a modest increase could have a significant impact given the size of the sector. The same goes for other major sectors such as agriculture and logistics, just to name two.

I'm not suggesting that the industrial strategy should be jettisoned; simply that it needs to be accompanied by broader policy thinking that takes a wider view and doesn't put all its eggs in one basket. Governments in countries like Germany and the Netherlands have found ways to empower each sector to create conditions to increase growth and employment, despite some receiving greater support.

We will see to what extent the industrial strategy facilitates or prevents this happening in the UK; whatever happens, a greater acceptance that growth does not necessarily bring significant employment opportunities will mean we can take a broader view on the economy and the labour market and as a result increase the speed of our economic recovery.

Find out more by visiting www.people1st.co.uk/news/policy or by following Martin-Christian on Twitter