It’s widely accepted now, especially in industries where engineering talent is a must, that apprenticeships will play a critical role in a workforce capable of solving tomorrow’s problems with pragmatism and deft confidence.
But accepting this principle is not enough on its own.
Supporting apprenticeship provision can be a challenging task – especially in an environment where outdated frameworks are being updated, quality control revisited and funding reformed.
Employers who want to get the cream of apprenticeship talent must stay on top of these changes – however inconvenient they may be from a change management point of view – or they will risk missing a step in the ever more intense recruitment race.
It is therefore a concern that a recent skills survey conducted by the Institution of Engineering and Technology (IET) found that, out of 400 organisations with engineering and IT skills requirements, energy companies are the least aware of government proposals to reform apprenticeships – in particular the funding mechanisms for them. Water companies were not represented.
Less than 40% of energy employers said they were in the know about the proposed changes compared to 64% in the talent-hungry aerospace sector which is currently growing at a rate ten times faster than the rest of the UK economy.
Provision not enough
This is not to say that the energy sector has displayed a general lack of appreciation for apprenticeships – particularly for technical and engineering roles where skills are in such short supply.
All of the big six, National Grid and a host of other firms in the sector offer apprenticeships to varying degrees and the sector skills council Energy and Utility Skills (EU Skills) is doing sterling work via its recently launched Energy and Efficiency Industrial Partnership as well as a range of other initiatives.
Furthermore, while sector specific data is not available, figures from the National Apprenticeship Service show that engineering apprenticeships across all levels are generally increasing in England.
In 2012-13 the National Apprenticeship Service recorded over 37,000 apprenticeship achievements in engineering and manufacturing disciplines. This figure is triple what it was a decade ago and for the utilities space, this includes thousands of newly qualified gas installation & maintenance, energy assessment & advice and wind turbine apprentices in the talent pool.
All of this is positive – but it is not enough to fill the increasingly critical deficit in engineering and technical skills in the UK which is escalating as more firms seek to grasp hold of the economic upturn and go for growth.
While there are other means than apprenticeships – such as talent transfer from other sectors – which can help stuff skills gaps in the short term, it is important that more employers offer more, high quality, apprenticeship places as they raise their growth ambitions. Especially as government starts running big publicity campaigns to promote apprenticeships as a qualification route, like the one planned for broadcast on national TV screen later this month.
If employers respond, the UK could make a big impact on a three pronged social and economic menace incorporating youth unemployment, aging workforces and the need for new types of skills in tomorrow’s engineering and business environment.
Clearly however, encouraging employers to offer more apprenticeships before they are fully conversant with the responsibilities and technicalities involved, and how these are likely to develop, would be irresponsible and could have a damaging impact on young people’s careers and confidence as well as on the skills security of organisations.
What are the reforms?
So what are the reforms that energy companies need to swat up on?
The central logic behind the direction of travel for apprenticeship reform is predicated on giving employers more ownership of apprenticeship funding and more input into framework development.
This strategy is based on wide ranging consultation with business and industry as well as the recommendations of reports including the Holt Review and the Richards Review of Apprenticeships, both published in 2012.
One manifestation of this drive toward employer ownership is the Employer Ownership of Skills pilot which, while it has received criticism for being unfriendly to SMEs in the past, has led to a number of admirable initiatives of which EU Skills Energy and Efficiency Industrial Partnership is one.
But this is not the end of the story.
A consultation on further reform of apprenticeship funding finished in May this year and it is with regard to these proposed changes that IET has raised the alarm about industry awareness.
There are two potential mechanisms being mooted by government to change the way all employers receive funding for apprentice applicant under the age of 24.
The first would see employers paying for the training their apprentices receive and then deducting government funding from their next PAYE payment.
The other sees the employer paying for training via an Apprenticeship Credit account, which automatically ‘tops up’ their payment with the government contribution.
Impact for large and small
When these suggestions were announced there was the usual bout of responses from industry and education which after an initial welcoming of government focus on apprenticeships, listed a litany of caveats and reasons why the proposed reforms present all sort of dangers.
The Association of Colleges said: “We recognise that the mechanisms offered are theoretically simple, but we have significant concerns that the approach to be adopted will not be fair and will provide an advantage to larger employers who are already involved in apprenticeships against smaller businesses and those new to the scheme.”
The IET too is concerned that small employers will be put off – particularly by a PAYE system which they feel may have too many technical requirements with associated costs.
But it’s not just small companies that need to be aware of the impact the proposed changes could have.
Defence giant BAE Systems, which recruited almost 400 apprentices in 2013, is concerned at the number of internal IT changes that a PAYE mechanism would necessitate according to one source and Dr Bill Drury, a member of the IET’s energy sector policy panel commented: “Engineering recruitment within large organisations involves the co-ordination of usually HR, Engineering and the necessary approving structure. Meanwhile, PAYE payback involves IT and Finance.
“Whilst this is not a problem in a well-oiled team, the added complexity for an organisation is unlikely to have a positive impact.”
The IET was one of around 1,400 organisations and individuals to submit written responses to the government’s consultation on apprenticeship funding reforms – it’s unclear as yet how many of those were made with the interests of the energy sector at heart.
Government will announce its final decision of reforms to apprenticeship funding mechanisms this autumn and will no doubt seek to implement as quickly as possible ahead of the general election – when there is every possibility that a change of government might mean another new tack.
Uncertainty and change is difficult for any company to work with. But this does not change the fact that the ability to recruit and develop talented individuals with relevant technical and business skills will define the ability of the energy sector to face the many challenges posed by political, market and environmental forces in coming years.
If employers in the energy sector plan to use apprenticeships as a route to doing this then they must be constantly aware of developments which effect apprenticeship delivery and quality and play a part in influencing decision making on this.