National Audit Office finds £200,000 spent creating one job

Government ministers have stepped in to defend a regional job creation scheme after a report showed that it is spending tens of thousands per job created.

A National Audit Office review of the Regional Growth Fund (RGF) questioned whether it had consistently offered value for money during its first two rounds, as its investment of £1.4 billion would only produce 41,000 new full time equivalent roles over seven years.

The RGF was designed to boost private sector employment in areas of the country traditionally reliant on the public sector for jobs, such as the north east. If the fund creates the projected 41,000 extra jobs then the average cost per job would be £33,000, a sum broadly similar to the average cost of jobs under past programmes.

However, the NAO report said there was “more scope to create more jobs relative to the amount of grant awarded”.

According to the NAO, the fund has not maximised its return on investment because a significant proportion of the £1.4 billion was allocated to projects that offer relatively few jobs for the money invested. Costs per job varied hugely between projects, from under £4,000 per job in some cases, to the worst case in which over £200,000 was spent creating one job.

The criticism has come while the fund’s third round is open to bidders, who have until the 13th of June to apply for a share of the £1 billion pot.

The report recommended that bidders must be subjected to tougher criteria concerning the value for money before being awarded grants.

Amyas Morse, Head of the NAO, said: “To achieve better value for money from the further £1 billion now available, the government should develop more challenging targets for the number of jobs projects should generate relative to their cost.”

In response, business secretary Vince Cable said: “The NAO’s report recognises that the RGF is working. It shows that the fund is set to create and protect 328,000 jobs for people in communities that need the most support and help companies grow. It shows that our processes are robust, competitive and unbiased. It shows that we chose to support the highest quality bids offering best value for money.”

Cable’s 328,000-job figure refers to posts of varying duration, while the NAO figure of 41,000 refers to FTE roles. The minister also said that some of the NAO’s recommendations were already in place, such as making more administrative resources available to process projects more quickly.

Lord Heseltine, chair of the RGF Independent Advisory Panel, added: “The NAO report shows the positive impact that the fund is having on some of the most disadvantaged parts of England. It clearly states that 328,000 jobs will be created or safeguarded by companies like Bentley, Bridon and Haribo. RGF awards are conditional on these employment benefits being delivered.”

The government said that in the first two rounds of the fund £1.4 billion was conditionally allocated to 176 bids across the country which will create and protect around 328,000 jobs. Nine of these projects have now withdrawn their bids from the fund.

Claire Churchard 11 May 2012

Bosses overestimate own abilities, CIPD research finds

Three-quarters of employers report a lack of leadership and management skills in their organisation but too many managers have an inflated opinion of their own abilities, argues new research.

Eight out of ten managers felt that their staff were “satisfied” or “very satisfied” with their management performance, but just 58 per cent of employees said that this was the case, according to a latest report.

This “reality gap” was crucial, said the institute, as the quarterly survey of 2,000 people also identified a clear link between satisfaction with line management and employee engagement.

As almost three in ten workers – equating to about eight million people across the UK – have direct management responsibility for at least one person, a small increase in capability could have a significant impact on overall staff engagement, wellbeing and productivity, commented Ben Willmott,. “Leadership and management capability continues to be an Achilles heel for UK plc, despite mounting evidence that these are ‘skills for growth’ essentials,” he explained.

“Too many employees are promoted into people management roles because they have good technical skills, then receive inadequate training and have little idea of how their behaviour impacts on others.”

The research also revealed further contrasting perceptions of management skills within organisations. While 61 per cent of managers claimed that they met each person they managed at least twice a month to talk about their workload and objectives, just 24 per cent of employees said they met with such frequency. More than 90 per cent of managers also reported that they coached their staff, compared to the 40 per cent of employees who agreed with this assertion.

A further three-quarters of managers felt that they discussed individuals’ development and career progression during one-to-ones, but only four in ten employees said that this happened. “Good managers value and prioritise the time with their staff because they realise that this is the only way to get the best out of them,” he continued to say.

“Employers need to get better at identifying and addressing management skills deficits through low cost and no cost interventions such as coaching by other managers, mentoring, online learning, the use of management champions, peer to peer networks, toolkits, and self assessment questionnaires.”

He added that in order to encourage economic growth and the transformation of public services, the government needed to play a bigger role in building demand among employers for investment in leadership and management skills.

Michelle Stevens 03 May 2012

Funding restricted to longer schemes in bid to ensure quality

The government has announced a new minimum duration of 12 months for all apprenticeship schemes receiving funding, in a bid to boost training scheme quality.

Skills Minister John Hayes said that the standard will come into force for all age groups from August 2012, following a consultation with providers and employers. A minimum length of a year had already been imposed for 16-18 year olds in December.

All apprenticeships will last for between one and four years, unless an individual has proven prior learning which can be counted towards their training. However, even if this is the case, the training period should never be less than six months and where a shorter scheme duration is possible, funding will be reduced to take this into account

The minister said: “The majority of apprenticeships are the gold standard in vocational training. They boost individuals’ life chances and build the skills that drive growth.

“They also provide a great return on public money. This has been independently recognised with the National Audit Office finding that apprenticeships generating £18 for the economy for every £1 spent.

“But we must be relentless in our drive to ensure all apprenticeships are as good as the best, to identify and root out any instances of poor quality provision, and to raise the bar on standards.

“We are taking strong and decisive action to tackle short duration so all apprentices receive high quality training and workplace learning setting them on the road to a long, rewarding career.”

David Way, chief executive of the National Apprenticeship Service (NAS), said: “I am pleased that we have taken time to get the best possible way forward on apprenticeship duration so that we can ensure confidence in all apprenticeships. We listened very carefully to messages from colleges and training providers at the National Quality Conference last week.

“A clear expectation has been set that an apprenticeship involves a significant amount of new learning delivered over sufficient time to practice and master skills in employment. There is greater flexibility here than for younger apprentices because older apprentices typically have more skills they have acquired.

“We need to ensure that all apprenticeships are high quality. By ensuring they last between one and four years, we are not only giving employers what they say they want but also giving confidence back to everyone who has questioned the growth in shorter apprenticeships.”

In addition, from today, small and medium sized businesses, which employ 250 or fewer staff, will be eligible for one of 40,000 apprenticeship grants worth £1,500 when they recruit their first apprentice aged 16 to 24 years old.

Claire Churchard – 2nd April 2012

One million UK workers come to work semi-conscious, say health researchers

Around one million UK workers are so deprived of sleep that their condition is comparable to being intoxicated, research has suggested.

The study of 39,000 employed people by health and wellbeing specialists vielife found that one in three people frequently come to work ‘sleep drunk’, having had such a poor night’s sleep that they are affected in a similar way to being over the drink-drive limit. Around 3.5 per cent of the working population, or one million workers, are in this semi-conscious condition at any one time, the research found.

Most people need more than seven hours sleep a night to avoid such ‘sleep risk’, the study said, with 56 per cent of people who get between five and seven hours ending up in the high risk category. After having between seven and eight hours’ sleep, only 6.25 per cent of people are still classified as high risk.

The study, based on ‘sleep scores’ recorded by users of vielife’s online health and wellbeing platform, also found that people working a regular five-day week generally enjoyed significantly better sleep than those working part-time or irregular hours.

Those who work long hours and have low satisfaction, together with overweight people and those suffering from depression, are all more likely to come to work in a sleep deprived state, said researchers. Women were slightly more likely to report frequent poor sleep (35 per cent) compared to men (31 per cent).

“Being ‘sleep drunk’ is a common issue that causes personal and work life issues and a healthy lifestyle is at the heart of solving it,” said Tony Massey, vielife’s chief medical officer.

James Brockett 03 April 2012

256,500 people began training in six months to January

The number of apprenticeship starts are on course to reach half a million this year, according to new government figures released today.

Provisional data shows that 256,500 people embarked on an apprenticeship in the first half of the 2011/12 academic year, which ran from August 2011 to January 2012.

The breakdown comprised of 79,100 people aged under 19, while there were 77,100 aged between 19 and 24, and 100,300 adults aged 25 or over.

Skills minister John Hayes – who has been spearheading  the governments push on apprenticeships – said that there had been a focus on the quality of programmes as well as boosting numbers. “These increases are extremely encouraging and it is testament to the government’s unwavering commitment to apprenticeships,” he said. “They are at the heart of our skills policy because they equip people with the skills they need for a prosperous future and provide businesses with the expertise they need to grow.”

Apprenticeship schemes have been criticised in some quarters for not creating enough employment opportunities for young people, but Hayes added that it was “particularly encouraging” to see such a large proportion of apprenticeship starts among the under-25 age group.

In the 2010/11 academic year, the number of such training placements swelled by 50 per cent to reach 442,700 – a total that looks set to be surpassed this year.

Of those 442,700, apprenticeships among the over-25s had grown by 257 per cent, the increase for 19 to 24-year-olds was 22 per cent, and for the 16 to 18 age category just 10 per cent, according to an analysis by the Institute for Public Policy Research.

In February, a  host of major employers announced new training places to coincide with Apprenticeship Week.

Starbucks unveiled its first apprenticeship programme in the UK, which will see the company offer up to 45 apprenticeships each month in 2012.

BAE Systems also announced the creation of 265 new apprenticeships, while Siemens said it would be introducing an additional 150 apprenticeships this year as part of its commitment to vocational training

Michelle Stevens 29 March 2012

Retention of experience should be key to business, argues research paper

Employers are failing to engage and retain older workers despite their growing importance in the UK economy, Acas commissioned research has found.

To fully benefit from the skills and experience of an aging workforce more organisations need to adopt age management policies and practices which are effectively communicated, argues a report by Cranfield School of Management and Nottingham Business School.

But there is little evidence that organisations are currently taking proactive steps to engage staff aged over 50 and many still hold stereotypical views about their performance, according to the paper The Employment Relations Challenges of an Ageing Workforce.

“Despite anti-age discrimination legislation, stereotypical attitudes about both older and younger workers appear to be both widespread and well embedded,” said report co-author, Dr Emma Parry of Cranfield School of Management.

“To overcome this, companies need a supportive culture with policies and procedures that focus on supporting and capturing the skills and experience of older workers. And crucially managers need the expertise and knowledge to deliver on these organisational aims.”

Acas chief executive John Taylor explained that an ageing workforce brought new challenges to employers – such as handling flexible working requests fairly and providing appropriate career development opportunities for employees of all ages.

“In difficult economic times, this issue may not be high on the agenda,” he continued. “Employers will undoubtedly need support and guidance to respond, but age issues should be embedded at the very heart of an organisation’s culture, and should not be a box ticking exercise to meet employment legislation.”

The Default Retirement Age was abolished last October, and data from the Office for National Statistics (ONS) has revealed that the number of Britons working past 65 has soared in the last 10 years.

There were 789,000 fewer working-age Britons in employment in 2011 than 2001, but 358,000 more pension-age workers, according to an analysis of the ONS Labour Force Survey requested by The Spectator magazine.

The diminished value of pensions meant that, despite an influx of migrant workers in recent years, older workers were undertaking jobs traditionally filled by younger sections of the workforce, the research showed.

Michelle Stevens 29 March 2012

UK inflation continued to fall in February, easing pressure on pay packets, official figures showed today.

The Retail Prices Index (RPI) the measure most commonly used in wage negotiations, fell from 3.9 per cent to 3.7 per cent last month, the Office for National Statistics said. The Consumer Prices Index (CPI) the government’s preferred measure which includes housing costs, fell from 3.6 to 3.4 per cent.

The fall was attributed to a decline in gas and electricity prices as well as discounting by high street retailers. Analysts had expected a sharper fall, but high alcohol prices were one factor in keeping the indices relatively high.

Inflation is now at its lowest level for 16 months, having fallen every month since September last year. Bank of England forecasts suggest it could continue to drop and reach 2 per cent by the end of the year.

However, inflation is still above the average pay rise, with earnings going up by just 1.4 per cent on average across the economy, meaning incomes are declining in real terms.

Charles Cotton, reward adviser at the CIPD, commented: “The news that the increase in the cost of living has fallen will come as a welcome relief for hard-pressed workers. However, price inflation is still outstripping pay inflation and is predicted to do so until the summer. We look forward to the budget to see what initiatives the government will announce to help employees on low and moderate salaries balance their household finances.”

Yesterday it was confirmed that the minimum wage will also rise by an amount that is less than inflation. The adult rate is to go up by just 11p in October to £6.19 per hour, an increase of 1.8 per cent.

Meanwhile, the rates for 18-20 year olds will remain frozen at £4.98 per hour and the rate for 16-17 year olds will also stay static at £3.68, as ministers seek to remove barriers to job creation. The apprenticeship training wage is to go up just 5p to £2.65, a rise of 1.9 per cent.

Yet businesses investing in wrong management training, find research

Over four in ten managers (43 per cent) consider their line managers to be ineffective, according to a survey released today.

The research produced by the Chartered Management Institute and Penna along with Henley Business School, found a strong link between management abilities and organisational performance. Only 39 per cent of managers in low performing business thought their line managers were effective, compared to 80 per cent in high performing organisations.

However, relatively few organisations are providing managers with the training and development they want to improve their skills, found the report. Accredited learning and qualifications  such as MBAs were rated by survey participants as having the best impact on management performance, yet the majority of organisations relied on short courses and on-the-job experience as their main training method.

The average expenditure on management training per manager per year was significant higher for high performing organisations (at £1,738) than it was for low performing ones (£1,275) indicating how greater investment in skills training can pay off.

The research drew on responses from 4500 managers, including 300 CEOs and 550 HR managers.

“This report contains good and bad news for UK managers,” said Christopher Kinsella, acting chief executive for CMI. “The bad news is that a culture of bad management continues to damage UK plc. But the good news is that organisations who are investing strategically in management and leadership development are far more likely to be reaping the benefits through higher performance. What is more, it is within an organisation’s own power to make that change – by investing in management and leadership development wisely, employers can make a real, measurable difference.”

Gary Browning, chief executive of Penna, added: “Developing effective managers not only impacts the business – they make better decisions and follow through – it also releases the potential of the people who work for them. The research shows us that having an effective manager means employees get more effective development and feel more positive about their ability to manage their own careers. We have seen through working with many employers the tangible difference that can be made by organisational commitment to management and leadership development. As the world economy starts to grow, British business needs to remain highly competitive; the ongoing development of our top talent will help us retain our position.”

28 February 2012

European companies are struggling to manage change effectively despite dealing with more downsizing and pay freezes than their global counterparts, according to a new study.
The research by Towers Watson found that in the last two years more companies in Europe, the Middle East and Africa (EMEA) had made redundancies (47 per cent) and frozen pay (31 per cent), than the global average (37 per cent and 24 per cent respectively).

But only half of EMEA organisations classed as “highly effective” at  managing change had provided clear direction to their employees around the reforms. This compared with two-thirds of “highly effective” companies globally, said the Clear Direction in a Complex World report.

The survey of 604 companies – of which 141 were in the EMEA region – found that European companies were less coherent at defining their Employee Value Proposition (EVP), which refers to what an employer and employee can expect from each other in terms of pay, benefits and performance.
Only 37 per cent of EMEA firms had a “clearly defined EVP”, compared with 45 per cent of organisations globally. Furthermore, 42 per cent of overall companies reported that they had a reputation among potential job applicants as having a good EVP, compared to 37 per cent of EMEA companies.

The study also explored the effectiveness of line managers in  communicating structural change and the value of company benefits to staff, as managers played “a central role in delivering the promises made in the EVP, and as a result in building trust and engagement in the organisation.”

But the data revealed that just 19 per cent of managers promoted the EVP overall, with the figure dropping to 9 per cent among EMEA respondents
However, 70 per cent of firms in both the EMEA and the rest of the world reported that managers kept employees informed about organisational changes which affected their work unit.
“Companies need to communicate a clear story about the business and the changes that occur,” said Nicola Cull, director of communications and change management at Towers Watson
“Creating greater certainty, confidence and engagement with employees has a significant impact on employee motivation, engagement and retention and this in turn is shown to be fundamental to better financial performance.”

Michelle Stevens27 February 2012

But workers rarely accept money to stay, survey shows

It is becoming more common for employers to offer resigning staff a counter-offer to stay with their company, research has shown.

As employers worry about losing key talent, one in four (23 per cent) senior HR professionals say their organisation is now more likely to make a counter-offer than previously, found a survey by recruitment firm Robert Half. The trend comes as three in four (72 per cent) of respondents said that losing top performers was a growing concern for them this year.

However, there is little evidence that promising a pay rise induces many resigning employees to stay. More than half (53 per cent) of respondents said it was ‘uncommon’ for a counter-offer to be successful while only three in ten (31 per cent) said it was ‘somewhat’ common for them to accept. Over a fifth (22 per cent) say they would never make a counter-offer, because they believe that disgruntled staff would be better off going elsewhere and that they will end up leaving the business in any case.

HR executives were also highly aware of the risks associated with counter-offers, with the biggest concern (40 per cent) being that a department’s salary structure would become skewed, opening a company up to suggestions of unfair disparities in pay. Other concerns were that the employee would be less loyal to the organisation (28 per cent) and that relationships between the employee and their manager or co-workers would become strained (25 per cent).

Instead of making counter-offers, the figures showed that employers should pay more attention to their salary structures and the competitiveness of their reward and prevent employees resigning in the first place, the researchers suggested.

“Some organisations have been challenged in remaining competitive amidst static remuneration increases and as such, run the risk of losing top talent to other organisations. In order to keep their best employees, companies need to ensure that they are paying competitively with an appropriate salary and bonus structure,” said Phil Sheridan, managing director of Robert Half UK.

“Top performers who feel they’ve made concessions during the recession will expect to be rewarded for their loyalty. Employers should therefore conduct regular salary reviews with all employees, even if increases are modest or deferred. Regular dialogue with employees on a monthly or quarterly basis is vital to ensure that they remain satisfied with their role and career progression with the company.”

When asked what rewards and benefits they plan to offer more of this year to attract and retain employees, the top responses in the survey were pension contribution (39 per cent), flexible work hours or telecommuting (38 per cent), health care or life benefits (30 per cent), additional bonuses or pay (29 per cent), a mobile/laptop (27 per cent) and subsidised training / education (27 per cent).

Discontent over pay has been fuelled in the last 12 months by the soaring cost of living. But this week saw a dramatic fall in both RPI and CPI measures of inflation, which may go some way towards easing employee relations fears.

14 February 2012

Britons are richer and more stressed than when the Queen came to the throne, a report by the Chartered Institute of Personnel and Development has found.

The CIPD report found the workforce in the UK has increased by six million, thanks to an influx of women since 1952.

However the total number of hours worked has stayed the same – driven by a big rise in part-time working.

Despite that reduction the CIPD claims work related stress has increased.

Workless homes

One cause for this, according to the report, is the increase in unemployment.

Measured by the number of people claiming the job-seekers allowance, unemployment has increased from 2.2% of the workforce in 1952, to 5.5% on the most recent figures.

More worryingly the report found that the number of households where nobody earned had increased dramatically from 4% to 18.8%.

“With the threat of unemployment an underlying concern even in good times, people do not seem much happier about their working lives and many exhibit the symptoms of work-related stress,” said Dr John Philpott, chief economic advisor for the CIPD.

Women workers

The report argued that the increase in the number of workless homes was linked to changes in the way we work, with fewer men in the workforce and more households with two earners.

However, with just 75% of men employed compared to 96% in 1952, this increased the number of households with no breadwinner.

On the other hand the female working age employment rate has risen from 46% to 66%.

Rising productivity

However the report accepted that people have become more productive over the last 60 years.

Despite the same number of hours being worked the value of the goods and services produced by the economy has quadrupled.

However this increase has come with increased pay inequality and a significant shift in the kind of work being carried out, the CIPD said.

The number of people in manufacturing jobs fell from 8.7 million in 1952 to just 2.5 million today while the number in managerial, professional and technical jobs has nearly doubled to 44% of the workforce.

Institute secures £800,000 funding in bid with CFA

Aspiring HR professionals will soon be able to kick start their career with an HR apprenticeship, after the CIPD secured £800,000 of government development funding through a partnership with apprenticeship body CFA.

As many as 725 people could take the new Higher Apprenticeship in HR Management by 2016, setting them up for a career in HR as well as developing their broader professional business skills.

The funding available for the qualification is part of the government’s strategy to address record unemployment rates and concerns about future skills shortages. An £18.7 million fund to support 19,000 higher apprenticeships was announced last December.

Development of non-traditional career routes such as apprenticeships could help address high levels of youth joblessness and support fair access into the professions.

It was mentioned that: “The HR apprenticeship will help to attract the brightest and best talent to a profession that has a crucial role to play in driving productivity and growth for organisations”.

“HR is a rewarding career of choice in itself and can also provide a route into other business disciplines. Gone are the days when HR was a predominantly administrative profession: today’s brightest HR professionals display a huge amount of business savvy and are real agents of change who contribute significantly to sustainable organisational growth.”

John Hayes, Minister for Further Education, Skills and Lifelong Learning, said: “I want more bright young people to build careers in vital professions like HR, and to receive nationally recognised training to the highest standards. By giving practical learning the same status and recognition as academic study, the government will help build a stronger economy and redefine the concept of higher education.”

There has been an enormous expansion of apprenticeships in this parliament, with government figures for the 2010/2011 year showing 442,700 new apprenticeships – 163,000 more than the previous year, and almost double that of 2005/2006.

Some commentators have expressed concerns about the dilution of the apprenticeship ‘brand’ through such rapid expansion, and the Business, Innovation and Skills select committee are to start an inquiry this month into apprenticeship policy. Such concerns were not helped by the, apparently coincidental, resignations of the chief executives of the two main apprenticeship bodies, the Skills Funding Agency (SFA) and the National Apprenticeship Service (NAS), on the same day last week

Claire Churchard 25 January 2012

‘John Lewis economy’ will boost productivity, says Clegg

Increasing employee share ownership in the UK could be the key to unlocking growth and boosting productivity, deputy prime minister Nick Clegg has said.

The Liberal Democrat leader told an audience in the City this morning that giving individuals a stake in their companies and promoting a “John Lewis economy” would lower absenteeism, staff turnover and production costs.

Clegg said he wanted to ensure that employee ownership got “into the bloodstream” of the British economy, and that the coalition planned to reduce red tape and revise the tax system to accommodate the concept.

Speaking at an event hosted by the City of London Corporation and Centre Forum think-tank, Clegg said: “We don’t believe our problem is too much capitalism – we think it’s that too few people have capital. We need more individuals to have a real stake in their firms. More of a John Lewis economy, if you like.

“And what many people don’t realise about employee ownership is that it is a hugely underused tool in unlocking growth,” he continued.

“Lower absenteeism, less staff turnover, lower production costs. In general, higher productivity and higher wages. They weathered the economic downturn better than other companies.”

Clegg added that he did not advocate employee ownership because it was a “somehow nicer” alternative to the traditional corporate world, but because those businesses were “just as dynamic, just as savvy, as their competitors”.

The John Lewis group is co-owned by all of its 76,000 permanent staff – called partners – who share in the firm’s annual profits. The model also gives workers a democratic voice in some business decisions through representation on a staff council.

Clegg suggested that the right for workers to request shares in their companies could be introduced in his bid to promote “responsible capitalism”.

Business secretary Vince Cable is expected to unveil the government’s full package of boardroom reforms next week, after recent outcry over executive pay and bonuses in relation to company performance and shareholder accountability.

Shadow business secretary Chuka Umunna claimed Clegg’s speech had followed Labour leader Ed Miliband’s calls for more responsible capitalism. “If Nick Clegg wishes to follow Labour’s lead in promoting shareholder activism and engagement, that is welcome,” Umunna added.

Michelle Stevens 16 January 2012

Carmaker will discuss Swedish derogation model

BMW has agreed to put on hold plans to employ agency workers thorough the so-called ‘Swedish derogation’ model while it has talks with unions on the issue.

Swedish derogation – under which agency workers become permanent employees of the agency and are contracted out to the employer – is being used by some companies as a response to the Agency Workers Regulations which came into force last year. The method, used by large employers including Tesco, Morrisons and Jaguar Land Rover, effectively means that the employers can get around the requirement to give agency workers the same pay and conditions as permanent staff after 12 weeks of employment.

But BMW has agreed not implement the plan for the time being while it enters talks with the union Unite, which is concerned about the implications of the move.

A BMW statement said: “The company and Unite, the union, have jointly agreed to enter into discussions relating to the use of agency staff. While these discussions are ongoing the company will not proceed with its plan to use regulation 10 of the Agency Workers Regulations [the Swedish derogation].”

The carmaker also said it would not proceed with its plan to close the current pension scheme to new entrants while negotiations with unions are ongoing.

Roger Maddison, national officer for Unite, said: “As always we are prepared to have meaningful discussions with companies in the car industry. Unite is determined to protect all the terms and conditions of our members and ensure that agency workers are treated fairly, in the true spirit of the agency workers legislation.”

13 January 2012

Workforce planning vital to gain full business benefit from 2012 Games

Nearly a third of UK employers have not yet made any preparations for the impact the 2012 Olympics will have on their workforce, research has found.

A survey of 1,200 businesses by BT revealed that 29 per cent did not have plans to deal with Olympic disruption – which could include a fall in staff attendance and employee transport problems – when the event takes place between the 27th of July and the 12th of August this year.

This lack of planning is surprising given that nearly all the employers surveyed (93 per cent) recognised that there would be some negative knock-on effects on their workforce capability during the London Olympics.

With less than 200 days to go, the research suggests that if organisations remain unprepared large numbers of them will “miss out” on the financial boost that the Games has to offer. In addition to employees taking time off to volunteer for the Games and to watch certain events, employers also said they expect to see supply chain and travel disruption, lower staff attendance and productivity issues.

Yet the potential business benefits were widely recognised, as 68 per cent said they expected a spike in demand for goods and services as up to a million visitors arrive in the UK for the event.

Almost half the businesses (45 per cent) predicted a rise in sales and the same number (45 per cent) expected new international business opportunities.

Previous BT research on the Vancouver 2010 Winter Olympic Games backs the idea that businesses will not profit fully if they ignore workforce planning. Research on those Games found that half of the companies in and around the Canadian city felt they could have done better from the event or that they had missed out on opportunities.

Colin Hansen, former British Columbia Minister responsible for the Vancouver 2010 Winter Olympic Games, said that British companies are right to be optimistic because the Olympics had a huge economic benefit in Vancouver and across Canada as a whole.

However, he said that the scale of the event was bigger than anybody expected and many companies were “not geared up” for the size of the opportunity.

“Nobody in the UK should expect next summer to be business as usual, but with the right plans in place, such as flexible working, every business – large or small – can take advantage of the occasion and seize the long-term economic benefits,” Hansen said.

Geoffrey Mead, partner at law firm Eversheds, said: “It is not too late for HR to prepare their organisations for the Olympics.

“Clarifying the likely staffing needs of the business, refining or developing clear staff policies, especially those dealing with absence procedures, as well as ensuring they are communicated clearly to staff will go a long way towards avoiding many of the short term problems that could arise.”

Clear strategies for holiday leave must be in place, especially as some organisations will have an increase in work and may not be able to allow any holiday requests at this time, he said.

“As part of any strategy, employers need to understand the extent of likely demand for time off. Staff should therefore be asked about their plans to request leave over the Olympics well in advance so that the organisation can consider the best approach.”

Acas also has guidance available for employers on managing holiday during the event and for those who have staff volunteering for the Games to help avoid misunderstandings

Claire Churchard 11 January 2012

Government accepts Future Forum proposals

Employers in the NHS will be ‘put in the driving seat’ of planning education and training in order to make local workforces more flexible, according to a policy framework published today.

The report – “Liberating the NHS: Developing the Healthcare Workforce” was produced following two in-depth consultations by the NHS Future Forum, and has been approved by the Department of Health. It outlines a new system for England in which Local Education and Training Boards (LETBs) will play a key role in identifying local training and workforce planning priorities, while the national body Health Education England (HEE) will oversee strategy and resources, and some important national functions such as medical trainee recruitment.

The aim is to promote education and training that is “responsive to the changing needs of patients and local communities” while the LETBs will be “the vehicle for providers and professionals to work with HEE to improve the quality of education and training outcomes” according to the report.

Responding to the report, health secretary Andrew Lansley said: “We are setting up a new system that can produce the flexible workforce we need to address future challenges, that aspires to excellence in training as well as a better educational experience for trainees, and is supported by a fairer and more responsive funding system… making these changes work is all about placing accountabilities in the right place. Locally, with providers supported by professionals who understand the local needs of their workforce, and nationally with Health Education England to interpret workforce intelligence and planning and then lead in support, guidance and oversight for the commissioning of education and training.”

Dean Royles, director of NHS Employers, welcomed the plans. “It’s great to see a strong focus on the role of employers in driving the new system. This has been lacking in the current machinery. This is a real opportunity to link the planning and development of the workforce with local patient needs and future service delivery.”

He said it was important that the new LETBs avoided a “one-size-fits-all model” and that their governance arrangements allowed for creativity and innovation at a local level.

“Building early confidence in the new system is essential. Employers will want to see that Health Education England as well as local LETBs are seen to be driven by patient need and employer demand. If this is the case, employers will relish the opportunity for increased involvement,” said Royles.

Also among the recommendations published today by the NHS Future Forum was the proposal for NHS workers to play a more proactive role in promoting public health, making ‘every contact count’ in getting across preventative health messages to patients.

10 January 2012

Watching a happy customer leave the forecourt in their brand new car is far from the end of the relationship between manufacturer and driver. Providing a high standard of aftermarket care builds brand loyalty, which means customers are far more likely to return in the future to purchase more cars, accessories and servicing options. Car companies are now realizing that what happens when a sale is completed is crucial to building long-term relationships and boosting profits.

“Aftermarket, or servicing, is highly profitable for automotive manufacturers – which means it is important customers are retained,” says Michael Martin, Vice President for Aftermarket at DHL Supply Chain.

The key to this is the way the industry’s cost base is structured, and in particular the greater margins to be found in car parts. “The sale of a car actually generates fairly low profits, especially as the automotive market is so competitive,” explains Martin. “Profits are generated from keeping the car on the road for longer.”

But challenges and competition in the aftermarket sector mean many manufacturers are missing out on the value of servicing. Industry research has shown that after three years, owners are more likely to opt for an independent or fast-fit chain for routine maintenance, as they can often undercut manufacturers by selling “gray market” imported parts. The EU Block Exemption means independent dealerships in any European country are free to import car parts from other EU member states. It aims to give consumers more choice and value for money, but for manufacturers it squeezes already pressured margins.

Automotive trends in the West add to the problem. With soaring oil prices, people are driving less, with concerns over emissions also foremost in their mind. Fewer miles means less servicing and brand loyalty is also on the wane: a recent US study found that only around 20% of car buyers stayed with the same brand when they purchased a new vehicle, compared to a high of 80% in the 1980s. All this is diminishing a vital value stream for manufacturers – but could an improved supply chain hold the answer?

It makes sense: save money from the back end and pass the savings on to the customer, gaining a competitive advantage over independents and increasing customer retention. Studies have found that strategically thinking about the aftermarket can lead to cash flow improvements of 10%, inventory reductions of up to 50% and service level improvements of 20%.

Moving from national to regional storage hubs for essential car parts, for instance, allows manufacturers to deliver to franchised dealerships several times a day, speeding up services and increasing same-day fulfilment. This helps reduce the inventory held at dealerships, freeing up space for other value-adding services. DHL works with Volvo and BMW dealerships in the UK, many of which now receive deliveries up to three times a day, as well as overnight. Receiving multiple deliveries in the day can help dealers increase revenues as they can encourage customers to get things fixed that they may otherwise postpone. Meanwhile, focusing on other back-end activities such as warehouse management, parts storage and forecasting can both slash costs and improve the customer experience – crucial for retention.

“Time is the most valuable asset for customers with busy lives,” says Martin. “An efficient and flexible supply chain in the aftermarket keeps the time required to maintain a car to a minimum, meaning they spend less time doing things they don’t enjoy.” And by making car maintenance as painless as possible, automotive companies can ensure customers are kept firmly on-side as they notch up the mile

Opportunity for employers to secure talent pipeline

The government has announced plans for a new type of privately funded ‘science university’ which could enable employers to secure a talent pipeline.

In a speech at the Policy Exchange think tank, Universities Minister David Willetts invited proposals for a new scheme aimed to bridge the gap between limited public funding and strong demand for higher education and research.

The new institutions will focus on science, technology and postgraduate courses.

“Local economic partnerships, universities, businesses and international partners can come together to put forward proposals,” the minister said.

“There will be no additional government funding. This time we will be looking to private finance and perhaps sponsorship from some of the businesses that are keen to recruit more British graduates.”

Willetts also said that “a lot of interest” had already been expressed in this type of university and that now the government wanted to “move this to the next level”.

It is no surprise that businesses are interested in securing skills for their future workforces as many employers expressed concern about the increase in university tuition fees. Certain sectors, such as the nuclear power industry, have also predicted future skills shortages if education and training issues are not addressed now.

Employers, such as KPMG, have already launched sponsorship schemes for university students to support talented individuals following the rise in tuition fees with a view to employing them in the future.

KPMG launched its sponsored degree in January 2011 to cover the cost of study and guarantee graduates a job with them. Meanwhile, more employers including Ernst and Young and PwC have looked to attract talent with in-house training described as being “as good as a degree”.

Claire Churchard

05 January 2012

Year-long paid placements offer ‘two-fold benefits’ for employer and intern

Chelmsford Borough Council is to take a second cohort of interns this autumn after the success of its inaugural programme. The local authority introduced a 12-month internship scheme last September after its workforce development plan revealed that only 14 per cent of town hall employees were in the 16-24 year old age group.

The council hoped the programme would not only identify potential talent for its own workforce, but would help equip successful young candidates with the experience and employability skills to set them apart in a increasingly competitive labour market.

Six interns – a mix of school leavers, graduates and masters graduates – undertook a rotation of three real-time projects during the year-long programme, in departments including HR, Property, Planning, Customer Service and Leisure.

Kerry Knowles, the council’s HR strategy and development team manager, explained that the programme co-ordinators had aimed to match recruits’ experience and aspirations to appropriate projects available within the council.

“HR reviewed the managers’ bids for placements, ensured they were set at an appropriate level and allocated them to the interns based on their education, qualification and career aspirations,” she explained.

The interns were paid in excess of the minimum wage for a 30-hour week, and enjoyed the same benefits as regular employees, plus tailored coaching and development opportunities.

“As much as we want to give people an insight into local government, we are not necessarily in a position to offer everyone a job at the end of the programme,” Knowles added. “So we made sure there were various development opportunities throughout the scheme – including coaching and mentoring for interns from their placement co-ordinator and line manager, and skills workshops around interviewing skills and how to compete application forms.”

There were more than 120 applicants for this year’s five placements, which will now encompass a 37-hour working week and are scheduled to begin this October.

The council has also announced two advanced internships to run alongside the standard programme, which will be focused on specific career areas such as business management and leisure services. Lasting for two years, the placements will culminate in a professional qualification.

Steve Packham, chief executive of Chelmsford Borough Council, described the first year of the internship scheme as “a real success” with “two-fold benefits”.

“It supports the council’s succession planning needs”, and “offers successful candidates the opportunity to improve their skills and enhance their educational experience through practical work assignments,”

Michelle Stevens 6th September 2011