General Election 2015
Will SMEs and apprenticeships get a good deal after the general election?
According to government statistics over 16% of 16 to 24 year olds were unemployed in the last quarter of 2014. That amounts to 740,000 unemployed young people. Just over 240,000 of these were in full time education, leaving over 14% out of employment and out of the education system. 200,000 of these young people were unemployed for over 12 months. Hiding in these statistics there will undoubtedly be some very talented young people. Young people eager for a chance to get into employment and make their mark on society. Will they ever get a chance?
Dr Vince Cable recently told an audience of SME directors that it was not the intention of the coalition to favour big business. He also raised concerns about skills shortages. In particular he said the UK lacks a coherent system of vocational training, such as those in Germany or Austria. As politicians from all parties are preparing to launch their general election campaigns, SMEs are featuring in all three of the main party’s manifestos. If SMEs are going to play a major role to drive our nation onto bigger and better things then something needs to be done to address the skills shortages that are holding back many SMEs.
SMEs need more talent, and they need to retain that talent. Universities have a part to play in providing some of this talent but certainly not all of it. I am a great believer in apprenticeships, having joined the industry as an apprentice myself. I do wonder why more isn’t done to marry up the pool of unemployed young people with industry and start to address the skills shortage through apprenticeships as a matter of urgency. I do realise this cannot be done overnight, but even Dr Cable implies in his presentation that unless we take action, this will get little attention for the next four to five years. My guess is this may not got any serious attention until the vote grabbing starts in the run up to the next general election.
“… If [apprentices] are working for free what value will they attach to the work they are doing?”
I suspect many SMEs shy away from employing young people because of the costs, investment in time and perceived problems of recruiting and getting novices up to speed. There is a big financial and time investment to turn these raw recruits into valuable members of the team. In my experience, employing experienced staff is also not without its headaches. Talented people who have learned their skills and gained their experience elsewhere have not always integrated well. We have enjoyed equal success employing inexperienced people from other industries and investing in their personal development. This has worked better for us as we were able to train and develop them in our product, as well as our ethos – our customers expect this from us.
Vince Cable also mentioned that he wasn’t in favour of unpaid internships to give young people the chance to gain experience. I think this is a very good point as we are not going to get the best out of someone if they have no self-worth. If they are working for free what value will they attach to the work they are doing? I believe unpaid internships may work for a period of ‘work experience’ for say two to four weeks but for a longer term I believe a formal contract for an apprenticeship works best for all parties.
Apprenticeships have certainly worked well for us. Our current apprentices are two thirds of their way through the Institute of Telecommunications Professionals (ITP) apprenticeship scheme which includes formal training at City College Coventry. We have run a few of our own apprenticeships over the years, totally autonomously from any government initiatives, providing training internally and through commercial organisations. Although there are grants available for apprentices, in our experience these cover very little of the actual costs. When you take apprenticeship fees, college accommodation costs and salary into consideration there is a considerable and sustained cost. There are also the additional costs associated with loss of time from the more senior members of the team acting as mentors.
”… SMEs need easier access to apprenticeship schemes”
As the first two lines of George Benson’s hit ‘Greatest Love of All’ echo in my mind “I believe the children are our future. Teach them well and let them lead the way.” I know apprentices are a sound investment. Having young people in the business with new ideas, passion and enthusiasm is contagious. There is an element of two-way mentoring too as the mentors get a new found interest in learning new technologies, especially when they are called on to help with assignments. It also sparks some healthy technical debate that is educational for all involved. Our apprentices have certainly injected new energy into our business. Coming from a technical background I see investing in apprentices (or any people for that matter) is the same as investing in product research and development.
I have limited knowledge as to how things work in other industries but the ITP seem to have devised a great method to attract and recruit telecommunications apprentices. Organisations can also recruit their own apprentices and enrol them on the ITP apprenticeship scheme if they wish but the candidates do need to have certain base level qualifications. The ITP have an annual awards event too where apprentices can celebrate their successes alongside seasoned industry veterans. This is an important aspect of the apprenticeship scheme, formally celebrating and sharing the successes of the past years’ apprentices. The seasoned veterans include owners and managers of organisations employing apprentices as well as mentors. The ITP apprenticeship is available to all sizes of organisation. There are many other organisations in our industry that would benefit from ITP membership and the apprenticeship scheme.
”… competitors within specific industries need to work together”
So, if SMEs really are vital to our economy, they need easier access to apprenticeship schemes. They will also need support from industry peers and/or industry bodies and possibly financial incentives. I am sure other industries would do well to learn from the ITP as they take a great deal of risk out of employing apprentices. There needs to be more activity between businesses and schools at an earlier age to align students with the business requirements in the area and to provide students with valuable information and experience in dealing with local businesses and business people. We have recruited two past apprentices and one current apprentice following successful school work experience placements. There are industry bodies already successfully doing this through associations with specific schools, providing mentors as well as open days where industry specialists deliver presentations and interview role play sessions. My Livery Company – The Worshipful Company of Information Technologists has a great track record in this area.
I am sure there is more scope for these methods but it may need some government initiatives to get things moving on a national scale. Maybe the industries and organisations that are doing well in this area should be given formal recognition for their success and then provide a pool of knowledge and advice and information for other industries. One thing I would say on this point is that for all of this to work well, competitors within specific industries need to be open-minded and work together when it comes to educating and developing their apprentices. Our apprentices work alongside apprentices from other SMEs as well as BT and Virgin Media among others.
To finish as I started this blog on some statistics…
In 2014 there were 5.2 million businesses in the UK. Over 99% of these businesses are SMEs (0 to 250 employees). If 15% of these SMEs offered one apprentice post – maybe as part of their corporate social responsibility, every 16 to 24 year old in the UK would have a job opportunity. I know this is a simplistic view especially when you consider only 24% of businesses are employers. But, balancing this with the fact that SMEs are responsible for over 60% of employment and almost 47% of turnover I sincerely hope that whichever party is in power following the general election, SMEs and apprentices get the support they deserve.
Useful links…
- Small companies are the government’s big agenda, says Vince Cable (SME Insider) – click here
- The Institute of Telecommunications Professionals – click here
- The Worshipful Company of Information Technologists – click here