An interesting publication launched this week by the CBI which focusses on the requirements for business up to 2030. There is some interesting commentary, nothing of much surprise to be honest but none-the-less the key conclusion is the training and skills market in the UK is huge and with very few exceptions – there aren’t many training providers, Colleges or Universities that have been able to successfully scale businesses that combine both publicly funded provision – mainly through the levy and privately funded training provision.
With over £44bn of annual spend on training – yes you read it correctly – £44bn! The value to someone who can ‘crack it’ are significant but why has it not happened successfully and why is there no sign of organisations emerging to address the opportunity – after all – the report says that business of all types are looking to spend their Levy Pots and also develop their people as we emerge from COVID-19 and the business environments in which we all operate changes forever.
I have been fortunate enough to work on both sides of the divide – a consumer of training spend at KPMG – where until very recently 99% of their training budget was spent with providers who had nothing to do with publicly funded training and more recently working with a range of businesses in a variety of sectors who commission training from all sorts of different places. I have also built some of the largest public sector training businesses in the UK, including in the levy space – enabling me to discuss openly with MD’s of companies what their needs are and some of the solutions to get what they need to make their people and their businesses more competitive.
To me there are some stark conclusions from these experiences which I would like to share, some of them in the CBI report but many of them aren’t. The CBI focus on what others should be doing, more than its members – I find this both a narrow minded judgement and not reflective of my own experience – so here goes:
The commissioning process works very differently and the talk is very different!
The process within many businesses, large or small in working with providers when it is privately funded is often through recommendation and word of mouth. In my experience, most providers, often supporting large PLC’s are small and niche and in my experience the quality of what they deliver is variable – they survive through great relationships within the HR department of those who are commissioning them and often an HR professional will take them to their next role as their preferred contractor. There is little tendering, price is not an issue and the modus operandi is building strong relations.
Contrast that with the same employer engaging providers using their levy which they are free to use within the restrictions of the funding methodology for Apprenticeships. Prolific tendering processes, often based on over inflated enrolment volumes get providers excited by long term relationships interrupted by delays by the employer, reduced volumes which puts viability at risk and more than often stalled programmes due to ‘restructuring’ imposed by others in Authority.
If we are really going to move forward, dare I say we need to change the way we talk and look to have a more mature way of commissioning based on building long term relationships. Name me more than a handful of providers that have crossed the divide of offering both publicly funded programmes and commercial programmes on a joined up basis – I’m struggling – WHY– because we talk differently !
For me, the employers are more than 50% at fault and I see this from both sides which lies at the heart of the problem for me – let’s move to the core issue….
HR is under invested in learning and development
With some notable exceptions, business does not invest in learning and development. I have worked closely with some major organisations with more than 100,000 employees and their learning and development teams consist literally of one person and their dog. Many of the very same businesses win lots of national awards for all sorts of learning and development initiatives but they are often just that – one initiative after another.
I have seen some excellent practice – and yes KPMG was one great example where learning and development was aligned to performance review, business excellence and supporting the business achieve growth and reduce professional practice risk. Clearly, it didn’t get it right all the time but the key difference was it was invested from the top of the organisation and L&D was heavily invested in, not just through cash but most importantly a team to drive it forward.
Too many businesses have no real strategy for L&D, if they do it changes by the day or at best month, particularly if a PLC getting close to year end! And controversially most HR directors I have met are not really trained in L&D at an expert level – their focus is on other things such as Industrial Relations and other important HR policy matters.
That is a core reason why the levy has not been spent – not about flexibility although that is part of the reason – but few businesses have a clear rationale about how the levy fits into a proper strategy.
Until business invests in L&D – we will be going around in circles for the next 20 years debating why the UK continually falls behind other OECD nations in terms of competitiveness and skills.
Innovation or lack of it
Much has been said about how providers of all types have responded to COVID by introducing e learning – from Schools to Universities and other providers.
But let’s be honest – most of it at best has been simply ‘keeping in touch’ with learners or participants involved in a programme rather than any real progression – less than 40% of School Children have actually developed their skills during lock down and we all know of School children who have had little or no contact from their School. This is the same in industry.
We operate as a nation with little innovation – I have been fortunate enough to examine learning approaches in Industry in the USA and Australia as well as the UK and other nations and being honest there is little that inspires.
Taking induction just as one simple example – most companies still deliver it the same way in which it has been done for the past 20 years – staff intensive, time consuming and very costly. I know of only one employer worldwide who has addressed this and come up with a solution to dramatically reduce time, cost and improve reporting and effectiveness – one simple way of campaigning for more flexibility in the use of the levy – a win – win for everyone.
We don’t have a culture of life-long learning in the UK!
The CBI correctly highlight the need for individuals to invest in their own learning – I am guilty of this but let’s be honest the UK does not have a good track record of individuals taking responsibility for their own development – if I was recruiting now, my questions would be focussed on ‘what have you done in the past six months whilst on furlough’ – and I doubt I would be inspired by most of the answers, including if I was answering the question as a candidate.
There is not easy answer to this one – it’s about our culture which is very different for example to those who live in the USA. We don’t encourage lifelong learning – and it’s not just about who pays. I am old enough to have experienced a vibrant market for lifelong learning in the 80’s and early 90’s – it was called ‘evening classes’ – people learning new skills, often paying themselves in College environments where in essence the College ran two businesses – one 9-4pm aimed at full time students and ‘reopening’ at 6pm for evening classes of all different types – I still believe there is a market for this in the UK, supported by business or indeed by individuals themselves.
So in conclusion, it is easy to say the Apprenticeship Levy has been a disaster with many £bn’s of underspend. After all, the ESFA designed it that way so large business was paying for the whole of the Apprenticeship provision across the whole of the SME community.
Releasing the levy back to employers is not the answer – WHY – because most don’t have a strategy in place on how to use it and in times of hardship – most will cull the budget to hit the City expectations or by other stakeholders.
We need to rethink the investment of the £44bn each year. In my view, lots of it goes to waste and doesn’t present value for money – therein lies the opportunity – Anyone up for a discussion?
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