The engineering manufacture sector hit the headlines recently, with news that it had officially entered a recession. In the past, many firms would have cut out the ‘easy’ costs, with training being an early casualty. But this time many firms bucked the trend, on the back of increasing evidence that their training budget was a sure-fire way to increase profitability and productivity even during lean times. EMTA, the National Training Organisation for Engineering Manufacture, and a Corporate Member of the ICPD, publishes a regular ‘Skills Scoreboard’ which shows a clear correlation between increasing levels of training and increased value added per employee.
Survey after survey shows that training needs to be treated as an investment rather than a cost. Earlier this year, the Learning and Skills Council published a report which showed that organisations which spend an extra £50 a week on training see their profits grow nearly twice as fast as profits in companies not allocating the extra funds. Bryan Sanderson, chairman of the LSC, highlighted the importance of this research, saying: "Some businesses still question the impact of training on the bottom line. This research will pull them up short."
In engineering, the message is getting through. Michael Sanderson, EMTA’s Chief Executive, said: "By investing in training and staff development, companies are increasingly viewing people as an asset and a cornerstone to the future success of the business. Our Skills Scoreboard shows that increasing levels of training investment improves business performance." Hüco Lightronic in Northern Ireland, a recognised Investor in People, provides an excellent example of best practice. With a high investment in training, sales turnover increased at more than twice the all-companies average according to EMTA’s last survey.
This is particularly important for a sector where 92% of companies have fewer than 50 employees, and over half of the 80,000 engineering sites or establishments have under 5 employees. Research undertaken by the University of Cambridge Centre for Business Research showed that those small firms offering sustained training to their employees fared much better in employment growth than those firms which did not. Training very clearly provided the impetus for growth – a vitally important message for UK industry.
K Home Engineering in the Tees Valley has been a standard bearer for apprentice training in recent years, and makes a very clear case for investment. Engineering Director Peter Kay highlights the fact that around £9,000 is the bottom line contribution for each apprentice at the end of their four year training scheme – not bad from an investment of only £34,000. But economics aren’t the only reason for good training. "We have a dozen ex-apprentices still working for us, including six in Dubai, and have lost only one. They’re having the time of their lives and we’re getting a return on those we’ve trained."
This is echoed by Jane Gilham from Xtrac, the world’s leading supplier of motorsports transmissions based in Thatcham in Berkshire. "Our apprentices are key contributors to our business", she said. In fact, the strength of their training has enabled Xtrac to solve a major business problem. "We had identified a number of areas where we could have had a skills shortage through retirement, so we used the Modern Apprenticeship to recruit some young people into those areas. As a first tier supplier to the motorsports industry we can offer challenging work across a whole range of motor environments, but often young people don’t think about the huge number of companies that make up the motorsport industry. Without people joining the first tier suppliers we cannot support the industry – a world class industry that is British based, and we want to keep it that way."
The knock-on benefits for business performance are clear. At BOC Edwards Vacuum Technology in Eastbourne, Paul Nash (a manufacturing cell manager) explained that "NVQs (National Vocational Qualifications) were a great vehicle for helping people use their skills to their best advantage. This has reinvigorated our internal quality systems and improved a wide range of business processes. We are able to use our people far more effectively now." John Askew, Internal Verifier at the Eastbourne site echoes this, adding: "Implementing NVQs has required us to be flexible with our people, but since then there have been business benefits. Staff are empowered by their training, enabling them to realise their capabilities."
This ability to maximise the potential of staff is critical, especially when business conditions present challenges. At a recent NVQ awards ceremony at Unipart Eberspächer Exhaust Systems Ltd, David Nicholas, Managing Director of the Unipart Manufacturing Group, said: "I look back on two years ago with the traumatic news that BMW were selling Rover, and wondered what kind of shape we were going to be in. It could have been easy to abandon many of the things we were doing, but I am really pleased that you have all stuck to the task and received your awards today. The story does not end here – it is about how we now move forward." The investment paid off, and the company is now poised to pick up several major new contracts thanks to its continued investment in training high quality staff.
The focus on using training to improve business performance has benefited those providers who commit to high quality, customer focused provision. John Caulkin, Director of Training at North Staffordshire Engineering Group Training Association Limited (NSEGTA), says: "Training needs analysis projects are increasingly demanded by my clients. Employers want to ensure maximum efficiency is achieved with all their resources, and their training investment is no exception. Many of our small company members have been able to get help for this from the European Social Fund, supported by EMTA – our National Training Organisation for Engineering Manufacture. This ensures that all our clients get the right training, at the right time, with the right people, for the right cost." This funding has helped a range of companies undertake more training than they would otherwise have been able to afford, contributing to the skills base of their companies and putting them in a much stronger position to respond to market forces. One of John’s member companies said: "The training needs analysis has identified areas we would never have considered without help. The training is adding to our skills base, which in turn will make us more competitive."
Peter Jones of The Training Connexion takes a similar view. "Our training is customised to specific competence standards for a particular job, based on employer requirements." Managing Director, Isobel Hylands, reinforced this approach. "It doesn't matter to us if you have three employees or 3,000 employees; we treat everyone the same. Everything we do here is customised to our clients’ needs, which includes training novices and experienced welders to both national and international approval standards and also by reinforcing job competence and knowledge through our NVQ programmes."
EMTA’s research department is involved in a range of studies, including the Skills Scoreboard. Further details can be obtained by calling 01923 238441 or via e-mail at research@emta.org.uk.
