Meeting the Training Challenge of SMEs

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David Greer, National Project Manager for Employer Training Pilots at the Learning and Skills Council, explains how ETPs can bring tangible business benefits for small and medium enterprises.

Small businesses are half as likely to train their staff as larger businesses. These were the recent findings of the Learning and Skills Council’s National Employers Skills Survey, which polled the opinions of 72,000 employers across England on training issues.

According to 52% of respondents, skills shortages led to customer service targets remaining unmet; 44% reported loss of business or orders going to competitors; and 38% reported increased operating costs, resulting in reduced profits.

Evidence shows that even SME owners committed to skills development find it difficult to overcome the practical issues involved in organising training for their staff. The cost of training presents real problems, as does the loss of work time while employees train off-site and the added worry of whether the training provided will be relevant to the business.

Employer Training Pilots

These formidable barriers are being addressed thanks to a scheme managed and funded by the Learning and Skills Council and jointly devised with Treasury and the Department for Education and Skills. Employer Training Pilots (ETPs), offer businesses subsidised training at National Vocational Qualification (NVQ) Level 2 (equivalent a GSCE) and essential skills, with approved providers, and compensation to employers to cover the time taken off by staff for their training.

Introduced into six areas of the England in September 2002, the pilots received a boost in the spring Budget of 2004 when the Chancellor Gordon Brown announced a £190million expansion to the existing scheme. The pilots now cover a third of the country.

Through ETPs, employers can define the areas in which they want their staff trained and have an overall staff assessment to gauge the skills needs of their business. Training advisors will then develop individual training plans for staff and source the training organisations best suited to provide the necessary training both on and off site.

Feedback from employers so far has been overwhelmingly positive, with nearly 11,500 employers and more than 70,000 employees already benefiting from training. Over 90% of firms involved in the scheme are small and medium sized businesses and over 70% have fewer than 50 employees.

The pilots have been particularly effective in attracting those traditionally thought of as hard to reach with training, such as people who left school at or before the age of 16 with no qualifications. They are primarily aimed at anyone aged 19 or over, in full or part-time employment, who does not have the equivalent of five GCSE A* to C grades or a Level 2 NVQ. ETPs have so far received over 90% satisfaction rates from employers and employees alike.

Results

Brain Moore, Managing Director of Smart and Kleen commercial laundry based in Tyne & Wear, trained five of his employees with ETP funding. His staff received essential skills training and support, to help them develop their literacy and numeracy skills.

“I have been really impressed with the success of the scheme," he said. "The benefits of the training are evident in the staff’s commitment and enthusiasm for work. Now they can carry out tasks such as converting gallons into litres with confidence. By training our staff we are giving them an incentive to progress within the firm, which results in staff retention, leading to better customer relations.”

Brain’s employees were initially unsure about returning to learning, but receiving regular visits from their training assessors they excelled and even set up their own homework club.

Employee Jakki Hindmarsh, 41, said: “I left school at 16 without much of an education. I had my three children when I was very young and didn’t work for years. I felt really nervous about going back to school, even if it was at work. However, we took our exam at Christmas and I passed, then decided that I wanted to go ahead and do part two.”

Industry Compliance

Allowing employees to gain formal qualifications to match their skills and comply with industry legislations is another important part of the scheme.

Muhammad Shabir Mughal, proprietor of the Spicy Hut curry restaurant in Rusholme, Greater Manchester, signed three of his staff up for Level 2 NVQs in Food and Hygiene. Regulations being introduced next year will require every eatery to have at least one employee with basic food hygiene qualifications.

The skills training is already paying off – at the end of last year, the restaurant won the Manchester curry chef competition in October and came third in the North West heat. Judges not only marked competitors on the dishes they created but also on preparation procedures.

Muhammad said: “We received the highest marks for hygiene in the preparation of the meal. I believe our success was a direct result of the food and hygiene course and I’m delighted.”

Evaluation

The scheme is subject to continuous evaluation to ensure that employers’ needs are being met and the delivery and method of training exactly suits their business.

At the recent Skills Strategy One Year On event, which recognised the benefits to employers of ETPs, the Secretary of State for Education and Skills, Charles Clarke said: “We will draw on the principles of these pilots and their evaluation as we decide the form of any national programme to support employer training and, as from 2006/07, the mainstream funds for adult training increasingly reflect this way of working.”

Introduced in September 2002, the LSC originally ran six ETPs in Tyne and Wear, Greater Manchester, Derbyshire, Birmingham and Solihull, Swindon and Wiltshire and Essex.
In the summer of 2003 the pilots were extended into a second year and into six new areas – Berkshire, Kent and Medway, East London, Leicestershire, Shropshire and South Yorkshire.
Six new areas set to benefit from ETPs by September this year are: West Yorkshire, Black Country, Cambridgeshire, Devon & Cornwall, Lancashire and the North East (the first regional ETP comprising of Tyne and Wear, Northumberland, Country Durham and Tees Valley).
* For more information on ETPs visit the LSC website or call 0870 900 6800.

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