I recently chatted with the CEO of a plc who told me that people in his HR department were always full of positive and earnest strategies about how to improve the skills and capabilities of the various divisions within the business.
His suspicion, though, was that such endeavours were being done to rather than done for the divisions. He believed the most effective training programmes were those that were actually sought by those at the coal face.
His response? The budget of the HR department was moved to the divisions and role of the HR transformed from being the provider of training to being the HR partner in support of training plans that actually came up from around the business.
This, in essence, is the crux of employer ownership of skills pilots.
To encourage businesses to take greater responsibility for the skills of their workforce, UKCES published a vision for the way the government should invest in skills - one which is employer owned and outcome driven.
Encouragingly, the government supported this, and the £340m Employer Ownership Pilot was born. I believe this is a fantastic opportunity to collectively move us towards a new approach for making public and private investment in people work harder and achieve more; aligning investment in people to broader business decisions and ensuring employers have the pipeline of talented people that they need to succeed.
The pilot places purchasing power with employers in exchange for significant investment of their own. Round 1 saw some £90 million of public funding more than matched by £115 million of inward investment from over 30 employers. All training delivered under the pilot must be led by an employer who can prove that this training is essential to the business, will result in jobs or growth and is not available through the normal publicly-funded channels.
So, for example, thanks to the Employer Ownership Pilot, Nissan’s Sunderland plant will be training an additional 3,600 people (including 2,000 new recruits) to enable it launch four new models in two years. Without this additional training, they would only be able to launch one new model. In Yorkshire and Humberside, more than a dozen employers in the energy sector have got together to launch an on-site “skills enhancement centre”. This allows new recruits and existing staff to learn essential skills, like the emergency shut-down of a hazardous power station, in an environment which combines realism with safety. It also means that some employers, who were previously reluctant to recruit unskilled staff into such a dangerous working environment, will be able to offer apprenticeships and traineeships for the first time.
All successful businesses know what problems they are striving to solve, although the frequent refrain that they don't necessarily know what qualifications and training can help solve them is true. That is why we have been so encouraged by the degree of involvement from colleges and providers in Round 1. Colleges and providers who are able deliver real expertise in high quality training solutions are well-placed to form strong, lasting and mutually beneficial partnerships with employers as a result of the pilot.
Round 2 of the Employer Ownership Pilot is now open for business. My hope is that this time around, bids will demonstrate that skills are an integral part of any wider industrial strategy. This could take a number of forms depending on the requirements of any given industry or locality. For example, employers may come together to take end-to-end responsibility for workforce development in their industry; entrepreneurs may show how they can work collaboratively with colleges to deliver high quality learning and take responsibility for ensuring that it boosts local competitiveness; and employers may collaborate through supply chains to engage and empower smaller businesses.
Colleges and training providers play, and will continue to play, a vital role in ensuring the country has the skills it needs for the future. By simplifying and strengthening their relationship with employers – a true partnership - I believe that role could be even greater.
Michael Davis is chief executive of the UK Commission for Employment and Skills (UKCES), a social partnership that aims to raise skill levels to help drive enterprise, create more and better jobs and economic growth
The deadline for applications to the second round of the Employer Ownership Pilot is 28 March, although expressions of interest must be registered by 11 March. For more information, visit www.ukces.org.uk/employerownership