Steve Nash, Chief Executive at the Institute of the Motor Industry

 

Steve Nash, Chief Executive at the Institute of the Motor Industry, looks at the challenges when it comes to increasing the uptake of apprenticeships: 

There is, currently, a welcome focus on vocational training after government committed to transforming apprenticeships in the Autumn budget, with the aim of making them more inclusive and diverse.

However, the proposed changes could have the reverse effect of reducing enthusiasm from SMEs in the short-term. And there is still a lot of work to do to ensure young people and, crucially, their parents, understand the opportunities apprenticeships offer them.

This is particularly noticeable in the motor retail sector, where perception about the industry and the opportunities has not caught up with reality.

The automotive retail industry has over 12,200 Apprentice starts each year and the IMI is the major provider in this area with 67% of all Apprenticeships in the automotive retail sector, in addition to full and part-time vocational qualifications.

The retail motor industry is, therefore, wholeheartedly committed to futureproofing apprenticeships and has already engaged as positively as it can with the reforms. In fact, the motor industry is one of the most engaged sectors when it comes to adopting and promoting the new apprenticeship model.

For this reason, the IMI urges government to stick with the new model already introduced and focus efforts on ensuring businesses fully understand how they can maximise the levy for the benefit of their organisation.

In the Autumn Budget, Philip Hammond announced that he is giving an extra £695 million to kick-start the new apprenticeship programme and this extra boost is welcome. However, the danger is that the Chancellor may have undermined the impact of the changes for small businesses by delaying their implementation.

The announcement revealed that the contribution small business have to make to the cost of apprenticeships is to be reduced from 10% to 5%. However, it won’t come into effect until next April. The result could see any small business already trying to balance their books and cash flow tempted to delay apprenticeship starts, on that basis.

This could have been avoided by implementing the changes with immediate effect. That said it is encouraging to see a lift of some of the constraints of the Apprenticeship Levy. In particular, it is great to hear that large businesses will be able to invest up to 25% of their apprenticeship levy to support apprentices in their supply chain.

Although the motor retail sector remains one of the strongest advocates of apprenticeships, many employers in the sector fall into the SME category. This means it is vital that everything is done to encourage these businesses to take up of apprenticeships. The worry is that the Autumn Budget could mean a step backwards in the short term.

An Image Problem

The skills gap in the motor retail sector is already critical. Young blood is, therefore, vital as the rapid development of new technology around electric, autonomous and connected vehicles changes the face of motoring, opening up a world of exciting new career opportunities.

But the sad fact is that apprenticeships still have an image problem and that’s a key part of the struggle to improve take-up.

IMI research has shown that only just over a third (36%) of parents would encourage their child to do an apprenticeship. More than one in 10 think people who choose vocational training are not as clever as those who take an academic route after school.

The perception is that apprenticeships are a second-class option for school leavers. Worryingly, this misconception about the value of apprenticeships has actually increased in the last four years, despite the government focusing on vocational training.

In 2014, 7% of respondents to IMI research said they thought those who did apprenticeships were not as clever. In our latest research, a quarter of parents think that their child won’t earn as much, if they don’t get a degree, which is an increase from 15% in 2014.

Lacking careers advice

We need better understanding and communication among schools, employers and career advisors about the career choices available to young people through apprenticeships. However, the budget constraints in education make it an uphill task to address this issue.

Schools offering careers advice to young people is at an all-time low, which is why it is vital that we don’t underestimate the importance of equipping parents with the knowledge to give their child informed careers guidance.

Our research shows that the majority of 11-15 year old’s receive little to no career’s advice whilst at school – even though over 60% of teenagers say they wanted to jump straight into work and start earning money to avoid the growing debt associated with a university degree. However, only 1 in 5 said they would choose an apprenticeship after leaving school.

On top of the general lack of awareness of the opportunities apprenticeships offer, only 5% of parents we surveyed were aware that an individual can earn money while they study. And worryingly, this awareness has declined severely over the last four years. In our study in 2014, 20% of parents understood the concept of earning while learning.

It’s not all bad news, though, because while nearly half (42%) of parents believe employers are looking for a degree when recruiting young people, over a third (36%) believe that it’s more important to learn a trade or skill than it is to learn a subject. And encouragingly, showing initiative and common sense ranked highest in the attributes parents think employers look for at 61% and 55% respectively.

However, not just apprenticeships have an image problem. The motor retail sector also needs to do a better job of selling itself to the next generation of workers – and their parents.

In our latest study, it was clear that parents don’t believe the motor industry offers an ideal career for their children. Just over a quarter (27%) said they would be happy for their child to become a vehicle mechanic, yet 59% favour a career in engineering for their offspring. And 8% said they would be embarrassed to tell people that their child worked in the motor trade.

There are many misconceptions associated with working in the automotive industry. Yet, as motoring technology evolves – from low emissions and connected to autonomous – a vast range of job roles are being created, such as tech gurus, designers, and IT software specialists. And there is unquestionably a skills gap in the sector, putting anyone who wants to focus on the automotive retail industry in a really strong position for great career and earning opportunities.

The motor industry provides teenagers with long-term careers through a wide range of exciting job roles – plus the option to continuously learn new skills enables them to progress up the career ladder. And the IMI is focused on helping businesses and training providers engage with young people to raise the profile of vocational training in the automotive sector.

For example, IMI Autocity has been developed for businesses, parents and teachers, supplying them with information to help teenagers make informed choices.

The motor industry has long been a shining beacon for the apprenticeship model. The sector has relied heavily on apprentices to evolve our workforces and keep up with innovations. And with businesses now at the heart of apprenticeships following the introduction of the Apprenticeship Levy and new Apprenticeship Standards, it’s vital that information is provided to teachers and schools, so that they can positively influence young people when they come to making decisions about their career and future learning.

With so many changes on the horizon in terms of the UK workforce, no time can be lost in building a sustainable pipeline of talented youngsters who businesses can then recruit and train.

Steve Nash, Chief Executive at the Institute of the Motor Industry

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