Apprenticeships: The industrious revolution
05 July 2016 -
A new breed of apprenticeship is offering employers a way to accelerate and keep top talent
Chris Hallett struggled with academic work in his teens. He could not see where it was leading and dropped out of college after failing most of his AS-levels. Now aged 30, this Barclays bank employee loves being one of the UK’s first Chartered Manager Degree Apprentices, combining study for a business degree with on-the-job training.
“I genuinely believe [degree apprenticeships] are the way forward. It’s a lot easier to see how the theory relates to the practical side of things,” says Sunderland-based Hallett.
He has been with Barclays for eight years, though most of his fellow degree apprentices training to be branch managers of the future are fresh out of school or college.
Barclays and Nestlé are pioneers of the recently launched Chartered Manager Degree Apprenticeship, developed by a group of 40 employers and universities, led by outsourcing company Serco, and supported by CMI and the government.
Others, such as Virgin Media, Pizza Hut and the Civil Service have also signed up.
An apprentice who completes a three- to five-year course will earn a degree in management and business and become a Chartered Manager. By 2019, there could be 10,000 people doing these apprenticeships, making them a useful contribution to raising the calibre and professionalism of British management.
They also form an important part of efforts by the government and employers to restore apprenticeships as a prime route into work for young people.
Turning the tide
To understand the emergence of degree apprenticeships, we need to understand the changing views towards apprenticeships as a whole.
Apprenticeships, in which people work for an employer while learning their trade or profession, date back to the Middle Ages. Numbers dropped sharply in the 1970s, when traditional industries declined.
Since 1995, successive governments have put money and effort into reviving them, but there have been obstacles.
For 20 years, ministers have been pushing more young people to go university, which nearly half now do. The government spurred the creation of 2.3 million apprenticeships from 2010–2015, and has pledged a further three million by 2020.
There has been heavy criticism about quality, though.
Much of the increase in the last parliament was accounted for by employers, including supermarkets, putting existing staff through short, low-level courses in skills such as making coffee and cleaning floors.
Now there is an opportunity to turn the tide in favour of higher-quality apprenticeships and, particularly, of degree apprenticeships.
The government is making reforms and is keen for apprenticeships not to be seen as inferior.
“The UK economy is diverse and apprenticeships can provide a route into every niche, from accountancy to engineering, from software development to being a chef,” says Nadhim Zahawi MP, the prime minister’s adviser on apprentices.
Two other factors are driving change.
First is the rising cost of university education in a competitive job market (the average debt incurred by a graduate now exceeds £40,000 – more than double the debt levels before the 2012 reforms).
Second is a shift in parental attitudes: earlier this year, a CMI-commissioned survey, carried out by Populus, found that 61% of parents would now favour their child doing a degree apprenticeship with a top employer over a traditional Oxbridge degree.
According to educational thinktank the Sutton Trust, apprentices in top-quality schemes will, on average, be paid £50,000 more during their lifetime than those with an undergraduate degree from all but Britain’s top universities.
Putting employers in charge
The aim of government reforms is to put employers in control of designing schemes.
So far, more than 140 ‘trailblazer’ groups of employers have drawn up at least 350 standards for apprenticeships that aim to be more rigorous than the previous frameworks.
The government has also tightened the rules by ensuring apprenticeships last for at least a year, demanding that a fifth of training be off-the-job, attempting to shift the focus to younger workers and insisting that bidders for government contracts worth more than £10m must show they have a “reasonable proportion” of apprenticeships.
More controversial is the government’s apprenticeship levy: from April 2017, companies with a payroll of more than £3m will have to pay 0.5% of staff spending to the government to fund the system.
The more apprentices they take on, the more state-supported training will be available.
The levy aims to raise £3bn a year by 2020. It will increase spending on apprenticeships and also quality, ministers say, since employers will want value for money.
Some business groups warn that the levy could increase costs without improving skills, as companies may try to rebadge existing schemes or simply cut other types of training.
A higher level
After repeated revamps of Britain’s vocational training system, some experts are reserving judgment on changes to the apprenticeship system.
Baroness Alison Wolf, a professor at King’s College London and author of a government review of vocational education in 2011, says the reforms should in principle improve quality, but sees the prospects as “quite finely balanced”.
She is particularly concerned about the target of creating three million apprentices, which could encourage quantity over quality. “The only logic is that it’s one million more than last time, and they only got the two million because most were short and rubbish.”
Baroness Wolf is, though, in favour of the apprenticeship levy: “It means that employers will have to do what they have done everywhere else in the world, which is pay for some training themselves.”
Levy systems operate in more than 50 countries, including Denmark, France and Austria. David Harbourne, director of research at the Edge Foundation, a charity that promotes vocational learning, is more optimistic.
He says: “What we have seen through the trailblazer process is an explosion of interest among employers, who are really keen to develop higher and degree apprenticeships. As they do that, we will see the numbers enrolling increase very rapidly.”
Petra Wilton, CMI’s director of strategy and external affairs, says the degree apprenticeships will help to meet expected demand for one million more managers by 2020 and raise professional skills.
CMI says four out of five UK bosses are ‘accidental managers’, who are promoted on the basis of their expertise in their job, but have little training in managing a team or a department.
“This programme is, for the first time, giving funding and legitimacy to driving high-level skills and linking it to professional registration and recognition,” Wilton says. “It’s a transformational step for the government to recognise this across a broader range of disciplines.”
CMI also hopes to introduce a Masters Degree Apprenticeship (level 7) and programmes at level 3 (team leader) and level 5 (operations manager).
Wilton sees weaknesses in leadership and management as a factor behind the UK’s poor productivity performance. A team of academics including John Van Reenen, director of the Centre for Economic Performance at the London School of Economics, interviewed 14,000 employees around the world and found that British workers rated their supervisors lower than those in countries such as the US, Germany and Japan.
Fast-tracking management, filling skills gaps
Management is seen as particularly suited to a higher or degree apprenticeship, because skills need to be learned through practical experience.
Barclays, for example, has introduced higher apprenticeships in relationship management, group finance, human resources and internal audit, as well as leadership and management. The latter is run in partnership with Anglia Ruskin University.
Degree and higher apprenticeships are blurring boundaries between vocational and academic education, which could help to reduce any perception that apprenticeships are second best.
“It will become increasingly blurred,” says Mike Thompson, Barclays’ head of apprenticeships. “For certain sectors, vocational education through the university pathway will become the norm. For example, I believe more people will learn IT and get related degrees through the workplace.”
Tom Banham, Nestlé’s head of talent acquisition, says the students on its degree apprenticeship programme would not only inject vital professionalism, but also provide relief for an ageing workforce.
Around 15% of its skilled manufacturing team is coming up for retirement in the next 15 years, so a lot of knowledge and management skills will be lost.
“That’s why, in 2012, we built the Nestlé academy, which is purely focused on driving entry-level talent for our organisation and giving them different development opportunities,” says Banham. “This programme is a fantastic opportunity for individuals joining our organisation: they get a degree apprenticeship from Sheffield Hallam University, they rotate through four commercial areas and, at the end of the three-year programme, they get a permanent opportunity at Nestlé, a degree and they become part of CMI.”
Towards a European model?
Across Europe, attitudes towards apprenticeships have long differed.
This has roots in the 19th century, when industrial Britain had a lot of low-skilled labour, notably in textiles, and other northern European countries sought to compete by investing in skilled industries and strong vocational education and training.
Germany’s apprenticeships system goes back to medieval times, but has endured despite criticism that it can be overly prescriptive.
Today, in Germany, about 60% of school leavers start an apprenticeship in one of about 350 trades. Often they have better wage and employment prospects than those in higher education.
Schemes cover not only high-tech jobs. A bricklaying apprenticeship, for example, offers the opportunity to become something closer to a civil engineer.
The UK appears to be moving in a similar direction.
Apprenticeships can be “incredibly beneficial” to employers, says Marcus Mason, head of business, education and skills at the British Chambers of Commerce, because they help to create a more skilled and motivated workforce and reduce recruitment costs.
Melanie Nicholson, Serco’s director of skills, began her career as an apprentice dental nurse and has “seen some fantastic apprentices over the years”.
She believes apprenticeships work well because they are “aligned with the job role that [apprentices] are doing and the fact that everything they learn they are putting into practice”.
She believes perceptions of apprenticeships are starting to improve, but “it will take a while and will depend on quality. I think individuals are starting to see it as a viable option. Parents I am not so sure about, and there is a long way to go with schools.”
A Sutton Trust study found that 65% of teachers would not advise a pupil who achieved the predicted grades for university to pursue an apprenticeship. But that was before the introduction of degree apprenticeships.
The challenge now is one of awareness. At the moment, only 13% of parents have heard of degree apprenticeships.
Education secretary Nicky Morgan, has pledged to legislate to end the “outdated snobbery” against apprenticeships and ensure that colleges and companies providing apprenticeships get into schools to give careers advice to pupils.
Baroness Wolf believes there is no stigma attached to apprenticeships as such: “It depends which apprenticeship and with whom. What the public has realised is that only a few apprenticeships are worth having. The only reason the whole thing hasn’t collapsed totally in the face of successive misguided government policies is that actually people think apprenticeships are great.”
In the end, apprentices themselves may be the best advocates.
Hallett, who wants to work in digital projects when he finishes his degree apprenticeship at Barclays, has no doubts about the value of his path: “If something like this was around when I was school-leaving or college age, this is the route I would have enjoyed going down.”
Visit managers.org.uk/degreeapprenticeships to learn more about the Chartered Manager Degree Apprenticeship
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