The logistics sector is equivalent in size to that of manufacturing and construction, yet it gets only a tenth of the public funding available for the training and development of its people.
In the next two and a half years, the Government has pledged in excess of 290 million to the sector in terms of training for drivers, warehouse and administrative staff alone. Yet unless the logistics industry joins the skills revolution now, it will miss out on funding and get left behind in the skills race.
In July the Government produced its response to Lord Leitchs review of skills. The core premise of the report, World Class Skills, is that a more highly-skilled workforce is key to achieving higher productivity, greater competitiveness and enhanced profitability across all organisations and all sectors. It goes on to outline the practical reforms that it will introduce to spark off the skills revolution and close the skills gap at all levels.
This means putting employers in the driving seat and changing training from being supply driven off the shelf training packages that have little relevancy to the workplace to demand-led and driven by the real business needs of employers. In the logistics sector, Skills for Logistics, the sector skills council for the industry, is working hard to ensure that the supply of skills and qualifications is driven by employers. It has worked extensively with employers and what is apparent is that there is a need for training that is both relevant and consistent. Mick Jackson, director of skills and development at Skills for Logistics, explains, After sitting down with employers and developing the sector skills agreements, we then bring training providers and employers together around the same table, so that training provision is employer led from the initial design stage.
Skills for Logistics mission is to move companies away from viewing training as an ad hoc activity to creating a culture of continuous learning through CPD (Continuous Professional Development). Jackson believes this will help develop what is often seen as an unsophisticated industry into a profession, and ensure that people in logistics think of themselves as professionals. The construction and manufacturing sectors are now seen as professions. These sectors have invested in becoming world class and competitive and how fully embrace NVQs and apprenticeships are embedded into their fabric. In the logistics sector where we do see evidence of investing in training it is focused on competency development of employees rather than on qualifications. However this is proving to be short-sighted. The Governments objective is to reduce the number of employees without at least a Level 2 NVQ (equivalent to 5 GCSEs at grade C) by 2010. This means that there is 290 million available to fund 161,000 new NVQs in the logistics sector in the next two and a half years. We need a culture of acceptance of publicly recognised qualifications to help develop our profession, give our employees the self esteem that comes with it, and secure the funding that we deserve.
It is a cultural change that is needed to up-skill the logistics workforce. Organisations need to create and embed a culture of learning. The key to this is a belief that learning and the development of skills will make a big difference to the organisations success. Bob Gibbon, managing director of the National Skills Academy for Manufacturing, says, When it comes to skills development there are those employers that know how to do it and those that dont. The first part of the process of cultural change is education; awareness throughout all parts of the organisation of the benefits of learning. Then the process of skills development needs simplifying to answer questions such as: What do we need? Where do we get it from? And how do we trust it? Then employers need to see that absolute business results are delivered quickly, this will give them confidence and encourage them to invest. Organisations need to value skills development, and live and breathe this from the top down.
The Advanced Modern Apprentice scheme has a big part to play in the learning revolution. There are 250,000 apprentices currently and they are proving the worth of their investment. Apprentices are up to 14% more productive than other comparable employees who have not completed an apprenticeship. And the net present value for an advanced modern apprenticeship is 17 for every 1 of public sector expenditure. This is an excellent return on investment, particularly considering that the Government is promising to fund two thirds of the cost of such schemes. An Apprenticeship allows facilitated learning, with a high level of one to one support, delivered at the place of work. Briggs Equipment is the only company in the materials handling industry that has designed and runs its own in-house fork Truck Maintenance Apprentice Scheme (see box below). Peter Fanning, director of Human Resources at Briggs Equipment, comments, The shortage of skilled workers across the materials handling sector is a major concern. As an industry, we must take responsibility for the training of the next generation of engineers, and who better to train them than the experts of today.
If the learning process is managed properly, driven by a training and business needs analysis, aligning training needs with overall business needs, and with clear objectives and measures set, the return can be astounding. This is not just measured in terms of how many more parcels can be shifted, or by how much damage is reduced, as Mick Jackson confirms, We have seen organizations that put a thrust on improvement in basic skills and shave 3% of their wage bill, because of increased employee retention, reduced churn and reduced absenteeism. One large company we are currently working with has just put in a series of apprenticeships with clear pathways and stairways through the organization. They have already seen savings of 500,000 and are projecting 1.5 million. These are fantastic results and significant business benefits from investing in skills development.
The benefits of skills development are strong bottom line business results and increased access to high levels of public funding. But perhaps the Holy Grail lies in becoming a learning organization, for out of this comes a virtuous spiral of increased training and ever improving business results delivering global competitiveness. An organisation that encourages learning among its people, promotes an exchange of information that creates a more knowledgeable, productive and, most importantly, happy workforce. Given that over 500,000 people working in logistics lack functional numeracy and literacy skills, with UK employers reporting that up to 10% of all staff lack the skills to do their job, and 68% of senior managers admitting that middle managers have not been adequately trained, the learning needs to start now.