Significant Returns on Government Skills Investment
Investment in engineering and science skills can pay
back five fold – that was the message for Secretary of State John
Denham from skills council Semta today.
The Secretary of State for Innovation,
Universities and Skills Rt Hon John Denham MP heard about the
measurable differences Semta skills interventions have made
directly from employers at a House of Lords showcase event.
DIUS has given the science, engineering and
manufacturing sector access to £65million in a skills funding
compact to improve competitiveness so the Secretary of State was
keen to hear what kind of return on investment he could expect.
Semta chief executive Philip Whiteman
explained that through Semta’s Productivity and Competitiveness
(PAC) approach companies went through a process linking training to
organisational and operational changes which yielded increased
productivity that could be measured on the bottom line. The
training also provided employees with sustainable skills such as
Business Improvement Techniques (B-IT) and supported government
targets to improve qualification levels in this strategic
sector.
Pilots in the West Midlands region found that
with government seed funding of £18,000, companies achieved an
average of £94,000 in profit improvement in a single year – a five
fold payback. Rolled out to just 50 companies in each English
region, this approach could reap a £42 million sustainable
improvement in profit and 2,400 B-IT trained employees. Moreover
B-IT programmes managed by Semta’s new National Skills Academy for
Manufacturing have already produced around £2.7 million in savings
across eight companies.
Secretary of State for Innovation,
Universities and Skills John Denham said:
“Investment in skills pays dividends for
individuals, companies and industries, and I congratulate Semta on
its admirable record of working with government and individual
firms to deliver the world-class training the sector needs to
succeed.
“This Government, in partnership with
Semta, will go further to make sure companies get the
training they need, when they need it. Through an improved,
flexible Train to Gain service and a national strategy for
manufacturing, delivering even more high-quality apprenticeships as
well as higher level skills, we’ll not just recruit the brightest
and best, but ensure that those already in employment have every
opportunity to develop their potential.”
Said Philip Whiteman: “Manufacturing is alive
and well in the UK having made 50% productivity gains in the last
10 years. It makes a £150 billion a year contribution to the
economy so skills investment is vital to overcome the hard to
vacancies currently costing the UK £800 million per year in lost
productivity. With an aging workforce coming up to retirement, our
sector needs 38,000 new skilled employees every year for the next
six years. As that’s three times more than the number of young
people joining the sector, we need also to reskill our current
workforce.
“So we are focusing our compact on return on
investment by giving employers the skills they need. This training
will give measurable economic benefit, technical skills, management
and leadership, and increased numbers of apprenticeships.”
Among the companies presenting to John Denham
were Jackson Keay of Nottingham which supplies gas cylinders and
other pressured containers. The company implemented lean
manufacturing using B-IT and leadership NVQs. The result is that
employee attendance is up from 67% to 96%, delivery lead time is
down from three weeks to five days, productivity is up by 40% and
delivery schedule adherence is up by almost 25% to over 98%. As a
result, their turnover increased from £2.3m in 2006 to £3.5
million in 2007 and employees received pay increases of 5% in
2007 and 7.5 % this year to reward their efforts.
Said Jackson Keay group operations director
Neil Bradshaw: “Semta’s support made all the difference. We have
diversified our product mix and become less reliant on individual
customers. And we continue to improve, winning business from
competitors through our improved our reputation for diversification
and fast turn around.”
The event also featured a preview of the
National Skills Academy for Manufacturing’s latest development, a
web-based portal to give employers easy access to information which
allows them to manage learner development.
To download the speeches from the event click
HERE
Notes to Editors
For further information: For
further information please contact either James Cameron or Fin
Robertson at Consolidated on 020 7781 2381 or 07742 090218 (out of
office hours).
Email: findlayr@consol.co.uk
Semta: http://www.semta.org.uk/
Semta is the employer-led skills council for
Science, Engineering and Manufacturing Technologies in the
UK. The sectors it represents are: Aerospace,
Automotive, Bioscience, Electrical, Electronics, Maintenance,
Marine, Mathematics, Mechanical, Metals and Engineered Metal
Products and Science. Its role is to the raise skills levels
and competitiveness in the 76,000 companies and 1.9 million-strong
workforce that make up these sectors.
The National Skills Academy for
Manufacturing www.manufacturing.nsacademy.co.uk
The National Skills Academy for Manufacturing
is dedicated to working with UK manufacturers to deliver an
independent national standard for manufacturing training content,
advice and delivery. All training solutions developed and
accredited by The Skills Academy possess the badge of quality
against these national standards. The National Skills Academy
for Manufacturing brand is a safeguard against poor training and a
beacon for security for manufacturing employers.
Key Performance
Indicators
A key element in the PAC project is the use of
a standard set of seven measures covering quality cost and
delivery. These measures have been in use in the automotive sector
for about ten years and are an agreed and consolidated set of
performance indicators with a proven track record in terms of
productivity improvement.
Using Quality, Cost and Delivery (QCD) as
criteria, seven key measures of competitiveness are used to offer a
clearly quantifiable frame of reference for supporting continuous
improvement, raising the levels of customer satisfaction and
greatly improving management of production.