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Taking control of the skills challenge

22 October 2014

Dr Ross Moloney, CEO of Skills for Logistics, reviews the state of skills in the logistics sector and how employers can take control of the challenge this presents.

During 2014, the UK economy emerged from the doldrums on which it had been drifting since the global financial crisis. More than half of the employers surveyed in the Logistics Employer Skills Survey, which Skills for Logistics published in the spring of 2014, reported improvements in profitability, productivity and turnover, in comparison to the previous 12 months.

However, the survey also showed that a skills gap remains in the UK Logistics Sector, that risks weakening the wind billowing the sails of economic growth.

Communication, organising and planning as well as job specific skills were among the skills that employers identified in the survey as requiring improvement to ensure staff can do their job more efficiently. Management and leadership skills were recognised by more than half of employers as needing improvement.

Logistics is a massive sector – the UK’s fourth biggest. It employs 2.3 million people across 188,445 businesses, contributes over £90 billion in GVA (Gross Value Added) to the economy, underpins all other sectors and is a vital part of keeping growth momentum going. 

Over the next ten years, an increase of 155,000 jobs by 2022 is forecast - a 6% growth between 2012 and 2022, According to Working Futures 2012 - 2022. Replacement demand will generate an additional 1 million job openings in the sector, meaning that with the jobs required due to growth, there will be a total requirement of nearly 1.2 million. In fact, what we will actually need are 1.2 million multiskilled workers who produce, contribute and handle the changes in logistics wrought by technology developments. The survey found that over a fifth of personnel replacement is expected across the machine operative roles, which is an area of great need yet is one where there are current recruitment difficulties.

It is important that logistics seen as a high tech sector as this will increase its attractiveness among young people, of which we have too few. A further less than rosy demographic fact is that three quarters of our workforce is male compared to about 50% in other sectors.

The UK is good at logistics. This fact that was confirmed in 2014 by the World Bank, which ranked us as the fourth best logistics nation in the world - a positive climb from our tenth place in 2013.  But we remain behind our closest geographic neighbours and competitors: The Netherlands, Belgium and Germany and it is training that holds us back. We don’t do enough and what we do is not good enough. Better training will help us match or better the productivity of our competitors, which, in turn will attract inward investment to the UK.

At the moment, Logistics is the second worst UK business sector at training beyond what is mandatory – behind only mining and quarrying.  How committed are we to investment in training? And it should be seen as investment rather than a cost. The Logistics Employers’ survey found that a lack of funding or resources to undertake training augments skills gaps within companies, as does the lack of time to train and the inability to find appropriate training solutions. Undoubtedly, employers fear loosing staff in whom they have invested but In terms of employee commitment, the evidence shows that if you train your staff, they gain brand affiliation and stay.

Employers will also be encouraged to train by having greater control over the training that can be offered. Government austerity budgets are moving the state to give employers ownership of training as the way forward. This is very much part of the Traineeships and Trailblazers schemes that aim to improve the take up of apprenticeships.

This needs improvement in logistics because currently just 4.3% of employers in our sector use apprentices – which is half the all sector average of 8.8%. By coming together in an industrial partnership with the government, employers can take real ownership of the skills system and the ‘voyage’ of individuals using their skills. In this way we can fix the skills challenges that we face in our sector together, such as identifying gaps in apprenticeship provision.  

One barrier to apprenticeship take up is that in terms of educational levels, they are a big leap for many potential new entrants to the Logistics Sector. They would benefit from what is effectively a Level 1 qualification, which starts individuals on the apprenticeship journey and then onto a career progression pathway.

Traineeships have been introduced to provide this ‘pre-apprenticeship’. They will help young people who are focused on getting an apprenticeship or sustainable job but do not yet have the skills or experience to compete successfully for vacancies. The important element behind them is that they involve unpaid work experience. Participants gain very basic skills so that while they may not be occupation ready, they will be work ready. Employers can influence the design of Traineeships in their local area to ensure they provide young people with the skills and attributes that will benefit their business. This offers a great way by which we can attract young people into the Logistics Sector.

Employers are also set to play a bigger part in apprenticeship frameworks. This is the idea behind the government backed Trailblazers initiative, which aims to deliver apprenticeships that meet the needs of employers rather than employers having to fit in around a prescribed framework. Employers, working together in groups, will drive the creation of their sector’s apprenticeship frameworks. Any employer in this group can influence the development of the standard and the way it is assessed – for example, by project work or observation.

Already, over 400 employers have collaborated to design the first new, concise and employer-led Apprenticeship standards in the first two phases of Trailblazers.

Employers in the Logistics Sector will need to get their heads together about what they want to do with apprenticeships come the spring 2015. Employer driven frameworks are the way ahead and not engaging will make it hard to attract new people into the sector after 2017.  This will mean getting groups of employers together. However, we believe that the flexibility offered by the new frameworks will encourage buy-in from a broad range of employers. 

A further frustration for employers that we frequently hear is people turning up to interviews without ‘work-ready’ skills. Skills for Logistics is addressing this with its Pre-Employment Training (PET) programme – which also requires employer support. 

This scheme’s focus is on developing personal skills to gain employment as well as insights in how to find a worthwhile career or apprenticeship with a logistics employer. It provides organisation and administration skills working towards a Level 1 Qualification. Workplace awareness, skills development, one-to-one coaching and mentoring as well as practical work experience with a logistics company are also part of the programme.

A red-letter day for logistics skills was 10 September, amidst growing concern over the shortage of drivers. This day marked the end of the first period covered by the Driver Certificate of Professional Competence (CPC) regulation, as it was the deadline for compliance.  In five years the sector has come a long way delivering 24,000,000 hours of training with 515,513 drivers successfully completing the training. It is now time to turn our thoughts to the future. Part of this includes the introduction of Skills for Logistics’ own initiative to endorse excellent training provision.

We need 149,000 new drivers over a 10-year period leading up to 2020 just for business as usual. The LGV driver sector is not as youthful as others. Given that 13% of drivers, which is 37,000 individuals, are over the age of 60, it is reasonable to assume that they will consider retiring in the next five or so years – Irrespective of the CPC deadline. Attracting recruits into the sector remains a challenge. 

It is vital that Driver CPC should be developed to ensure that it does not act as a disincentive but fulfills its original objective of professionalising LGV driving, which will increase its attractiveness as an occupation for recruits. 

For this reason, on 2 October, Skills for Logistics launched the Standard of Excellence Driver CPC in response to a need voiced by employers and providers to showcase excellent training provision. Providers who can demonstrate that they meet the Standard of Excellence in all five metrics – which were developed in consultation with key logistics employers - will be able to use the kitemark.

This will allow businesses to identify excellent training providers as well as give them a chance to benchmark their own in house training against the best in sector. 

Another exciting launch followed in November, as the new www.thelogisticsguild.com web site went live. The Logistics Guild was created by Skills for Logistics in 2012 as a free-to-join member network offering support, guidance, development and jobs to its members. BiS Henderson Academy is now working on behalf of Skills for Logistics to grow the membership of The Logistics Guild and to build a broad platform of benefits for the support, career development and up-skilling of members. The Guild promises to offer support to the industry with the highly skilled and engaged workforce it needs by working with a range of partners to create jobs and use apprenticeships. It will also be a hub for generating opportunities for the individual logistics worker. 

If 2014 was the year that employers recognised skills gaps and their contributing factors, 2015 will be the time to overcome these challenges if they wish to operate effectively and efficiently and remain competitive in the future. Skills for Logistics will be playing its role of supporting the sector take control of these challenges and overcome them.

Find out more about Skills for Logistics’ role to attract, develop and support at www.skilssforlogistics.org