Employer Investment in the Health Sector

Transcription

1 Employer Investment in the Health Sector Presentation to the NHS Employers: Get Britain Working & Apprenticeship Network Meeting 6th December 2012 Terence Hogarth Institute for Employment Research University of Warwick

2 The Fifth Net Benefits of Training to Employers Study Since the mid 1990s a series of studies have been conducted to identify how much employers invest in workplace training The studies have looked at Apprenticeships across a common set of sectors: engineering, construction, retailing, etc. Since the mid 2000s the studies have also sought to identify the financial benefits to the employer (generally show that employers recover their training costs over one to two years) Fifth Net Benefits Study was extended to look Apprenticeships in the health sector

3 Net Benefits of Training in the Health sector The health sector identified as one sector with potential to increase take up of Apprenticeship. The health sector study addressed the following questions: i. Why do employers in the health sector invest in Apprenticeships? ii. iii. iv. Where employers invest, what is the size of that investment? To what extent is employer participation in Apprenticeships sensitive to the level of public funding? Over what period are employers training costs recouped? v. What benefits do employers derive from Apprenticeship training?

4 The Method 24 employer case studies of where workplaces (mainly hospitals) had taken on an apprentice Conducted across four SHAs Assessed three broad frameworks: Clinical support (mainly nursing support) Business Administration Engineering Results indicative based on relatively few, in-depth observations

5 Health and Social Care Apprenticeship Starts All Apprenticeship Starts Apprenticeship Starts in Health and Social Care 600,000 70,000 60,000 Health and Social Care Grand Total 500,000 50, ,000 40, ,000 30, ,000 20,000 10, , /3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 2009/ / /12 0

6 Health Specific Apprenticeships Starts Health Dental Nursing 820 2,190 Health Clinical Healthcare Support 660 1,870 Health Pharmacy Services Health Healthcare Support Services Health Optical Retail Health Maternity and Paediatric Support Health Perioperative Support Health Emergency Care Health Pathology Support Health Allied Health Profession Support / / ,000 1,500 2,000 2,500 Number of Apprenticeship Starts

7 Why Employers Invest in Principal Reasons: Apprenticeships Establishing a vocational pathway into several occupations (principally where Level 2 and 3 qualifications are required but with an expectation that Apprenticeships will eventually be delivered at Level 4) Widening the pool of people who might enter into employment in the NHS A means of attracting more young people into the sector given the ageing of various Trusts workforces Corporate social responsibility and a need to ensure that young people, in particular, have access to high quality training whilst being in employment Providing existing employees with a structured learning programme leading to Level 2 and 3 qualifications as part of their continuing professional development But a general sense that Apprenticeships were on trial and employers needed to be sure that Apprenticeships were good value and met the needs of the organisation

8 Estimating Employer Investment in Apprenticeships Total number of apprentices or trainees Number of apprentice or trainees who drop-out without completing Apprentice or trainee salary ( p.a.) Salary of Fully Experienced Worker ( p.a.) Trainee productivity (% of skilled workers) Supervision (per apprentice or trainee) % of Training Manager's time spent training % of Line Manager's time spent training % of Supervisor's time spent training Training Manager's Salary ( p.a.) Line Manager's Salary ( p.a.) Supervisor's Salary ( p.a.) Total training costs per apprentice or trainee ( ) Costs of recruiting the apprentice or trainee Course fees Supervision costs Apprentice or trainee salaries Employer's NI contributions Administrative costs Total cost Total training benefits per apprentice or trainee ( ) Apprentice or trainee product Other income (please specify) Total benefit per apprentice or trainee Net cost per apprentice or trainee Net Cost including drop out Year 1 Year 2 Year...n Total

9 Estimate of Costs at Level 3 in Nursing Support Background Information Total Drop out rate (%) 0.5% Apprentice salary ( p.a.) 16,500 Salary of Fully Experienced Worker + NI ( p.a.) 22,100 Apprentice productivity (% of skilled workers tasks undertaken by apprentice) 83% Supervision (per apprentice) Total labour costs of supervision (including employer NI contributions) 5,800 Total training costs per apprentice ( ) Costs of recruiting the apprentice 100 Course fees 450 Supervision costs 5,800 Administrative costs / Other costs 300 Apprentice salary (including Employer NI) 17,850 Total cost 24,500 Total Cost / Benefit to the Employer per apprentice Apprentice product 18,350 Other income (please specify) 0 Total benefit per apprentice 18,350 Net cost per apprentice 6,150 Net Cost including drop out 6,200

10 Estimate of Costs at Level 2 in Nursing Support Background Information Total Drop out rate (%) 5.8% Apprentice salary ( p.a.) 7,800 Salary of Fully Experienced Worker + NI ( p.a.) 15,750 Apprentice productivity (% of skilled workers tasks undertaken by apprentice) 85% Supervision (per apprentice) Total labour costs of supervision (including employer NI contributions) 2,700 Total training costs per apprentice ( ) Costs of recruiting the apprentice 650 Course fees 550 Supervision costs 2,700 Administrative costs / Other costs 700 Apprentice salary (including Employer NI) 7,900 Total cost 12,500 Total Cost / Benefit to the Employer per apprentice Apprentice product 13,350 Other income (please specify) 0 Total benefit per apprentice 13,350 Net cost per apprentice Net Cost including drop out - 750

11 Summary of Costs. Broad Framework Level 2 Level 3 Clinical Support ,200 Business Administration - 1,700 5,400 Engineering 10,100 Where existing employees are being trained costs to the employer are lower

12 Employer Sensitivity to Costs What would happen if employer costs increased? There was no scope for reducing wages because these would need to be centrally negotiated. No scope to reduce further training wages Little appetite to find an alternative training provider with lower costs in most instances employers had shopped around for best deal Little scope to deliver training more efficiently Passing on more of the cost to the apprentice via training loans was not considered feasible since many of the apprentices were in relatively low paid jobs There might be scope for training to existing employees to be delivered through other programmes - including ones which did not lead to an externally accredited qualification Some might focus attention on apprentices who would attract full funding Overall impression that training volumes would decrease if employer costs increased substantially

13 Summary of Payback Periods. Broad Framework Level 2 Level 3 1 year, Clinical N/A 7 months Business Administration N/A 1 year 1 year, Engineering 1 month

14 Benefits Derived by Employers in the Health Sector Apprenticeships favourably regarded by employers Employers felt they were able to widen the pool from which they recruited Recognition that Apprenticeships provided a high quality training entry pathway where training can be readily monitored guaranteeing that it meets professional standards and organisational needs Apprenticeships opened up the vocational pathway into clinical support roles this may allow progression to Level 4 eventually Nearly all apprentices completed their training Even if not able to offer a job on exit from the Apprenticeship within the training workplace usually employment found somewhere in local health service so adding to the overall pool of skills The cost of Apprenticeships relatively modest and recouped by employers relatively quickly High completion rates and costs quickly recouped suggests a low risk investment for the employer

15 Benefits Derived by Employers Across Sectors The Fifth Net Benefits of Training to Employers study revealed a number of benefits which accrued to employers which recurrently invested in Apprenticeship: A flow of new ideas into the organisation which can be cascaded through the workforce A close bond between apprentice and employer where employer is able to shape attitudes to work A way of ensuring that the apprentice possesses the skills the organisation needs Higher retention rates because apprentices stay with the organisation longer A cadre of skilled employees from which supervisors and managers could be selected Given that Apprenticeships relatively new to many health sector workplaces which participated in the study, there is potential for the benefits listed above to be increasingly derived by health sector workplaces.

16 Links to Reports The Fifth Net Benefits of Training to Employers: Health Sector study: Benefits-to-Employers-of-Apprenticeships-in-He.ashx IER Research on Apprenticeships:

17 Thank You Terence Hogarth Institute for Employment Research University of Warwick Coventry, CV4 7AL Tel: