Event report 20 March 2014

Transcription

1 Event report 20 March 2014 in partnership with Measuring the human capital value of apprenticeships WORK WORKFORCE WORKPLACE

2 Championing better work and working lives The CIPD s purpose is to champion better work and working lives by improving practices in people and organisation development, for the benefit of individuals, businesses, economies and society. Our research work plays a critical role providing the content and credibility for us to drive practice, raise standards and offer advice, guidance and practical support to the profession. Our research also informs our advocacy and engagement with policy-makers and other opinion-formers on behalf of the profession we represent. To increase our impact, in service of our purpose, we re focusing our research agenda on three core themes: the future of work, the diverse and changing nature of the workforce, and the culture and organisation of the workplace. WORK Our focus on work includes what work is and where, when and how work takes place, as well as trends and changes in skills and job needs, changing career patterns, global mobility, technological developments and new ways of working. WORKFORCE Our focus on the workforce includes demographics, generational shifts, attitudes and expectations, the changing skills base and trends in learning and education. WORKPLACE Our focus on the workplace includes how organisations are evolving and adapting, understanding of culture, trust and engagement, and how people are best organised, developed, managed, motivated and rewarded to perform at their best. About us The CIPD is the professional body for HR and people development. We have over 130,000 members internationally working in HR, learning and development, people management and consulting across private businesses and organisations in the public and voluntary sectors. We are an independent and not-for-profit organisation, guided in our work by the evidence and the front-line experience of our members.

3 Introduction The CIPD hosted a human capital metrics (HCM) roundtable to investigate how organisations measure the value of their apprenticeship schemes. HR and talent leaders from five established organisations were invited to discuss the opportunities and challenges that come with capturing and understanding data and using it to inform the development and delivery of apprenticeship programmes....organisations continue to focus on a short-termist strategy of managing costs, often looking to HR as a source of savings. Business apprenticeships continue to feature in government policy as a means to tackling low employment levels amongst young people, and are increasingly angled as a viable alternative to higher education. As a result of this, government-subsidised apprenticeship schemes are as popular to businesses as they have ever been: in 2013, 56% of small businesses and 61% of medium-sized organisations increased the number of apprenticeships that they were offering 1. This increase in attractiveness is happening within a volatile economic environment underlined by prevailing weakness in the economy, and as a result organisations continue to focus on a short-termist strategy of managing costs, often looking to HR as a source of savings CIPD research shows that half of public sector organisations and over a third of private and not-for-profits report their resourcing budgets for will reduce in size 2. Given the significant effort now committed to developing and managing apprenticeship programmes, organisations are more and more aware of the importance of demonstrating the individual, business and societal benefits of their investments. To better understand how organisations are approaching this issue, the CIPD invited five HR professionals to a roundtable discussion and posed three key questions regarding human capital measurement within an apprenticeship context. Key themes The following questions were put to the panel to prompt discussion amongst the group: Where is your organisation currently in terms of measuring the success of your apprenticeship schemes? What do you want to know about the success of your apprenticeship schemes that you don t already know? How can the CIPD and other organisations help you to better understand the impact of your apprenticeship schemes? 1 CIPD Learning to Work Survey CIPD Resourcing and Talent Planning Survey 2013, pg 31 1 cipd.co.uk/valuingyourtalent #ValuingYourTalent

4 Discussion outcomes...the potential cost savings offered by government subsidy, along with the benefit of investing in the development of in-house talent, were the most persuasive potential benefits to the business. Current capability The first area of discussion focused on the strategic background to the group s apprenticeship programmes, and established the challenges that organisations faced when they set up their schemes. Participants recognised similar challenges; in particular, how to develop and select measures that were relevant to HR but which also applied to the rest of the business. The decision processes that resulted in the development of the apprenticeship schemes appeared to be very different one organisation stated that the business case came from the CEO, who became the senior sponsor for the programme, while others noted a difficult fight with the rest of the organisation to commit resources to developing their programme. It seems that the potential cost savings offered by government subsidy, along with the benefit of investing in the development of in-house talent, were the most persuasive potential benefits to the business. As a result of the business case process, HR were compelled to devise success measures from the very beginning. Even where the push for the programme came from the top table, the organisation has since had to backfill and demonstrate the importance to the business of investing in the apprenticeship programme. As a result, data was very much on the agenda and there was a concerted effort to configure a data capture and reporting system from the inception of the scheme. Metrics that lend well to comparison across other recruitment streams were favoured by the participants: Our CEO kicked off the apprenticeship scheme, so we did not need to make the business case. Since then there has been some backfilling, mainly to show the cost benefit of growing your own talent versus buying in graduates. From the beginning the schemes were target driven to improve diversity for example; and our graduate scheme wasn t helping us to do this. Organisations around the table had schemes that tended to have been running for 3 5 years, and as a result, respondents stated that their business leaders were now increasingly interested in understanding the value of apprenticeships compared with other sources of talent. One organisation was undertaking independent research to assess the psychological, social and economic benefits for the apprentices at their organisation such social return on investment (SROI) programmes were popular amongst the group, which was looking to build qualitative measures of success into their more structured quantitative measurement programmes. A main source of quantitative data appeared to be engagement processes, such as well-being surveys. One participant recognised that their engagement scores were illustrating a difference between apprentices and other types of 2 cipd.co.uk/valuingyourtalent #ValuingYourTalent

5 A major point highlighted in the discussion was best practice of HR regarding the utilisation of apprentice talent and the measurement of effective programmes. employees, and was illustrating that their apprentices were more satisfied in their roles compared to other employees. Another stated that they were looking to benchmark graduates and apprentices, and that their first foray into the data was showing that apprentices maintained their satisfaction levels for longer than other employees. Cost was a significant driver, not just the reduction of cost compared with hiring through other streams, but also the ability to invest in the development of apprentices as a blank canvas an individual who can be moulded and trained to a particular standard, without bad habits gained from previous roles or work experience. The concept of investment, through training and development, was one that resonated amongst the group. The group recognised a significant perceived risk in transience of young people and apprehension to embed within a particular role or organisation, which would have implications for investment in training and development, plus workforce planning. The rest of the business appeared to recognise this too, highlighting that productivity and effort expended up front to bring apprentices up to speed were two of the main barriers that line managers stated when assessing whether to recruit an apprentice. Getting a young person up to speed and ensuring they re productive as early as possible can be a concern. We aim to get our young people to the same standard as our graduates only a few years later. In this case, taking a long term perspective can be a challenge too. Within the business there are tensions over make versus buy. What is a Social Return on Investment (SROI) SROI is a methodology for measuring the return on value for an investment which goes beyond a monetary return and attempts to capture the social, environmental and economic costs and benefits of an initiative in an easy to understand way. SROI measures improvements in processes, products and systems, taking account of the wider environmental and societal context providing a clearer narrative of the full impact businesses can have. SROI is often a measure for understanding the impact of change, and includes a mix of quantitative numerical data and qualitative narrative. Organisations are increasingly aware of the SROI of business processes and the methodology now features heavily in annual and corporate social responsibility reporting. Understanding measurement A major point highlighted in the discussion was best practice of HR regarding the utilisation of apprentice talent and the measurement of effective programmes. It was also recognised that the ability to predict future success was perhaps more challenging with apprentices, and that if the business could better appreciate the benefits of apprenticeships it would make the development of future initiatives much easier: It would be good to know what others are doing around the business case share best practice around measurement. and; 3 cipd.co.uk/valuingyourtalent #ValuingYourTalent

6 Engagement continued to be highlighted as one of the major measures for successful apprenticeship schemes. We would like to know the bottom line business benefits of recruiting apprentices. So for example in 2016 I would be able to make the case again for further funding with examples such as if you employ apprentices, in 18 months you will get X outcomes. A comparison of return on investment (ROI) between different streams of recruitment was also an aspiration for the group. For many, the first steps to developing metrics and establishing data collection processes had been undertaken, but they were not yet at the level where they could appreciate the final investment return of the apprenticeship programme, partly due to the maturity of their programmes. The group highlighted the particular importance of demonstrating ROI within the SME community, where businesses need to get apprentices embedded and working from the very beginning. Participants highlighted that this particular community would most likely benefit from metrics that can better illustrate the early value from apprenticeships. A human capital measurement framework for apprenticeship schemes As part of the session, participants were introduced to the emerging Valuing your Talent framework and were asked to reflect on how it can be used to improve measurement of apprenticeship schemes. The group suggested that there were a number of common threads amongst their apprenticeship schemes that could be better measured and may help to demonstrate the importance of their programmes. Diversity is seen as a key driver for apprenticeships in the first instance, and the group expressed that they would like to gain better quality and more timely information about the demographics of their apprentices. The performance and productivity aspects were also noted as being key specific metrics such as speed to ROI or time to productivity were explored by the group as opportunities to demonstrate the value of apprenticeships. When reviewing the framework the group suggested two specific measures: latent productivity the potential productivity to be realised by the apprentice; and business capacity to innovate the ability of the business to foster innovation. Both were discussed by the group as potentially valuable but given present measurement capacity both were deemed too challenging to capture: How do you quantify innovation? I understand that it needs to ultimately be measured as an aspect of revenue growth but could we have another lens for the framework that focuses on innovation? Engagement continued to be highlighted as one of the major measures for successful apprenticeship schemes. From reviewing the framework the group recognised that indicators regarding cultural dynamics and trust behaviour were priority challenges within their organisations. Combining complementary measures was suggested as a possible route to improving the capacity of HR to measure the success of apprenticeship schemes for example, understanding how the dimensions of engagement vary according to demographics, job role, and seniority. The group believed this would give a good picture of the make-up of the apprentice community but combined performance data with career progression statistics 4 cipd.co.uk/valuingyourtalent #ValuingYourTalent

7 We need help to understand the difference between our recruitment programmes and how we can do these better. We need to demonstrate the value of apprenticeships and compare this with other streams of recruitment. would provide the business with an indication of the success of apprenticeships at delivering value back to the organisation. Benchmarking data across business units, and then externally with sector peers, were additional suggestions the group made that may illustrate how a scheme is performing. Further insight Delegates discussed the importance of meeting with other organisations which are in a similar position to them, and sharing best practice amongst the HR community. Case studies, professional networking and opportunities to hear the latest research from thought leaders were all highlighted by the group as useful future content for them to access: We could do with producing anonymised case studies which clearly show how to measure and demonstrate the ROI of our schemes and perhaps build a forum or group of practitioners interested in the subject and; We need help to understand the difference between our recruitment programmes and how we can do these better. We need to demonstrate the value of apprenticeships and compare this with other streams of recruitment. Conclusions A continuing theme that appeared to run throughout the discussion concerned the establishment of measures of success, including future, longer term impact/success, which combine quantitative measures with qualitative narrative data. Delegates noted throughout that one set of data should not override the other, but that insight comes from a combination of the two. The group understood the success of their programmes from personal reflections, from their positions of oversight, and from the personal accounts of managers and apprentices. As to which measures are most useful, the group continued to return to a robust calculation of apprenticeship ROI as a priority challenge for HR to tackle. This, along with measures of productivity and engagement, were the major benchmarks that participants picked out as potential focal points of development for the emerging Valuing your Talent human capital framework. 5 cipd.co.uk/valuingyourtalent #ValuingYourTalent

8 Attendees Anouska Ramsey Head of Talent Capgemini Ben Saunders Head of HR and Learned Society IMarEST Dominic Gill Partner Apprenticeship Programme Manager Microsoft Mike Thompson Head of Early Careers Barclays Sarah Bampton Talent Programme Manager Fujitsu For further information on Valuing your Talent visit cipd.co.uk/valuingyourtalent #ValuingYourTalent 6 cipd.co.uk/valuingyourtalent #ValuingYourTalent

9 Chartered Institute of Personnel and Development 151 The Broadway London SW19 1JQ UK Tel: +44 (0) Fax: +44 (0) Website: cipd.co.uk Incorporated by Royal Charter Registered charity no Issued: May 2014 Reference: 6566 Chartered Institute of Personnel and Development 2014