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Training Issues facing Social Economy Enterprises in Cambridge March 2003 CONTENTS Introduction Methodology Importance of Training Barriers Organisational Capacity to Map Training Needs Organisational Capacity to Deliver/Receive Training Existing County-Wide Provision Paying for Training Accreditation Training Needs Training Materials and Tools Summary and Conclusions Appendices A, B, C Footnotes INTRODUCTION In the year 2000, Cambridge CDA (CCDA) undertook a piece of never-before-done research into the specific training needs of co-operatives and social firms in Cambridgeshire. Based on its findings, CCDA successfully delivered 2 ESF training projects in 2001 and 2002. More than 11,500 hours of training and support, including accredited programmes were delivered. Other outcomes included the development of a dedicated IT training suite. With the recent level of interest in social enterprises and as part of its ongoing support to the social economy in Cambridgeshire, Cambridge CDA has been able to re-visit this earlier research with support from the Learning & Skills Council's Local Initiative Fund. The working definition of 'Social Enterprise' currently used by Cambridge CDA is any enterprise that trades primarily to meet social objectives. This means that 'Social Enterprises' encompass a wide variety of business structures that includes social firms, co-operatives and community businesses, all of whom were polled as part of this research. It is anticipated that this updated research will be used to improve delivery of training to social enterprises throughout Cambridgeshire. Return to Contents METHODOLOGY As with the initial research conducted by Cambridge CDA in 2000, a questionnaire was developed. It was circulated to various other relevant organisations in Cambridgeshire including the Learning and Skills Council, Business Link and Cambridgeshire Enterprise Services. These organisations were invited to comment on its design and suggest additional areas of data capture they required. Social enterprises, identified through the Guild's recent mapping exercise and Cambridge CDA's ongoing mapping of the sector, were initially sent the questionnaire. Individual contact, including visits, from CCDA staff then followed up specific issues or helped enterprises compile the information requested. Desk based research was also undertaken into training issues for mainstream businesses and voluntary organisations at a national, regional and local level to enable 'benchmarking'. This ensured that training issues specific to social enterprises and those in common with mainstream businesses could be more clearly identified. A list of all the documents used in this stage of the research is contained in the bibliography in Appendix B . Finally, there was also qualitative research undertaken through personal interviews with training agencies that have some experience of working with both mainstream businesses and social enterprises. Again, this was to ensure that training issues specific to this sector could be clearly identified. Return to Contents IMPORTANCE OF TRAINING Training within organisations is a vital regionalpriority as the East of England Development Agency (EEDA) and the Learning & Skills Council (LSC) have determined. This has been further emphasised through the Regional and Local Development Plans for European Social Fund measures and policies. Businesses report that as employees participate in training, their productivity increases. For smaller businesses though, these positive effects are less evident [1]. Productivity issues arise with the existence of skills gaps within any workforce and many problems encountered by employers are directly caused by gaps in skills. Particular problems have been found to be poor operating efficiencies, where management and employment issues are not being addressed, due to a lack of relevant skills. This is of particular importance to Cambridgeshire businesses, as 1 in 5 of all adults in this area are recorded as having basic skills deficiencies [2]. Other research into workforce training shows that the better trained someone is, the more likely they are to be employed. If employed they are more likely to be offered, and participate in, further training activities [3]. This does of course present a paradoxical cycle. If a person is less qualified to begin, they may be less likely to participate in any training. In turn this reduces their potential for gaining advancement, re-employment or further qualifications. This should alert us to a potential downturn in productivity for about 20% [4] of the current workforce unless there are direct strategic interventions to break this cycle. For social enterprises in particular, training is even more important. This has been highlighted by the Government through the dti's report concerning social enterprises as well as by the fact that they operate in a relatively new 'sector' with high growth potential and with specific skills requirements that do not readily exist in the majority of the workforce. Interestingly, research at the local level showed that not all social enterprises in Cambridgeshire judge direct relevance to be the most important criteria when selecting training. This shows that even if improvements are not discernable in day-to-day trading or activity, then employees' training and on-going personal development is still seen as beneficial to the business in non-quantifiable ways. Mainstream business has also started to identify this as good practice. Return to Contents BARRIERS Nationally, regionally and at local levels mainstream businesses identified the prime barriers to participating in training as being time and cost. This includes loss of earnings for the business while an employee is engaged in training rather than in working. The local voluntary sector identified location as an additional barrier: would-be participants from the voluntary sector are generally not able to travel far. A significant proportion of the workforce in this sector would therefore appear to have transport or mobility problems, particularly those people with disabilities. Within social enterprises the barriers to accessing training are also time, cost and location as shown by a regional study. The study, perhaps crucially, showed that knowledge was also a barrier. Social enterprises have identified significant gaps in their knowledge of who can develop and deliver training to meet their needs. This could, in part, be due to the relative 'newness' of the sector and the training needs being very specific in some cases. Perhaps it is also a reflection that training packages, tailored to social enterprises, still need to be further developed and made widely available. In addition these gaps in knowledge may also be symptomatic of difficulties found by training providers in informing social enterprises of existing provision. Social enterprises in Cambridgeshire identified the main barriers to accessing training as time, cost, location and lack of knowledge of existing provision. This partly mirrors trends within mainstream businesses as well as trends in local voluntary organisations. Return to Contents ORGANISATIONAL CAPACITY TO MAP TRAINING NEEDS The ability to identify current training needs and to forecast skills shortages is crucial for the successful development and growth of any business. Not knowing what skills will be required in future years means a reduced ability to manage business growth adequately and to capitalise on market opportunities. Having a current training plan does not guarantee that future skills shortages can be identified. However, it does enable employers to start to see what their existing skills shortages are and to provide a means to begin addressing them. Nationally 43% of mainstream businesses with training plans identified skills shortages. Only 24% could identify specific shortages where there was no plan. Unfortunately, also at a national level, over 3/4 of all businesses have no training plan of any kind [5]. Within Cambridgeshire, 38% of all social enterprises have training plans of some kind, and 80% of those are able to identify skills shortages. Further, 75% of those without training plans were also able to identify specific skills gaps. All are currently involved in training activity, even the ones with no training plans. These figures place local social enterprises well ahead of their counterparts in mainstream business in mapping skills shortages, although it may be that this high figure of being able to identify skills gaps may be closely linked to the 'newness' of the sector where there are generic skills gaps common in any new enterprise this can only been determined with continued monitoring into the future. Although over 77% of all local social enterprises were able to identify some current skills gaps, they are severely limited in their capacity to deliver the training that is required. Where resources had been committed to developing a training plan the actual amount of training a social enterprise was able to deliver fell by over 25%. Given that large resources are not necessarily needed to develop training plans, we can see how valuable even a small quantity of support can be in supporting the development and delivery of social enterprises' training. Return to Contents ORGANISATIONAL CAPACITY TO DELIVER / RECEIVE TRAINING Nationally 80% of all businesses deliver some form of training to employees (although this may not include all the employees of a given business). However, on the whole, smaller businesses are less likely to train employees than larger ones [6]. This is a key factor when considering workforce training for enterprises in Cambridgeshire as the county is dominated by small and medium sized businesses [7]. Most employees of Cambridgeshire businesses should therefore be less likely to engage in training activities. This assessment is to some extent vindicated by national figures which show that 1/3 of all employees have never been offered training by their employer [8]. Research in the voluntary sector at a local level shows a similar percentage of organisations being unable to meet their staff's current training needs [9]. The training tools and methods used by mainstream business are often used by social enterprises. At a regional level, social enterprises have been found to use many systems common in mainstream businesses to deliver training. These include external courses, appraisals, on-the-job training and induction. This was also found at local level in Cambridgeshire, by recent research. At a local level, a greater engagement with training activity was found to distinguish social enterprises from mainstream businesses. This is highly significant given that both types of organisation were found to employ an average of eleven people. Thus making them less prone to engage in training than larger organisations by national trends. This difference is most likely to be due to the values and objectives of social enterprises. Their aims are often more focussed on the welfare of employees than on generating profits or surpluses. They are more willing to invest resources in the development of their workforce than mainstream businesses might be. Return to Contents EXISTING COUNTY-WIDE TRAINING PROVISION Throughout Cambridgeshire there are a wealth of training agencies and opportunities that social enterprises can benefit from:
There are also numerous private trainers. As noted already, a key barrier to social enterprises' engaging with training, particularly with external training bodies, is a lack of knowledge of provision currently available. This highlights the pressing need for trainers and support agencies to identify and target social enterprises in order to better support their needs. Social enterprises also need to be encouraged to use training and development networks to raise their awareness of relevant opportunities as they arise. Many local social enterprises already access support from a wide variety of training agencies to help them receive, access and develop training. This is despite their self-identified lack of knowledge of provision in the area [10]. The regional colleges, Business Links and private training agencies all play their part as they are all already used to varying degrees by social enterprises in the area. However, research found that the most frequently used agency by local social enterprises was CCDA. It was also found that CCDA was their most preferred agency. Return to Contents PAYING FOR TRAINING Nationally payment for staff training comes from a variety of sources: 68% comes from the businesses itself; employee's pay for 17% and the remaining 15% is sourced from local grants or the LSC [11]. Similarly at a local level 86% of employeeÕs training costs are met by their employer, 11% pay for themselves and only 3% are funded from such sources as grants [12]. Although over 80% of all business nationally have no formal training budget, those that do spend an average of £19,000 per year. This equates to an average of 2% of each business' turnover [13]. Regionally, social enterprises have been found more active at setting training budgets than mainstream businesses. Over half of the social enterprises in the region have a formal training budget [14] compared with only 2/5 of mainstream business [15]. At local level a similar proportion of social enterprises have a formal budget for training. Their training budgets, where they exist, are also 2% of turnover, on average, per organisation - identical to that of mainstream business. Given that social enterprises' aims are not primarily concerned with the pursuit of financial profits, the costs of their training budget will therefore be more keenly felt throughout the organisation. This fact shows the importance that social enterprises place on training. Although they will not generate profits in the same way or to the same extent as mainstream businesses, they are just as committed, if not more so, to delivering workforce training. Return to Contents ACCREDITATION Nationally 1/3 of all mainstream businesses offer accredited training courses, with similar figures representing businesses within the eastern region [16]. However, research undertaken by the Cambridgeshire Learning Partnership found that only 8% of all training activity within the local workforce is accredited. Given that Cambridgeshire has higher than average adult qualifications compared with both national and regional figures [17], employees are therefore more highly qualified before they begin work. The paradoxical cycle referred to in the earlier section on the importance of training (the more qualified a person is, the more likely they are to be employed), therefore starts at an earlier stage. Further, as most workforce training is not accredited then those made redundant will be at a disadvantage in the labour market unless they had much higher levels of qualifications before they started work than is currently average for the area. The low figure for accredited training also means that much training activity is not likely to be 'captured'. Many employers do not believe training has taken place unless it is externally accredited: workplace training such as induction, supervision or introduction of new working practices is unlikely to be reported. The Annual Local Labour Force Survey in 2001 states that: 'Administrative sources on education grossly underestimate the amount of learning taking place because a great deal of useful learning goes on outside the formal education system.' Training providers in the area validate these assertions from their experience of working with social enterprises and mainstream businesses. Interviews with training providers show that, as they understand it, employees of social enterprises are more concerned with gaining vocational skills than gaining accreditation. Being able to do the job seems to be more important than having a certificate to show that training has been done. This contrasted with their experience of mainstream businesses. The trainers interviewed reported that in mainstream business people are much more keen for training activity to be accredited. Research of the voluntary sector locally has found that the majority of training undertaken is not accredited which further backs this assertion. However, the recent research into local social enterprises found that 1/3 of all of them offer accredited training programmes, placing them much more in line with the norms for national mainstream businesses. This is most likely due to the values of these enterprises already referred to on page 6. Return to Contents TRAINING NEEDS At national level, the main training needs of businesses primarily relate to IT. This is mirrored in local mainstream businesses with additional needs being identified such as management and marketing. However, research into the local voluntary sector shows that IT skills are not such a high priority. Training that has been identified as being of high priority includes much more 'basic' operational issues such as: first aid, fundraising, health & safety, accounts, management, marketing, personnel [18]. For social enterprises in the region the 2 main training needs identified were understanding the culture of social enterprises and business management [19]. Locally, the priorities for social enterprises are more in-line with those of mainstream business: business finances, business management and health & safety issues. This difference in priorities between regional and local levels in the importance of understanding the culture of social enterprise may have much to do with the existence of Cambridge CDA. Research has found that wherever Co-operative Support Organisations (CSOs) exist, clusters of co-operatives, social firms and social enterprises will develop around them and begin networking [20] to share experience and culture. The culture of social enterprises are often best leant through social enterprises sharing experiences with others like themselves, ideally through being in close regular contact and proximity with each other, and often facilitated through participation in joint activities organised by a CSO. Return to Contents TRAINING MATERIALS AND TOOLS In mainstream business tutor support is the preferred training method. Books and ICT methods (Information Communication Technologies: the internet and CD-ROMs) [21] follow. Locally, research shows a similar pattern with employees of social enterprises. However, the preference for tutor support is even more pronounced and there is less enthusiasm for ICT materials. This may again be due in part to the relative 'newness' of the sector and so people working within it are seeking to engage not only directly in the training activity but also to have an opportunity to network with people from other social enterprises in order to share examples of best practice. This is a theme Cambridge CDA noted often in the delivery of its ESF funded training programmes that targeted social enterprises in Cambridgeshire. Return to Contents SUMMARY AND CONCLUSIONS
APPENDIX B BIBLIOGRAPHY
APPENDIX C TRAINERS CONTACTED AND INTERVIEWED Mark Granger, Mark Granger Training January 2002 Clare Benton, CB Horizons January 2002 Return to Contents Footnotes [1] 74% of large businesses report an increase in productivity where employees engage in training, compared to 64% of small to medium businesses. Learning & Training at Work, 2002 [2] Adult Basic Skills Survey 2000 [3] 52% of adults without any NVQ-equivalent qualifications are employed against 87% with NVQ level 4 or equivalent, with similar ratios reflecting participation in training, Annual Local Area Labour Force Survey 2001. [4] 20% of the workforce in Cambridge has basic skills deficiencies. LSC 2000 [5] Employers Skills Survey 2001 [6]Learning and Training at Work 2002 [7] 90% of businesses in Cambridgeshire employ less than 20 people. LSC [8]Extent and Nature of Work-Based Learning 2002 [9] An Overview of Skills Development, COVER 2002 [10] 38% of social enterprises report that they are unaware of all the current training provision available to them; in effect, they know what they do not know [11] Extent and Nature of Work Based Learning 2002 [12] Cambridgeshire Learning Partnership 2000 [13] Employer Skills Survey 2001 [14] Making @ Living, The Guild 2002 [15] Learning & Training at Work 2002 [16] Learning & Training at Work 2002 [17] English Local Labour Force Survey 2001 [18] An Overview of Skills Development, COVER 2002 [19] Making @ Living, The Guild 2002 [20] East of England Mutual & Co-operative Council 10 year strategy [21] Cambridgeshire Learning Partnership Return to Contents |
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