Automotivate
The Sector Skills Agreement for the Downstream Motor
Industry
Sector Skills Agreement – Stage 3
Gap Analysis and Market Testing
United Kingdom Report
November 2006
Institute of the Motor Industry
Fanshaws
Brickendon, Hertford
SG13 8PQ
01992 511521
UK Stage 3 – Gap Analysis & Market Testing
Page 1 of 42
November 2006
Contents Page
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -PREFACE ...................................................................................................................................... 4
1
INTRODUCTION..................................................................................................................... 5
2
EXECUTIVE SUMMARY ........................................................................................................ 6
3
THE EVIDENCE.................................................................................................................... 10
3.1
SKILLS NEEDS .................................................................................................................. 10
3.1.1
The Sector .............................................................................................................. 10
3.1.2
Geodemographics .................................................................................................. 11
3.1.3
Workforce Profile .................................................................................................... 11
3.1.4
Skills Categories ..................................................................................................... 12
3.1.4.1 Employability Skills.............................................................................................. 12
3.1.4.2 Basic Skills .......................................................................................................... 12
3.1.4.3 Generic Skills ...................................................................................................... 12
3.1.4.4 Technical Skills ................................................................................................... 13
3.1.4.5 Management and Leadership Skills.................................................................... 13
3.1.5
Approach to Employer Engagement....................................................................... 13
3.1.5.1 Published Reports............................................................................................... 13
3.1.5.2 Roadshow Debates............................................................................................. 14
3.1.5.3 Bi-lateral Discussions.......................................................................................... 14
3.1.5.4 Employer Depth Engagement............................................................................. 14
3.1.6
Employer Depth Engagement................................................................................. 14
3.1.7
Engagement Strategy for Stages 4 and 5 .............................................................. 16
3.1.8
Approach to Communication, Discussion and Evaluation...................................... 16
3.2
SUPPLY-SIDE EVALUATION ............................................................................................... 18
3.2.1
SWOT Analysis – UK.............................................................................................. 18
3.2.2
Geographic Context................................................................................................ 20
3.2.3
Changes to Provision by Skills Category................................................................ 21
3.2.3.1 Employability Skills.............................................................................................. 22
3.2.3.2 Basic Skills .......................................................................................................... 23
3.2.3.3 Generic Skills ...................................................................................................... 24
3.2.3.4 Technical Skills ................................................................................................... 24
3.2.3.5 Management and Leadership Skills.................................................................... 25
3.2.4
Approach to Supply-Side Consultation................................................................... 25
3.2.5
Balance of Evidence – the Learner Input ............................................................... 26
4
PROPOSED COLLABORATIVE SOLUTIONS.................................................................... 27
4.1
4.2
4.3
5
OVERALL REVIEWING & MONITORING ARRANGEMENTS ........................................... 29
5.1
5.2
5.3
6
INTRODUCTION ................................................................................................................. 27
OVERARCHING SOLUTION THEMES .................................................................................... 27
CONSULTATION MECHANISMS ........................................................................................... 28
GENERAL ......................................................................................................................... 29
CHECKPOINT REVIEW ....................................................................................................... 29
SPECIFIC REVIEWING AND MONITORING ............................................................................ 30
APPENDICES ....................................................................................................................... 31
6.1
APPENDIX 1: HIGHER EDUCATION ..................................................................................... 31
6.2
APPENDIX 2: UNITED KINGDOM SWOT ANALYSIS .............................................................. 32
6.2.1
Strengths................................................................................................................. 32
6.2.2
Weaknesses ........................................................................................................... 33
6.2.3
Opportunities .......................................................................................................... 36
6.2.4
Threats.................................................................................................................... 38
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REFERENCES ............................................................................................................................. 40
Table of Figures
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -FIGURE 1: ENTERPRISE TURNOVER ................................................................................................. 11
FIGURE 2: ENTERPRISE SKILLS FOCUS TYPOLOGY ........................................................................... 15
FIGURE 3: SWOT ANALYSIS - UK.................................................................................................... 18
FIGURE 4: EMPLOYMENT VOLUMES.................................................................................................. 21
FIGURE 5: HIGHER EDUCATION ........................................................................................................ 31
UK Stage 3 – Gap Analysis & Market Testing
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PREFACE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --
This report is one of a suite of reports prepared as part of the sector skills agreement (SSA)
negotiated between stakeholders in the retail automotive sector. The SSA process commenced
in 2004 and most reports present a view of the sector in 2006.
The SSA represents a milestone in the development of processes that will ensure the United
Kingdom has sufficient numbers of appropriately skilled people to meet the future needs of the
retail automotive industry and in particular to meet the targets identified by Lord Sandy Leitch in
his 2006 report, a Prosperity for all in the global economy - world class skills.
This report reflects the work of Automotive Skills Ltd (ASL), which was the original sector skills
council (SSC) for the retail automotive sector. Readers should be aware that in July 2007 ASL
merged with the Institute of the Motor Industry IMI, the industry’s professional body since 1920,
and in September 2007, the Sector Skills Development Agency (SSDA) issued IMI with a licence
to be the SSC for the sector. The name ‘Automotive Skills’ is still used by IMI in relation to its
role in developing national occupational standards and qualification frameworks.
The nature of the retail automotive sector means that research and policy development is
ongoing. Also, there are ongoing changes to the sector’s footprint. Details of current research,
the wide range of policy issues being addressed in the sector and the most recent definition of
the sector’s footprint can to be found on the IMI’s website, www.motor.org.uk.
Sarah Sillars
Chief Executive Officer
The Institute of the Motor Industry
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1 Introduction
---------------------------------------------------------------This report forms part of the group of reports produced from the development and moderation of
Stage 3 of the Sector Skills Agreement (SSA) for the motor industry downstream of the factory
gate.
This publication covers the whole of the United Kingdom (UK) and there are reports for each of
the home nations published separately. The UK report summaries some of the key issues
developed in the four home nations (England, Scotland, Wales and Northern Ireland) and puts
them in a UK context. Draft action plans are not included in the UK report because these are, by
necessity, specific to each home nation.
Stage 3 of the SSA has drawn on the outputs and analyses from Stages 1 and 2, which have
been discussed, refined and agreed with employers, providers and stakeholders across the UK.
This report outlines the agreement of what the skills needs of the sector are and provides a
series of solutions that form the basis of the draft action plans contained in the home nation
reports.
Priorities for action have been agreed and set and at the time of writing negotiations with some
employers and key partners are already underway as the SSA moves into Stages 4 and 5.
The draft action plans flag up indications of where contributions to the SSA can be expected to
be derived from, prior to the firmer commitments to action that will be negotiated through Stages
4 and 5.
This report also includes the results of the gap analysis and market testing activities carried out
as part of Stage 3.
The fundamental purpose of this report is to stimulate discussion between interested parties to
ensure that the negotiation phases are informed and productive with a mutually beneficial and
synergistic outcome. For this reason this report is designed as a consultation document setting
out the key issues and priorities for the sector, what the solutions may be and what contributions
employers, providers, stakeholders and other partners may be able to make to the successful
implementation of the final agreements.
Automotive Skills hopes readers will find this report illuminating and stimulating and looks
forward to working with all interested parties to deliver action plans for the benefit of all.
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2 Executive Summary
---------------------------------------------------------------------ƒ
The automotive sector downstream of the factory gate, with its annual turnover of
£140bn and a GVA of £24bn, is a far more significant contributor to the UK economy
than is generally realised. Nearly 600,000 employees directly depend on the sector and
its 83,000 enterprises are inextricably linked along the supply chain to major global
automotive manufacturing businesses.
ƒ
The sector experiences low profitability, pay levels are subdued and the business
outlook is often short-term in the light of which workforce development is a challenge for
a great many employers.
ƒ
Progressive consolidation and concentration has been a feature of the sector since the
1960s and continues at pace, as complex product technology increases demand for
capital expenditure.
ƒ
Employers with predominantly urban or predominantly rural market environments face
differing employee and customer dynamics that impact on recruitment and retention as
well as pay and training.
ƒ
Although there has been a long standing focus on technical occupations within the
sector they actually account for only about a quarter of all positions. There are many
widely differing roles across the footprint, in equal need of development.
ƒ
When looking at skills gaps and shortages five main categories have been identified
from Stages 1 and 2 through the gap analysis:
ƒ
o
Management & Leaderships Skills
o
Employability Skills
o
Basic Skills
o
Generic Skills
o
Technical Skills
As part of Stage 3 Automotive Skills has employed a wide range of engagement
techniques with employers to review the outputs of the first two stages, the gaps
between needs and provision and the potential solutions.
ƒ
The draft action plan solutions need to be seen in the context of a dichotomy of broadly
aligned employers who can be categorised as “Survivors” or “Aspirers” according to a
range of characteristics. Differing solutions will have differing applications to these two
main groups of employers depending on their needs.
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ƒ
The SWOT analysis identified some key issues for the sector which are summarised
below:
o
Strengths (internal) include;
ƒ
Significant contribution of sector to the economy
ƒ
Relatively immune from (cheap) foreign competition
ƒ
Strong supply chain supports training and development
ƒ
Continuing consolidation supports increased professionalism and
workforce development opportunities
ƒ
Significant existing training in technical skills to be built on
ƒ
Widespread sector employer recognition of benefits of improved skills
ƒ
Wide variety of successful project initiatives support skills (e.g. Young
Apprenticeships)
ƒ
o
Improving Information Advice and Guidance support for sector
Weaknesses (internal) include;
ƒ
Depressed profitability
ƒ
High capital investment requirements
ƒ
Constant pressure on training budgets
ƒ
Non-aspirational sector image and reputation
ƒ
Diverse sector with lack of a collective voice and dominated by micro
businesses (often ‘hard to reach’)
o
ƒ
Gender imbalance
ƒ
Tendency towards internalised recruitment-
ƒ
Low managerial qualification penetration
ƒ
Widespread concerns about the quality of training
Opportunities (external) include;
ƒ
Sector Skills Agreement
ƒ
14-19 agenda initiatives will help encourage higher calibre to join sector
ƒ
Improved information, advice and guidance will help young people make
more informed choices about career options available to them
ƒ
Changes to Block Exemption Regulation
ƒ
Wide range of potential employees with transferable skills
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ƒ
Increasing numbers of qualified people leaving HE institutions
ƒ
Increasingly responsive delivery of training and development
ƒ
Engaged public sectors skills and workforce development organisation
and institutions
o
Threats (external) include;
ƒ
Sector not seen as a priority in any home nation or English region
ƒ
Supply chain pressures (including acquisition and/or control)
ƒ
Changes to Block Exemption Regulation
ƒ
Pace/type of product technological change
ƒ
Ever increasing consumer/customer expectations
ƒ
Increasing legislative controls
ƒ
Political response to climate change (CO2 issues)
ƒ
Social changes to purchase behaviour (sales and aftersales)
ƒ
Economic downturn (especially falling house prices)
ƒ
New types of competition
ƒ
Declining volumes of school leavers
ƒ
Inability by industry to recruit people from HE institutions
ƒ
Increasing volumes of skilled workers retiring, structural changes to
provision and its funding, public sector unresponsive to employer needs,
etc.
ƒ
Main areas contained within the proposed collaborative solutions outlines in the draft
action plans are grouped under the following headings:
o
Management and Leadership:
ƒ
Developing First Line Management Skills
ƒ
Developing Higher Level Management Skills - develop leaders able to
run aspiring companies
o
Technical Skills:
ƒ
Raising Technical Skills Capacity and Capability in ways to help people
keep their skills fully up to date with technological advances
o
Other essential Skills:
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ƒ
Developing employability skills so that people new to the industry are
motivated and have the right attitudes to work and learning
ƒ
Developing generic skills such as customer handling, problem solving
and team working skills
o
o
ƒ
Developing Basic Skills to tackle poor literacy and numeracy skills
ƒ
Increasing awareness of Legislation
Balanced Workforce:
ƒ
Improving the attractiveness of the Sector
ƒ
Developing Career Pathways
ƒ
Balancing the Workforce
ƒ
High Calibre & Extra Sector Recruitment
ƒ
Developing Employability Skills
Strategic Over-Arching Solutions
ƒ
Developing Quality Development Programmes
ƒ
Quality Improvement Strategy (QIS)
ƒ
Centres of Excellence
ƒ
Skills Passport
Development of the downstream automotive Sector Qualifications Strategy (SQS) will
underpin collaborative work with partners to drive the delivery of SSA action plans.
Automotive Skills looks forward to engaging with employers, stakeholders and other partners
in negotiation focusing on the development and delivery of solutions for the greater benefit of
the sector.
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3 The Evidence
----------------------------------------------------------------------
3.1 Skills Needs
3.1.1
The Sector
The sector in the UK comprises thirteen industry-defined sub-activities across a range of
business types downstream of the vehicle factory gate. In 83,000 businesses across the UK
(67,000 VAT registered) turning over £140 billion annually it employs over 596,000, of who 78%
are male, producing a total GVA of £24 billion each year. It is dominated by relatively few very
large employers and the 87% that are micro-businesses.
Sector profitability is relatively poor, with less than 1½% net profit ratio seen as typical. Some
sub-sectors, such as body repair, suffer the poorest profitability, whilst others such as road side
recovery, contract hire and leasing enjoy better margins. Overall this depresses pay levels,
investment in training and development of skills making it short-termist, especially in the face of
high capital equipment and facilities investment requirements.
Business regulation and
legislation as well as cash flow in the face of competition are particular concerns for employers.
Historically the sector has been driven by targets and there is still room to improve customer
focus. At the same time increasing emphasis on careers, rather than occupations, is recognised
as necessary. Furthermore, the sector’s image and reputation would benefit from improvement
through greater professionalism across the spectrum of enterprises since this would aid
recruitment and help to attract higher quality employees.
The sector has seen a considerable amount of consolidation over recent years with the larger
businesses acquiring medium-sized and family firms as investment requirement increase. This
consolidation has seen many locations close illustrated by the fact that the number of franchised
outlets has halved over the last 30 years, from 10,200 in 1975 to 5,600 in 2005. Meanwhile the
number of bodyshops has fallen from 12,700 in 1997 to just 6,700 in 2005.
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Figure 1: Enterprise Turnover
Enterprise Turnover
Reprofiled from SIC 50 to match Automotive Skills Footprint
UK
£138,635
ENGLAND
£123,872
£36,111
South East
Country/Region
East of England
£16,352
London
£13,148
North West
£13,014
West Midlands
South West
Yorkshire & the Humber
East Midlands
SCOTLAND
WALES
North East
NORTHERN IRELAND
£12,864
£10,303
£9,605
£8,690
£8,064
£3,917
£3,786
£2,783
£m
3.1.2
Geodemographics
Automotive Skills’ research highlighted a dichotomy between predominantly urban and
predominantly rural geodemographics, with the latter more likely to suffer vacancies because of
poorer communications and access, although their customer and employee base is more stable
with lower turnover than in more urban areas. Training and development is easier to deliver and
less disruptive to enterprises in urban areas.
Annual turnover of employees averages about one in four, although this varies widely by
employer and location. Poaching is a common response to skills shortages in the face of high
turnover, especially in more urban areas. Recruitment from out with the sector remains modest
and opportunities exist to bring a wider range of experiences into many occupations within the
footprint. This applies equally to graduates.
3.1.3
Workforce Profile
Although significant in terms of FE candidate volumes, technicians and related occupations
account for only a quarter of all employees in the footprint. Skilled occupations overall account
for one third of employees, sales and administration about two-fifths and about 10% are owners
or senior managers, leaving 10-15% in professional and elementary roles.
Male employees dominate the workforce (78%), but union and staff association membership is
just 4½% and those employed in the public sector account for only 2%.
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Improving human resource protocols will:
•
assist in broadening the skills pool from which the sector draws its talent,
•
help reduce staff turnover
•
support development of those employees entering and already within the sector.
3.1.4
Skills Categories
Considering the skills gaps of existing employees in the sector, highlighted by around a quarter
of employers across the UK, and the shortages relating to recruits, highlighted by around one-inten employers, five skills categories (below) have been identified by employers as requiring
action. Most of these could be said to apply across sectors.
The reasons for these shortages are varied but several issues have emerged; the insufficient
volumes of applicants with the right skills for the vacancies on offer, inadequate training of many
existing employees and the need for additional development of management in formal
management and informal leadership roles.
There is widespread acceptance that the increasingly competitive and complex commercial
environment will require a step change in the skills sets of employees at all levels. This is driven
not only by technological change at both product and workplace level, but also by customer and
supply-chain expectations.
Political, legal, economic, social and technological change will
continue to alter the business environment and employers, providers, stakeholders and other
partners will need to react positively and appropriately to this if the sector is to prosper in the
future.
3.1.4.1 Employability Skills
A higher proportion of employees (especially young people) need to be interested, enthusiastic,
willing to learn, reliable and motivated
Employers have often put the importance of these
attributes above existing technical skills sets.
3.1.4.2 Basic Skills
Employers believe there are too many school leavers joining the workforce with inadequate
numeracy and literacy standards and that too much remedial action has to be taken.
3.1.4.3 Generic Skills
These skills are increasingly essential for any business in the twenty-first century.
Sector
employers have identified a number of generic skills as being key including; customer handling,
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November 2006
problem-solving, communications, and team working. Three quarters of employers agreed that
such generic skills were essential for their organisations to remain competitive.
3.1.4.4 Technical Skills
Approximately two-thirds of the sector’s employers across the UK identified a lack of proficiency
in sector-specific technical skills among their workforces. The phenomenal pace of technical
change in the products sold, serviced, and repaired by the sector is demanding a corresponding
increase in technical capabilities of those carrying out the work. Nine out of ten employers
definitely agree that there is a considerable need for new training and up-skilling as a result of
these manufacturer-driven changes, which will continue at an increasing pace.
3.1.4.5 Management and Leadership Skills
Employers have argued that management and leadership is key to achieving success in this
sector, as in others, and that this category is in many ways the most important set of skills to
improve.
Considering that just 14% of managers in the sector have a level S/NVQ 4+ (or equivalent)
qualification, it could be said that there is room to increase the proportion of managers so
qualified.
Leadership skills in particular are in need of development with 73% of employers definitely
agreeing that this is required. If enterprises are to become less bureaucratic and more like
learning organisations significant change will be required in this area.
3.1.5
Approach to Employer Engagement
Through Stage 3 the findings from Stages 1 and 2 have been communicated to employers,
providers and stakeholders through a series of channels primarily including the following:
3.1.5.1 Published Reports
Five reports have been published for the UK and each of the home nations for Stages 1 and 2 of
the Sector Skills Agreement.
These are available on the Automotive Skills website 1 , with
invitations to comment and to provide feedback.
1
www.motor.org
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3.1.5.2 Roadshow Debates
Automotive Skills has held a series of Roadshow Debates across the whole of the UK beginning
in September 2006 with the last one held at the end of October 2006.
Employers, trade
associations, providers and stakeholders were invited by personal contact and through our
website.
At each of the half-day debating sessions the findings of Stages 1 and 2 were
presented together with outline solutions followed by a discussion to 'market test' these to
address the gap analysis.
These were informal open debates without assumptions or
preconceptions designed to identify the priorities for the sector.
3.1.5.3 Bi-lateral Discussions
In addition to the roadshow debates, key and interested employers unable to attend the debates
were met to discuss the same issues in a one-to-one setting.
3.1.5.4 Employer Depth Engagement
In addition Automotive Skills commissioned a research agency to conduct an additional series of
26 depth interviews with employers to explore in a confidential and objective manner the issues
arising out of Stages 1 and 2. This activity supplemented the output of Stages 1 and 2 as well as
contributing to Stage 3.
The output of this activity has been fed back into this report, is
summarised below and more details can be found in the appendix – section 6.
This report also forms an integral part of the consultation and negotiation process with employers,
providers, stakeholders and other interested parties through Stages 4 and 5 right up to sign off of
the SSA.
3.1.6
Employer Depth Engagement
As part of Stage 3 twenty six face-to-face depth interviews were carried out with employers
across the UK. The interviews were spread around the footprint’s sub activities.
The interviews showed that employer engagement and response to potential solutions varied
according to the structure of the organisation and fundamentally reflects profitability. It is worth
noting that vehicle dealer profitability fell to just 0.6% net profit on sales in August 2006 (Source:
Motortrader , 23rd October 2006, p 10). What is clear is that a one size fits all solution will not
address the issues sufficiently.
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Figure 2: Enterprise Skills Focus Typology
“Survivors”
“Aspirers”
Type of Business
Often smaller, independent,
long established and family
run.
Medium/large independents,
franchised, larger retailers,
groups
Sites
Often single site
Often multi-site, also single
site
Employees
Typically micro-businesses;
<5 employees
Micro- and larger businesses;
>5 employees
Business Imperative
Survival
Looking for opportunities to
grow
Skills Focus
Often cannot (or don’t want to)
cope with the rigours of
training and development.
Lead by progressive attitudes
or external influences (e.g.
manufacturers, Customer
Satisfaction Index).
Skills Gap/Shortage
Categories recognised
Larger problem with:
Smaller problem with:
ƒ
Employability skills
ƒ
Basic skills (esp <25s)
ƒ
Generic skills
ƒ
Technical skills
Management and leadership
needs often not recognised.
Impact of skills
gaps/shortages more
significant on smaller
workforce.
ƒ
Generic skills (esp.
customer handling)
ƒ
Technical skills
ƒ
Management and
Leadership Skills
The less employable without
minimum requirements have
been screened out already.
Technical needs
More likely to want more ‘old
school’ mechanics (which are
hard to find) to work on older
cars – and who often find it
more challenging to adapt to
new technology
Tend to replace rather than
repair on newer vehicles.
Pace of technological change
causing some difficulties.
Approach to Employees
Less likely to have the time to
mentor or look after
apprentices and new recruits
More likely to have HR
function, pay tends to be
better.
Few have basic standards for
entry.
Easier to attract better staff.
Little training infrastructure to
support micro-businesses (too
little practical application in
college courses these days).
Often organise or use own or
manufacturer
facilities/courses; e.g.
academies, reflecting the xyz
way of doing things.
Approach to Training
An underlying theme has crystallised through the first three stages of the SSA; that too many
young people have a poor attitude and lack of motivation to fulfil even the most basic of
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employer requirements. A widespread lack of discipline combined with a feckless approach to
work is a common experience for employers.
Employer dissatisfaction with such experiences in part explains the move to employ workers
from EU accession states.
Employees from Eastern Europe are seen as being reliable,
conscientious, diligent and attentive, and this encourages employers to overcome any language
difficulties that may exist.
The need for better skilled, better qualified managers and leaders is recognised, especially by
the more progressive and sophisticated enterprises. Promotion through the ranks is a common
theme in the sector, but skills development to support changing requirements has been lacking.
Even those who may be good managers may not be good leaders.
3.1.7
Engagement Strategy for Stages 4 and 5
Throughout Stages 4 and 5 Automotive Skills will continue to build on the excellent working
relationship it has developed over a number of years with employers across the UK. This will
include the national employers’ fora and many ad-hoc meetings, events, roadshows, focus
groups and other engagement activities.
These regular meetings are continuing and on-going and have been very productive so far. In
Stages 4 and 5 Automotive Skills will be engaging and negotiating with employers, trade
associations, providers, stakeholders and other partners to develop the final action plans for the
SSA. Such negotiations are likely to take place at a number of levels and over a wide range of
issues. This will draw on the priorities set in Stage 3 and contained within this report, which will
form a starting point for negotiations.
3.1.8
Approach to Communication, Discussion and Evaluation
The gap analysis carried out in Stage 3 derived from an internal review of the outputs from
Stages 1 and 2 of the SSA and one carried out by consultants heavily involved in Stages 1 and 2
of the project.
Automotive Skills drew together the strands of these pieces of work through internal reviews and
workshops designed to develop a series of possible or proposed solutions grounded in the
findings of the first two stages and the gap analysis.
The possible or proposed solutions were initially presented to standing employer fora around the
UK for consideration and comment. These were used to validate the initial gaps and ideas for
resolving these gaps. From the response to these meetings the solutions were refined and at
subsequent roadshow debates a series of more defined solutions was put forward for discussion.
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Whilst Automotive Skills has always played the role of impartial honest broker during the SSA,
some employers expressed a desire that it should lead employers in a specific direction of
change, rather than simply asking employers to decide on the validity of and priorities for action.
In the very first full roadshow debate employers expressed a clear wish that Automotive Skills
should not only present solution option scenarios, but also clearly recommend the solution
options to deliver the improvements desired.
These views were taken into account and the scenarios were re-presented at subsequent
roadshow debates to sign post the way ahead. The focus of solution presentation, discussions
and evaluation at the roadshows became more aligned to a proposed direction of travel, as
demanded by our employers. Consequently, Automotive Skills presented a series of solution
scenarios ‘recommended’ through the feedback. Employers and other partners attending the
roadshows were invited to comment on, agree or disagree with the proposed solutions by degree.
The responses to the proposals were captured and synthesised for later use.
In parallel with this activity Automotive Skills commissioned an independent research agency to
undertake 26 face-to-face depth interviews with employers across the UK to reaffirm the
priorities for action. The outputs from this exercise fed into the evaluation of the priorities for
action, defined as long, medium or short-term.
Automotive Skills then held an internal workshop involving all research, policy, regional and
national staff to discuss and debate the outcomes of the employer engagement activities
undertaken. This drew together the gap analysis, responses to the roadshow debate proposal
scenarios presentations, and the employer depth interviews, to create a set of draft action plans
to act as the basis for negotiations in Stages 4 and 5.
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3.2 Supply-Side Evaluation
The following sections examine the supply side issues impact on the Sector Skills Agreement.
Part of this process is a SWOT analysis for the sector; the Strengths and Weaknesses being
internal and the Opportunities and Threats being external.
3.2.1
SWOT Analysis – UK
Figure 3: SWOT Analysis - UK
STRENGTHS
WEAKNESSES
Sector Characteristics
‰ Sector employs approximately 2% of the working
population
‰ Significant potential and strong productivity in
comparison to European comparator counties
Workforce
‰ Stability in the rural workforce
Training
‰ Apprenticeships are a common and valued route
within the sector
‰ Employees aged 16-24 are more likely to receive
training than the all sector average
‰ Training spend per employee receiving training
above the all sector average
‰ Over 88% of employers able to articulate strategy
for identifying training needs
‰ Over 94% of employers either satisfied or very
satisfied with impact of training on performance
‰ Only 6.4% of employers feel that there is no link
between training and business performance
Qualifications and Provision
‰ 14 NVQs/SVQs over three levels covering each
sub-sector of the industry
‰ Training in Key or Core Skills also offered
‰ Technical Certificates developed for
apprenticeships
‰ ARMS has been developed for managers and
potential managers
‰ A high number of Level 3 qualifications
‰ Range of technical courses is believed to be
adequate to meet the needs of the sector
‰ Large employer input into course design is felt to be
significant
‰ Public funded training provision within the UK has
received good inspection grades
Sector Characteristics
‰ Net margins/profitability in the sector are low
‰ Many sub-sectors require very high levels of
capital investment; training not always a
priority
‰ Tendency to focus on jobs rather than
careers
‰ Remuneration levels in most occupations
are depressed
Recruitment
‰ Poor image and reputation of certain subsectors
‰ Sector often acts as a repository for less
able school leavers
‰ Positive aspects not promoted by careers
advisers
‰ Low level of graduate recruitment
‰ Limited recruitment of individuals from other
sectors
‰ Sector has a distinct gender imbalance
‰ Significant proportion of employers report
hard to fill vacancies; rural employers in
particular
‰ Particular
difficulties
in
recruiting
technicians/mechanics
Workforce
‰ High level of staff turnover, typically 25% per
annum
‰ Lowest proportion of Level 4 qualified
managers of any sector; 16% of managers
have no qualifications
‰ Promotion to management and leadership
roles not accompanied by training
‰ Predominance of a ‘blame culture’ in many
enterprises
‰ Difficult to recruit individuals with required
level of technical skills
‰ Generic skills in short supply amongst
existing employees and new recruits
‰ Standard of literacy and numeracy is often
poor
‰ Employability/life skills lacking within the
sector’s workforce
‰ Internal skills gaps most common amongst
skilled trades occupations, followed by sales
and customer service staff
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November 2006
Training
‰
Comparatively
small
proportion
of
employers have a Business Plan or
Strategy, a Training Plan and a specific
budget for training; with smaller employers
much less likely to have any of these
‰ 10% fewer businesses in the sector (54%)
provide training for their employees than the
UK average
‰ Female employees significantly less likely to
receive training
‰ Employers find it difficult to access training
in a manner which is not disruptive to their
business
‰ Direct and indirect costs of training act as a
barrier to uptake
‰ NVQs/SVQs are perceived negatively by
some employers
‰ A need for a closer partnership between
training providers and employers
‰ Engagement is made difficult by a lack of
interest among many employers
‰ Employers are often reluctant to use the
same training provider as a rival firm
Qualifications and Provision
‰ Provision of qualifications above Level 3 is
comparatively sparse
‰ Gap in vocational training funding for the
over 19s
‰ Concerns about declining levels of funding
for FE
‰ Structure of provision and funding of
courses is confusing for employers
‰ Concern that some training providers do not
have the up-to-date equipment required
‰ Internal Quality Assurance was an area
identified as a slight weakness by official
inspectorates of provision
‰ The level of co-operation between training
providers has been reduced by the
introduction of competition between colleges
in the FE sector
OPPORTUNITIES
THREATS
Sector Characteristics
‰ Larger businesses are acquiring smaller
counterparts; more likely to interact with Automotive
Skills and offer training
‰ Consolidation of the number of businesses in the
sector may increase the power of employers in the
sector
Recruitment
‰ Poor/negative image of the sector can be
addressed, perhaps by the creation of Industry
Ambassadors and by the activities of Automotive
Skills
‰ Opportunities exist to improve the image amongst
the 14-16 age group, including:
o
Activities to inform the school curriculum
o
The targeting of formal influencers such
as Careers Advisors
Sector Characteristics
‰ Levels of investment required to operate in
the sector are increasing
‰ Potential that low net margins could
continue to have a negative impact on
investment in training
‰ Manufacturers putting pressure on the
downside supply chain to cut costs
‰ Rapid technological changes could create
skills demands which the sector is unable to
meet
‰ The potential introduction of National
‘Super-Complaints’
‰ Multination ownership of major employers
‰ Longer service intervals and increased
reliability of new vehicles may impact upon
the servicing and repair sector
‰ Solutions to skills deficiencies need to be
tailored to meet the needs of all business
types; a singular approach is likely to be
unsuccessful
o
o
The targeting of informal influencers such
as parents, guardians and relatives
Improved work experience activities and
pre-apprenticeships
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November 2006
‰
Skills gaps can also be addressed by a wider
sourcing of employees, including:
o
The recruitment of individuals from other
sectors
o
Actions to address the gender imbalance
‰ Create career pathways to enable new entrants
and the existing workforce to gain a vision of how
their career within the sector can develop
Workforce
‰ A Skills Passport would enable the qualifications
and competencies of individuals to be recorded.
Training
‰ Make training more attractive for employers by
offering modular, building block and bite-sized
delivery of courses to reduce disruption
‰ New methods of learning to enable employers in
remote areas to access training, i.e. e-learning
‰ More effective communication of value to
employers
‰ On the job up-skilling could be improved by
promoting ‘train-the-trainer’ courses
Qualifications and Provision
‰ Actions to address inadequacies in management
and leadership (ARMS Level 3 (‘Step Into ARMS’)
and Level 4
‰ The creation of a Sector Qualifications Strategy will
offer the opportunity to only retain support for
courses which meet the needs of employers
‰ Need for a single authoritative information point and
recognised approval system for training provision
‰ Formation of a virtual Skills Academy could offer
the opportunity to disseminate best practice
3.2.2
Recruitment
‰ Activities of ‘rogue’ employers could
continue to tarnish the image/reputation of
the whole sector
‰ Increased numbers of young people being
guided towards Higher Education
‰ Low pay and poor working conditions could
continue to hamper the sector’s ability to
attract high quality employees
Workforce
‰ 30% of the workforce will need to be
replaced during the period 2004-2014,
creating the danger of further and more
extensive skills gaps
‰ A danger that management culture will
remain function orientated and short-termist
‰ A danger that employers will be unable to
keep up with the pace of technological
change and its associated training demands
‰ A danger that the school educational system
continues to fail to equip young people with
the core skills required
‰ A danger that the sector will continue to only
attract individuals with lower level core skills
Training
‰ As a result of the retirement of many of the
more highly skilled individuals the ability to
offer on-the-job training internally may
decrease
Qualifications and Provision
‰ Expectation that the number of training
providers will decline over the next 5-10
years
‰ A danger that the cost of providing training
for
certain
sub-sectors
becomes
prohibitively expensive
‰ Employers continue to be sceptical of the
value of NVQs/SVQ and new qualifications
are not embraced
Geographic Context
Each home nation within the UK has its own distinctive policy context and large parts of the skills
agenda have been devolved to regional level within the nations – among the nine English
regions in particular. The skills, training and development issues facing employers and providers
across the UK are very similar with only marginal differences in scale or importance.
Automotive Skills estimates that nearly 600,000 people work in the sector in total accounting for
just under 2.1% of the working population of the UK. Within this framework England accounts for
85% of the UK workforce and 89% of the sector’s turnover and GVA in the UK. This in no way
diminishes the importance of the other home nations, especially in their respective policy
contexts, but does highlight the overall size of the sector.
Where there is a difference however is in the dichotomy between businesses with predominantly
urban and predominantly rural employee and customer territories. Those employers in more
rural areas tend to find it more difficult to hire suitable staff, but retain them for longer, and have
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November 2006
a more loyal customer base than those in more urban areas where communities are more
transient and fragmented and the range of alternative employment is greater.
A look at the employment volumes by nation and region highlights the significant workforces
employed right across the UK.
Figure 4: Employment Volumes
Employment Volumes
South East
85,960
West Midlands
74,177
East of England
62,988
Country/Region
South West
58,668
57,672
North West
Yorkshire & Humber
53,973
47,646
East Midlands
Greater London
43,571
SCOTLAND
36,458
29,860
WALES
North East
NORTHERN IRELAND
23,044
14,693
Employees in Automotive Skills Footprint
Changes to Provision by Skills Category
3.2.3
Changes to Provision by Skills Category
In the next sections we outline by skills category in table format a narrative of the requirements
for change that forms the basis for the proposed collaborative solutions.
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3.2.3.1 Employability Skills
Employability Skills
Persons possessing the right attitudes and
motivations for work, including willingness to learn,
reliability, dependability, thoroughness, aptitude,
good timekeeping, appropriate appearance and such
like.
Desired changes to current provision
ƒ
Improvements to the school curriculum
ƒ
More advice
programmes
ƒ
Standardised initial assessments
ƒ
Preparation for work courses
ƒ
Inter-personal skills development
ƒ
Pre-apprenticeships
ƒ
Learning programmes to include a range of
technical, basic, generic and employability skills
on
the
content
of
Desired changes to provider structure
For negotiation to meet the goals for change
Demographic groups to be targeted
Primarily:
ƒ
Targeted industry sub-activities
ƒ
Specific skills
ƒ
Qualification Frameworks
ƒ
Levels
ƒ
Volumes/Proportions
Workforce
ƒ
14-16 Age Groups
ƒ
16-19 Age Groups
Flexible, appropriate qualifications frameworks are
needed to focus on informal soft attributes.
of
Desired Modes of Delivery
For negotiation to meet the goals for change
Desired Provider Capacity
For negotiation to meet the goals for change
Other Information (including examples of
good practice)
Please refer to individual nation reports
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learning
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November 2006
3.2.3.2 Basic Skills
Basic Skills
Comprising in the main:
Desired changes to current provision
ƒ
Literacy
ƒ
Numeracy
ƒ
Improvements to the school curriculum
ƒ
Learning programmes to include a range of
technical, basic, generic and employability skills
Desired changes to provider structure
For negotiation to meet the goals for change
Demographic groups to be targeted
ƒ
14-16
ƒ
School Leavers
ƒ
Apprentices
ƒ
Targeted industry sub-activities
ƒ
Specific skills
ƒ
Qualification Frameworks
ƒ
Levels
ƒ
Volumes/Proportions
Workforce
New entrants and existing workforce
of
Desired Modes of Delivery
For negotiation to meet the goals for change
Desired Provider Capacity
For negotiation to meet the goals for change
Other Information (including examples of
good practice)
Please refer to individual nation reports
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3.2.3.3 Generic Skills
Generic Skills
ƒ
Planning and organising
ƒ
Problem-solving
ƒ
Team working
ƒ
Customer handling
Desired changes to current provision
Learning programmes to include a range of
technical, basic, generic and employability skills
Desired changes to provider structure
For negotiation to meet the goals for change
Demographic groups to be targeted
All employees in the footprint.
ƒ
Targeted industry sub-activities
ƒ
Specific skills
ƒ
Qualification Frameworks
ƒ
Levels
ƒ
Volumes/Proportions
Workforce
Relevant to all occupations, especially customeroriented roles, in all sub-sectors and activities.
of
Desired Modes of Delivery
For negotiation to meet the goals for change
Desired Provider Capacity
For negotiation to meet the goals for change
Other Information (including examples of
good practice)
Please refer to individual nation reports
3.2.3.4 Technical Skills
Technical Skills
Particular emphasis on keeping pace with changing
product technology
Desired changes to current provision
Learning programmes to include a range of
technical, basic, generic and employability skills
Desired changes to provider structure
For negotiation to meet the goals for change
Demographic groups to be targeted
Technical occupations across all sub-activities
ƒ
Targeted industry sub-activities
ƒ
Specific skills
ƒ
Qualification Frameworks
ƒ
Levels
ƒ
Volumes/Proportions of
Workforce
Likely to impact all technicians and technical roles
across the UK.
Desired Modes of Delivery
For negotiation to meet the goals for change
Desired Provider Capacity
For negotiation to meet the goals for change
Other Information (including examples of
good practice)
Please refer to individual nation reports
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3.2.3.5 Management and Leadership Skills
Management & Leadership Skills
Desired changes to current provision
More focus on CPD, building blocks, bitesize
learning
‘Step Into ARMS’ (Level 3)
Roll out ARMS more widely
Desired changes to provider structure
For negotiation to meet the goals for change
Demographic groups to be targeted
All managers and supervisors
ƒ
Targeted industry sub-activities
ƒ
Specific skills
ƒ
Qualification Frameworks
ƒ
Levels
ƒ
Volumes/Proportions
Workforce
Likely to impact all mangers from first-line
supervisory level upwards across the entire footprint.
There is a need to address the more formal
management and informal leadership skills issues.
of
Desired Modes of Delivery
For negotiation to meet the goals for change
Desired Provider Capacity
For negotiation to meet the goals for change
Other Information (including examples of
good practice)
Please refer to individual nation reports
3.2.4
Approach to Supply-Side Consultation
Through 2006, Automotive Skills has been undertaking regular engagement with stakeholders
across the UK through the Project Board meeting, ad-hoc group sessions and bi-lateral meetings.
These are continuing and on-going and have so far been very productive.
Throughout Stages 4 and 5 Automotive skills will be engaging and negotiating with employers,
trade associations, providers, stakeholders and other partners to develop the final action plans
for the SSA. Such negotiations are likely to take place at a number of levels over a wide range
of issues. This will draw on the priorities set in Stage 3 and contained within this report, which
will form a starting point for negotiations.
Automotive Skills will continue to work with stakeholders and partners to align solutions with the
nations and regions policy agenda to enable positive benefits and synergistic outcomes to be
developed.
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3.2.5
Balance of Evidence – the Learner Input
From the very beginning of the SSA process Automotive Skills has recognised the importance of
the individual employee at the heart of change in the sector. Without the commitment, diligence
and application of the individual learner skills development cannot be embedded in the
workplace.
Although the development process of the SSA as defined does not specifically
incorporate evidence from individual employees, Automotive Skills has carried out research with
employees. Specifically, this work has helped to identify roadblocks in the way of personal
development.
Work/life balance-related issues in particular were identified as a significant restraint on
workforce development – often driven by a combination of operational and supply-chain
pressures – that impact significantly on an individual’s capacity and capability to develop
professionally. As part of the drive to inform and advise employers about the benefits of training
and development to their businesses Automotive Skills aims to help remove such obstacles to
new learning and up-skilling.
The role that trades unions can play in supporting development of the shared skills agenda is
widely recognised, although penetration of trades union and staff association membership in the
sector is very low. Wherever practical and appropriate Automotive Skills will work with trades
unions to ensure the SSA reflects the collective needs of their members as well as the sector’s
workforce as a whole.
Automotive Skills will continue to work with all partners to ensure the needs of individuals are
reflected in the solutions and action plans to be agreed.
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4 Proposed Collaborative Solutions
----------------------------------------------------------------------
4.1 Introduction
The central part of the Sector Skills Agreement are the Action Plans. These will be developed
for each home nation and the English regions and for each solution will include a narrative
description of what are at present proposed solutions plus;
ƒ
Evidence Base (Supply and Demand)
ƒ
Sub-sectors and Occupations Likely to be Affected
ƒ
The Desired Impact of Change, Improvement or Activity
ƒ
Employer Involvement and Actions
ƒ
Stakeholder Involvement and Actions
ƒ
Timescales (S/M/L-term)
ƒ
Forecast Outputs and Outcomes
ƒ
Funding and Costings (to be agreed by the end of Stage 5)
ƒ
Reviewing and Monitoring Arrangements (to be agreed by the end of Stage 5)
The tables containing the information above represent the draft Action Plans that form the basis
for discussions and negotiations in the latter Stages of the SSA.
4.2 Overarching Solution Themes
Because the draft Action Plans are specific to each nation, this section will refer to the key
solution themes that have developed in the creation of the draft Action Plans. The draft Action
Plans can be found in the respective nation reports. Main areas contained within the proposed
collaborative solutions outlines in the draft action plans are grouped under the following
headings:
o
Developing First Line Management Skills
o
Developing Higher Level Management Skills
o
Raising Technical Skills Capacity and Capability
o
Developing Generic Skills
o
Increasing Legislative Awareness
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o
Developing Basic Skills
o
Developing Core Skills
o
Improving the attractiveness of the Sector
o
Developing Career Pathways
o
Balancing the Workforce
o
High Calibre & Extra Sector Recruitment
o
Developing Employability Skills
o
Developing Quality Development Programmes
ƒ
Quality Improvement Strategy (QIS)
ƒ
Centres of Excellence
ƒ
Skills Passport
4.3 Consultation Mechanisms
The draft Action Plans will form the basis for discussions and negotiations with employers,
providers, stakeholders and other partners through Stages 4 and 5 of the SSA.
These discussions and negotiations will take a variety of forms based around group and bilateral face-to-face formats.
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5 Overall Reviewing & Monitoring Arrangements
----------------------------------------------------------------------
5.1 General
The SSDA has declared that Sector Skills Agreements in their published versions will become
the basis for SSCs’ business plans going forward. Automotive Skills will use the SSA as the
focus of its activities going forward in parallel with the over 14-19 age group agenda and the
Sector Qualifications Strategy (SQS) that will be developed from the SSA.
When finalised at the end of Stage 5 the action plans will include specific arrangements to
evaluate the expected outcomes and out-turns of each part of the overall SSA, including the
timetables envisaged and how progress towards success targets, set out in the action plans, will
be measured.
5.2 Checkpoint Review
The SSDA has been consulting with Sector Skills Councils (SSCs), partners and stakeholders
represented on the nations Project Boards on their Checkpoint Review (CR) initiative. Given the
lessons learned from the Pathfinder SSCs the aim of the CR is to ensure the outcomes and outturns of the SSA are embedded in all relevant activities as agreed in the SSA.
At the time of writing (November 2006) the consultation with partners is still ongoing and the
specification of the CR is not confirmed, although its operation will vary according to the
arrangements agreed in each nation. In outline terms the CR will include:
ƒ
An annual Ministerial meeting with CEOs of SSCs in implementation mode (i.e. post
Stage 5) and delivery partners to update on progress; highlight achievements and good
partnership practice and in addition indicate any barriers to joint delivery of action plans.
ƒ
The meeting would be informed by a short report from each partner and the SSC, using
the existing monitoring and evaluation mechanisms established through the Action Plans,
to demonstrate delivery and impact and provide a ‘litmus test’ ensuring that SSAs are
providing a response to changing business needs.
ƒ
There will also be an interactive question and answer-type session led by the Minister.
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It is envisaged that the CR will make extensive use of the monitoring and evaluation
methodologies agreed as part of the Action Plan development leading to the final publication and
launch of the SSA at the end of Stage 5.
5.3 Specific Reviewing and Monitoring
All specified activities laid out in the final versions of the Action Plans will require baseline
measurement, on-going monitoring and evaluation to ensure a comprehensive understanding of
the impacts of the Action Plans themselves can be established.
At this stage the precise nature of the measurements will require finalisation, but the broad
nature of these – with any detail already envisaged – are included in the tables shown in section
4 Proposed Collaborative Solutions. Further details will be devised in Stage 5 and finalised in
the published SSA.
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6 Appendices
----------------------------------------------------------------------
6.1 Appendix 1: Higher Education
The table below shows the varied availability of Higher Education (HE) courses across the UK.
The fact that the regions and nations vary in terms of both physical area and size of the retail
automotive sector means that it is appropriate to include these factors in the gap analysis.
Figure 5: Higher Education
Retail
Region
Courses
Automotive
Courses per
Sector Sites
100 sites
2
Area (km )
Courses per
1000 km
2
East Midlands
328
5,151
6.4
15,627
21.0
East of England
455
8,036
5.7
19,126
23.8
London
209
4,934
4.2
1,574
132.8
North East
0
2,631
0.0
8,592
0.0
North West
167
8,194
2.0
14,163
11.8
0
1,822
0.0
14,150
0.0
Northern Ireland
Scotland
18
4,934
0.4
78,807
0.2
South East
320
10,988
2.9
19,086
16.8
South West
30
6,712
0.4
23,851
1.3
Wales
116
3,580
3.2
20,778
5.6
West Midlands
601
6,958
8.6
13,004
46.2
Yorkshire and the Humber
271
6,234
4.3
15,411
17.6
2,497
65,240
3.8
244,169
10.3
UK
Sources:
HE Courses: UCAS, Courses containing automotive module only
Automotive Sites: Automotive Skills / Simpson and Carpenter: Automotive Sector Research Database 2005
Area Data: Office for National Statistics UK Standard Area Measurements
The number of courses available per 100 retail automotive sites gives a guide to the comparative
choice of course provision available to employers in each region/country. It is important to note
that because the potential number of learners that could be accommodated on each course is
not considered, since no such data is available, this is not a measure of the actual capacity of
the sector in each region in terms of number of HE learners.
The West Midlands had proportionately the widest choice of HE courses available, with 8.6
courses for every 100 retail automotive sites. The next largest choice of HE courses per 100
automotive sites was found in the East Midlands (6.4), followed by the East of England (5.7) and
Yorkshire and the Humber (4.3). Scotland and the South West were both noticeably below
Gap Analysis & Market Testing
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November 2006
average in terms of the number of courses available, with just 0.4 HE courses for every 100 sites
in both regions.
The number of courses per 1000km2 provides a measure, in relative terms, of how far
individuals/employees in a region might have to travel to access HE training provision. A lower
figure indicates that individuals/employees would have to travel a longer distance.
6.2 Appendix 2: United Kingdom SWOT Analysis
This SWOT analysis looks at the strengths, weaknesses, opportunities and threats of the
•
Sector’s characteristics
•
Recruitment
•
Workforce
•
Training Provision
•
Qualification provision
6.2.1
Strengths
Sector Characteristics:
•
The Retail Automotive Sector is important, employing approximately 2% of the working
population
•
The potential is significant; the UK new car market is second only to Germany in size and
approximately 30 million vehicles use the UK’s roads
•
Productivity in the vehicle maintenance and repair sector is strong compared to European
comparator countries
Workforce
•
Established workforce with strong identity
•
A clearly defined footprint and occupational structure
•
Need for employment spread across the country
•
Rural employers operating in the sector tend to have workforce stability
Training
•
Manufacturers and franchise dealers have a strong emphasis on training and updating skills
to match new products
•
Apprenticeships are a common and valued route within the sector, with an increase in the
uptake in the number of apprenticeships being taken in the sector evident
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November 2006
•
Employees in the 16-24 age range working in the Retail Automotive Sector are more likely to
receive training than the all sector average, therefore this generation of employees will be
accustomed to accessing training as part of the their working life
•
Training spend per employee receiving training in the Retail Automotive Sector is above the
all sector average
•
Over 88% of employers in the sector are able to articulate their strategy for identifying
training needs
•
Over 94% of employers in the sector who provide training for their employees are either
satisfied or very satisfied with its impact on performance
•
Only 6.4% of employers feel that there is no link between training and business performance
Qualifications and Provision
•
Automotive Skills support 14 NVQs/SVQs over three levels covering each sub-sector of the
industry, some of which are broken down to accommodate specialities
•
Training in Key or Core Skills is also offered to aid individual improvement, self learning and
performance in education, training and work
•
A range of technical certificates have also been developed for apprenticeship programmes
•
The Automotive Retail Management Standard (ARMS) has been developed for managers
and potential managers to improve productivity in the sector, and is due to be expanded in
the near future
•
There are a high number of Level 3 qualifications serving the sector across the UK
•
The range of technical courses available is believed to be adequate to meet the needs of the
sector, with a particular concentration in vehicle maintenance, repair and servicing
•
Employer input into private sector course design is felt to be significant amongst larger
employers
•
According to official inspectorates (Ofsted, ALI, ETI, HMIe), public funded training provision
serving the sector in the UK is good, with relatively few establishments criticised on any
major issues
6.2.2
Weaknesses
Sector Characteristics
•
Average net margins/profitability in the sector are low (1½%), particularly in sub-sectors such
as paint and body repair
•
Many sub-sectors require very high levels of capital investment, resulting from technology,
supply chain and customer demands. As such, staff training and development is not always
a priority
•
There is a tendency within the sector to focus on jobs rather than careers, especially within
small businesses
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November 2006
•
Although there are some highly paid roles, remuneration levels in most occupations are
depressed
•
There are a proportionately low number of sector businesses located in rural areas
Recruitment
•
The image and reputation of certain Retail Automotive sub-sectors is not positive
•
Poor image and reputation has a negative impact on recruitment, with the sector too often
acting as a repository for less able school leavers
•
The positive aspects of the sector are not promoted adequately by careers advisers
•
The level of graduate recruitment within the sector is low
•
The employment of individuals from other sectors who have transferable skills is limited
•
The sector has a distinct gender imbalance, only one other UK sector has a lower proportion
of female workers
•
As a result of the above a significant proportion of UK Automotive Sector employers report
having hard to fill vacancies; rural employers in particular find it difficult to recruit
•
Employers report particular difficulties in recruiting technicians and mechanics
Workforce
•
The Retail Automotive Sector has a high level of staff turnover, typically 25% per annum.
Urban employers have a particularly high workforce turnover
•
Management & Leadership: the sector has the lowest proportion of Level 4 qualified
managers of any sector; 16% of managers have no qualifications
•
Management & Leadership: management and leadership skills within the sector are believed
to be weak, with promotion to these roles from technical or sales occupations often not being
accompanied by the training required
•
Management & Leadership: there is a predominance of a ‘blame culture’ in many enterprises
•
Technical Skills: employers find it difficult to recruit individuals with the required level of
technical skills, indeed technical skills gaps are a major issue for the sector
•
Generic Skills: generic skills (i.e. customer handling, team working) are in short supply
amongst existing employees and new recruits
•
Basic Skills: the standard of literacy and numeracy of recruits is often poor
•
Employability & Life Skills: attitudes, consistency, motivation, reliability and willingness to
learn are issues within the sector’s workforce
•
With regards to occupations, internal skills gaps are most common amongst those in skilled
trades occupations, followed by sales and customer service staff
Gap Analysis & Market Testing
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November 2006
Training
•
Only 27.6% of employers in the sector have a Business Plan or Strategy, only 12% have a
Training Plan and just 7.2% have a specific budget for training; with smaller employers much
less likely to have any of these
•
Retail Automotive Sector employees as a whole receive less job related training, with 10%
fewer businesses in the sector (54%) providing training for their employees than the UK
average
•
Employers find it difficult to access training in a manner that is not disruptive to their
business, particularly rural employers who often have greater transportation challenges.
Indeed, the location of training is a key barrier to uptake
•
The direct and indirect costs of training also act as a barrier to uptake
•
NVQs/SVQs are perceived negatively by some employers, with trainees often not being
sufficiently experienced in practical skills to enable them to undertake the activities their
qualifications say they can
•
There is an identified need for a closer partnership between training providers and
employers
•
Engagement is made difficult by a lack of interest amongst many employers
•
Intense competition and fear of ‘staff poaching’ means that employers are reluctant to use
the same training provider as a rival firm
Qualifications and Provision
•
The provision of qualifications above Level 3 is comparatively sparse
•
There is a gap in vocational training funding for the over 19s
•
Training providers are concerned about declining levels of funding for FE
•
The structure of provision and funding of courses is felt to be confusing for employers
•
Given the resource intensive nature of some forms of training there is concern that some
providers do not have the up-to-date equipment required
•
Internal Quality Assurance was an area identified as a slight weakness by official
inspectorates of provision
•
The level of co-operation between training providers has been reduced by the introduction of
competition between colleges in the FE sector
Gap Analysis & Market Testing
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November 2006
6.2.3
Opportunities
Sector Characteristics
•
Larger businesses are acquiring smaller counterparts within the sector; larger businesses
are more likely to interact with Automotive Skills and offer training
•
Consolidation of the number of businesses in the sector may increase the reliance of
manufacturers on larger dealer groups – increasing the power of employers in the
downstream automotive sector
Recruitment
•
In the main the poor/negative image of the sector is unfounded and can therefore be
addressed, perhaps by the creation of Industry Ambassadors and by the activities of
Automotive Skills
•
A number of opportunities exist to improve the image amongst and enhance recruitment
from within the 14-16 age category, including:
o
Activities to inform the school curriculum (i.e. guest speakers from within the sector, both
employers and employees, site visits to successful organisations within the sector etc)
o
The targeting of formal influencers, such as Careers Advisors, with promotional material
and opportunities to experience the different occupations within the sector
o
The targeting of informal influencers, such as parents, guardians and relatives, with
o
Improved provision for the able and the motivated, with options including enhanced work
promotional material
experience activities and pre-apprenticeships
•
Skills gaps can also be addressed by a wider sourcing of employees, including:
o
o
The recruitment of individuals from other sectors with highly developed transferable skills
Actions to address the gender imbalance and the removal of barriers to women working
in the sector. This would also help to address the poor image of the sector amongst
female customers
•
Linked to all of the above, there is a need to create career pathways within the Retail
Automotive Sector to enable new entrants and the existing workforce to gain a vision of how
their career can develop
•
Socio-demographic changes – more older workers who may be more suitable to roles within
the sector (i.e. sales)
Workforce
•
The creation of a Skills Passport would enable the qualifications and, more importantly the
competencies of individuals to be recorded. This would ensure that employers could be
certain that individuals are competent at the tasks their qualifications indicated they can do
before employing them
Gap Analysis & Market Testing
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November 2006
Training
•
There is a opportunity to make training more attractive for employers by offering modular,
building block and bite-sized delivery of courses which reduce the disruption to day-to-day
activity
•
New methods of learning could be adopted to enable employers in remote areas to access
training, for example e-learning or mobile training centres
•
The value of training and qualifications could be more effectively communicated to
employers
•
On-the-job up-skilling could be improved by promoting ‘train-the-trainer’ courses
•
There is an opportunity to promote FSA accreditation to ensure financial consistency within
the sector
Qualifications and Provision
•
Actions to address inadequacies in management and leadership within the sector are
underway with the establishment of Automotive Retail Management Standards (ARMS)
Level 3 (‘Step Into ARMS’) and Level 4. The impact will depend on the success of marketing
and delivery
•
The creation of a Sector Qualifications Strategy will offer the opportunity to only retain
support for courses which meet the needs of employers in the Retail Automotive Sector and
to outline clear career and training pathways
•
There is an identified need for a single authoritative information point and recognised
approval system for the provision and funding of courses to reduce employer confusion
•
The proposed formation of a virtual Skills Academy could offer the opportunity to
disseminate best practice in training between employers and training providers operating in
the sector
Gap Analysis & Market Testing
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November 2006
6.2.4
Threats
Sector Characteristics
•
Levels of investment required to operate in the Retail Automotive Sector are increasing; this
could lead to a further decrease in the number of businesses operating in the sector
•
There is a potential that low net margins in the sector could continue to have a negative
impact on investment in training
•
Manufacturers
putting
pressure
on
the
downside
supply
chain
(dealerships/repair/distribution) to cut costs; this could impact on training as it is often one of
the first activities to be cut
•
Rapid technological changes could create skills demands which the sector is unable to meet
in the short term (i.e. high level problem solving and technical diagnostic skills to cope with
complex vehicle systems)
•
The potential introduction of National ‘Super-Complaints’ could result in mandatory
legislation which will impact on skills and training requirements
•
Some of the major employers within the Retail Automotive Sector are multinationals and
therefore the sector is subject to influences from outside the UK
•
The servicing and repair sector is showing signs of a small decline, given the longer service
intervals and increased reliability of new vehicles this trend may.
•
The skills required in the serving and repair this sub-sector may change rapidly, with the
potential that there will only be a demand for a smaller number of more highly
qualified/training workers
•
The diversity of the sector means that solutions to skills and training problems need to be
tailored to meet the needs of all business types; as such, if a singular approach were
adopted it is likely to be unsuccessful
Recruitment
•
The activities of a small number of ‘rogue’ employers and the highlighting of these by the
media could continue to tarnish the image/reputation of the whole sector
•
Increased numbers of young people being guided towards Higher Education could continue
to reduce the pool of potential recruits
•
There is a danger that low pay and poor working conditions could continue to hamper the
sector’s ability to attract high quality employees
•
Competition from other sectors
•
Employers may have to pay more to recruit, which could reduce budgets for training and
investment even further
Gap Analysis & Market Testing
Page 38 of 42
November 2006
Workforce
•
It is projected that approximately 30% of the workforce will need to be replaced during the
period 2004-2014, including a high proportion of the more highly skilled individuals within the
sector, creating the danger of further and more extensive skills gaps
•
Management and Leadership: there is a danger that management culture within the sector
will remain function orientated and short-termist
•
Technical Skills: there is a danger that employers, especially SMEs, will be unable to keep
up with the pace of technological change and its associated training demands
•
Generic, Basic and Employability Skills: there is a danger that the school educational system
will continue to fail to equip young people with the core skills required; a threat outside of the
control of the sector
•
Generic, Basic and Employability Skills: there is a danger that the sector will continue to only
attract individuals with lower level core skills
Training
•
As a result of the retirement of many of the more highly skilled individuals in the sector the
ability to offer on-the-job training internally within the sector may decrease
•
Limited number of providers with up-to-date training equipment
•
Less investment on training as employers concerned about poaching or staff moving for
career development
Qualifications and Provision
•
There is an expectation that the number of training providers will decline over the next 5-10
years; this could impact negatively on the ability to satisfy employer needs
•
There is a danger that the cost of providing training for certain sub-sectors will become
prohibitively expensive (i.e. heavy vehicle) and that the training courses required will not be
available
•
There is a threat that employers continue to be sceptical of the value of NVQs/SVQs and
that new qualifications (i.e. ARMS) are not embraced
Lack of transferability amongst manufactures may become more pronounced as a means of
them trying to retain staff
Gap Analysis & Market Testing
Page 39 of 42
November 2006
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