This letter appeared in the Financial Times May 29 2015
If the government is serious about training it has to find ways of retaining skilled people in downturns
This letter appeared in the Financial Times May 29 2015
The German government is running a scheme to tempt ‘A’ level qualified people aged 18 to 35 to Germany to serve an apprenticeship during a three year period all expenses paid – a new “Auf Wiedersehen Pet” story.
British companies needing to recruit talented young people have some competition now: the government of the Federal Republic of Germany is paying to recruit young people from Britain to receive full training in up to 300 occupations.
The International Business Academy (IBA) in London, which was appointed to administer the scheme in the UK, aims to provide hundreds of young people from UK to Germany for apprenticeship placements and work in specific areas.
The scheme is recruiting people aged 18 to 35 years for both vocational training and jobs for young professionals in fields like engineering and healthcare. The latter requires ready-trained professionals.
The recruitment drive is evidence that Germany is planning for the fall in its domestic workforce in 10-20 years time when low birth rates will be felt.
To be eligible for vocational training courses, candidates must have ‘A’ levels or a Baccalaureate but a degree is not required. Knowledge of some basic German is needed in particular for apprentices, who need to go to college once a week under the dual training system.
Successful candidates receive a full package of benefits designed to tempt people to relocate to Germany, including 170-hours of German language lessons in England or Germany before the final placement in a German company, a minimum net salary of Euro 818 per month during training, which lasts approximately three years.
Travel costs for the interview in Germany are covered, as are relocation costs to Germany if the person takes the placement or job and two free flights home every year.
The German government has capped funding for the programme to Eu139 million. “There is no allocation to the individual nations, it is a first come, first served basis,” says Wulf Schroeter who runs the IBA in London.
Germany has a shortage of occupations for which there are numerous job opportunities, especially for technicians and engineers, hotel and catering jobs and doctors and healthcare professionals.
“For these occupations, trained specialists are needed. In these and in more than 300 other professions, apprenticeships can be offered,” says Mr Schroeter.
IBA is part of the FuU Group, a training institute based in Heidelberg appointed to run the UK scheme within an EU-wide framework called Mobi-Pro EU that promotes young and unemployed professionals within Europe. “Only organisations that are recognised by the German Federal Ministry of Social Affairs may place young professionals in to German companies,” Mr Schroeter adds.
Full details of the scheme and how to apply are at http://www.international-business-academy.co.uk/
Greg Walton in the Daily Mail 15 August 2012 reports on a recent survey revealing that German firms are shocked by the low quality of apprenticeships in the UK.
Sunday 11 March 2012 – Bob Bischof appeared on BBC Radio 4’s ‘Analysis’ to share the ideas from Germany that could help improve the UK’s fortunes.
Presenter Matthew Taylor travels to Bob’s birthplace, Hamburg, to discover how apprenticeships are set up to buffer businesses and workers against hard times.
You can listen to the programme in full here: http://www.bbc.co.uk/programmes/b01cvkg6
The BBC article by Matthew Taylor is at http://www.bbc.co.uk/news/business-17213556
As published in the Guardian: by David Marsh and Robert Bischof. http://www.guardian.co.uk/commentisfree/2012/jan/26/hire-and-fire-destroyed-uk-jobs
These days we tend to talk about the divisions in Europe as one between net creditors and debtors. In reality this is just a sideshow. There is a much more fundamental gulf, hinted at by Angela Merkel in her Davos speech yesterday: between countries with organised industrial training systems such as Germany, the Netherlands, Belgium, Scandinavia, Austria and Switzerland – all currently with jobless rates of between 3% and 7% – and those with much higher rates of unemployment, often in double digits, in peripheral Europe.
The issue pits Anglo-Saxon precepts of free market regulation against the Germanic “Rhineland” system of managed capitalism, with modern apprenticeship systems built on a long-term compact between labour and employers. In the years before and immediately after the euro’s birth in 1999, the peripheral countries of the European monetary union (Emu) often followed Anglo-Saxon principles by liberalising parts of notoriously inflexible labour markets. “Hire and fire” became the motto.
Initially this seemed to work. But as debt market conditions worsened and growth stalled after the 2007-08 financial crisis, Emu’s periphery has been left seriously exposed by the failure to replace unproductive regulations with new mechanisms to generate jobs.
In the battle between rival systems, “Rhineland capitalism” appears to be winning hands down. In the two years since the global economic downturn in 2009, Germany has expanded employment by 1.8m, while the UK, US, France, Italy and Spain have shed 7m jobs. In 2007, when most other countries were nearing the end of a boom driven by excess credit, Germany had the highest unemployment rate (8.7% of the workforce on a harmonised basis) of the group of seven leading industrialised countries. Yet in late 2011, according to OECD figures, German unemployment, at 5.2%, was the lowest in the G7 apart from Japan.
While the UK struggles with record youth unemployment, Germany’s youth unemployment rate is one third of the OECD average and one eighth of the rate in Spain. High youth unemployment is the most pressing problem in Europe right now – Merkel acknowledged as much when she admitted that mere austerity would make the European project meaningless for the next generation of young people. “Structural reforms that lead to more jobs are essential,” she said in her opening statement.
But Merkel is drawing strength from Germany’s own experience with low unemployment in the mid-noughties, and she is right to do so. While the German labour market underwent some Anglo-Saxon-style deregulation under Gerhard Schröder in 2003-2005, it still places more emphasis on employers’ freedom to build long-term loyalty between employers and workers. These relationships are embedded in a strikingly different cultural approach to industrial training, closely tied to the German tradition of family-owned Mittelstand businesses buttressed by long-term savings that take a generational approach to assembling skills and technology.
British politicians are keen to talk about “skills”, but at the same time they are reluctant to let go of the flexible labour laws that have set them apart from the European mainland in the past. They can’t have it both ways. Employers who do not have a sense of social responsibility for training are unlikely to be durably persuaded to hire apprentices through one-off state payments. Instead, governments should consider building comprehensive vocational training schemes that could be funded through a reduction in the social costs ensuing from unemployment. Tinkering with apprenticeship programmes on a piecemeal basis, as has been done in the UK, is unlikely to yield long-term results, as such half-hearted reforms result in expensive and wasteful systems that lack both scale and content.
And it’s not just the German system of apprenticeship schemes that could do with being copied. One of the main reason why Germany’s economy was able to recover so quickly after the downturn was the system of short-time working support (Kurzarbeit), introduced in the 1920s and extended in recent years.
Funded by an employment insurance levy, it pays for firms to keep workers for six to 12 months, provided employers can show their businesses are in a cyclical and not a structural downturn. Imagine a small engineering firm that ran into financial trouble in 2008: rather than letting go of the 17-year-old apprentice who had recently joined the firm, it would have been able to keep employees on board and then benefit from their experience when the economy was back on its feet. Even if the company had gone bust, the apprentice would by law have been sent to another company.
Sir Anthony Bamford, chairman of UK excavator maker JCB, points out that his company was forced to shed more than 20% of staff in Britain when production halved in 2009. By contrast, the Kurzarbeit system enabled him to keep all his labour force in Germany.
Such examples underline how Germany’s previously unfashionable model has enabled it to become the industrialised world’s premier job machine. As the economic climate darkens, 2012 will be a difficult year both for Germany to hold on to its advantages and for other countries striving to follow the German lead. Yet unless they start to lay the groundwork for longer term gain, time for catching up will soon run out.
This letter appeared recently in the Times and is republished here:
“Instead of accepting the CEO’s whining about high taxes and too much regulation, the Prime Minister could have interrogated them at the Times CEO Summit about their abysmal performance in world markets. As we heard, Britain has been exporting more to Ireland with 4.5 million people than to the BRICS countries (Brazil, Russia, india, China and South Africa), with nearer 4 billion people. German companies have to cope with far more regulation and carry substantially higher payroll costs, but have managed to reduce unit labour cost by more than 20 per cent in the last decade and raise productivity. Moreover, Germany was until 2009 the largest exporter in the world.
Britain, on the other hand, had a more than 20 per cent devaluation of sterling but British exporters have not taken advantage with higher sales volumes. Mr Cameron is right to try to turn bad regulation into useful regulation, but he should look at taxing profits which stay in companies and are re-investe in markets and products differently from those that are paid in dividends and share buy-backs.
In the absence of credit-induced consumption and state spending to drive the economy, growth depends to a large degree on our companies’ performance over the coming years. One precondition is to increase the skill base. Here again, should the Government beg companies to engage in its ambitious apprenticeship programme or should there be a training levy, against which companies can reclaim some of the cost of training? Either way, feeding companies carrots does not seem to work: more stick might work better.”
To make this a reality, certain changes have to be made to the present system regarding the content of the learning offering. In addition, it needs simplifying and a higher degree of standardisation to achieve the necessary scale, which in turn will make it more cost-effective.
These changes are of course primarily designed to make apprenticeships more desirable to youngsters as well as employers. A lot of what is on offer at present should stay in place and form the basis of an upgraded, attractive first step on the ladder of a career for young people.
Eventually the Universal Apprenticeship should replace all of NVQ1-4, Modern and Advanced Apprenticeships. It would need high level political and business support, together with a PR makeover.
Vocational should therefore mean that young persons’ differing talents – academic, artistic or practical – are recognised as equally useful in a “Big and Inclusive Society”. Accordingly, young people need to be offered corresponding pathways – firstly, from school into the world of work and after a successful completion of the first step – the Universal Apprenticeship, further career progression opportunities to fulfil their aspirations may they be in trades, crafts, technical, administrative or other occupations.
Education should mean that school leavers aged 16 to 19, by choosing the Universal Apprenticeship are not just taught the ins and outs of a specific job in a narrow manner, but that they continue their education in general terms, too.
Enhancing their social and communication skills would be some of the aims of this part of their further education. This will lay the necessary foundation to enable the person to move off “the shop floor” and reach “the top floor” of his chosen profession, whatever it may be. This part must be the responsibility of vocational colleges, as it needs real teaching abilities. Of the total college based part of the apprenticeship, it should be around one third of the learning program, whilst the other two thirds are the theoretical part backing up the in-house company job specific training.
The largest part of the Universal Apprenticeship, namely Training, ought to be based on standardised frameworks of in-company/organisation learning.
This would typically be over a period of around 2-3 years, for which the apprentice and employer enter into a training contract. Ideally the frameworks should give the apprentice as holistic an insight into their work environment as possible.
This gives the trainee/employees more self-esteem, empowers them to work more autonomous with less supervision and ultimately is more flexible, cost-efficient and productive.
The apprenticeship training contract should be largely standardised and safeguarded by law. To complete an apprenticeship successfully there should be a recognised and meaningful certification process, to ensure successful apprentices achieve good standing in society as young professionals.
In short, a successfully completed apprenticeship should not be the end but the beginning of a career for those with aspirations.
German Industry UK (GIUK) has been in discussion with John Hayes MP, Minister of State for Further Education, Skills and Lifelong Learning. Conversations regarding the development of German models of vocational training to benefit the UK economy have led GIUK to develop a proposal for progressing UK Apprenticeship schemes to become more successful.
Britain has been pretty good in training its elites but has neglected the training of “foot soldiers” for decades. If one wants to turn innovations into successful products, one needs both, and if David Cameron’s “Big Society” is to have any meaning in further education then his government has to look at apprenticeships in a new structured manner.
John Hayes himself recently made an announcement regarding the government’s commitment to progressing Apprenticeship schemes in the UK, saying “We must create a radically new model for workplace training, with apprenticeships at its heart”.
In view of John Hayes’ statement, during a meeting between GIUK and Mr Hayes on 3 February 2010, about his interest in bringing key elements of the German Dual Vocational Training System to Britain, GERMAN INDUSTRY UK has developed the following proposal.
GIUK is of the opinion that the present UK apprentice training system requires simplifying, restructuring and more relevant content, for companies to buy into it.
Since successive governments largely abandoned apprenticeships, a vacuum was created, which has been filled with a myriad of well-meaning but chaotic initiatives, duplicating many efforts and lacking structure and transparency.
From comparisons with continental systems we are also sure that it is possible to reduce cost drastically whilst increasing transparency and efficacy.
The German government spends around Euro 1,9 bn per annum on its Vocational Training Colleges and the certification of apprentices through local chambers of industry and commerce. German industry spends around Euro 18.5 bn p.a. net on training apprentices. Around 650,000 youngsters (or 58% of school leavers) enter into apprenticeships every year.
The completion rate is always well over 90%. In total, there are approximately 1.6 million youngsters training as apprentices in Germany, at any one time, at a cost to the state of about Euro 1,200 ( GBP 1,000) per person p.a. and about Euro 12,000 ( GBP 10,000) per person p.a. for the employers.
Setting up of a small working group to:
A budget needs to be agreed by the Minister for Skills.
Once the basis of the above has been agreed with the government and work commences, GERMAN INDUSTRY UK will actively support the new apprenticeships and will encourage its members to take on as many young people as possible as apprentices.
GERMAN INDUSTRY UK – THE VOICE OF GERMAN INDUSTRY IN THE UNITED KINGDOM
Ymwlch Isaf, Criccieth, Gwynedd LL52 0PW · Telephone: 01766 523 113
Email: email@example.com · Website: www.gi-uk.co.uk
Bob Bischof will be co-chairing the upcoming German-British Forum Conference on Monday 22 and Tuesday 23rd November this year.
Entitled Investment in Skills & Productivity: Better training as the key to economic dynamism, the conference will address pressing macro- and micro-economic themes around how to ensure young people are being trained in the right ways to address the future needs of modern European economies.
Europe as a whole recognises that a high-skill, high-productivity economy provides the most effective platform to boost competitiveness and enhance well-being.
As Peter Loescher, Chief Executive of Siemens AG, put it at the Annual Dinner of the German-British Chamber of Industry and Commerce on 9 June 2010 in London;
German Industry UK (GIUK) has been at the forefront of efforts by German businesses in the UK to attempt to provide in Britain a framework similar to the German Dual Training System.
GIUK has held constructive meetings with Ministers from both the Labour government and the new Conservative-Liberal coalition administration and has now set up a working group within the Department for Business, Innovation and Skills to determine how this can be done for England.
The new UK government has made tackling the skills gap a significant priority in its efforts to spur economic renewal. There is considerable interest in learning lessons from Germany, where equipping the workforce with competitive skills through the vaunted apprenticeship and vocational training system, in partnership with industry, has long been a centre-piece of economic policy.
The presence of a large number of German companies in the UK has added impetus. Underlining this point, Robert Bosch, BMW, EON and Siemens are all giving support to the conference.
The gathering will highlight the role of the Technician Council, a new body set up in the UK to promote a new non-academic route to technical excellence for employees in many different fields.