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Delivering Work Based Learning

3. VALUE OF WORK BASED LEARNING

Purpose of Chapter

3.1 This chapter explores the benefits of work based learning and the value generated by different ways of delivering this. Too much of the existing research and policy discussion surrounds the volume of work based learning. There needs to be a greater understanding of the factors that influence its effectiveness. Specifically, we ask questions about:

• the benefits of work based learning for employees and employers
• the relative value of industry wide versus job specific training
• any impact on effectiveness flowing from the location of the training provided.

This analysis is first informed by a consideration of some of the existing research literature.

Background Literature

Value of Work Based Learning for Individuals

3.2 Blundell et al. (1996) found that work based learning, particularly where this is employer led with qualifications, leads to rewards for individuals in terms of future earnings and employment prospects.

• employer provided training generated significant returns to individual workers, adding 5% to real earnings over a 10 year period
• individuals who obtained a middle or higher level vocational qualification from their work based learning receive even higher returns of between 5 and 10%
• returns to work based learning appear to be transferable across employers
• work based learning is particularly important for the wage prospects of individuals with intermediate level school qualifications, although these individuals are also less likely to obtain work-related training.

3.3 Coleman and Willis (1998) found apprentices favoured a work based approach due to the attraction of paid work with practical training. In confirmation, IES (2000) research found that young people perceive the benefits of the Modern Apprenticeships programme as:

• the opportunity to gain work experience and a qualification…
• …and at the same time obtain a wage and funded training
• offering more career direction than the 'A' Level route
• a chance to combine work with on and off-the-job training.

Value of Work Based Learning for Employers

3.4 The 'bottom line' question for firms in the private sector is whether training contributes to profits (Green, 1997), and public sector employers require to see value for money returns on training investment. Studies can assess whether the claimed benefits for the workforce translate into real benefits, but as they rarely measure the costs of training they do not assess the rate of return (McIntosh, 1999).

3.5 Some studies indicate that training impacts positively on productivity. However, impact estimates vary from around an 80% increase attributed to training to negligible effects. Research by Dearden, Reed and Van Reenen (1999) in the production sector of the British economy found that raising the proportion of employees trained in an industry from 10% to 15% is associated with at least a 3 percentage point increase in the value added per worker. Lynch and Black (1997) surveyed firms in the USA with at least 20 employees, but found no significant training impact on company turnover or productivity. These examples highlight the lack of clear agreement on the size of the impacts of training in the research literature.

3.6 In a more dynamic context, the Centre for Business Research (2000) analysed the impact of training on small firm growth and survival. The study found that:

• scale or intensity of training, as measured by training costs as a percentage of total sales, was positively and significantly related to employment growth
• the training impact on employment growth depended on the human resource management practices within which it was embedded. The effect was significant only for firms with total quality management, quality circles, job rotation and performance-related pay.

3.7 There is also international evidence of the impact of work based learning on both productivity and wages (OECD, 1998). The results of a number of studies are summarised below.

Impact of Work Based Learning on Performance of Workers

Source: NACETT, 2000.

The benefits of Work Based Learning

Who Instigates Work Based Learning

3.8 Although this section is principally concerned with establishing the benefits of work based learning, there is a prior question as to who motivates it. The employee survey carried out as part of this study suggests that the majority of work based learning that takes place in the workplace is instigated by the employer.

• 79% of employees who had undertaken training had been asked to do so by their employer
• 1 in 5 employees had approached their employer for training.

Although the employee-motivated proportion is a minority, it is a significant one. There is clearly scope to impact on the volume of work based learning by stimulating the employee demand for this.

3.9 Although 21% of employees overall approached their employer about work based learning opportunities, there were some variations by age, gender, occupation, industrial sector and IiP status.

• at 23%, people in the age category 25-44 were the most likely to ask their employer for training, compared to 21% of the under 25s and only 17% of the over 45s
• 25% of female employees had approached their employer for training compared to only 16% of male employees
• 40% of managers and administrators had approached their employers for training, more than double any other occupational group and more than three times the percentage of plant and machine operatives and those employed in personal and protective service occupations
• 27% of those employed in business and financial services and the public sector asked their employers for training, 10% more than in the next nearest industrial sector of primary, manufacturing and construction industries
• 29% of employees in organisations with IiP status had approached their employer for training, compared with 20% of those in non IiP companies and only 13% of those organisations that have made a commitment to IiP
• 25% of employees in the largest organisations had instigated their work based learning compared to only 18% where less than 25 people were employed. It may be easier to pursue the issue where the employee is dealing with a human resource department or a line manager in a large organisation, rather than an owner manager or senior manager in a small organisation.

3.10 A number of these variations correlate with the differences in the proportions participating in work based learning, discussed in Chapter 2. This again underlines the potential to drive an increase in work based learning from the employee side.

Employer Evidence on Benefits for Employers

3.11 Based on the survey of Scottish employers carried out for the study, Table 3.1 lists the benefits cited by employers who provide work based learning opportunities for their employees. The benefits appear to be strongly associated with an employer's ability to retain or improve their position in the marketplace. The most important benefits are summarised below.

• improving the company's product or service to the customer was cited by 3 out of 10 employers, but was particularly important in the wholesale, retail and hospitality industries where it was cited by 41% of employers, and in transport and communications where this rose to 50%
• 10% argued that work based learning made the company more competitive, although this rises to 18% of companies with under 25 employees
• improving employee competence in their current job was cited by 9% of employers
• keeping up with technological change was most important to 8% of respondents, with 15% of employers under 25 employees raising this as an issue
• increasing flexibility of employees to take on new tasks was cited by 7%. This was especially important in the financial and business service sector, mentioned by 15% of employers.

Table 3.1: Employer Benefits from Work Based Learning (%)

Source: Survey of Employers

Note: '-' indicates a percentage below 0.5%

3.12 One of the most telling responses is that only 11% thought work based learning helped influence the organisations image with customers, and only 1% saw this as the main benefit. The lack of a sufficiently demanding customer base for both private and public sector organisations is clearly a weakness in the drive to influence quality standards more generally, and labour quality in particular.

3.13 Some of the employers answered the questions in relation to the value they perceived in the process of work based learning, with around 1 in 8 employers citing as the main benefits more focused training, training over which the employer has more control and other similar features.

Employee Evidence on Benefits for Employer

3.14 The previous section questioned employers on the benefits for their organisations from work based learning. Their employees were asked the same question and their responses are summarised in Table 3.2.

• overwhelmingly the main benefit was seen to be a better quality product or service. Employees were more likely to cite this as a benefit than their employer, although both agreed this was the main benefit
• employees placed a lot more weight on the impact on the organisation's image with customers, perhaps because they are closer to their customers than the organisation's managers
• improved managerial/supervisory effectiveness and enhanced teamworking were cited as benefits by between a third and half of employees, but did not feature in the responses of their employers.

Table 3.2: Employee Views on Employer Benefit from Work Based Learning (%)

Source: Survey of employees

3.15 A comparison of the result of Tables 3.1 and 3.2 demonstrates both confirmation and variance. As a consequence of the latter it could be interesting to know how often employers use feedback from their employees in evaluating the impacts of work based learning on the effectiveness of their organisations.

3.16 A small number of the employees surveyed saw no benefit for their employers from the work based learning with which they had been involved. The main responses to explain this were that:

• the training was not relevant to their job (cited by 40%)
• the employee already had the skills the training was providing (mentioned by 36%).

Benefit for Employees

3.17 Employees were also asked about how they benefited from work based learning. The main benefits reported by employees (in Table 3.3) were:

• helping them to produce better quality work (25%)
• increase in self-confidence (13%), although this varied considerably by age, cited by 15% of the under 25s, 14% of the 25-44 year olds and only 7% of the employees aged 45 plus
• keeping up with technological change, mentioned as a concern by only 4% of the under 25s but 14% of the 45 plus group of employees.

Knowledge of these types of variations has potential value in helping design effective marketing or awareness raising campaigns around work based learning.

3.18 Employees clearly perceive a link between the training that they are undertaking in their jobs and the positive effects that this may have on their employment situation.

• 37% of employees thought that work based learning would help them to gain promotion within the organisation, although only 5% overall thought this was the main benefit; 13% of those in finance and business services cited this as the main benefit
• 54% of employees thought that the training they were doing would help them get a better job with another employer; although only 6% thought this was the main benefit. Interestingly, none of the over 45s cited this as the main benefit of training, although this was mentioned by 10% of the under 25s and 6% of the 25-44s.

Table 3.3: Benefits of Work Based Learning for Employees (%)

Source: Survey of Employees

3.19 Many of the benefits employees saw for themselves from the process of work based learning also translate into benefits for their employers. The major exception was the case of the 54% who felt the training would help them move to other employers.

3.20 The discussions with employees in focus groups generated conclusions broadly similar to those flowing from the survey analysis. Most groups, and the most commonly stated response, believed that work based learning helped them to carry out job tasks in an improved way, mainly as a result of increasing knowledge of the job. Some group members also saw training as raising their skill levels and increasing their flexibility, allowing them to carry out new work tasks.

3.21 The very small number of employees who felt that they were not gaining any benefits from work based learning cited four main reasons:

• 60% claimed to already have the skills the training was aimed to provide
• 20% felt that it was not relevant to their job
• 1 in 10 thought the course was too short
• 1 in 10 considered the trainers to be of poor quality.

BEnefits of Employer Specific AND Industry Wide Training

3.22 Employers were asked to place a value on work based learning tailored specifically to their needs or more general, industry-wide training. Their responses are summarised in Table 3.4. Work based learning that provides employer-specific skills is considered to be clearly more effective than industry-wide training by employers hoping to benefit from:

• increased employee productivity (70%)
• improved quality of products and services (69%).

Table 3.4: Relative Value of Employer Specific and Industry Wide Training (%)

Source: Survey of Employers

Note: Figures are row percentages, and do not always sum to 100% because some employers could not make a judgment.

3.23 The development and enhancement of core skills, flexibility, staff loyalty and organisational image are also better served by employer specific skills training, although not to such a great extent. More than 1 in 10 employers expressed no preference in relation to developing these skills.

3.24 Employer size and sector did not impact significantly on responses, although employers in the wholesale, retail and hospitality industry place more importance on employer-specific training with regard to increasing staff loyalty (66%) and improving staff morale (68%).

3.25 The box below illustrates the development of a customised approach to work based learning and accreditation.

3.26 Industry-wide approaches can also generate significant benefits. The box below describes an initiative designed to ensure the provision of an effective training infrastructure within the semiconductor industry.

Senior staff from each of the institutions meet formally on a 6-weekly basis to pursue the aims of the Consortium. Their efforts are supported by 150,000 from the Further Education Funding Council, and more than 2,000,000 worth of equipment has been donated by the industry.

Benefits of different types of work based learning

3.27 Work based learning can be delivered in the workplace, but often it will include a combination of different types of delivery. The four broad categories used in this study were work based learning:

• on the job, in the workplace
• off the job, in an employer's premises
• off the job, in a simulation of the workplace
• off the job in a non-workplace setting.

The value of work based learning in each of the different settings was explored with both employers and employees.

Employers

3.28 The main finding of Table 3.5 is that employers believed on-the-job training was the most valuable means of delivery against a range of different criteria. The second most preferred delivery approach was off the job, but on an employer's premises. There is, therefore, a clear preference within the employing community for work based learning to be delivered within workplaces. There are some variations.

• learning in a workplace is seen as particularly valuable for employers wanting to develop employer specific skills, and for raising employee productivity and flexibility, for developing core skills and for impacting on the quality of the product or service.
• in relation to improving staff morale, increasing employee loyalty to the organisation and improving company image, training away from workplaces increases in value for employers - but the workplace is still the preferred location even in these cases.

Table 3.5: Relative Value of Types of Work Based Learning Delivery (%)

Source: Survey of Employers

Note: Figures are row percentages, and do not always sum to 100% because some employers could not make a judgment.

3.29 There were some variations in preferences across employers in relation to where work based learning is delivered.

• the smaller the employer the more likely they were to favour on the job training as the most valuable means of skilling their staff. 61% of employers with 1-24 employees favoured on the job training to develop employer specific skills, compared with 47% of organisations with 250 plus employees, and this difference applied to most of the categories of potential benefit flowing from work based learning
• on the job learning was most popular among employers in manufacturing, and least popular in the largely public sector service industries such as education and health. Employers in the growing business and financial service sectors lay in between in terms of the extent of their preference for work based learning on the job.

3.30 Employers were asked about the advantages and disadvantages of the different ways of delivering work based learning and the most common responses are summarised in the box below.

Employees

3.31 Employees were also asked to assess the value of the different ways of delivering work based learning in relation to:

• becoming better at their current job
• developing into a more effective employee for their current employer in the longer term
• finding a job with another employer.

Their responses are summarised in Table 3.6.

3.32 As with employers, employees see on-the-job training as the most valuable means of delivering work based learning across a range of criteria.

• it is seen as the most effective means of improving performance in an employee's current job by over half of respondents
• 47% see learning on the job as the most effective route to core skills development
• off the job training in a non-work setting is seen as the most valuable method of gaining the necessary skills and experience to move to another employer, cited by 43% of employees.

Table 3.6: Relative Value of Types of Work Based Learning Delivery (%)

Source: Survey of Employees

3.33 There were some interesting variations in emphasis across different industrial sectors and age groups.

• 65% of employees in retail and hospitality ranked on the job training as the most effective way of improving performance in their current job, compared with only 43% in business and finance and 40% in public administration, education and health
• employees aged less than 25 valued on-the-job training more highly than older workers with 65% considering that it was the most useful way of developing skills for their current job compared with 45% of the 25 - 44 age group
• 63% of the under 25s also valued on the job training as a means of developing core skills, as opposed to only 41% of the 25 - 44 age group.

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