The Association of Colleges’ annual HR conference takes place in Nottingham tomorrow and Wednesday. Richard Banks and Geoffrey Mead look at issues on the minds of college HR officers up and down the country.

Hiring apprentices is a great way for businesses to grow their own talent by developing a motivated, skilled and qualified workforce.

It can also help businesses to improve productivity and competitiveness, which they are catching on to.

Employers clearly play an important role in developing new skills by taking on apprentices and, as can be seen from the government’s Future of Apprenticeships in England: Implementation Plan, the government very much encourages employers to do this.

It is also worth noting that in terms of the financial cost of engaging an apprentice, the minimum an employer has to pay an apprentice who is either under 19 or over 19, but in the first year of their apprenticeship, is £2.68, whereas the national minimum wage is £6.31.

But what do employers need to be aware of when engaging apprentices? Is taking on an apprentice any different from taking on any other employee?

An apprentice can be employed either under a contract of apprenticeship or under an apprenticeship agreement.

However, regardless of the method used to engage the apprentice, employers should be aware that apprentices are also employees.

Employers might be tempted to put an upper age limit on applicants for their apprentice places

This means that they have the same rights any other employees, including the right not to discriminated against, the right not to be unfairly dismissed, the right to statutory sick pay and the right to family-friendly leave.

One of the protected characteristics that employers need to be particularly aware of when ensuring they are not discriminating against an apprentice is that of age.

As the government provides higher funding for younger apprentices, employers might be tempted to put an upper age limit on applicants for their apprentice places.

However, this is likely to constitute direct age discrimination against older applicants as it will be difficult for an employer to objectively justify this criteria.

In addition to the normal employee rights that an apprentice has, employers also have some additional responsibilities for an apprentice, depending on what sort of agreement the apprentice is engaged under.

So what is the difference between a contract of apprenticeship and an apprenticeship agreement?

If an apprentice is employed under a contract of apprenticeship, it is harder to dismiss the apprentice than a normal employee.

This is because the main purpose of the contract is to train the apprentice, which means that an employer owes them greater obligations as compared to a normal employee.

If an employer wants to dismiss an apprentice engaged under a contract of apprenticeship for misconduct, the apprentice’s behaviour must be so unreasonable that it is no longer possible to teach the apprentice.

Accordingly, it may be possible to fairly dismiss an apprentice who habitually neglects his duties and continually fails to carry out reasonable orders of the employer.

However, an employer may struggle to show that a dismissal for misconduct short of this is fair.

Further, an employer cannot dismiss an apprentice engaged under a contract of apprenticeship for redundancy unless there is a closure of the business or the employer’s business undergoes a fundamental change in its character.

To avoid the complexities of dismissing an apprentice engaged under a contract of apprenticeship, an employer can engage an apprentice under an apprenticeship agreement.

Such agreements are deemed to be a contract of service resulting in an employer being able to terminate such an agreement as any other employment contract.

However, for such an agreement to be held to be an apprenticeship agreement, it must comply with the conditions set out in the Apprenticeships, Skills, Children and Learning Act 2009.

According to the Skills Funding Agency, 80 per cent of those who employ apprentices agree that they make the workplace more productive.

Therefore although employers do need to be careful when employing apprentices and ensure that the apprenticeship is set up correctly. There are clear benefits in doing so and definitely worth considering.

Geoffrey Mead, employment law partner, Eversheds

See Richard Banks expert piece here.

Adult apprenticeships emerged as a top funding priority for the government in the Skills Funding Statement last month, according to Mark Corney. He looks at the implications this might have for the HMRC funding plan and also 16 and 17-year-old apprenticeships

The skills funding statement (SFS), published alongside the Higher Education Funding Council for England grant letter, had some important implications for the reform of apprenticeship funding.

The statement confirms turning loan funding for 24+ level three and four apprenticeships into grant funding distributed at the moment to providers.

The decision to introduce individual loans for this group of adult apprentices was forced on the Department for Business, Innovation and Skills (BIS) by the Treasury at the last minute as part of Spending Review 2010.

Individual loans for 24+ level three and four FE courses were already agreed, but extra savings had to be found and so income contingent loans were extended to 24+ level three and four apprenticeships as well.

Always at odds with employer ownership and placing purchasing power into the hands of each employer over public funding of post-16 apprenticeships, the fact that all apprenticeship funding takes the form of grants means the Coalition is now in a position to take the next steps in routing public funding through HMRC system and introducing compulsory employer cash contributions.

More importantly, perhaps, the SFS removes any assumption about the minimum level of planned expenditure on adult apprenticeships within the grant funded adult skills budget (ASB).

In 2015/16, the grant-funded ASB is planned to be £2bn.

Although the precise details of the HMRC system to be used and the alternative for small businesses are important, they are second order issues

The SFS emphasises that funding of adult apprenticeships is the top priority for public support with 19 to 24 traineeships and training for unemployed adults a close second and third.

Previous SFS announcements placed a minimum level of grant and loan funding in cash terms for adult apprenticeships of £770m for 2014/15.

Given that funding for adult apprenticeships is the top priority for public funding and the Prime Minister in the New Year championed more 18 to 24 apprenticeships, a fair judgement is that the sky is the limit within the £2bn ASB.

In effect, BIS wants employers to drive up demand for adult apprenticeships to the maximum available from the ASB.

Apart from the political consensus for more apprentices, especially for 18 to 24-year-olds, and the economic benefits apprenticeships bring, there are specific reasons for wanting spending on adult apprenticeship to be higher than £770m.

In 2013/14, planned spending by the Department for Education on 16 to 18 apprenticeships was £810m. Adding this allocation to the minimum level of planned expenditure by BIS on adult apprenticeships of £770m gives a total of about £1.6bn.

This is not a large sum of public spending in the scheme of things to involve HMRC in its distribution to each employer participating in post-16 apprenticeships. And indeed, less than £1.6bn might need to be routed through HMRC systems if an alternative approach is required for small firms supporting apprentices.

In other words, bumping up spending on adult apprenticeships and in turn overall planned expenditure to more than £1.6bn, whatever the decision for small firms strengthens the case for harnessing large scale national systems operated by HMRC.

A biblical flood requires help from the military: the odd river bursting its banks does not.

A technical specification for the new apprenticeship funding system is due to be published in the spring. But there are critical policy decisions the Coalition must also make.

Although the precise details of the HMRC system to be used and the alternative for small businesses are important, they are second order issues.

The first order issue remains compulsory employer cash contributions (CECCs). More specifically, the Coalition must decide whether it is sensible for CECCs to apply to apprentices starting at 16 and 17 given that the numbers doing so are only 25,000 and 35,000 respectively.

CECCs for 16 to 17-year-olds could weaken employer demand at a time when raising of the participation age to the 18th birthday requires this age group be in some form of education and training.

England has a small 16 to 17 apprenticeship sector, but a growing adult apprenticeship sector. Decisions on CECCs for 16 to 17 apprenticeships will determine whether this sector of the apprenticeship system survives or withers further away.

Mark Corney is an independent policy consultant

Click here to read Rebecca Cooney’s article on Trailblazers, pay and loans

The Association of Colleges’ annual HR conference takes place in Nottingham tomorrow and Wednesday. Richard Banks and Geoffrey Mead look at issues on the minds of college HR officers up and down the country.

Colleges were incorporated on April 1, 1993 — fully 20 years ago.

One might imagine that, over those two decades, the remuneration arrangements of colleges would have changed considerably given different visions and divergent income streams.

Yet, so very often, the only question asked about remuneration is whether to apply that year’s pay recommendation from the Association of Colleges (AoC).

Those recommendations are not addressed to the fundamental question that must be asked of remuneration arrangements — what are they designed to promote and reward?

Remuneration is given in exchange for service, effort and/or achievement.

The nature of an organisation’s remuneration arrangements can have a significant bearing upon the behaviour of those that work for it.

What the remuneration is, why it’s given, and how, all have a bearing on the quality of service provided, the effort remitted, and the achievements realised.

Remuneration has a triple purpose — to secure the necessary resource and skills, to retain and grow that, and to motivate.

Colleges routinely focus their remuneration considerations solely on the issue of quantum. This might have a bearing on recruitment and retention, but does not impact on the third purpose of remuneration — to motivate.

We have incremental scales, composed of closely-spaced points.

Often overlapping with each other, some scales have starting points below the level of the living wage.

We have numerous grades, not necessarily aligned to our structures or ways of working.

We have allowances that are rooted in local authority practice of decades ago, overtime arrangements that encourage inflexibility, and, often, a pay review date that fails to align with the point at which a college understands its next year’s finances.

We have annual leave arrangements that are often inflexible, and thereby cut across customer requirements.

We have outstanding pension arrangements that, while expensive, are under-promoted and under-appreciated.

And we have contracts of employment that have changed little since incorporation, and are willfully restrictive.

These inherited arrangements may possibly act as effective attractors of the requisite numbers of staff, are non-threatening, and are easy to administer.

But do they allow colleges to attract the best? Are they motivational? Do they encourage innovation, and drive and reward performance? The answer to all these questions is, I believe, a resounding no.

This is because we have, largely, not actively designed our remuneration arrangements. Because these send messages they need to be actively constructed to promote achievement of a college’s strategic aims.

Remuneration arrangements form part of the jigsaw of an organisational development approach. It can be difficult to make remuneration motivational, but it’s very easy for poorly-designed, or un-designed, remuneration arrangements to undermine the rest of the jigsaw.

Clumsy adoption of more modern systems is no answer at all. Poorly-thought-through incentive schemes can be dissonant with the desired culture, and can have disastrously unintended consequences.

There is no point building incentive schemes atop shaky foundations of poorly-defined key performance indicators, weak performance management and pedestrian expectations.

Any meaningful review of remuneration arrangements should start from explicit clarity about the purpose of those arrangements.

The fundamental question is not whether any particular year’s AoC recommendation can be afforded, but whether the remuneration system is aligned to what a given college values and is looking to achieve.

It is time to rethink remuneration arrangements in our colleges.

We need to step beyond considerations of whether a fixed percentage uplift can be afforded in any one year.

Instead, we need to consider which remuneration arrangements are required to support achievement of our goals.

Those goals vary from college to college. The one-size-fits-all approach has shrunk in the wash of the last 20 years, and now fits no-one.

 Richard Banks, HR specialist, College Leadership Services, Protocol

See Geoffrey Mead‘s expert piece here.

With Destination Data fast becoming the new FE show in town, Lynne Sedgmore looks at the issues that may have held it back — and may continue to do so.

The Skills Funding Statement hints not very subtly again that ‘payment by results’ is on the way.

That is, payment by ‘real’ results — or rather, what learners actually go on to do after they leave their programme.

It seems that this is likely to happen as soon as Destination Data, currently being collated by the Department for Education and the Department for Business, Innovation and Skills and published in ‘pilot’ format, is deemed ‘robust’.

Privately, many admit this may not be for quite some time, but the principle and the direction of travel is clear.

We have, in this discussion, to take for granted the rather peculiar belief that many politicians have that the only way to get people to worry about something is to tie funding to it. Leaving that aside for a moment, let’s think about what we are trying to achieve for our learners.

We cannot argue, as we often do, that qualifications are something of a straitjacket and then suggest that they are the main measure by which we should be judged and funded.

We find ourselves in a strange coalition with many employer groups in pointing out that assessment is not the same thing as a qualification, and that, in turn, having a qualification does not necessarily indicate how well-prepared for work any learner actually is.

The All Party Parliamentary Group on social mobility recently published its Manifesto for Character and Resilience. It is one of a growing number of documents aimed at the Westminster village which argue the case for outcomes to be about more than
just cognitive ability — and, dare I say it, practical skill.

What better demonstration of whether or not that education has succeeded in its goal than to look at where the learner ends up at the end?

Tied to funding or not, it is hard to argue that learner destination is not among the best, if not the best, indicators of our impact.

Some universities would certainly be forced to re-examine their curriculum if they were judged on the basis of graduate unemployment after six months. But here is where we hit an obstacle.

Assessing whether a destination is a positive one is not a very easy thing. There is a degree of subjectivity involved. Positive for whom? The learner? The local economy? Society as a whole?

The ‘hairdresser debate’ has been much rehearsed, but it is perhaps the clearest example of how difficult this question is. If a student studies hairdressing for three years and then goes on to get a job in retail management, how do we link the impact of the education to the ultimate outcome?

Many in education will argue that it is the development of broad skills during the hairdressing course which has enabled that student to get the job, but how can we prove it?

And, in any case, do all jobs count as ‘successful’ outcomes? Do they have to pay well? Is it not enough for someone who was not in education, employment or training, for example, and comes from generations of unemployment, simply to have a job?

It will be impossible to factor into a measurable scale such social factors, or whether the student themselves is happy with their outcome — or feels better prepared to take on the world.

And recent history is littered with attempts to measure the unmeasurable in order that the bureaucracy of a funding machine can be made to work efficiently.

So, student destinations are absolutely the right way to determine the impact of FE, but they are troublesome to analyse.

Most colleges, though, already carry out detailed assessments of their own student destinations. They take account of many of the subtleties, in a way that a national database cannot.

Perhaps, in a truly professional world, these assessments should be the key to unlocking funding. Surely we can work with policy makers to find a way to hold colleges accountable for those

Lynne Sedgmore, executive director of the 157 Group

Click here for another destination data expert piece, by Geoffrey Stanton, independent consultant and visiting fellow at the Institute of Education.