Topping up learning: university or employer provided academy?
Mary Carmichael, September 08, 2011
Take one change of university fees policy. Stir in technology shifts that create increasing needs for new skills. Add a dash of social media, a sprinkling of emerging business nations, dollops of growth in CSR and ethical business practices – and voilà, a perfect recipe for an education and training revolution.
With the cost of university soaring, potential students are reviewing their options and, rather than seeing higher education as the automatic next step, are increasingly viewing work as a springboard to qualifications. At the same time, employers looking to equip staff with new skills, retain those whose skill set is particularly 'hot', or to standardise a way of working, are also looking hard at the issue, from the bottom rung all the way to the CEO.
The results are a multi-flavoured dish. Plenty of employers are happy to enrol staff on established courses - although some are still seasoned according to individual taste - while some choose to invest in their own academies and accredited qualifications. A growing number favour a blended approach.
Established institutions and courses have two immediate advantages over in-house training. One is dedicated, knowledgeable staff, who also know how to inform; the other, the broader scope of a general qualification.
Alick Kitchin, business director at Edinburgh Business School, Heriot-Watt University, believes that, for MBA students in particular, a straightforward proposition of core skills - focusing on planning/managing people, projects and money - works fine.
"Bespoke training works if a company has a specific upgrade of a certain type in mind - and it is sometimes beneficial to use specific case studies," Kitchin says.
"However, it is generic skills that count: when you make it specific, you don't add much value. For a longer skill shelf-life, you need a more established programme."
Susan Balint, director of MBA programmes at Westminster Business School, says benefits also include student diversity. "Organisations are increasingly realising they need senior executives and managers to understand how the world is changing and to look at different approaches," she says.
"We would like to think that, no matter what the topic, a student should be able to make a call to another student or alumnus for help. This exposure to different ideas and different ways of thinking - particularly over issues such as insight into how to conduct business in Africa and China - is invaluable." And when general doesn't quite cut it, universities can still sharpen the edges, with targeted versions of their courses, using specific case studies. Brunel Business School has targeted healthcare and aviation management, while Westminster Business School has put on consortium MBAs, with tailored content for groups of companies in the transport and healthcare sectors.
They can even go further and produce specific courses. Birmingham City University teamed up with DHL Supply Chain to create a foundation degree in automotive logistics (see box, page 36), while Oxford Brookes University has developed an MSc in project management in the built environment, which aims to meet growing demand in the construction industry for managers who can oversee a project from start to finish.
Oxford Brookes programme leader Mark Austin believes industries such as construction may need a more bespoke approach: "It is diverse; there are jobs in procurement, finance etc, not just building," he explains. "Companies spend millions on incredibly complex jobs and it is very difficult to cover all the necessary skills bases."
He also points out that, with construction becoming increasingly global, networking with students from all over the world offers opportunities to gain contacts, as well as new perspectives. "With the industry developing in many interesting ways and new directions - green questions, for example - how do they access this knowledge while concentrating on getting the next contract in? Mixing with other students helps."
This level of bespoke training is still not enough in some cases, though. For some, developing their own qualifications or in-house academy is a way to hang on to employees with an in-demand skill, while for others it is about creating a precise way of doing things across the business, safe from competitors' eyes.
These start at apprentice level and go all the way up to the boardroom. Rolls-Royce's new state-of-the-art academy, for example, has helped it to double the number of apprentices on a programme that boasts a 98% retention rate, with nine out of 10 apprentices going on to achieve higher qualifications - half to degrees. At a higher level, insurer LV= has launched its own actuarial academy (see box, page 38), while higher still, Telefónica (which operates as O2 in the UK) has its own global training academy - Universitas Telefónica, a180-bedroom campus outside Barcelona. This was established three years ago "to help with the overall global agenda", according to Rory Simpson, Telefónica chief executive learning officer and it targets its leaders, 6,000 of whom visit at least once a year.
Simpson is adamant Telefónica's approach is not about indoctrination. "Quite the opposite," he says. "It is a central resource to serve regions. It needs to meet challenges and develop and deliver highly relevant training."
Telefónica's size (it has 300,000 employees in 40 countries) means lack of diversity among course attendees is rarely a problem. "The executives won't get to compare notes with someone who works for a mining company in Africa," concedes Simpson. "But they might meet someone with different concerns from South America."
The company is also canny enough to be tackling the importance of both research and dedicated educators: "To be a corporate university, we need to increase our own capability to develop and deliver, so we have needed to train up," Simpson says. "Whereas last year, only 5% of speakers in class were from inside the company, this year it will be 20% and next 40%."
The company also plans to expand. "We operate at the moment largely on a horizontal slice," said Simpson. "But we think we should do it as a vertical slice too, to fit the way we work. With projects, you don't do it all with your peers. My vision is all sorts of people, all sorts of levels, all sorts of countries. The vision is to be seen as a cauldron of ideas, a think-tank for brainstorming, a retreat, a place to rub shoulders with the CEO."
For some operators, however, a bespoke academy carries too many risks. Cost is an obvious drawback and so is the difficulty of predicting training needs over a long period to warrant the investment. As Oxford Brookes' Austin points out: "How do you balance the long-term training with the peaks and troughs of the industry?"
Certainly, few companies have as single-minded an approach as Telefónica, with many preferring a 'pick 'n' mix' stance. While LV= opted for in-house academies for actuarial and insurance skills, for example, its senior managers take leadership training at Exeter University Business School, on a course that also includes delegates from Honda, the Met Office and the RAF.
Even McDonald's, pioneer of employer- accredited qualifications, granted awarding body status in 2008, still chooses to go with City & Guilds syllabuses for its maths and English GCSE training and apprenticeships. This is a decision, says McDonald's HRD Jez Langhorn, based on the volume of candidates involved (McDonalds has helped employees towards more than 10,000 GCSE passes in five years).
However, Langhorn points out that the company does award its own level three diplomas, which are achieved mainly via 'business as usual', on-the-job training. It has also worked with Manchester Metropolitan University to create a management foundation degree course. There have been 10 graduations so far, with a further 47 in the current cohort - and Langhorn believes that opportunities such as these have been a factor in boosting the average length of service for a McDonald's manager to 11.5 years.
So how does an HR director make the choice? Well, there are no hard and fast rules, but there are some general trends. For detailed technical or practical skills, where precision is part of a company's efficiency, a bespoke course involving only the company's own employees makes sense. However, if the subject matter is less tangible - leadership, creativity, strategy etc - and benefits from fresh perspectives, the multi-lensed focus offered by higher education institutions (HEIs) might be better.
Size is also a factor. Multinationals may have enough scope to provide diversity, therefore offering the networking opportunities and alternative perspectives that are the universities' big selling points. However, smaller operators may need the skills-and-experience mix of external training.
The key to making the right decision is assessing needs accurately - something likely to become even more crucial as purse strings tighten. It is tough, particularly in today's economic climate, to predict how many more companies will take the plunge with their own academies, but business schools are certainly expecting to see some changes, particularly in sponsorship.
The consensus is that employers are likely to spread their spend more thinly and to ask staff to contribute financially. The trend may well be towards paying module by module, or for an employer to fund the first three or six modules of an MBA - to postgraduate certificate in business administration or postgraduate diploma levels respectively - but encourage the employee to fork out for another three to get an MBA or MSc.
"There will be more interest in how employees take their learning back to the organisation. Criteria will be designed around in-work projects, as this helps to spread knowledge around and add more value to the organisation," says Andy Bailey, director of professional programmes at Lancaster University Management School.
Distance learning is likely to increase as employers seek to lose staff for as few hours as possible, while part-time learning will become the norm, so participants are available and able to make ongoing use of newly acquired skills and knowledge.
For those who want more individualisation but can't afford exclusivity, more industry-specific, tailored or consortium-style courses will result from greater collaboration between universities, employers and professional bodies. "Employers should definitely be talking to universities," says Oxford Brookes' Austin. "They should be saying: 'These are our needs - what can you do?' This goes for SMEs too. Come and talk to institutions. Shop around. Don't just accept - ask for what you need."
Case Study: LV
Insurer LV=, which employs about 60 qualified and student actuaries, as well as recruiting graduates, has launched its own academy, with training leading to actuarial qualifications.
Stuart Affleck, head of learning and development at LV=, says the aim is to find and keep a 'hot' skill and to create the capability the company needs.
Job roles have been aligned across the business areas - general insurance, life, pensions and asset management products. Roles and competency frameworks have been defined to enable actuaries to rotate across the different business areas. This, says Affleck, is particularly attractive to junior staff: "They can broaden their experience without leaving the business and, in turn, LV= gets to retain its skilled staff."
Technical training is via on-the-job learning, external education and events, but there are also informal 'lunch and learn' sessions to share knowledge and skills, while external and internal speakers lead sessions on industry and broader business issues.
Motivating a team, presenting to the board and dealing with other business issues are taught via modules, using e-learning and textbooks, as well as face-to-face learning.
Affleck admits a bespoke academy is more expensive than sponsoring employees externally, but says the programme is more about value than cost: "We are still in the initial 18 months, but already several staff have changed jobs internally, indicating a boost to retention and a saving on recruitment."
Cast Study: DHL
When logistics specialist DHL Supply Chain wanted to boost its employees' skills, it opted to take an external but tailored route, teaming up with Birmingham City University to develop the UK's first foundation degree in automotive logistics.
The three-year, part-time course gives a solid grounding in the principles and an appreciation of how logistics decisions impact on a business, combined with practical experience, culminating in a work-related project based around identifying and solving a problem.
The course also covers softer skills relating to people management and awareness of technological innovations. Assessment is via course-work and examinations, with students encouraged to develop more specialist skill sets.
The initial intake in February was exclusive to employees of the company's automotive team but, next year, the catchment will be extended to other DHL sectors and to other companies in the logistics industry. DHL plans to roll out similar programmes across the UK in partnership with higher education institutions (HEIs).
The decision to make this a recognised vocational qualification was, according to a DHL spokesperson, to "expose staff to a broader set of potential challenges than they may face in the workplace.
"Empowering them to think critically about problem-solving and to develop a more holistic appreciation of how their individual functions support the wider organisation's objectives can unlock significant value across the company."