Training issues facing Social Economy Enterprises in Cambridgeshire March 2003

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CONTENTS Introduction 3 Methodology 4 Importance of Training 5 Barriers 6 Organisational Capacity to Map Training Needs 7 Organisational Capacity to Deliver/Receive Training 8 Existing County-Wide Provision 9 Paying for Training 10 Accreditation 11 Training Needs 12 Training Materials and Tools 13 Summary and Conclusions 14 Appendices 15

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INTRODUCTION In the year 2000, Cambridge CDA (CCDA) undertook a piece of never-before-done research into the specific training needs of co-operatives and social firms in Cambridgeshire. Based on its findings, CCDA successfully delivered 2 ESF training projects in 2001 and 2002. More than 11,500 hours of training and support, including accredited programmes were delivered. Other outcomes included the development of a dedicated IT training suite. With the recent level of interest in social enterprises and as part of its ongoing support to the social economy in Cambridgeshire, Cambridge CDA has been able to re-visit this earlier research with support from the Learning & Skills Council’s Local Initiative Fund. The working definition of ‘Social Enterprise’ currently used by Cambridge CDA is any enterprise that trades primarily to meet social objectives. This means that ‘Social Enterprises’ encompass a wide variety of business structures that includes social firms, co-operatives and community businesses, all of whom were polled as part of this research. It is anticipated that this updated research will be used to improve delivery of training to social enterprises throughout Cambridgeshire.

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METHODOLOGY As with the initial research conducted by Cambridge CDA in 2000, a questionnaire was developed. It was circulated to various other relevant organisations in Cambridgeshire including the Learning and Skills Council, Business Link and Cambridgeshire Enterprise Services. These organisations were invited to comment on its design and suggest additional areas of data capture they required. Appendix A contains the questionnaire and Appendix B contains the responses from polled social enterprises. Social enterprises, identified through the Guild’s recent mapping exercise and Cambridge CDA’s ongoing mapping of the sector, were initially sent the questionnaire. Individual contact, including visits, from CCDA staff then followed up specific issues or helped enterprises compile the information requested. Desk based research was also undertaken into training issues for mainstream businesses and voluntary organisations at a national, regional and local level to enable ‘benchmarking’. This ensured that training issues specific to social enterprises and those in common with mainstream businesses could be more clearly identified. A list of all the documents used in this stage of the research is contained in the bibliography in Appendix C. Finally, there was also qualitative research undertaken through personal interviews with training agencies that have some experience of working with both mainstream businesses and social enterprises. Again, this was to ensure that training issues specific to this sector could be clearly identified.

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IMPORTANCE OF TRAINING Training within organisations is a vital regional priority as the East of England Development Agency (EEDA) and the Learning & Skills Council (LSC) have determined. This has been further emphasised through the Regional and Local Development Plans for European Social Fund measures and policies. Businesses report that as employees participate in training, their productivity increases. For smaller businesses though, these positive effects are less evident1. Productivity issues arise with the existence of skills gaps within any workforce and many problems encountered by employers are directly caused by gaps in skills. Particular problems have been found to be poor operating efficiencies, where management and employment issues are not being addressed, due to a lack of relevant skills. This is of particular importance to Cambridgeshire businesses, as 1 in 5 of all adults in this area are recorded as having basic skills deficiencies2. Other research into workforce training shows that the better trained someone is, the more likely they are to be employed. If employed they are more likely to be offered, and participate in, further training activities3. This does of course present a paradoxical cycle. If a person is less qualified to begin, they may be less likely to participate in any training. In turn this reduces their potential for gaining advancement, re-employment or further qualifications. This should alert us to a potential downturn in productivity for about 20%4 of the current workforce unless there are direct strategic interventions to break this cycle. For social enterprises in particular, training is even more important. This has been highlighted by the Government through the dti’s report concerning social enterprises as well as by the fact that they operate in a relatively new ‘sector’ with high growth potential and with specific skills requirements that do not readily exist in the majority of the workforce. Interestingly, research at the local level showed that not all social enterprises in Cambridgeshire judge direct relevance to be the most important criteria when selecting training. This shows that even if improvements are not discernable in day-to-day trading or activity, then employees’ training and on-going personal development is still seen as beneficial to the business in non-quantifiable ways. Mainstream business has also started to identify this as good practice. 1 74% of large businesses report an increase in productivity where employees engage in training, compared to 64% of small to medium businesses. Learning & Training at Work, 2002 2 Adult Basic Skills Survey 2000 3 52% of adults without any NVQ-equivalent qualifications are employed against 87% with NVQ level 4 or equivalent, with similar ratios reflecting participation in training, Annual Local Area Labour Force Survey 2001. 4 20% of the workforce in Cambridge has basic skills deficiencies. LSC 2000

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BARRIERS Nationally, regionally and at local levels mainstream businesses identified the prime barriers to participating in training as being time and cost. This includes loss of earnings for the business while an employee is engaged in training rather than in working. The local voluntary sector identified location as an additional barrier: would-be participants from the voluntary sector are generally not able to travel far. A significant proportion of the workforce in this sector would therefore appear to have transport or mobility problems, particularly those people with disabilities. Within social enterprises the barriers to accessing training are also time, cost and location as shown by a regional study. The study, perhaps crucially, showed that knowledge was also a barrier. Social enterprises have identified significant gaps in their knowledge of who can develop and deliver training to meet their needs. This could, in part, be due to the relative ‘newness’ of the sector and the training needs being very specific in some cases. Perhaps it is also a reflection that training packages, tailored to social enterprises, still need to be further developed and made widely available. In addition these gaps in knowledge may also be symptomatic of difficulties found by training providers in informing social enterprises of existing provision. Social enterprises in Cambridgeshire identified the main barriers to accessing training as time, cost, location and lack of knowledge of existing provision. This partly mirrors trends within mainstream businesses as well as trends in local voluntary organisations.

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ORGANISATIONAL CAPACITY TO MAP TRAINING NEEDS The ability to identify current training needs and to forecast skills shortages is crucial for the successful development and growth of any business. Not knowing what skills will be required in future years means a reduced ability to manage business growth adequately and to capitalise on market opportunities. Having a current training plan does not guarantee that future skills shortages can be identified. However, it does enable employers to start to see what their existing skills shortages are and to provide a means to begin addressing them. Nationally 43% of mainstream businesses with training plans identified skills shortages. Only 24% could identify specific shortages where there was no plan. Unfortunately, also at a national level, over ¾ of all businesses have no training plan of any kind5. Within Cambridgeshire, 38% of all social enterprises have training plans of some kind, and 80% of those are able to identify skills shortages. Further, 75% of those without training plans were also able to identify specific skills gaps. All are currently involved in training activity, even the ones with no training plans. These figures place local social enterprises well ahead of their counterparts in mainstream business in mapping skills shortages, although it may be that this high figure of being able to identify skills gaps may be closely linked to the ‘newness’ of the sector where there are generic skills gaps common in any new enterprise – this can only been determined with continued monitoring into the future. Although over 77% of all local social enterprises were able to identify some current skills gaps, they are severely limited in their capacity to deliver the training that is required. Where resources had been committed to developing a training plan the actual amount of training a social enterprise was able to deliver fell by over 25%. Given that large resources are not necessarily needed to develop training plans, we can see how valuable even a small quantity of support can be in supporting the development and delivery of social enterprises’ training.

5 Employers Skills Survey 2001

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ORGANISATIONAL CAPACITY TO DELIVER / RECEIVE TRAINING Nationally 80% of all businesses deliver some form of training to employees (although this may not include all the employees of a given business). However, on the whole, smaller businesses are less likely to train employees than larger ones6. This is a key factor when considering workforce training for enterprises in Cambridgeshire as the county is dominated by small and medium sized businesses7. Most employees of Cambridgeshire businesses should therefore be less likely to engage in training activities. This assessment is to some extent vindicated by national figures which show that 1/3 of all employees have never been offered training by their employer 8. Research in the voluntary sector at a local level shows a similar percentage of organisations being unable to meet their staff’s current training needs9. The training tools and methods used by mainstream business are often used by social enterprises. At a regional level, social enterprises have been found to use many systems common in mainstream businesses to deliver training. These include external courses, appraisals, on-the-job training and induction. This was also found at local level in Cambridgeshire, by recent research. At a local level, a greater engagement with training activity was found to distinguish social enterprises from mainstream businesses. This is highly significant given that both types of organisation were found to employ an average of eleven people. Thus making them less prone to engage in training than larger organisations by national trends. This difference is most likely to be due to the values and objectives of social enterprises. Their aims are often more focussed on the welfare of employees than on generating profits or surpluses. They are more willing to invest resources in the development of their workforce than mainstream businesses might be.

6 Learning and Training at Work 2002 7 90% of businesses in Cambridgeshire employ less than 20 people. LSC 8 Extent and Nature of Work-Based Learning 2002 9 An Overview of Skills Development…, COVER 2002

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EXISTING COUNTY-WIDE TRAINING PROVISION Throughout Cambridgeshire there are a wealth of training agencies and opportunities that social enterprises can benefit from: Anglia Polytechnic University are delivering a distance learning diploma

specifically on issues in social enterprises; Social Firms Eastern Region are delivering a distance learning course

specifically on management in social firms; Cambridge Co-operative Development Agency is constantly developing

and delivering tailored training activities; Business Links run an ongoing programme of business training courses; Cambridgeshire Chamber of Commerce has an annual training

programme; Other programmes are being constantly developed as part of a regional

initiative, SSEER (Supporting the Social Economy in the Eastern Region); there are also numerous private trainers. As noted already, a key barrier to social enterprises’ engaging with training, particularly with external training bodies, is a lack of knowledge of provision currently available. This highlights the pressing need for trainers and support agencies to identify and target social enterprises in order to better support their needs. Social enterprises also need to be encouraged to use training and development networks to raise their awareness of relevant opportunities as they arise. Many local social enterprises already access support from a wide variety of training agencies to help them receive, access and develop training. This is despite their self-identified lack of knowledge of provision in the area10. The regional colleges, Business Links and private training agencies all play their part as they are all already used to varying degrees by social enterprises in the area. However, research found that the most frequently used agency by local social enterprises was CCDA. It was also found that CCDA was their most preferred agency.

10 38% of social enterprises report that they are unaware of all the current training provision available to them; in effect, they know what they do not know

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PAYING FOR TRAINING Nationally payment for staff training comes from a variety of sources: 68% comes from the businesses itself; employee’s pay for 17% and the remaining 15% is sourced from local grants or the LSC11. Similarly at a local level 86% of employee’s training costs are met by their employer, 11% pay for themselves and only 3% are funded from such sources as grants12. Although over 80% of all business nationally have no formal training budget, those that do spend an average of £19,000 per year. This equates to an average of 2% of each business’ turnover13. Regionally, social enterprises have been found more active at setting training budgets than mainstream businesses. Over half of the social enterprises in the region have a formal training budget14 compared with only 2/5 of mainstream business15. At local level a similar proportion of social enterprises have a formal budget for training. Their training budgets, where they exist, are also 2% of turnover, on average, per organisation - identical to that of mainstream business. Given that social enterprises’ aims are not primarily concerned with the pursuit of financial profits, the costs of their training budget will therefore be more keenly felt throughout the organisation. This fact shows the importance that social enterprises place on training. Although they will not generate profits in the same way or to the same extent as mainstream businesses, they are just as committed, if not more so, to delivering workforce training.

11 Extent and Nature of Work Based Learning 2002 12 Cambridgeshire Learning Partnership 2000 13 Employer Skills Survey 2001 14 Making @ Living, The Guild 2002 15 Learning & Training at Work 2002

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ACCREDITATION Nationally 1/3 of all mainstream businesses offer accredited training courses, with similar figures representing businesses within the eastern region16. However, research undertaken by the Cambridgeshire Learning Partnership found that only 8% of all training activity within the local workforce is accredited. Given that Cambridgeshire has higher than average adult qualifications compared with both national and regional figures17, employees are therefore more highly qualified before they begin work. The paradoxical cycle referred to in the earlier section on the importance of training (the more qualified a person is, the more likely they are to be employed), therefore starts at an earlier stage. Further, as most workforce training is not accredited then those made redundant will be at a disadvantage in the labour market unless they had much higher levels of qualifications before they started work than is currently average for the area. The low figure for accredited training also means that much training activity is not likely to be ‘captured’. Many employers do not believe training has taken place unless it is externally accredited: workplace training such as induction, supervision or introduction of new working practices is unlikely to be reported. The Annual Local Labour Force Survey in 2001 states that:

“Administrative sources on education grossly underestimate the amount of learning taking place because a great deal of useful learning goes on

outside the formal education system.”. Training providers in the area validate these assertions from their experience of working with social enterprises and mainstream businesses. Interviews with training providers show that, as they understand it, employees of social enterprises are more concerned with gaining vocational skills than gaining accreditation. Being able to do the job seems to be more important than having a certificate to show that training has been done. This contrasted with their experience of mainstream businesses. The trainers interviewed reported that in mainstream business people are much more keen for training activity to be accredited. Research of the voluntary sector locally has found that the majority of training undertaken is not accredited which further backs this assertion. However, the recent research into local social enterprises found that 1/3 of all of them offer accredited training programmes, placing them much more in line with the norms for national mainstream businesses. This is most likely due to the values of these enterprises already referred to on page 6.

16 Learning & Training at Work 2002 17 English Local Labour Force Survey 2001

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TRAINING NEEDS At national level, the main training needs of businesses primarily relate to IT. This is mirrored in local mainstream businesses with additional needs being identified such as management and marketing. However, research into the local voluntary sector shows that IT skills are not such a high priority. Training that has been identified as being of high priority includes much more ‘basic’ operational issues such as: first aid, fundraising, health & safety, accounts, management, marketing, personnel18. For social enterprises in the region the 2 main training needs identified were understanding the culture of social enterprises and business management 19. Locally, the priorities for social enterprises are more in-line with those of mainstream business: business finances, business management and health & safety issues. This difference in priorities between regional and local levels in the importance of understanding the culture of social enterprise may have much to do with the existence of Cambridge CDA. Research has found that wherever Co-operative Support Organisations (CSOs) exist, clusters of co-operatives, social firms and social enterprises will develop around them and begin networking20 to share experience and culture. The culture of social enterprises are often best leant through social enterprises sharing experiences with others like themselves, ideally through being in close regular contact and proximity with each other, and often facilitated through participation in joint activities organised by a CSO.

18 An Overview of Skills Development…,COVER 2002 19 Making @ Living, The Guild 2002 20 East of England Mutual & Co-operative Council 10 year strategy

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TRAINING MATERIALS AND TOOLS In mainstream business tutor support is the preferred training method. Books and ICT methods (Information Communication Technologies: the internet and CD-ROMs)21 follow. Locally, research shows a similar pattern with employees of social enterprises. However, the preference for tutor support is even more pronounced and there is less enthusiasm for ICT materials. This may again be due in part to the relative ‘newness’ of the sector and so people working within it are seeking to engage not only directly in the training activity but also to have an opportunity to network with people from other social enterprises in order to share examples of best practice. This is a theme Cambridge CDA noted often in the delivery of its ESF funded training programmes that targeted social enterprises in Cambridgeshire.

21 Cambridgeshire Learning Partnership

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SUMMARY AND CONCLUSIONS

Local social enterprises are very similar to mainstream businesses: they need to be financially viable and employ skilled staff. Further, both groups identify similar training needs and similar barriers to accessing training.

Social enterprises’ primary aims are about the needs and well being of

employees and their communities. This leads to their being more active in wanting to deliver workforce training. This distinguishes them from mainstream businesses where primary aims will include the generation of financial profits, and a tendency to have a lower engagement with training.

Although social enterprises are often grouped with the voluntary sector,

in many respects their training needs differ significantly.

Training and support agencies need to continue to develop their ability to better inform social enterprises about existing training provisions and to work to help remove other identified barriers to that training namely time, cost and location. There is a need to offer social enterprises opportunities to meet each other to share their experiences and to help build a more sustainable self-supporting sector.

The largest obstacle in conducting this research has been the lack of appropriate benchmarking. The only specific research done locally into the needs of social enterprises was part of an initial mapping project in 2000. It has not been possible to locate any similar research projects from other parts of the country focusing exclusively on this sector at a county-wide level only. Mainstream businesses have therefore been used as the benchmark, to give a context to the findings. The voluntary sector has also been used as a benchmark, given that social enterprises are often grouped together with them. Hopefully this research will be revisited on a regular basis to map the developing training issues within this part of the local social economy sector.

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APPENDIX A QUESTIONNAIRE

Cambridge CDA research into training issues facing social enterprises Please fill in your responses as completely as possible and return in the pre-paid envelope to Cambridge CDA, Alex Wood Hall, Norfolk Street, Cambridge CB1 2LD by January 17th 2003 1. Contact details

1.1 Name of enterprise 1.2 Address

1.3 Tel: 1.4 Fax: 1.5 Email: 1.6 Web: 1.7 Contact person re: training

2. About the organisation

2.1 Type of business: (please tick all that apply) worker co-op housing co-op employee owned business company limited by guarantee partnership Industrial & Provident Society Unincorporated Other Charity

2.2 General details Year established Annual turnover (and how much sales, grants, donations?) Business or other activity undertaken:

2.3 Do you undertake work: Locally Regionally Nationally Internationally

2.4 Staffing details How many f/t staff (with/without support needs)

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How many p/t staff (with/without support needs) How many volunteers How many people on training placements If a co-op, how many members

3. Training

3.1 Are you able to identify your current and future training needs? If so, what process do you use? If not, what support would you need to be able to do so? 3.2 If you are able to identify them, what are your current training needs? (please tick all that apply) Management accounts / book-keeping Marketing Business planning Business management Personnel Health & Safety Food Hygiene Understanding social economy / co-ops IT Financing (applying for loans or grants) Other:

Of those chosen, which are the 4 most urgent?

3.3 Does anyone currently receive training? 3.4 If so, is it:

In-house External By other staff of the organisation Accredited Part of an on-going training plan Other

3.5 What type of training is preferred by your organisation: In-house External By other staff of the organisation Specific, one-off activities Other Computer-based (e.g. CD-ROM, Internet)

And what sorts of materials are preferred in receiving training? (i.e. presentations/books/CD-ROM?)

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And why are these types preferred? Cost Time Availability (or lack of) relevant trainers Other:

3.6 Do you have a formal training budget? If so, how much is it? (Who pays for the training?: Company/Individual/External funder)

3.7 Do you have a formal training plan for your organisation or employees? If so, please give details

3.8 Please list training activity undertaken within the last 12 months by people within your

organisation Training activity

In-house External By staff Other Training provider

e.g. book-keeping

X Enterprise Services

3.9 Which training agencies do you rank most highly? (please list in order of preference: 1 = excellent, 5 = would never use; for example Business Link, CDA, Anglia University)

Training Agency Last used Not used Reason for preference

1 2 3

3.10 What criteria do you use when selecting training? (please rank in order of importance,

1 = highest priority) Price Relevance Location Trainer Timing (when training is available compared with the needs of the business)

3.11 What barriers do you encounter when developing or engaging with training?

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Knowledge of trainers and training courses Lack of available finance to pay for the training Lack of staff time to engage with training Other: 3.12 Do you have any other experiences of training that you have not been able to

record in answering the previous questions? If there are any questions which you do not feel able to answer, or do not feel able to answer in the way the form is set out, please feel free to contact Cambridge CDA directly.

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APPENDIX B FULL ANALYSIS OF RETURNS Total number of questionnaires returned: 13 (35%) Average number of employees per enterprise: 11 Average number of trainees per enterprise: 15 Number of enterprises identifying current training needs: Yes 77%

No 23% Methods used to determine training needs: appraisal 90%

other 10% Most urgent training need: accounts, financing, health & safety, business management All training needs (in order of demand) – Business planning/marketing 19% Health & safety 17% IT 15% Business management 13%

Understanding the social economy/accounts 9% Financing/personnel 6% Food hygiene 4% Enterprises currently training = 100% In-house = 54% External = 85% Accredited = 38% As part of an on-going training plan = 38% Enterprises’ training preferences: In-house = 38% External = 62% IT-based = 23% Enterprises’ preferences for type of training materials Workshops/seminars = 46% CD-ROM = 8% Books= 23% No preference = 21% Reasons for preference of materials: Time = 54% Cost = 38% Trainer = 38% Enterprises with a training budget: Yes 54% No 46% Training budget supplied by: company 63% other sources 37% Average training budget per enterprise that has one: £9,286

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Enterprises with training plans: Yes 15% No 85% Recent training activities, in order of incidence: IT 24% First-aid 16% Nvq-related training trainers 10% Accounts/health & safety/management 8% Financing/food hygiene/mediation/marketing 5% Personnel 3% Recent training activities undertaken: in-house 14% externally 86% Current or recent training providers used, in order of incidence: CCDA 24% Huntingdon regional College 20% NHS/social services 15% Cambridge Regional College 12% Private training agencies 3.3% each Learndirect/county council/business link 3% each Preferred training agencies, in order of preference: CCDA 38% Cambridge Regional College 15% Anglia Polytechnic University 8%

Business Link 8% Cambridgeshire Chamber of Commerce 8% Huntingdon Regional College 8%

Learndirect 8% Social Services 8% Reasons for preference of training agency: Cost 45% Locality 45% Ongoing partnership 10% Criteria for selecting training, in order with 1 being the best Relevance 1.2 Price 2.8 Location 2.9 Timing 3.3 Trainer 3.7 Barriers to accessing training: Knowledge 38% Funding 62% Time 54%

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APPENDIX C BIBLIOGRAPHY Adult Basic Skills Survey 2000 An Overview of Skills Development Opportunities & Training needs within the Community and Voluntary Sector in the East of England, COVER, 2002 Annual Local Area Labour Force Survey 2001 Cambridgeshire & Peterborough Learners Survey 2000, Cambridgeshire Learning Partnership Co-operatives Research Project, Cambridge CDA 2000 East of England Mutual & Co-operative Council 10 year strategy, 2002 Eastern Region Regional Development Plan EEDA Regional economic Strategy Emerging Social Firms Research Project, Cambridge CDA 2000 Employer Skills Survey 2001, Dept for Education & Skills English local labour force survey mar 00 – feb 01 Extent, Causes, and Implications of Skills Deficiencies, Dept for Education & Skills 1999 Extent and Nature of Work Based Learning, Dept for Education & Skills 2002 Greater Cambridgeshire Partnership Annual Conference Report 2002 Learning and Training at Work 2002, Dept for Education & Skills 2002 Making @ Living: For the Community, The Guild 2002 Social Enterprise: A Strategy for Success, dti 2002

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APPENDIX D TRAINERS CONTACTED AND INTERVIEWED Mark Granger, Mark Granger Training – January 2002 Clare Benton, CB Horizons – January 2002

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Alex Wood Hall, Norfolk Street, Cambridge, CB1 2LD

T: 01223 360977 F: 01223 509040

E: Cambridgecda@connectfree.co.uk W :www.colc.co.uk/cambridge/ccda

Cambridge Co-operative Development Agency Ltd. Registered in England No. 1853517