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									                      Sector Skills Agreement
         Food and Drink Manufacturing Sector

                             Wales Executive Summary
2                Wales Executive Summary

Executive Summary

Introduction                                • There are approximately 400
                                              businesses in the Welsh sector
                                                                                        • The age structure of the Welsh sector
                                                                                          presents an issue that needs to be
The Sector Skills Agreement (SSA) in          representing 7% of all Welsh                tackled. The UK has an ageing
Wales is a compact between Welsh              manufacturing companies;                    population and this will have a
employers, partner and stakeholder                                                        significant impact on the age structure
organisations and providers/funders of      • The industry generates a turnover
                                                                                          of the future workforce.
training. SSAs have been developed to         of approximately £600 million
deliver the Skills for Business Network’s     per annum;                                • Demographic trends highlight that the
strategic objectives of increasing                                                        number of young people entering the
                                            • Gross Value Added (GVA) for the
productivity, addressing skills shortages                                                 workforce each year is falling.
                                              Welsh sector is approximately
and gaps, widening opportunities and          £679 million;                             • Employers are facing significant skills
making skills provision more responsive                                                   deficiencies in areas such as
to employer needs.                          • Wales is home to some major Food
                                                                                          supervisors/managers, technical roles
                                              and Drink Manufacturing companies,
                                                                                          (including food scientists), machine
The creation of this Sector Skills            including Unilever (Best Foods), RF
                                                                                          operators and craft skills.
Agreement has involved five key stages:       Brooks, Princes, Memory Lane Cakes,
1. The Skills Needs Assessment                Allied Bakeries, SA Brain & Co.,          • The food and drink industry retains a
                                              Wynnstay Group, Dairy Farmers of            negative image as a place of work.
2. Understanding Supply                       Britain, Welsh Country Foods, Dunbia,
                                                                                        Overall the Welsh industry needs to
3. Gap Analysis & Market Testing              Dawn Meats and Grampian to name
                                                                                        recruit an estimated 8,000 people
                                              but a few.
4. Action with Employers                                                                between 2004 and 2014 to meet
                                                                                        sector demand.
5. Action Planning                          However Wales faces a major skills
                                            challenge if we are to maintain or          There are a number of key forces that
However the SSA process is continuous       improve this position:                      drive the food and drink manufacturing
and agreements will continue to be                                                      industry - and therefore reflect and
                                            • Total employment in the Welsh Food
developed, renewed and updated.                                                         represent the pressures for change on an
                                              and Drink Manufacturing sector is
                                                                                        individual food and/or drink business.
                                              forecast to remain stable between 2004
                                                                                        These include:
Demand and                                    and 2014, in contrast to the UK sector
                                              average which is forecast to decline by   • Consumer change - the changes in
Supply-side Evidence                          around 10% 2004 and 2014.                   intermediate and final demand caused
Wales’ Food and Drink Manufacturing                                                       by changing incomes, population,
                                            • The majority of Wales’ sector
industry is vital to the economy:                                                         tastes and lifestyles.
                                              workforce (54%) has level 2 or lower
• It provides jobs for more than 16,000       qualifications. 21% of workers do not     • Changing technology - the search
  people accounting for approximately         have any qualifications at all.             for and adoption of new products,
  5% of the UK’s food and drink                                                           new processes, new distribution
  manufacturing employment;                                                               methods, storage systems etc.

• Market power - the changing scope            improved and the quality and supply of            audience. Much of the existing
  and direction of competition as              technical, practical and craft skills must        training is driven by legislative and
  globalisation and retail concentration       be increased.                                     regulatory requirements rather than
  occurs. This leads to market                                                                   by innovation, new technology and
                                               One of the current mechanisms used to fill
  developments, including own-label                                                              value-added opportunities.
                                               today’s vacancies is the use of Overseas
  versus brands, and the internet/web
                                               Nationals (OSN) at all levels within food       • There is a low level of take up of
  shopping vs. supermarkets or farmer’s
                                               and drink manufacturing. Official figures         publicly funded training even though
                                               show just over 5% of employees in the UK          there are initiatives targeted at those
• Continuing regulation - the changes          food and drink manufacturing sector are           with low or no qualifications levels
  in farming, processing, distribution         non-UK nationals. However, employer
                                                                                               • The level of training carried out by the
  and new product development are              anecdotes suggest this proportion is much
                                                                                                 workforce needs to move from basic
  constrained or encouraged by new             higher i.e. 15% to 20%. If the industry is
                                                                                                 to higher level provision, in order to
  dictates be these on health and              to maximise the skills within this group,
                                                                                                 meet the skills demand now and in
  nutrition, the environment,                  then there needs to be increased access to
                                                                                                 the future.
  international trade preferences or new       language and communication skills for
  labour regulation.                           OSNs together with parallel work on             • The case for increasing skills needs
                                               improving supervisory/management skills           to be emphasised to Financial
                                               within the current workforce. This will           Directors and Chief Executives.
Conclusion                                     enable employers to make the most of the          The senior board members in the
If the industry is to attract the people       OSN skills whilst also ensuring that cultural     UK view training and skills as a
and talent it requires to meet skills          differences are managed to enable all             cost rather than an investment. A
demands and increase productivity then         employees to work well together.                  concerted effort needs to be made
it must raise its awareness, increase its                                                        to alter this mind-set if a real change
                                               In terms of supply issues facing the food
attractiveness and improve accessibility to                                                      is to be delivered.
                                               and drink industry;
the majority of the population e.g.
female, ethnic and younger sections of         • Employers, training providers, and
the workforce.                                   public sector stakeholders, have a
                                                 good grasp of the key training issues;
There is a shortage of technical (food
                                                 a clear understanding of the
scientists and technologists, engineers,
                                                 problems; and a reasonably strong
electricians) and skilled (especially craft)
                                                 infrastructure to support and build
workers (bakers, butchers). These
                                                 upon training initiatives.
problems are evident across the food and
drink manufacturing industry. If the food      • There is a lack of understanding of
and drink manufacturing sector is to             what is available in terms of support
boost its productivity and                       from the public sector and there is
competitiveness, management and                  frustration that some funding
supervisory skills must be raised and            opportunities are missing their target
4                Wales Executive Summary

Key Issues

                                                                                          Problems of time and space for
Demand and Supply                           Changing market conditions:
                                            a number of non-skills related                training: this is a particular issue for
The workforce of the future:                developments will have an impact on           food sector employers on a 24/7 regime,
employment in the sector will decrease      the sector over the coming years, as          as the production line needs to be
over time, but replacement demand           they have had an influence in the past.       maintained and in an industry where
for workers will be relatively high.        The combined impact of the demands            margins are tight, releasing staff to
Elementary occupations will decrease        from the major retailers and more diverse     undertake training can be an overhead
through technology change though            consumer demand, aligned with global          expense too far. The evidence from the
there will still be requirements for        sourcing of raw materials, tighter            employer training pilot (ETP) models, that
replacement plant and machine               requirements for waste management and         included wage subsidy to provide cover,
operatives, skilled trades occupations      the need to control energy use and            showed that this did facilitate the take
and managers in particular.                 carbon emissions mean a more complex          up of learning.
                                            environment for managers.
Problems in recruiting graduate                                                           Limited planning and training
scientists and engineers: the sector has    The benefits of skills development            planning in the sector: whilst overall
difficulties in recruiting sufficient       and acquisition: much of the formal           the sector has a sound track record of
graduates for its needs now and in the      training activity that is going on is         business and training planning compared
future. In part this is due to reducing     focussed on meeting legislation and           to the all sector average, its performance
levels and quality of science teaching in   regulatory requirements, with less being      deteriorates as the size of the employer
schools and in part a reflection of the     done in areas which will contribute to        decreases. Also in common with other
image of the industry. All the same, the    the productivity of the sector. At the        sectors, the incidence of planning and
sector is not one that is particularly      same time, there is a lot of on the job       training budgets has reduced.
highly regarded as a career path.           and non-accredited training happening in
                                                                                          Finding and identifying providers and
                                            an informal manner. This is reflected in
Overseas nationals: Since EU                                                              relevant provision: training provision is
                                            the qualifications profile of the workforce
enlargement in May 2004, large                                                            hard to identify among some public
                                            of the sector, where nearly half of
numbers of overseas nationals have                                                        sector providers and often word of
                                            employees do not have a level 2
come to the UK to work. One of                                                            mouth within the sector is the best way
                                            qualification at least. There is a question
the sectors that has welcomed this                                                        of finding the appropriate provision.
                                            as to whether individual training budgets
labour source is the food and drink
                                            are sufficient for the needs of a business,   The Qualifications regime: employers
manufacturing sector. Survey evidence
                                            and why, if the sector is one with high       are largely indifferent as to whether
with employers shows that these workers
                                            GVA, do employers use reducing margins        training leads to a qualification or not
are highly motivated, work well and are
                                            as a barrier or excuse for not investing      and will purchase training depending on
prepared to take on more responsible
                                            more in training.                             operational requirements. If there is an
jobs in the sector. Issues arise over
                                                                                          outside incentive for qualifications,
language and workforce development.
                                                                                          (regulation, customer requirements) then
                                                                                          they will be obtained. Some employers
                                                                                          do recognise that employees may value
                                                                                          the external accreditation and use this

                                                              The Skills Action Plan

for motivation, however small companies       1. Careers Development                          2. Promoting
in particular fear that once qualified, an
employee will move on to a competitor.        The Issue:
                                                                                              The Issue:
Similarly, providers will supply the          Skills shortages are evident in a variety of
required training, whether or not it leads    areas within the food and drink                 Global sourcing of raw materials,
to a qualification, according to the          manufacturing sector. For example;              tighter requirements for waste
employers’ needs. Where employers,                                                            management and the need to control
                                              • food scientists & technologists with
employees and providers may lose out is                                                       energy use and carbon emissions mean
                                                the required skill-sets to drive
that with some refinements, an                                                                a more complex environment for food
                                                innovation in the sector are in short
accredited qualification programme could                                                      and drink manufacturing and the decision
                                                supply. The demand for these roles is
be delivered that may draw down some                                                          makers working within it. Skills deficiencies
                                                increasing and their skills are needed
elements of public funding, and thus                                                          are reported in management functions,
                                                in a wide variety of areas e.g. quality
help to meet public sector targets as                                                         and employment projections indicate a
                                                assurance; new product development.
well. It is public funding regimes and the                                                    high demand for more senior managers
priorities of government and other            • engineers with the required skill-sets        and professionals in the future. Lean
stakeholders that may drive the                 are in short supply; these skills are vital   Manufacturing has to become a reality for
qualifications imperative.                      to be able to harness and take                the sector to maintain competitive
                                                advantage of new technology                   advantage and increase productivity so the
The Cinderella Sector: food and drink           innovation and to implement and               skills in this area need to be developed.
is often a priority sector for different UK     maintain these technologies effectively.
nations. However, the food                                                                    The Solution:
manufacturing sector is not defined           • language, communication and basic
                                                                                              A programme to enable the effective
uniformly by stakeholders leading to            skills have been highlighted as an
                                                                                              adoption of continuous improvement
confusion for employers and other               issue and barrier to entry and
                                                                                              and lean manufacturing skills that are
stakeholders. Within this confusion of          progression for both non-UK nationals
                                                                                              right for the company. The programme
definition, the Improve footprint can be        (migrant workers) and UK nationals.
                                                                                              will establish a ‘gold standard’ for
lost and therefore employers lose out on      The Solution:                                   companies seeking to implement lean
funding and support to other more                                                             manufacturing into the business
attractive sectors.                           A series of programmes designed to
                                                                                              processes. It draws on existing employer
                                              address skills shortages from a number of
                                                                                              best practice and experiences of
                                              disciplines to aid entry into and
                                                                                              exemplars in the sector from agencies
                                              progression within the sector. For example;
                                                                                              and bodies specialising in the
                                              developing graduate conversion training
                                                                                              sustainability agenda such as the Carbon
                                              schemes with industry employers;
                                                                                              Trust, Envirowise and similar regionally
                                              attracting more science graduates into the
                                                                                              based initiatives.
                                              sector; producing more accessible and
                                              relevant learning programmes to meet the
                                              skills needs of the industry and expanding
                                              media efforts to promote the careers
                                              opportunities and progression routes
                                              within the sector.
6                Wales Executive Summary

The Skills Action Plan

3. Pick and Mix                              4. Training                                    5. Connecting the
The Issue:                                   The Issue:
                                                                                            The Issue:
Food and drink manufacturing employers       There is a lot of on-the-job and
are divided in their views on whether        non-accredited training going on               Relevant learning provision for employers
current qualifications are fit for purpose   in the food and drink manufacturing            in the sector is hard to identify and
and are indifferent as to whether training   sector. This training is often without         often word of mouth is the best way of
leads to a qualification or not. While       a structured approach or ability to            finding relevant provision. Those seeking
some are happy with existing                 measure the benefits, so employers are         training with a specific food and drink
qualifications, others prefer to purchase    unaware of its quality or effectiveness        manufacturing emphasis (rather than
bespoke training targeted at the needs       and find it difficult to link to the overall   management or general engineering)
of the company. N/SVQs are generally         business strategy.                             are most affected and employers often
viewed as too broad and generic and                                                         find they have to pay more or work
                                             The Solution:
employers are therefore reluctant to                                                        with private companies to access the
release staff to do modules that are not     An approach to support and encourage           required training.
directly relevant to the company.            structured approaches to training and
                                                                                            The Solution:
                                             development in the workplace. This will
The Solution:
                                             enable employers to measure the                A solution focused on embedding
A strategy to help employers recognise       effectiveness of training provision,           specialist food and drink manufacturing
the achievement of employees, through        ensuring that skills development is fit for    knowledge and information into existing
the use of units which lead to               purpose e.g. implementation of records         skills brokerage arrangements to ensure
customised qualifications that suit the      of achievement, appraisals and training        they can fully meet the sector’s needs.
skills needs of the individual and the       plans linked to overall business strategy.
employer’s business.                         Programmes will include; promotion of          The approach will ensure that
                                             training for in-house trainers (including      information on learning providers and
This solution builds upon the work                                                          training is available on all major
                                             migrant workers) to gain qualifications;
currently being undertaken by Improve                                                       databases of learning opportunities; a
                                             key workers to achieve Assessor Awards;
through its Sector Qualifications Strategy                                                  learning programme to help generic skills
(SQS) which will ensure a consistent         The scheme will ensure that employers          brokers develop a deeper appreciation of
standard of learning between                 have greater confidence in the quality of      the sector and the issues employers face.
competency based and vocational              in-house training provision and
qualifications, reducing repetition and      employees are better motivated.
duplication of training across NVQs,
VLQs, Apprenticeships, etc.

                                                               The Skills Action Plan

6. Sweet Success                               7. A Future in Food                           8. Learning Together
The Issue:                                     The Issue:                                    The Issue:
Much of the training activity which goes       The food and drink manufacturing              Food and Drink manufacturing
on in the sector is driven by legislation      sector is not one that is regarded            employers face problems with finding
and regulatory requirements, with less         particularly highly as a career path.         the time and space for training their
being done in areas which will contribute      It is difficult to attract motivated and      staff. In an industry where margins are
to the productivity of the sector. At the      talented people into the industry,            tight, releasing staff to undertake
same time, there is a lot of on-the-job        whether they are skilled crafts people        training is often an overhead expense
and non-accredited training going on.          or managers and professionals. There          too far. This is particularly the case for
This is reflected in the qualifications        is also a low awareness of career             smaller employers who are less likely to
profile of the sector, where more than         opportunities available in the sector.        have the facilities on-site and the
half of the workforce (54%) is qualified                                                     flexibility in the workforce to train.
                                               The Solution:
to level 2 or below.
                                                                                             The Solution:
                                               A programme to promote career
The Solution:
                                               opportunities, entry and progression          This approach will promote regional
An approach to enhance industry’s              routes to potential and existing              and sub-regional collaboration and
strategic view of skills as a means of         employees to demonstrate the value of a       co-operation on skills issues amongst
raising productivity and not merely as         career in the sector and ensure that skills   small and medium enterprises (SMEs).
a minimum legal requirement. It will           deficiencies are met. Elements of this        Making better use of existing, or
ensure that skills are seen as THE             include; high quality work experience         developing new, groups of employers
success factor.                                placements; teacher placements; career        willing to collaborate on workforce
                                               events & sponsorship; production of high      development and training; encouraging
The strategy will involve a well-crafted
                                               quality case study and promotional            the development of shared facilities;
promotional programme emphasising
                                               materials; Media PR engagement.               exploring the potential for e-learning
‘bottom-line benefits’ to business of skills
                                                                                             facilities are elements of the solution
and learning; accumulation of evidence
                                                                                             which together would help overcome
refuting common training myths;
                                                                                             barriers to training and problems relating
targeted on-line tools to help businesses
                                                                                             to lack of space for learning through
create quality business & training plans.
                                                                                             economies of scale.
How you can get involved
If you would like to be part of the SSA, please contact Improve
and ask to speak to your Operations Manager for Wales.

Improve, on behalf of the sector, will continue to visit
employers, stakeholders and partners to discuss how these
agreements can be developed to ensure commitment.

While eight proposed solutions are presented here it is
anticipated that each partner or stakeholder will focus on the
areas where they can make the biggest impact. This may result
in each agreement focusing on 2 or 3 solutions.

Improve would like to thank all employers, stakeholders
and industry partners who engaged with the SSA
development and consultation process. A full list of all
organisations who contributed to this document is listed
in the full research reports.

Copies of the SSA reports are available to download from
the Improve website

Improve Ltd              Tel.     0845 644 0448
Ground Floor             Fax.     0845 644 0449
Providence House         Email.
2 Innovation Close       Web.
YO10 5ZF
                                                                                                                           Improve July 2007

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