Schaeffler, UK: Fostering employability
During the 1990s, Schaeffler UK’s German parent company transferred an increasing amount of its production capacity to Eastern Europe to take advantage of much lower labour costs in its precision engineering business. In response, the main UK plant at Llanelli in South Wales began a major programme of skills improvement across the whole workforce, giving it the capacity to compete on the basis of producing higher value-added products.
Schaeffler UK (formerly INA Bearings) is part of the German multinational Schaeffler Group, a family-owned company that has 60,000 employees worldwide. The group as a whole produces a range of automotive products and expanded significantly through the recent merger with FAG Europe. The company has around 440 employees in the UK, with 360 based at the Llanelli factory and 80 mainly sales and distribution staff based in the West Midlands. The company recognises the Amicus trade union at the Llanelli factory.
Training and learning in UK companies has always operated on a voluntary basis. Since 1997, Labour governments have focused on the need to increase employability through learning and training throughout a worker’s career. The two main strands of the government’s approach have been to give employers and employer associations more say in the delivery of vocational education and to provide unions with funding and union learning reps with rights to help encourage increased take-up of training and learning at work. These came into play as Schaeffler implemented its training strategy.
Description of the initiative
In order to face up to the challenge of low-cost competition from Eastern Europe, management at the Schaeffler plant in Llanelli decided on a strategy to focus on higher value-added products. The strategy involved a major cultural change within the organisation, with continuous improvement and cost reduction running alongside plans to improve employee skills across the facility.
Following a strategy meeting involving the then 10-strong management team in March 2001, the company identified a number of central values as well as an overarching aim that ‘the rate of learning must be greater than the rate of change’. The key values were integrity, innovation, respect, commitment and passion.
The company began a major consultation exercise with a briefing document sent to all employees, who were also interviewed individually by a member of the senior management team. Around two-thirds of the 360 employees are hourly-paid production workers; the rest are a mixture of quality, maintenance, engineering and support staff.
The message from management was that it was trying to create a learning culture so that employees would have the skills and knowledge necessary to adapt to the changing demands on the company to produce new, innovative, high-quality products. Everyone in the organisation went through an assessment and appraisal to see what from of training might be appropriate.
A significant challenge for the company was to address reluctance among some employees (those with few or no qualifications) to undertake training and learning following their negative experience of school education. A key argument used by the company was employability. Managers explained that by boosting their skills, employees would either be able to retain their job in Schaeffler, which would be more likely to survive and thrive with a high-skilled workforce, or they would be in a much better position to find work elsewhere if the company hit harder times.
Employees were offered a range of courses that delivered National Vocational Qualifications (NVQs) relevant to their particular job. The company worked with Amicus, the local college (Coleg Sir Gar), and the government’s Learndirect initiative to set up an e-learning centre where employees could take a number of courses, including basic IT skills.
In order to encourage employees to consider new learning opportunities, the company organised ‘lunch and learn’ sessions to give them a taste of what was available.
Amicus was involved from the start of the process and supported the company’s initiative. It was also able to play a positive role through the election of four union learning representatives who were able to provide employees with support, advice and encouragement.
The training and learning process was very broad and took place at several levels. Thus, while many workers were overcoming their reluctance to learn and acquiring basic qualifications, the company has also completed a team leadership programme linked to NVQ level 3 in management. It also started a supervisory programme linked to NVQ level 3 in business improvement techniques.
The impact of the learning initiative has been most evident in the number of workers attaining qualifications, with over 200 now having NVQs and the rest working towards them. All operators have achieved or are working towards NVQ level 2.
The company says this has had an impact on productivity and quality of output, while absenteeism has also fallen.
The initiative has been innovative in trying to create a learning culture throughout the workforce and acknowledging that the training and learning being offered will boost workers’ general employability while also enabling the company to respond to the need to deliver high-quality, higher value-added production.
Management and unions have been important in not just saying they support the initiative, but in taking a role in making it a success. Line managers have been given training, recognised through NVQs, to develop their skills as team leaders and supervisors. Senior managers have also been involved from the start in pushing the initiative and demonstrating to workers how their training has an impact in the workplace.
In the longer term, the company hopes to benefit from the creation of a learning culture so that the initial boost to training will be continued into the future as employees take control of their learning and continue to develop their skills.
Exemplary and contextual factors
This case is exemplary in the way that the company undertook to consult in detail with every employee about their training and learning needs and addressed the challenge posed by reluctant learners. It was an initiative triggered by the recognition that the company needs high-skilled and well-trained workers as part of an international strategy to survive and flourish in the face of low-cost competition.