I thank the Acting Chairman and members of the committee for inviting Skillnets to this meeting. I am joined by my colleagues, Mr. Dave Flynn, programme support manager for Skillnets, and Dr. Lorcán Ó hÓbáin, programme manager for ManagementWorks. We would be very happy to deal with any question from members about the wide variety of initiatives that Skillnets is involved in. In my opening remarks I will, as outlined by the Acting Chairman cover the following areas: the effectiveness and relevance of the Skillnets enterprise-led model in the current economic climate for developing the current and future skills needs of enterprise and the workforce; the appropriate use of conversion courses as an effective policy response in filling skills gaps and labour market activation; and the importance and impact of boosting the management capability of our SME owners and managers to sustain and grow their businesses and the role that the new ManagementWorks initiative plays in delivering this.
Let me start by addressing who we are, what we do and how we address the current and future skills needs. Skillnets was established in 1999 and is an enterprise-led support body dedicated to the promotion and facilitation of training for enterprise in Ireland. We aim to increase participation in enterprise training by Irish companies, most particularly SMEs that form more than 95% of all the companies we support, to improve competitiveness or business but also to provide improved access for their employees and since 2010, for jobseekers to skills development and enhanced employability. We are funded by the Department of Education and Skills from the national training fund. In 2013, our total funding allocation is €14.5 million.
We have a community of training networks which comprise groups of companies from the same sector or region who come together, identify their common training needs and seek to deliver on those needs. We currently have 55 such training networks operating across the country. At the core of our model it involves companies being directly involved in the identification, design, delivery and evaluation of skills development, either as lead bodies or in partnership with other organisations.
What do we mean by the enterprise-led approach?
Basically we support networks and their member companies to identify their own training needs and deliver them locally in order that they are truly demand driven and flexible. It is important to note that enterprises contribute financially in terms of cash and resources. Therefore, our training networks are a joint investment between public and private. The mere fact that companies are prepared to invest quite heavily is clear testament that they perceive value in doing so. Another feature of the enterprise led models is that new concepts and sharing of ideas are encouraged so that we are constantly more innovative in our delivery of training solutions to support growth and expansion.
In 2012, €22.7 million was invested in training through our networks, benefiting more than 43,000 employees and jobseekers. This comprised Skillnets from the national training fund investing in excess of €12 million and industry investing in excess of €10 million. More than 10,000 companies participated in our training programmes in 2012. As a demand and labour market driven organisation, Skillnets is continually adapting and responding to industry needs. By way of example, we have developed new training programmes to upskill current and future employees in sectors identified by the expert group on future skills needs, such as ICT, life sciences, food and agri-business. This has included the development of many brand new qualifications on the national framework of qualifications up to and including level nine. In addition, since 2010, our model also supports jobseekers. One unique feature of this model is that it provides access to training alongside those in employment, therefore, ensuring that the training is relevant as well as providing a much needed opportunity for jobseekers to remain connected with the world of work. A further example is our ability to respond rapidly. In 2011, when TalkTalk in Waterford made more than 500 workers redundant, Skillnets was able, in partnership with some local and national networks, within days to begin a process of support which included training and access to other jobs in the sector. This has continued in our ongoing support to local employers such as Eishtec in the training and development of new workers, many coming off the life register. As further proof of the demand for our model we have recently launched a new fund for the development of brand new training networks specifically aimed at regions and sectors where there are gaps.
Our key message is that enterprise, particularly SMEs, will engage in skills development once barriers around value, quality and access are overcome. As I mentioned earlier, part of our ability to adapt is evidenced by our commencing support for jobseekers in 2010. In its report, Creating Policies that Work, the committee recommended the need to focus resources on active labour market programmes with strong labour market linkages. In support of this recommendation I take this opportunity to highlight some conversion programmes which enabled jobseekers of one discipline to acquire training in a different discipline to re-enter the jobs market.
During the past couple of years, but 2012 in particular, our training networks have developed and delivered a number of conversion courses which have been very successful in helping jobseekers move from declining sectors into growth sectors and from unemployment into employment. These conversion courses are delivered under our jobseekers support programme which is fully funded by Skillnets and combines work placement with intensive training. We are currently evaluating a group of 12 of these programmes where a new model is emerging in terms of what makes an effective conversion programme but some of the common critical success factors are already very clear to us. First, the quality of the relationship that the individual network manager has with the member companies is a vital catalyst in designing these programmes. By starting with the end in mind, that is, what jobs are available now or are in the pipeline, networks can plan their training and support for jobseekers around the needs of real jobs. Therefore, industry engagement at the planning stage is essential as it often results in key employers endorsing and championing the programme which gives the jobseekers who complete them a distinct advantage in the job market.
Intensive industry endorsed training with work placement or longer-term internships have combined very successfully with JobBridge, the national internship scheme, and are a powerful combination in terms of employment outcomes. Programmes that have proven to be particularly effective are those that are highly structured but project based and include significant elements of training and support by company mentors in combination with external expertise. The 12 conversion programmes act as an example and exemplar and comprised 400 jobseekers. The progression rate currently stands at 72% into direct employment within two months of completion of these programmes. This excludes those who have progressed into further education and is based on the numbers who secured employment or, in some cases, established a business within two months of completing or training in work placements. We are undertaking an ongoing research project on these 12 programmes and will shortly issue a report, based on the programmes. Once published, it would be our intention to provide a copy of the report to each member of the committee. Some further research conducted only in the past week indicates that some of those programmes are achieving employment rates of over 90%.
The third theme we want to speak about is our ManagementWorks initiative which is managed by Skillnets. It is focused on increasing the management capability of Irish SMEs in order to have a direct impact on their ability to sustain and create employment. Following the recommendations of the advisory group on small business in 2011, ManagementWorks was established under the Action Plan for Jobs 2012. The focus of the programme is to assist owners and managers of firms to develop their businesses and improve performance. As the committee will be aware, there are almost 200,000 SMEs employing in excess of 600,000 people in Ireland. More than 90% of these firms have fewer than ten employees. Therefore, surviving businesses have weathered the storm of the past five years but research shows there is a strong positive correlation between management capability and firm survival, growth, productivity and turnover. The message for us is clear. By increasing the management capability of Irish SMEs this will have a direct impact on their ability to sustain and grow employment.
ManagementWorks helps to improve helps to improve management capability through relevant workshops with small groups of owner managers and targeted mentoring on a one to one basis. We are aware of and support the committee's recently published report on mentoring support to SMEs. Our experience has been that the engagement with an experienced and professional mentor who can question and support the manager, as part of a learning journey, is making a real difference in terms of implementation and also the transfer of learning from the workshops to the individual firms. Since its launch in September 2012, more than 320 business people from all over the country have chosen to participate in ManagementWorks programmes. It is worth noting that smaller firms, that is, those comprising less than ten employees, make up 65% of participating firms so far and in the vast majority of cases these owners and managers have not participated in any form of management training previously.
ManagementWorks is focused on improving the capability of SMEs. Initial feedback from participants reveals great progress on actions which will build to that objective with firms reporting better business information being generated, mentors who are challenging them to think about their business more clearly and significant increases in their business and personal confidence. We are undertaking a full evaluation of the programme following an interim evaluation at year end which is being submitted to the Department of Education and Skills.
In summary, we believe that Skillnets occupies a unique position in the multidimensional jobs challenge. On the one hand, we have a strong relationship with, and ability to support upskilling within enterprise both in terms of job preservation and growth. On the other hand, we have also developed solutions and pathways for jobseekers to increase their chance of gaining employment through gaining skills and experience in demand by enterprise. For us the evidence is clear. All of the stakeholders involved in the jobs challenge, be they employers, the employed, jobseekers, etc., will engage in skills development once the barriers around value, quality and access are overcome.
I thank the committee for its time so far today. We are happy to answer any questions the members may have.
