Any business that spends an average of £1,400 a year on training for each of its employees is entitled to expect a tangible return on its investment.
For Nissan Manufacturing UK (NMUK) in Sunderland, being top of the European motor industry productivity league for the past seven years provides ample justification for such spending. It currently turns out 99 vehicles a year per employee – 10 more than its nearest rival.
NMUK training and development manager Steve Pallas says: “It’s very difficult in training to say ‘I spend this much and get this much back’. But I believe we are the most productive plant in Europe because our people are well motivated and that’s because they are well trained and given the tools to do the job.
“I think our training spend is twice if not more than that of the others in European automotive manufacturing.”
A survey published this summer shows that NMUK is also among the top 10 of more than 850 engineering and manufacturing companies in the UK for its commitment to training.
The research, conducted every two years by the Sector Skills Council for Science, Engineering and Manufacturing Technologies (Semta), also shows the company is the top trainer in the UK automotive sector, pumping nearly 4 per cent of its annual payroll into training compared with a national average of 1 per cent.
Plant employees receive an average of eight days of off-the-job training annually, nearly four times the national average.
Semta’s research head, Bill Twigg, says NMUK’s success is inextricably linked to its training policies. “It shows what can be achieved when you invest time and money in your workforce.”
But Pallas says the steady stream of corporate visitors to the factory should be wary of trying to transplant its training policies and methodology elsewhere.
“Sometimes companies pick up on things and don’t understand them. You can’t slavishly transplant what happens at NMUK and put it into another company. You have to go with good practices and develop them to local conditions.”
That is exactly what the company has tried to do since being established by the Japanese multinational in 1986.
“How could I transplant the Japanese system into Europe?” says Pallas. “Their people would come in (to the company) and, historically, would be with you for the rest of their career. Hence they have a slow and methodical approach to training.
“A lot of their training is by on-the-job learning, whereas we needed to get people to those levels of training a lot quicker.”
A learning culture was therefore established from the outset, particularly as the region has no previous history of car manufacturing from which to draw.
The North East’s shipbuilding and heavy engineering heritage may have helped, but Pallas says that, fundamentally, the local workforce is no different to anywhere else in the country.
In fact, the quality of its employees is the only distinct advantage NMUK has over its rivals at the moment.
“We are building cars on an island, 80 per cent of our product goes abroad and we aren’t in the Euro zone,” explains Pallas. “It’s a mega-competitive market, even within the Nissan environment.”
Not only is NMUK competing for new models with Nissan’s other European plant in Spain but with Renault plants as well , since an alliance was formed with the French manufacturer in 1999.
NMUK employs 4,500 people and produces the Micra, Almera and Primera cars. Production of a fourth model is due to start in January 2006.
The annual training budget is more than £6m, and although it has to be agreed by the main board, Pallas largely decides how the money is spent.
“I’m constantly going to our key customers and asking whether they are getting what they want,” he says. “I’m very fortunate that the senior management team values training. We’ve always had a big training department in relative terms and a decent budget to go with it.”
Most of the technical training, which covers areas such as robotics and pneumatics, is bought in, leaving the nine in-house trainers to concentrate on production techniques, shop-floor management and behavioural programmes.
Pallas says it is important that the people who deliver these types of training understand the working environment in which it will be applied. “It also means we are pretty quick to respond to things.”
Speed of delivery has proved particularly valuable among the plant’s 220 supervisors who hold a pivotal position in the workforce between production staff and management.
Pallas says: “There have been times when we have wanted to change the role of the supervisor in some way and we’ve been able to design and develop programmes and then roll them out in months or even weeks from the concept stage.”
Each supervisor is responsible for two team leaders and around 18 manufacturing staff. “There is a defined route map for each of the grades,” says Pallas. “We have a well-defined training path to get everyone to a supervisor level.”
For manufacturing staff, the development programme involves off-the-job training in areas such as presenting information, leading tasks and team working plus NVQs in business improvement techniques and manufacturing operations.
For team leaders, the emphasis is on developing people management and workshop management skills.
People management is covered more intensively in the supervisor development programme, which takes between 55 and 60 days to complete.
Of course, not every new production worker aspires to the role of supervisor but the motivation to continue with training is fostered in other ways.
Everyone is regularly rotated so they have to learn new skills anyway and individual ability in areas such as just-in-time techniques and team leadership are assessed during annual appraisals. This provides a tangible way of measuring the impact of training on the whole staff, says Pallas.
“We are hoping to expand everyone’s capabilities as far as they can go. If you take our current deputy managing director, he started as a team leader in the engine shop,” he says.
Training is not always the answer to raising individual standards, he says. “It could be a project, coaching or working alongside an individual who is good at a particular job.”
But the company’s faith in training is demonstrated by the way it provides each employee with 12 hours of academic training in any subject of their choice each year. It also pays 80 per cent of any further education course costs as well.
“We’ve done everything from bricklaying to MBAs,” says Pallas. “One of the things we are keen to do is to keep everyone on that learning journey. It keeps them more receptive to training if they’re exposed to training all the time. We don’t want people leaving school and then having a gap of several years.”
He believes this approach fosters a positive attitude towards the company among the workforce.
“By investing in the whole individual, it shows the company is giving something back.” Annual labour turnover of around 4 per cent is a reflection of this, he says.
“Absenteeism was 2.8 per cent in August and the benchmark for the UK automotive sector is 7.3 per cent. It all goes together. Because they are well trained and motivated and other factors are right, people don’t tend to leave us.”
This can pose problems for Pallas after employees have been with NMUK for several years. “The biggest challenge for me is how to keep refreshing the knowledge of staff; the bulk of the staff we’ve got now will be the same in the future. You are constantly looking at new ways of doing things.”
When the company does recruit new workers, little expense is spared in their training.
Taking on individuals as a modern apprentice takes four-and-a-half years and costs £120,000 of which the Government pays 10 per cent. This compares with the £6,000 cost of training adults to do production work over a 13-week period.
There are usually around 100 modern apprentices at any one time. They end up as multi-skilled technicians capable of sorting out both electrical and mechanical problems virtually anywhere on the production line.
“They are very much like old-fashioned apprentices, spending a fair chunk of time at college and on block release courses,” says Pallas.
The graduate trainee programme lasts two-and-a-half years and has around 50 places at any one time.
“They’re not seen as elite, and the first thing we do is put them on the shop floor to build cars for two weeks,” says Pallas. “That way you learn how hard it is down there.
“As engineers, they have to think about the poor person that has to fit or carry the things they engineer.”
The one area of training where there is considerable input from the parent company is in management training.
Over the last three years, it has introduced a management development programme common to all Nissan plants which focuses on 11 interpersonal, leadership and management competencies.
Pallas says this creates more opportunities for transfers and promotions between plants. “As well as offering greater career prospects, it is much easier for managers to see what everyone expects of them.”
This approach may seem at odds with the principle of developing training to suit local conditions. But the overriding objective, contained in NMUK’s corporate philosophy and culture, is to “develop and expand the contributions of all staff by strongly emphasising training and by the extension of everyone’s capabilities”.
This philosophy, says Pallas, is what he constantly refers back to when developing any new training programme. “If it does not support that, we question whether it is the right thing we should be doing.”
Preparing for a new model
This month, 100 manufacturing apprentices start at the NMUK plant as it gears up for production of the new five-door hatchback.
The training has been developed in association with Gateshead College and focuses on the manufacturing skills needed to build cars.
The programme is for 16- to 23-year-olds, lasts 20 months and involves a mix of on-the-job training and block release, which results in a range of NVQ qualifications.
The cost is £130,000 per individual, more than for modern apprentices even though the programme is completed in less than half the time. This is because their salaries rise much more steeply and courses are tailored much more to the specific needs of the company.
Pallas says similar schemes have been run in the past when preparing for a new model.
“We always try to take on a number of young people, some unemployed and some people from other companies,” he says. “We wouldn’t recruit many engineers or technicians straight in because we want to grow our own. One reason is that you get a better product.”
Another is that pay rates at NMUK are above average in the region and the company wants to avoid the reputation of poaching skilled employees from other companies.
NMUK is recruiting 200 extra people for the £125m project that will also involve around 800 existing workers at the plant.
CV: Steve Pallas
2000 Training and development manager, NMUK
1998 Regional board member of the Sector Skills Council for Science, Engineering and Manufacturing Technologies (Semta)
1997 Senior training controller, NMUK
1988 Training controller, NMUK
1987 Management development manager for England and Wales, Dutton Forshaw Motor Group1986 Regional training manager, Dutton Forshaw Motor Group
1985 Centre manager, DATA Northern
1984 Training controller, DATA Northern
1983 Industrial chemist, Corning Glassworks
1982 Professional golfer
1976 Industrial chemist, Corning Glassworks