Background

Prior to this research there has been little evidence of how employers use NVQs/SVQs and how far they are integrated into human resource management strategies, and the evidence that existed was conflicting. Both Industrial Relations Services (IRS) and the Institute of Employment Studies (IES) found that few NVQ/SVQ-using employers reported that the qualifications were influencing aspects of Human Resource Management (HRM)- appraisals, individual training needs analysis, organisation-wide skills audits, implementing quality assurance schemes (i.e IiP, BS5750, TQM), labour planning, recruitment, promotion and pay.

However, more recently the Skill Needs in Britain survey (field work Spring 1994) found that, of the 85% of employers in the total sample who were aware of NVQs/SVQs, 56% used the qualification in recruitment and selection (cf. 1.5% in the IRS survey) and 34% used them in staff appraisal (cf. IRS 4%). There is evidence from a 1995 IES survey (Employers Use of the NVQ System) that employers move newly qualified NVQ employees to higher grades (16% of employers using NVQs/SVQs promote newly qualified NVQ/SVQ employees) and pay more to holders of NVQs (28% of employers implementing NVQs paid more to employees after they gained NVQs). There was scant evidence of the HRM strategies of employers of different sizes or industrial types and research which more systematically examined the relationship between NVQs and employers' HRM practices.

Objectives of the Research

The aims of this research were to assess the use of NVQs/SVQs in employers human resource management policies and to examine what effect these qualifications are having on employee earnings. The key objectives of the project were to examine the extent to which NVQs/SVQs have become integrated in employers' overall human resource management strategies and of its various components, including:

-     employer take-up of NVQs/SVQs (by size & industrial sector),
-     the length of employers involvement with NVQs/SVQs,
-     pay policy,
-     employee recruitment / selection,
-     employee promotion,
-     employee training needs analysis,
-     and other aspects of human resource management.

Research Methodology

This research was originally intended to measure the extent to which NVQs/SVQs were being used to help further employers' HRM practices. During the development of the work, the focus was expanded to take in all forms of vocational qualifications. The survey showed that NVQs were offered by around three quarters of those employers offering vocational qualifications of any kind. Thus, although it is not strictly correct to relate those questions about employer behaviour which were asked of vocational qualifications in general, to NVQs/SVQs in particular, the chances are that it will be reasonably safe to do so. This research still focuses mostly on employers use of NVQs/SVQs, but also includes data on employers use of traditional vocational qualifications and this provides some useful comparisons between the two different qualifications and their effects on employers' HRM.

This research was conducted by telephone interviews with a sample of 590 employers at establishments with 11 or more employees in Great Britain. The sample was structured by business sector and size to optimise coverage of employment as well as of employers. Fieldwork was conducted during February and March 1996. Results have been scaled up to business population estimates derived from the 1993 Employment Census. This process eliminates any imbalances in sampling that may have occurred during the survey. The 330 thousand employers with 11 or more employees covered by this survey employ some 16.6 million people.

Findings

Over half (58%) of employers with 11 or more employees 'offer' vocational qualifications of some kind to their staff. Most of these (42% overall) offer NVQs/SVQs. The offer is rarely compulsory- only around 15% of employers make it so- although where Skilled Manual workers are involved, the level of compulsion reaches more sizeable proportions (24%). NVQs/SVQs are currently on offer to 3.3 million employees or 20% of the workforce in Great Britain.

The offer of vocational qualifications of any kind increases steadily with employer size from 51% (38% offer NVQs/SVQs) in the 11-24 employees category to 84% amongst those with 200 plus employees (70% offer NVQs/SVQs). The overall level of employer take-up of NVQs/SVQs and by employer size is broadly similar to those found in the 1995 Skill Needs in Britain survey.

The longer an employer has been involved with NVQ/SVQs, the greater is the chance of them being offered to a majority of the workforce. It typically takes three years for most employers to be offering NVQ/SVQs to at least 50% of their workforce. In a large proportion of cases (41%) NVQs/SVQs are the first vocational qualification to be offered by the employer in the particular occupations involved. Otherwise NVQs/SVQs tend to operate alongside traditional vocational qualifications (38%) rather than replacing them (9%). Fewer employers have future plans to replace other vocational qualifications with NVQs/SVQs (5%).

Employers offering NVQs/SVQs are somewhat more active in rewarding employers than those employers offering vocational qualifications more generally. 58% of NVQ/SVQ employers give employers precedence, particularly promotion and further training opportunities and 42% recognise the attainment of an NVQ in terms of increased pay.

A third (31%) of those offering NVQs/SVQs (a fifth of all employers) look specifically for NVQs/SVQs during recruitment of some part of their workforce- 15% in Skilled Manual recruitment, 12% for Office grades, 9% Other Manual and 3% Management/Supervisory.

Nearly all employers (82%) conduct Appraisals or Training Needs Analysis for individuals, and 46% of them make use of written lists of skill needs or competencies for each individual job in the process. Employers offering NVQs/SVQs are much more likely to use lists of some sort (56%), (including Occupational Standards on which NVQs/SVQs are based) than those offering vocational qualifications (38%). The fact that only 42% of employers offering NVQs/SVQs make use of them or Occupational Standards in the most immediate role of supporting staff appraisals or training needs analysis, emphasises that there is some way to go for NVQs/SVQs to reach their full potential in HRM terms.

Employers offering NVQs/SVQs are slightly more likely than average to register the impact of qualifications on training thoroughness, targeting and volume, as well as on staff morale. This is probably a result of the fact that employers offering NVQs/SVQs have a size profile that is skewed towards larger firms compared to that of employers offering vocational qualifications more generally.

Conclusion

Those such as TECs and ITOs who help to implement NVQs/SVQs, generally find that they sit most comfortably with employers who have adopted a structured HRM approach. It is thus no surprise that NVQs/SVQs have been most readily adopted by larger employers and others who are more advanced in HRM terms. Such employers tend to use a wider range of tools in their HRM and in these circumstances it is perhaps to be expected that employers using NVQs/SVQs will have incorporated them into their wider HRM activities.

This research shows that NVQs/SVQs are beginning to play a part in employers' wider HRM practices. However at the moment their use in this way tends to be restricted to minority of employers. This is mainly due to the limited extent to which they are offered to employers' workforces, which in turn is due to their evolutionary position.

It seems unlikely that NVQs will have a more significant impact on employers' HRM practices until a critical mass in terms of employee coverage is reached within each employer's workforce- or at least within a significant component of it. The alternative is for employers to operate different HRM systems for small minorities of employees- something that they are generally reluctant to do.

Although very few employers show signs of dropping their involvement with NVQs/SVQs, there is only a slow drift towards the critical mass that will encourage their fuller integration across the full breadth of HRM activities. Unless more is done to convince employers of the relevance, potential value and importance of NVQs/SVQs across the breadth of their workforces they will remain apart from the mainstream of their HRM practices beyond the training area.

Biographic Notes

Edwin Smith has been a Director of IFF since 1973. Since then he has been involved in a wide range of work for the former Employment Department. He was Project director on the Skill Needs in Britain surveys 1989 to 1994.

The Department for Education and Employment undertakes research to help achieve its aim of supporting economic growth by promoting a competitive, efficient and flexible labour market.
Research Briefs summarise key findings from reports that are published in the Department's Research Series.

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Employers' Uses of NVQs/SVQs in Human Resource Management
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