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The Skills Accord
Annual Review Report
May 2017
Copyright
All rights reserved. No part of this publication may be reproduced, stored in a retrievable
system, or transmitted in any form or by any means whatsoever without prior written permission
from the copyright holder.
© EU Skills Group May 2017
Registered Office: Friars Gate, 1011 Stratford Road, Shirley, Solihull, B90 4BN
Registered no: 3812163
W: www.euskills.co.uk
T: 0845 077 99 22
A: Friars Gate, 1011 Stratford Road, Shirley, Solihull, B90 4BN
The Skills Accord
Annual Review Report
Executive Summary ............................................................................................................. 2
1. The Skills Accord Concept ............................................................................................. 5
2. The Annual Review ........................................................................................................ 9
3. Annual Review Outcomes .............................................................................................12
4. Summary and Recommendations for Future Roll-out ....................................................24
Glossary ...............................................................................................................................27
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 2 of 31
Executive Summary This report presents the outcomes and achievements of the Annual Review accomplished by the
signatory companies.
The Challenge The Energy and Utilities Skills Partnership (formerly the Energy and Efficiency Industrial Partnership)
set the challenge: can procurement practices be leveraged to encourage investment in training and
development across the supply chain? The answer to the question was yes and the solution
developed was the Skills Accord.
The pressure on contractors to remain competitive often results in underinvestment in skills.
Procurement policies provide a means of delivering change at scale: introducing the same
requirements for all contractors, adopting a consistent approach to managing relationships and
measuring performance fairly and transparently. A working sub-group (Skills Accord Task and Finish
Group) has developed the Skills Accord as a vehicle for delivering this transformation.
The Skills Accord sets out five commitments designed to promote and lock-in sustained
investment in the technical and operational skills the sector needs most via procurement
practices. The aim is that it should become essential for signatories to accept the commitments within
the Skills Accord and, in turn, to cascade them down to their own suppliers. The resulting Skills Accord
has five robust and challenging commitments that require signatory companies to ensure that
responsible procurement practices are used to drive investment in skills through the delivery of
contracts.
Amey, National Grid, SSE, Thames Water and UK Power Networks have the led the
development of the concept and the piloting of the Skills Accord. They have been consulting on
this approach to procurement and investment in training with their strategic suppliers and have on-
boarded 19 of them. The 26 signatory companies, for the pilot year, are:
Key Outcomes and Recommendations In order for signatories to measure the impact of signing up to the Skills Accord, it is necessary for them
to complete an Annual Review, which is documented in Commitment 5. The table below summarises
the key outcomes of the Annual Review and key recommendations to consider for the subsequent roll-
out of the Skills Accord initiative.
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 3 of 31
Skills Accord Commitments
Summary of Outcomes Recommendations for subsequent roll out
Commitment 1
To address sector-wide
skills gaps
and shortages
Contribute to 5% sector
target, based on company’s
requirement determined
through analysis of sector
skills needs.
Measure of Success
Signatory companies will
support the sector to reach,
in addition to contribute to its
overarching target. This
target consists of 5% of the
technical or operational
headcount enrolled on
relevant skills development
programmes.
The training figures for signatories ranges from 2% to
33%.
In addition the majority of signatories used robust
processes or systems in their organisation to ensure
current and future resource requirements were
adequately met.
The recommendations for Commitment
1 are:
1. To set the percentage target at 10%
of the technical or operational
headcount enrolled on relevant skills
development programmes and use the
10% as a baseline figure to measure
future improvement.
2. In order to measure and review
impact of signatory companies’ skills
development on sector wide skills
shortages, the recommendation is to
request precise details of training
programmes in the roll-out year. In
addition the Training Eligibility Criteria
(TEC) will be further refined.
3. For the Skills Accord Steering Group
to recommend skills shortage areas to
target. For pilot companies to share
their best practice for workforce
planning.
Commitment 2
To promote signing up to
Accord through the
Supply Chain
Encourage suppliers to
become signatories
and agree training targets
with suppliers.
Measure of Success
The lead signatories will on-
board 4-5 of their strategic
suppliers to become
signatories and work
towards embedding the
commitments.
The 5 lead companies, Amey, National Grid, SSE,
Thames Water and UK Power Networks, all met this
requirement.
In the pilot year, Commitment 2 was not applicable for
the 19 signatories on-boarded by the lead companies.
This Commitment will apply to the 19 suppliers in the
roll-out year and all new signatories.
The recommendations for Commitment
2 are:
1. For all signatories (lead and
suppliers, new and existing) to on-
board at least one supplier and agree
with Lead Companies the suppliers to
engage in future years, as well as re-
engage with existing suppliers and
ensure their commitment for roll-out.
2. Good practice was demonstrated by
Lead Companies in engaging and
leading their suppliers to embed the
commitments. This practice ought to be
shared with signatories at the best
practice workshop.
Commitment 3
To promote relevant skills
development
across the Supply Chain
through
procurement
Develop and deliver
responsible
The recommendations for Commitment
3 are:
1. To review whether it is appropriate to
ask tier 2 and SME suppliers to on-
board suppliers (Commitment 2) and
embed Commitment 3.
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 4 of 31
procurement practices
through supply chain
on skills delivery.
Measure of Success
Signatories will embed
relevant skills development
in their procurement
process, evaluation criteria
and contracts, where
excellence is demonstrated,
by including a reference to
the Skills Accord and
necessitate suppliers to
report against their plans
and proposals.
Good practice was demonstrated in embedding skills
development into procurement processes. The annual
review identified that most companies were including
the Skills Accord and skills development in the pre-
qualification and tender technical evaluation in the
procurement process.
A core feature of Commitment 3 was for signatories to
consider whether it is appropriate to require its
suppliers to put forward plans and proposals for
relevant skills development and to necessitate
suppliers to report against these plans and proposals.
The annual review found this was embedded primarily
at contract negotiation stage or delivery stage of the
contract.
2. To further develop tools to help
signatories to embed this commitment.
In addition, to review compliance
criteria and weighting for this
commitment.
3. Embedding requirements into
contracts was the most difficult and
challenging part of this Commitment
and, moving forward, this is an area to
review.
4. For signatory companies, the
recommendation is to embed more
explicitly current and future workforce
development into their evaluation
criteria and contracts, referencing the
Skills Accord where applicable.
5. In terms of criterion 3.2, further
exploratory work is required on how
signatories can embed and evidence
this commitment.
6. Pilot companies to share ways in
which skills development can be
embedded into the procurement
process.
Commitment 4
To continuously improve
performance
Continuous improvement of
signatories’
sustainable work practices.
Measure of Success
Signatory companies will
demonstrate continuous
improvement in their own
sustainable workforce
practices and that of their
suppliers.
In the analysis it was noted that the compliance
criterion for this Commitment had been interpreted
quite differently by the signatory companies.
The recommendations for Commitment
are 4:
1. To modify the compliance question
and criteria and provide examples to
guide signatories on what is required.
Commitment 5
To monitor and report
Annual review and reporting
of company
and sector performance
Measure of Success
All signatory companies will
complete the annual review
reporting their compliance
with commitments.
The recommendations for Commitment
5 are:
1. For most signatories to improve from
good to excellent, the focus needs to
be on improving their workforce
development strategies and plans.
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 5 of 31
1. The Skills Accord Concept
Introduction This report presents the outcomes and achievements of the Annual Review accomplished by the
signatory companies. There are four sections to the report:
i. Section 1 provides the background of the Skills Accord initiative and the development of the
concept, outlining the contractor and supplier skills issues that are being addressed and why
the procurement lever was used.
ii. Section 2 describes the Annual Review process and how it fits into the Skills Accord Initiative.
iii. Section 3 is the core of the report and presents the outcomes of the Annual Review.
iv. Section 4 summarises the outcomes and achievements and presents the recommendations to
consider for future roll-out.
The Challenge: Can procurement practices be leveraged
to enhance training through the supply chain? This was the challenge set by the Energy and Utilities Skills Partnership (formerly the Energy
Efficiency Industrial Partnership). The answer to the questions was yes and the solution developed
was the Skills Accord.
The issues the Energy and Utilities Skills Partnership is trying to address with the Skills Accord
initiative include:
Encouraging investment in skills and training throughout the supply chain: working
across the supply chain and helping them collaborate for mutual benefit on skills investment is
essential. This ensures sustainable supply chains as well as providing opportunities to
develop new talent. It is proven that investment in skills training brings a high level of return
yet there is still an underinvestment in skills.1
Encouraging investment in workforce training: The supply chain predicts it will fill 83% of
its future vacancies by going to the marketplace compared to 26% for asset owners, who have
a much heavier reliance on internal moves, growing talent and promoting from within.2 This
initiative will help to shift the balance so that suppliers move towards greater investment in
internal workforce development.
Addressing technical and operational skills shortages: The energy and utility sector faces
a particularly high proportion of hard to fill vacancies, which are higher than other UK sectors.
In addition, most of the vacancies are in the skilled and technical trades. Due to the nature of
the role, there is a longer lead time to competence and also this sector faces greater
competition for skills from other sectors.3
Achieving parity across the supply chain: Building on the experience of Crossrail, TfL and
the UK Government’s Commercial Executive, a new way of incentivising supply chains is
1 Department for Business, Innovation & Skills (2015), ‘Measuring the Net Present Value of Further Education in England’ 2 EUSG (2016) Workforce Planning Research Results 3 HM Treasury, (2015) National Infrastructure Plan for Skills, HMT
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 6 of 31
required to generate the necessary capacity and capability the sector needs by retraining the
current workforce and creating new additional apprenticeships and traineeships.4 To truly
succeed, the sectors need parity across their entire supply chain.
Why a Procurement centred Skills Accord?
Aligning with the UK Government’s Procurement and
Skills Agenda
Aligning with the Apprenticeship Reforms
The apprenticeship reforms and levy which went live on the 6th April 2017 will have an impact on
companies’ training and workforce strategies. The Skills Accord seeks to address technical skills gaps
and shortages and one of the training pathways will be apprenticeships. Addressing the technical skills
issue and encouraging suppliers to develop their workforce aligns with the aims of the reforms. In
particular, the distribution of unspent levy funds to suppliers in the sector and support for SMEs will be
key enablers in the Skills Accord. This Skills Accord initiative also demonstrates how the funds could
be distributed to suppliers in the other infrastructure sectors.
Delivering on Procurement
The initiative aligns with the UK Government’s commitment to skills outlined in the Treasury’s National
Infrastructure Plan for Skills. From 1 April 2015, companies bidding for large public infrastructure
projects are required to demonstrate their commitment to skills, by ensuring and incentivising skills
investment through procurement processes.5
Use of procurement process as a lever for skills investment has been reinforced in the Government’s
‘Building our Industrial Strategy: Green Paper’. The strategy sets out the proposed approach to the
Government’s long-term policy framework for investment decisions. Improving procurement is one of
the 10 pillars of the strategy “we must use strategic government procurement to drive innovation and
enable the development of UK supply chains. Used strategically, government procurement can
encourage innovation, competition, and investment in skills”.6
To meet this requirement, the UK Government is planning to roll out of a “balanced scorecard”, an
approach recently developed by the Cabinet Office. The balanced scorecard will be utilised across all
major construction, infrastructure and capital investment projects over £10 million, including those in
the recently published National Infrastructure and Construction Pipeline. The scorecard aims to ensure
that the impact of procurement on the growth of small businesses and UK supply chains is accounted
for. Skills and apprenticeships will be reviewed when considering the overall value for money
represented by different bids.7
Driving the skills step change through procurement
In 2015 the Energy and Utilities Skills Partnership Council established a Contractors’ Forum of senior
executives to review procurement practices and identify the changes necessary to address these skills
issues. Currently, the pressure on contractors to remain competitive often results in underinvestment
4 HM Treasury, (2015) National Infrastructure Plan for Skills, HMT 5 ibid 6 Department for Business, Energy and Industrial Strategy (2017) Building our Industrial Strategy: Green Paper 7 ibid
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 7 of 31
in skills. Procurement policies provide a means of delivering change at scale: introducing the same
requirements for all contractors, adopting a consistent approach to managing relationships and
measuring performance fairly and transparently. A working sub-group of procurement specialists
(Skills Accord Task and Finish Group) and their legal advisers have developed the Skills Accord as a
vehicle for delivering this transformation.
The Skills Accord Commitments The Skills Accord sets out five commitments designed to promote and lock in sustained investment in
the technical and operational skills the sector needs most via procurement practices. The aim is that it
should become essential for signatories to accept the commitments within the Skills Accord and, in
turn, to cascade them down to their own suppliers. The resulting Skills Accord has five robust and
challenging commitments that require signatory companies to ensure that responsible procurement
practices are used to drive investment in skills through the delivery of contracts. The commitments are
outlined below in Figure 1 and more detail is presented in section 3.
Figure 1: The Skills Accord Commitments
Skills Accord Commitment
Outline of the Commitment
To address sector-wide skills gaps and shortages
Contribute to 5% sector target, based on company’s requirement determined through analysis of sector skills needs.
To promote signing up to Accord through the Supply Chain
Encourage suppliers to become signatories and agree training targets with suppliers.
To promote relevant skills development across the Supply Chain through procurement
Develop and deliver responsible procurement practices through supply chain on skills delivery
To continuously improve performance
Continuous improvement of signatories’ sustainable work practices
- To monitor and report
Annual review and reporting of company and sector performance
The Pilot 2017 The Skills Accord was a 12 month pilot launched in April 2016, led by five lead companies: Amey,
National Grid, SSE, Thames Water and UK Power Networks, who have been consulting on this
approach to procurement and investment in training with their strategic suppliers (26 companies have
been consulted) over the pilot period. The three objectives of the pilot year were to:
Engage and support pilot companies to embed the Commitments
Test the processes and procedures of the Skills Accord
Evaluate the long-term delivery
2
21
1
3
21 4
21 5
21
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 8 of 31
The 19 suppliers on-boarded by the Lead Companies were made-up of both Tier 1 and Tier 2
suppliers, see Figure 2 for the 26 signatory companies involved in the pilot.
Figure 2: The signatory companies
The official company signing of the Skills Accord by the 26 pilot companies took place at the launch
event on 11 October 2016 at the House of Lords. By signing the Skills Accord, companies committed
to embedding the five commitments and participating in the annual review.
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 9 of 31
2. The Annual Review
What is the Annual Review? In order for signatories to measure the impact of signing up to the Skills Accord, it is necessary for
them to complete an Annual Review, which is documented in Commitment 5. For this Commitment all
signatories to the Skills Accord agree that monitoring compliance is a key determining factor in
successfully achieving the overarching aims of the Skills Accord. Therefore, each year, signatories to
the Skills Accord commit to:
reporting the percentage (an average for the year) of technical and operational headcount
involved in the energy and utilities sector, undertaking relevant skills development within their
organisation
reporting on their company’s compliance with the commitments of the Skills Accord.
Signatories to the Skills Accord were required to carry out an annual review of their performance
against the commitments. This involved two processes:
Quantitative Assessment – Measuring the sector target for compliance of Commitment 1:
to address sector wide skills gaps and shortages.
Qualitative Assessment – Evaluation questionnaire – to measure compliance against
Commitments 1 to 4.
In December 2016, the pilot year annual review was initiated and the review process was completed
by the end of March 2017. 26 companies tested their achievements against the commitments over the
pilot year.
In the pilot year the mandatory requirements were for all companies to meet Commitments 1, 4 and 5;
and Commitment 3 for Asset Owners and Tier 1 contractors with more than 50 employees.
Commitment 2 was not applicable for 19 suppliers as only the five leading companies were committed
to on-boarding suppliers during the pilot year.
A compliance criterion was developed which outlined the requirements signatories needed to meet for
the five individual commitments. There was a total of seven compliance criteria and each one was
scored out of 3, where 3 was excellent compliance and 0 was compliance not addressed (Figure 3
outlines the agreed scoring matrix). Therefore, the maximum score achievable was 21. However:
for the 19 suppliers the total score achievable in the pilot year was 18, as Commitment 2 was
not a requirement for them;
Commitment 3 was not applicable to all of the suppliers, as some do not procure or have a
supply chain (or have had no live procurements in this period). Therefore, the maximum score
achievable for these suppliers was 12.
Figure 3: Agreed scoring matrix Type of Signatory Maximum Score for Pilot Year Exempt Criteria
Lead company 21 None
Supplier with supply chain 18
Commitment 2 (only applicable in the
pilot year)
Supplier without procurements 12 Commitments 2 and 3
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 10 of 31
To achieve the Skills Accord recognition, signatories must score 2 or above across all seven
applicable criteria, as illustrated in green in Figure 4. The two outcomes that were proposed for award
achievement were:
Met the commitments – the signatory company has achieved a score of 2 or more for each
applicable commitment.
Working towards the commitments - the signatory company has achieved an average score of
less than 2 for each applicable commitment.
It was agreed by the Task and Finish Group that no awards would take place in the pilot year.
Figure 4: Scoring Matrix
Compliance Criteria Scoring
Commitment Criteria No. 0-Not
addressed
1-Some
compliance
2-Good
compliance
3-Excellent
compliance
1. To address sector wide skills gaps and
shortages
1.1
1. To address sector wide skills gaps and
shortages
1.2
2. To promote signing up to the accord through the
supply chain
2.1
3.To promote relevant skills development across
the supply chain through procurement
3.1
3.To promote relevant skills development across
the supply chain through procurement
3.2
4.To continuously improve performance 4.1
5.To monitor and report 5.1
Annual Review Results 24 of the 26 signatory companies completed the Annual Review. Figure 5 presents a breakdown of
signatory companies’ sector representation: most signatories represented more than one industry,
ensuring that an adequate spread was achieved for the Skills Accord pilot year.
Figure 5: Business and industry areas
0 2 4 6 8 10 12 14 16 18
Power - transmission/ distribution
Water treatment/ sewerage
Gas distribution
Power - generation (including renewables)
Smart meters
Other (please specify)
Waste management
What part of the business or industry areas does this Skills Accord submission cover?
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 11 of 31
While the average total score is just 12, the figure is skewed by two low scoring companies. Figure 6
presents a breakdown of the average signatory score by type of signatory. The five Lead Companies
performed very well with an average total score of 17 out of 21. The signatories that have no suppliers
also performed well with an average score of 9 out of 12. Whereas suppliers with supply chains
averaged a very respectful 11 out of 18, some suppliers provided over and above what was required
in the pilot year. Overall, a good set of evidence documents was provided to support compliance.
Figure 6: Breakdown of signatory scores
Type of Signatory Maximum Score for Pilot Year Average Score
Lead company 21 17
Supplier with supply chain 18 11
Supplier without procurements 12 9
As illustrated in Figure 7 below, achievement of Commitments 1, 4 and 5 was good among the
signatures. Commitment 2 was achieved by the lead companies, but was not applicable to supplier
companies. Commitment 3 was the most challenging for the majority of signatories to achieve, due to
the requirements of the Commitment: signatories were required to make changes to their procurement
policies and practices, as well as have live tendering and contracting happening in the year, in order to
embed the commitment. Nevertheless, good results have been achieved by many of the signatories.
The next sections provide further details on these outcomes.
Figure 7: Overall compliance of pilot companies by criteria
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Criteria1.1
Criteria1.2
Criteria2.1
Criteria3.1
Criteria3.2
Criteria4.1
Criteria5.1
0 0
19
6 7
1 01
7
0
5
10
7
13
10
1
12
7
11
14
20
74
1 0
57
Rating 3 - excellent
Rating 2 - good
Rating 1 - some
Rating 0 - not addressed
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 12 of 31
3. Annual Review Outcomes
About the Commitment Commitment Requirement
The organisation commits to supporting the energy and utilities sector in reaching its target
of 5% of the technical or operational headcount enrolled on relevant skills development
programmes each year.
Compliance Criteria for signatories to achieve
Criteria 1.1 – Signatory companies must complete the quantitative assessment. For this,
they will need to supply their training figures broken down by percentage of operational/
technical head count on eligible training, forecast of training requirements as a percentage
and training broken down by levels.
Criteria 1.2 - The signatory must demonstrate that they use robust processes or systems to
ensure current and future resource requirements, for staff involved in technical and/or
operational activities, can be met.
Commitment 1: To address sector wide skills gaps and
shortages requires signatory companies. Signatories must contribute and support the energy and utilities sector to reach, its target of 5% of the
technical or operational headcount enrolled on relevant skills development programmes. To achieve
this commitment, signatories were required to supply a detailed breakdown of their training figures for
the year and also demonstrate that they use robust processes or systems to ensure that current and
future resource requirements can be met.
Compliance Achievement The 5% Target 23 (of 24) of the companies achieved Criterion 1.1 to supply training figures broken down by the
percentage of operational/ technical head count on eligible training, as well as to supply a forecast of
training requirements up to Year 3. The majority, 75% (18 signatories), achieved a rating of 3 – which
represents an excellent level of compliance. Thus, a full set of training figures was produced, which
included forecasting figures and current training broken down by level.
COMMITMENT 1: TO ADDRESS SECTOR WIDE
SKILLS GAPS AND SHORTAGES
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 13 of 31
17 (71%) signatory companies met criterion 1.2, demonstrating that they use robust processes or
systems to ensure that current and future resource requirements are met. The remaining 7 companies
were working towards criterion 1.2.
The signatories were able to demonstrate that all of the training included in their figures met the
Technical Eligibility Criteria (TEC) developed for the Skills Accord. Please see Figure 8 for the TEC.
Figure 8: Technical Eligibility Criteria (TEC) training rules
1. Related to the Power, Gas or Water utilities businesses
2. For technical, design or operational roles related to work on or associated with the asset. This will
include design, planning, construction, operations, maintenance and decommissioning roles - i.e. the full
life-cycle of the asset
3. A significant training intervention (>3 months) that includes assessment of competence and / or
knowledge and leads to a qualification or award (internally or externally verified), for example
apprenticeship, traineeship, HNC/HND, graduate programme, internal programme etc.
4. A significant training intervention also includes internal training programmes which consist of on and off
the job training for specific job role. This could be up-skilling into a new job role or a new recruit receiving
training for the role.
5. The course of study or training can be shown to directly contribute to the development of skills or
capability to perform an operational or technical role
6. For job-role levels 1 to 6 (and Scottish equivalent) where there is a skills need in the business or sector
Outcomes The signatory companies that completed the annual review reported that in the pilot year circa 10% of
the workforce was enrolled on relevant skills development programmes. The technical and operational
headcount for the 24 signatory companies equalled 32,144. This equates to approximately 3,057 of
the 32,144 workforce reported on technical and operational training. The training figures for individual
companies ranged from 2% to 33%. The reported forecasting figures indicate that there will be peaks
in figures for some companies due to smart metering training requirements, the new AMP cycle for
water, SMEs picking up new technologies and signatories included in the pilot being high performers.
These factors tend to drive up skills development in the short-term. As Figure 9 below demonstrates,
next year the percentage enrolled on relevant skills development programmes is higher but over a
three year period it averages out to 10%.
Figure 9: Percentage on Eligible Training
No on eligible training
Head count % on eligible training
Pilot year 3,057 32,144 10%
2017/18 Forecast
4,098 31,633 13%
3 year Forecasting average 3,252 33,003 10%
Of the 3,057 on eligible training over a third of employees are enrolled on relevant skills development
programmes at Level 2 (34%), with only 14% at Level 1 and the remaining, which is over half (52%) at
Level 3 and above. As a proportion of the workforce at each level, 16% of those in Level 2 job roles
are on technical and operational training programmes and 25% at Level 3 and above. This compares
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 14 of 31
to only 5% in Level 1 job roles, as illustrated in Figure 10. This demonstrates a prevalence of, and
requirement for, technical and operational training to be at Level 2 and above.
Figure 10: Training by level (to include)
Workforce planning The majority of signatories used robust processes or systems in their organisation to ensure current
and future resource requirements were adequately met. The training courses or interventions used
included Apprenticeships, NVQs, Internal Training Programmes, Foundation Degrees, Graduate
programmes, Diplomas and Management and Supervisory courses.
In addition, 7 companies conducted very comprehensive workforce planning, at least on an annual
basis, with some succession planning and Training Needs Analysis (TNA). These companies provided
robust evidence in terms of strategy documents, to illustrate compliance of the company.
05
1015
20
Level 1 - Operative
Level 2 - Crafts person
Level 3 - Technician
Level 4-6 - Engineer or specialist
Level 1 - Operative Level 2 - Crafts person Level 3 - TechnicianLevel 4-6 - Engineer
or specialist
Training % by level 5 16 13 12
Training % by level
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 15 of 31
About the Commitment Commitment Requirement
Encourage suppliers to become signatories and agree training targets
Compliance Criteria for signatories to achieve
Criteria 2: The signatory company must encourage, where applicable, their supply chain
partners to become signatories to the Skills Accord.
Commitment 2: to promote the signing up to the Accord
through the supply chain For the pilot year, the requirement for lead signatories was to on-board 4-5 of their strategic suppliers
to become signatories and work towards embedding the commitments in their respective
organisations. There was also a condition for the Lead Companies to agree training targets with their
suppliers for the pilot year. This Commitment was not applicable to 19 suppliers in the pilot year.
Compliance Achievement & Outcomes The 5 lead companies, Amey, National Grid, SSE, Thames Water and UK Power Networks, all met
this requirement. They encouraged, where applicable, their supply chain partners to become
signatories to the Skills Accord, and they have worked with them to set achievable skills development
targets for their companies, Figure 6 presents the the suppliers each lead company engaged.
In the pilot year, Commitment 2 was not applicable for the 19 signatories on-boarded by lead
companies. Therefore, they were not expected to bring on any of their suppliers. This Commitment will
apply to the 19 suppliers in Year 1. In readiness for this, a number have prepared an engagement
strategy for next year and some have selected suppliers and started discussions with them.
Figure 11: Lead Companies and their strategic suppliers on-boarded
Lead Companies
Suppliers On-boarded
T&K Gallagher Ltd
IWJS
Sapphire Utility Solutions
Peter Duffy Ltd
Complete Asset Life Mgt
COMMITMENT 2: TO PROMOTE SIGNING UP TO THE
ACCORD THROUGH THE SUPPLY CHAIN
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 16 of 31
Balfour Beatty
Siemens
GE/Alstom
Amey
RJ McLeod
Kier Utilities
Lanes group
Costain
Balfour Beatty
NWH Treatment
Amec Foster Wheeler
McNicholas
The Clancy Group
Morrison Utility Services
Morgan Sindall
ABB
Skanska
Laing O’Rourke
Murphy
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 17 of 31
About the Commitment Commitment Requirement
Develop and deliver responsible procurement practices through the supply chain on skills
delivery.
Compliance Criteria for signatories to achieve
Criteria 3.1: The signatory company must use, where applicable, responsible procurement
practices to promote relevant skills development through the supply chain.
Criteria 3.1: The signatory company must give proper consideration as to whether it is
appropriate to require its suppliers to put forward plans and proposals for relevant skills
development and to require suppliers to report against these plans and proposals.
Commitment 3: To promote relevant skills development
across the supply chain through procurement. This is the core or the heart of the Skills Accord. To achieve this Commitment signatory companies
are required to develop and deliver responsible procurement practices through the supply chain on
skills delivery. To meet this commitment, signatories must embed relevant skills development in the
procurement process, evaluation criteria and contracts, where excellence is demonstrated by including
a reference to the Skills Accord (the requirement is classed as Criterion 3.1). In addition, (classed as
Criterion 3.2) signatories must consider whether it is appropriate to require its suppliers to put forward
plans and proposals for relevant skills development and to necessitate suppliers to report against
these plans and proposals.
Compliance Achievement 13 (54%) signatories have embedded the criteria and 11 (46%) are working towards this Commitment
(see Figure 11) which is almost an even split of signatories. All five Lead Companies achieved good
levels of compliance against this criterion. This Commitment is not applicable to 5 out of the 11 of
those companies that were classed as working towards this Commitment as they do not procure or
have a supply chain in this sector. It was found this was the case for all of the Tier 2 suppliers involved
in the pilot.
COMMITMENT 3: TO PROMOTE REVEVANT SKILLS DEVELOPMENT
ACROSS THE SUPPLY CHAIN THROUGH PROCUREMENT
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Figure 12: Compliance for Commitment 3
In terms of Criterion 3.2 (the organisation gives proper consideration to whether it is appropriate to
require its suppliers to put forward plans and proposals for relevant skills development and require
suppliers to report against these plans), 7 signatory companies demonstrated good compliance for this
Criterion and a further 9 signatories demonstrated some compliance. 4 of the Lead Companies
demonstrated good compliance. Some suppliers also presented good practice in this area. In the roll-
out year, further work is required to embed and evidence this commitment.
Outcomes 13 signatory companies demonstrated good practice in embedding skills development into
procurement processes and the evaluation criteria. However, it was difficult to determine in some of
the cases whether this was existing practice or influenced by this Skills Accord commitment. This is an
area to review and monitor in Year 1.
Figure 13, below, outlines where in the procurement process the Skills Accord could be embedded
along with recommendations of how this could be done. The Annual Review identified that most
signatories included the Skills Accord and skills development in the pre-qualification and tender-
technical evaluation stage in the procurement process, either by referencing skills development in the
procurement policy and/or adding a question in the pre-qualification and tender technical evaluation.
However, in a number of cases, the actual mention of Skills Accord commitments is not explicitly
referenced or mentioned.
0
2
4
6
8
10
12
Rating 0 - notaddressed
Rating 1 -some
Rating 2 -good
Rating 3 -excellent
Criteria 3.1 6 5 12 1
Commitment 3
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 19 of 31
Figure 13: Embedding the Skills Accord principles into Procurement Process
1 Pre-Qualification (PQQ)
Quantitative pre-
qualification
through sourcing
platforms such as
Achilles
2a Tender -Technical Evaluation
Detailed qualitative
and technical
analysis of
potential suppliers
2b Tender - Commercial Evaluation
Detailed
commercial
analysis of
potential suppliers
2c Tender - Due Diligence
Hands on
assessment of
potential suppliers,
including:
- site visits
- behavioural
assessment
3 Final Offer
Best and Final
Offers (BAFO)
including both
technical and
commercial
submissions
2a.“Demonstrate and evidence as an engaged business how you ensure continuity of skills across key areas of your business specifically around attract, recruit retain cycle, please reference national accords and ongoing work such as EU Skills Accord activities and outputs in your response.”
1. “How many directly employed resources does your organisation have within [insert] role / skill set?” Questions such as this can be used to down-select suppliers based on their capacity and capability to deliver the services required under the proposed contract.
2b. We do not envisage any direct application of the principles of the Accord within the Commercial Evaluation process.
2c. Alongside site visits and behavioural assessments, it may be prudent for sourcing organisations to undertake further due diligence by interviewing existing clients of their proposed suppliers.
3. Final opportunity for suppliers to demonstrate their commitment to the Accord and the wider industry skills agenda
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A key requirement for Commitment 3 is locking in skills development into contracts. Nearly all of the
signatory companies outlined that they were in the process of embedding skills development into live
contracts. This part of the Commitment was the most difficult and challenging to embed and moving
forward this is an area for improvement. Four signatories demonstrated that skills development was
included in live contracts this year.
Figure 14: Skills development embedded into procurement
Embedded into procurement process
Embedded into tender evaluation
Embedded into contracts
Put in plans and proposals and reported against it
No of signatories which has achieved this
13
13
4
7
Another core feature of Commitment 3 was for signatories to consider whether it is appropriate to
require its suppliers to put forward plans and proposals for relevant skills development and to
necessitate suppliers to report against these plans and proposals. The annual review found two types
of practices were in place. These are:
1. Contract negotiation stage – signatories develop plans and proposals for skills development at
contract stage which are then reviewed at contract review meetings which take place on a
monthly or annual basis.
2. Delivering the contract stage - the other practice in place is to only incorporate and track skills
development at monthly meetings or annual review meetings.
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About the Commitment Commitment Requirement
Continuous improvement of signatories sustainable skills and training interventions
Compliance Criteria for signatories to achieve
Signatory company demonstrates its Commitment to continuous improvement in its own
sustainable workforce practices and that of its suppliers.
Commitment 4: To continuously improve performance The signatories to this Accord commit to driving continuous improvement in their own sustainable
workforce practices and those of their suppliers, in relation to their ability to maintain and enhance the
technical and operational skills within the workforce.
Compliance Achievement & Outcomes More than two-thirds (67%) 16 companies, either achieved good or excellent compliance, see Figure
14 below, thus demonstrating a commitment to continuous improvement in their company’s
sustainable workforce practices and that of their suppliers.
Figure 15: Continuous Improvement Measures
0
2
4
6
8
10
12
Rating 0 - notaddressed
Rating 1 - some Rating 2 - good Rating 3 -excellent
Commitment 4 1 7 11 5
SIG
NA
TOR
Y A
CH
IEV
EMEN
T
Commitment 4
COMMITMENT 4: TO CONTINUOUSLY IMPROVE
PERFORMANCE
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In the analysis it was noted that the compliance criteria for this Commitment had been interpreted
quite differently by the signatory companies. Therefore, a range of measures has been included such
as workforce strategies, training provision, quality of training, internal annual reviews and review
meetings with suppliers. Consequently this criterion will need to be clarified further for the Annual
Review process in in the roll-out year. The actual requirement for signatory companies was for them to
have a sustainable workforce strategy in place with continuous improvement measures included for
the company (and for their suppliers); as well as including measures to improve the implementation of
the Skills Accord commitments.
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About the Commitment Commitment Requirement
Annual review and reporting of company and sector performance
Compliance Criteria for signatories to achieve
The signatory company must complete and provide an annual report against the training
eligibility target. In addition, it must report on their compliance with the commitments of the
Skills Accord.
Commitment 5 All signatories to the Skills Accord agree that monitoring compliance is a key determining factor in
successfully achieving the overarching aims of the Skills Accord. Therefore each year signatories to
the Skills Accord commit to reporting the percentage (on average over the year) of operational
headcount involved in the energy and utility sector undertaking relevant skills development within their
organisation and their compliance with the commitments of the Skills Accord.
Compliance Achievement & Outcomes Nearly all (21) signatory companies achieved good or excellent for this Commitment and thus met the
criteria. These companies’ quantitative assessments and qualitative questionnaires were fully
completed, with relevant and comprehensive evidence provided. In addition a thorough Improvement
Plan was included.
Those that achieved good compliance all achieved excellent compliance in the quantitative
assessment; but only received good compliance in the qualitative component or the workforce
planning (criteria 1.2) requirement was not fully met.
COMMITMENT 5: TO MONITOR AND REPORT
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4. Summary and Recommendations for
Future Roll-out
The table below, summarises the key outcomes of the Annual Review and key recommendations to
consider for the Skills Accord initiative roll-out.
Commitment Summary of
Outcomes
Recommendations for
roll-out 1. To address sector wide
skills gaps and shortages
requires signatory companies to
contribute and support the
energy and utilities sector to
reach its target of 5% of the
technical or operational
headcount enrolled on relevant
skills development programmes.
The signatory companies
reported that in the pilot year
10% of their workforce was
enrolled on relevant skills
development programmes.
The training figures for
signatories range from 2% to
33%.
In addition, the majority of
signatories used robust
processes or systems in their
organisation to ensure current
and future resource
requirements were adequately
met.
The recommendations for Commitment
1 are:
1. To set the percentage target at
10% of the technical or operational
headcount enrolled on relevant skills
development programmes and use the
10% as a baseline figure to measure
future improvement.
2. To measure and review impact of
signatory companies’ skills
development, on sector wide skills
shortages. The recommendation is to
request precise details of training
programmes in the roll-out year. In
addition, to further refine the TEC.
3. For the Skills Accord Task and Finish
Group to recommend skills shortage
areas to target.
4. Pilot companies to share their
good workforce planning at the best
practice workshop.
2. To promote signing up to
the Skills Accord through the
supply chain. In the pilot year
the requirement was for lead
signatories to on-board 4-5 of
their strategic suppliers to
become signatories and work
towards embedding the
commitments in their respective
organisations.
100% of Lead Companies
achieved this Commitment
and on-boarded 19 of their
suppliers to the Skills Accord.
The 5 lead companies, Amey,
National Grid, SSE, Thames
Water and UK Power Networks,
all met this requirement.
In the pilot year Commitment 2
was not applicable for the 19
signatories on-boarded by the
lead companies. This
Commitment will apply to the 19
suppliers in the roll-out year and
all new signatories.
The recommendations for Commitment
2 are:
1. For all signatories (lead and
suppliers, new and existing) to on-
board at least one supplier and agree
with Lead Companies the suppliers to
engage in future years, as well as to re-
engage with existing suppliers and
ensure their commitment for roll-out.
2. Good practice was demonstrated by
Lead Companies in engaging and
leading their suppliers to embed the
Commitments. This practice ought to
be shared with signatories at the
best practice workshop.
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3 To promote relevant skills
development across the
supply chain through
procurement. This is the core
or the heart of the Skills Accord.
To achieve this Commitment
signatory companies are
required to develop and deliver
responsible procurement
practices through the supply
chain on skills delivery.
Signatories must embed
relevant skills development in
the procurement process,
evaluation criteria and contracts,
where excellence is
demonstrated by including a
reference to the Skills Accord
and must necessitate suppliers
to report against their plans and
proposals (Criteria 3.2).
54% of signatories have
achieved this through
embedding skills
development into
procurement processes,
evaluation criteria and
contracts.
Good practice was
demonstrated in embedding
skills development into
procurement processes. The
annual review identified that
most companies were including
the Skills Accord and skills
development in the pre-
qualification and tender
technical evaluation in the
procurement process.
A core feature of Commitment 3
was for signatories to consider
whether it is appropriate to
require its suppliers to put
forward plans and proposals for
relevant skills development and
to necessitate suppliers to report
against these plans and
proposals. The annual review
found this was embedded
primarily at contract negotiation
stage or delivery stage of the
contract.
The recommendations for Commitment
3 are:
1.To review whether it is appropriate
to ask tier 2 and SME suppliers to on-
board suppliers (Commitment 2) and
embed Commitment 3.
2. To further develop tools to help
signatories to embed this commitment.
In addition, to review compliance
criteria and weighting for this
commitment.
3. Embedding into contracts was the
most difficult and challenging part of this
Commitment and moving forward this is
an area to review.
4. For signatory companies the
recommendation is to embed more
explicitly current and future
workforce development into their
evaluation criteria and contracts;
referencing where applicable the Skills
Accord.
5. In terms of criterion 3.2, further
exploratory work is required on how
signatories can embed and evidence
this commitment.
6. Pilot companies to share ways in
which skills development can be
embedded into the procurement
process.
4. To continuously improve
performance. The signatories
to this Accord commit to driving
continuous improvement in their
own sustainable workforce
practices and those of their
suppliers, in relation to their
ability to maintain and enhance
the technical and operational
skills within the workforce.
67% of signatories achieved
this and demonstrated a
Commitment to continuous
improvement in their own
sustainable workforce
practices and that of their
suppliers.
In the analysis, it was noted that
the compliance criteria for this
Commitment had been
interpreted quite widely by the
signatory companies.
The recommendations for Commitment
4 is to modify the compliance
question and criteria and provide
examples to guide signatories on what
is required.
5 Annual review and reporting
of company and sector
performance. All signatories to
the Accord agree that monitoring
compliance is a key determining
92% of the signatories
completed the Annual Review.
Nearly all 88% (21) signatory
companies either achieved good
or excellent and thus met the
criteria.
The recommendations for Commitment
5 is for most signatories to improve
from good to excellent the focus needs
to be on improving their workforce
development strategies and plans.
Skills Accord Annual Review Report – May 2017 © Energy & Utility Skills Group Page 26 of 31
factor in successfully achieving
the overarching aim.
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Glossary Energy & utilities sector
Includes: Power Generation, transmission, distribution, metering and supply; Gas transmission,
distribution, metering and supply; Water (Clean and Dirty) treatment, transportation, metering and
supply; Waste Management (later).
Operational headcount
For the purposes of this Skills Accord, Operational Headcount shall be defined as those UK-based
employees of the organisation who are directly involved in delivering technical, STEM (Science,
Technology, Engineering or Maths) based activities in the energy and utility sector. Employees full or
part-time in operational roles in the organisation. Some organisations do not have their full-time
trainees on headcount but should be included for the purpose of this reporting.
Lead Companies
These are the companies that have lead on the development of the Skills Accord Initiative and the
piloting of it.
Pilot companies
This refers to all the companies involved in the Skills Accord initiative and includes lead and supplier
companies.
Relevant Skills Development
This refers to meeting the Eligible Training Criteria (TEC) outlined in Annex 2. The eligible criteria
includes the roles, skills areas and corresponding courses that are operational or technical in nature
i.e. back office non-technical, support or administrative functions and health and safety are not
included.
Responsible procurement practices
For the Skills Accord it refers to embedding procurement practices appropriately to encourage
investment in skills development.
Sector skills gaps
These are skills that are lacking in the existing workforce of an employer. They might be technical or
soft skills.
Sector skills shortage
These are skills that employers are having difficulty recruiting from the labour market (e.g. overhead
linesperson)
Signatories
Companies formally signed-up to the Skills Accord commitments, either working towards or having
achieved the commitments in the Accord.
Social Value
The Social Value Act requires people who commission, or buy, public services to consider securing
added economic, social or environmental benefits for their local area.
Sustainable workforce practices
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Maintainable workforce planning and strategies for the short, medium and long term, accounting for
the various internal and external factors.
Suppliers
In the context of this initiative the supplier companies refer to the suppliers of the lead companies.
Tier 1 and Tier 2 suppliers
Tiers outline where in the supply chain the contractors is in relation to the lead company.
The Annual Review
For the purposes of this Skills Accord, the Annual Review is defined as the process by where
individual companies Commitment to the Accord is evaluated, as per Commitment 5.
Workforce planning
The systematic identification and analysis of what a company is going to need, in terms of the number
and skills of employees, to achieve its objectives. It is a process used to generate business
intelligence to inform the organisation of the current, transition and future impact of the external and
internal environment on the organisation, enabling it to be resilient to known or predicted changes.
Training definitions:
Apprenticeship
Apprenticeships are programmes that combine practical training in a job with study.
Employer sponsored course of study
The employer funds and/or resources the programme of study.
Traineeship
Traineeship is an education and training programme with work experience that unlocks the great
potential of young people and prepares them for their future careers by helping them to become ‘work
ready’.
Graduate programme
In-house or external training programmes for graduates.
Significant Programme of Learning
For the Skills Accord it refers to a 3 or 6 month plus technical, design or operational programme of
learning.
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