Fair Work in modern and graduate apprenticeships

Part Two: Findings

This section presents the main research findings and is organised around the following themes/topic areas: the impact of the Covid-19 pandemic on apprenticeships; awareness of fair work and FWF; views on FWF; Fair Work First and the Real Living Wage (RLW); benefits of apprenticeships and likely impact of FWF; mechanisms for embedding FWF; incentivising the adoption of FWF; guaranteed apprenticeships for specific groups who experience labour market disadvantage (such as those who are care-experienced or disabled); and advice and support on fair work and Fair Work First for employers.

The impact of the Covid-19 pandemic on apprenticeships

There was a general consensus and consistency across stakeholders, employers and apprentices about the impact of the Covid-19 pandemic on apprenticeships. The main message recounted by research participants was that, in their view, the pandemic had negatively affected the uptake of new apprenticeships, as well as the placement and progress of existing apprenticeships. Stakeholders reported significant reductions in apprenticeship numbers in 2020 and believed that this would continue in 2021 as employers absorb the economic costs of the pandemic, before picking up in 2022 and beyond.

Stakeholders reflected on the differential impact of the pandemic on specific sectors, highlighting that while apprenticeships in sectors such construction, engineering and in sectors employing 'essential workers' were being sustained, redundancies were emerging and would continue to emerge in hospitality and retail. Some stakeholders anticipated up to a 33 per cent reduction in apprenticeships in 2021 but believed that these numbers could recover in the medium and longer term. However, there was considerable uncertainty about what will happen to jobs and workplaces after the end of the Coronavirus Job Retention Scheme (CJRS).

Employers highlighted a number of disruptions to their recruitment of apprenticeships in 2020. Some had suspended or delayed their apprentice recruitment process. However, these employers did anticipate returning to normal over the course of 2021 and most employers spoke about there being no change to the numbers of apprentices they will employ in 2021 and in 2022 from their pre-pandemic numbers. Two large employers also spoke about looking at expanded numbers of apprentices in the next three years. Going forward, stakeholders and employers were largely positive about apprentice numbers and expected these to return to normal after 2021.

Some employers spoke about workplace support for new apprentices in 2020 and their appreciation of the particular difficulties being faced by new starts, who would otherwise normally be expected to work in public-facing and/or in office-based environments, and whose experience to date of their new employer and work colleagues had been largely online and in virtual settings. This aspect was also identified by two of our apprentice participants whose experience of the workplace to date had been largely or wholly virtual and digital.

All stakeholders, employers and apprentices spoke of their appreciation of the CJRS and the help this provided in retaining apprenticeships. For stakeholders, their views on the efficacy of schemes such as the Partnership Action for Continuing Employment (PACE)^[9] and the Adopt an Apprentice^[10] initiative were supportive: particularly around the practical financial support being provided by the Adopt an Apprentice initiative to help support the continued training of existing apprentices. This suggests that policy initiatives have been helpful in responding to the challenges employers and apprentices have faced over 2020 and into 2021.

Stakeholders and employers also highlighted Covid-19 related impact in terms of a delay to the progress of current apprentices. This was confirmed in interviews with apprentices who reported delays in their progress and the completion of their training ranging between 3-6 months at the point of interview. Apprentice participants strongly welcomed their employer's actions to support their jobs and the reassurances that some reported that they had been given about the security of their jobs and training. The latter was seen as particularly important by around a third of the sample who reported their experiences of furlough. Some employers and apprentices also used Covid-19 required homeworking as an opportunity to focus on the more theoretical elements of their study and training.

The main factors influencing delays to progress and completion were:

• the shift to online working and learning from April 2020 which meant an inevitable delay as employers and apprentices had to acclimatise to a new homeworking approach, including ensuring that all employees had the materials and resources to enable them to work from home;
• off-the-job training providers had to shift to wholly virtual learning environments and new digital software platforms and systems; and
• continuing difficulties associated with conducting on-the-job apprentice assessments where these involved practical tasks and/or observational elements. For apprentices this meant that they were unable to complete parts of their training (for example, practical engineering tasks, customer service, carer interactions) because of lockdowns and social distancing restrictions around face-to-face interaction.

Awareness of fair work and Fair Work First

In general, there was greater levels of awareness of fair work among stakeholders and employers compared to apprentices. Public sector and large employers were more aware of fair work than small or medium sized enterprises (SMEs) or micro employers (employing fewer than 10 employees), with the former groups able to refer to the existence and various outputs of Scotland's Fair Work Convention. Fair work was best understood and applied by stakeholders and larger employers, particularly those in the public sector. There were moderate levels of awareness among SME employers and little to no awareness of fair work among GA and MA apprentices.

Stakeholders and larger employers (particularly in the public sector), were very aware of the term 'fair work'. They were able to discuss fair work in detail and identify it as part of their existing approaches and efforts to 'invest in people'. Many could cite various policy initiatives and documentary sources and spoke about its current use in public sector procurement procedures. To illustrate, this knowledge included:

• the existence and work of the Fair Work Convention;
• awareness of the Fair Work Framework;
• the requirement of training providers to promote Fair Work with apprentice employers; and
• the requirement to deliver fair work in public sector procurement.

Four large employers (two public sector) also spoke about the practical utility of the Fair Work Framework document and described how they have used this as guidance on standards to embed into their HR policy structures and practices.

As a group, SME and micro-employers were generally less aware of fair work. Some were aware of the term but could not speak about the concept with any in-depth of knowledge of what it meant or how they applied it in their workplace policies, procedures and practices. However, even some larger employers felt that fair work was not generally well understood by employers in Scotland. There was a moderate level of uncertainty about where fair work was positioned in Scotland's

policy landscape, and its links to other related policies covering employment and apprenticeships, such as the new Young Person's Guarantee^[11]. These points were also echoed by some employer participants who attended the roundtable discussion event, who also highlighted the overlapping policy landscape relating to work and workplaces and the difficulties this created for employer understanding. This raises the potential for enhancing communications with employers, workers and other stakeholders on the fair work agenda to raise awareness of the importance and benefits of fair work.

For the GA and MA research participants, there was much more limited awareness. None of the apprentices were aware of the term fair work or of its meaning as operationalised in Scotland^[12]. However, their initial first impressions of fair work once introduced to it were positive and supportive.

Not surprisingly, given the relatively recent publication of the Fair Work First criteria, significantly fewer research participants were aware of this development, and at the time of interviewing for many participants (that is, prior to January 2021), the Fair Work First Guidance to support implementation^[13] was not available to inform them.

Views on Fair Work First

Stakeholders, employers and apprentices were largely supportive of most of the Fair Work First criteria. Although one stakeholder and one employer described the Fair Work First approach as a 'luxury', particularly in the context of recovering from Covid-19 (i.e. assuming that the job quality focus of Fair Work First would be displaced by a greater emphasis on job creation), there were few criticisms of most of the Fair Work First criteria. Instead there was a general recognition that the different elements of Fair Work First were, as a package, exactly what good employers should be doing. Employers recognised elements such as the continued investment they make in their apprentices' skills and training, the contractual security of employees, paying people the same rate for doing the same job and their existing mechanisms for voice in their own workplace as indicators that fair work was already part of their employment standards, policies, procedures and structures. Overall, then, actively pursuing a fair work agenda and Fair Work First were viewed largely as unproblematic and consistent with current practices across good employers.

GAs and MAs were the least aware of fair work but their initial impressions of this and the Fair Work First criteria were very positive and supportive. They saw the Fair Work First criteria as important workplace standards to have in place and they were able to identify specific criteria that they liked, and to give reasons for their choices (e.g. action to address the gender pay gap, because people should be paid the same for doing the same job and equal pay matters to the overall gender pay gap; and appropriate channels for effective voice, because people should have a say in decisions that affect them at work). Similar to employers, both GA and MA apprentices were also able to identify a number of different ways in which their employers and workplace practices reflected different aspects of the Fair Work First criteria: for example, access to dedicated training programmes and opportunities to develop their future skills, workplace supports such as paid study leave and mentoring/buddy systems, employers asking for their views on their training, and the availability of different mechanisms to raise any issues of concern with employers.

As a whole, GA and MA apprentices were able to identify with some or all of the Fair Work First criteria. Most apprentice participants saw the Fair Work First criteria as consistent with the existing practices of their current employers. There were some very good discussions of how they thought aspects of the Fair Work First criteria were embedded in the prevailing practices and culture of their employers. Two typical responses from GAs are given below:

"I relate it (i.e. Fair Work First) to my employer and they're an established apprentice employer. They do this stuff very well. We get sent to College, get training and sent to Uni. We have contractors but we don't have anyone in (the company) on zero-hour contracts. Not sure on the gender pay gap but I would expect that we pay everyone the same rate for the same job. And I'm a trade union member so voice is actively encouraged."

[GA, age 28, Engineering]

"People do need a voice and we are asked for our opinions at work along with mentoring and buddy systems to support us if we have any problems or issues. We have monthly early careers meetings and discuss any issues we have. We are able to give constructive feedback and they listen. Senior leaders are very interested in early careers and there are other employee forums that are open to us." [GA, age 20, IT]

Fair Work First and the Real Living Wage (RLW)

As reported above, most of the Fair Work First criteria were relatively unproblematic for most stakeholders, employers and apprentices. However, there were a number of issues raised by stakeholders and employers concerning the cost or 'affordability' of the RLW. While it was recognised by stakeholders that many employers already pay above the rates of the National Minimum Wage (NMW) and the National Living Wage (NLW), the RLW represents a significant uplift to the current age-related training rates^[14]. While some stakeholders identified similar types of employer concerns that were raised at the time of adopting the NMW, others felt that adopting the RLW would be a strong disincentive for SME and micro employers to use apprenticeships. The RLW criteria was also perceived as likely to challenge employers in sectors such as hospitality, retail and early years and other low-pay sectors and particularly onerous for many others if this meant removing existing age-related pay rates for apprentices. For some stakeholders there were a number of consequences of adopting the RLW element of Fair Work First into apprenticeships, including concerns that the RLW criteria would impact negatively on:

• differential pay rates in organisations with a knock-on effect on wider pay scales for other (more experienced) staff;
• employers' use of younger people and may shift the balance of their recruitment towards those in more experienced age groups; and
• the numbers of available apprenticeship and training opportunities, particularly if existing age-related pay rates were removed.

These concerns were mirrored by the views of employers (large, SME and micro). While there was a recognition by some employers that the existing age-related minimum wage rates were too low (which is why they paid apprentices above the NMW and NLW), some were concerned that the RLW criteria in Fair Work First would effectively replace this structure and make apprenticeships unaffordable for some employers. Although it was recognised that apprentice pay rates were a concern in some jobs where apprentices were paid a lower rate than others for effectively doing the same sets of tasks, in other circumstances pay reflected the lack of work experience and the lower skill levels of apprentices. Consequently, adopting the RLW was an issue that would require:

• more extensive and detailed discussion with apprentice employers and trade unions where present;
• a more detailed economic assessment of the impact of adopting the RLW on apprentice employers; and
• potentially greater financial support and funding given to employers by Scottish Government to facilitate delivery of the RLW to apprentices.

Issues about the RLW featured heavily in discussions at the stakeholder roundtable. In particular, discussions focussed on two issues: the age-related training rate for apprentices and of employer pay variations. It was recognised by some that unionised workplaces generally had better rates of pay and conditions than non-unionised workplaces. However, it was highlighted that in some sectors with relatively large numbers of SME employers, such as hairdressing, retail and hospitality, the lack of trade union presence meant no such positive influence on pay rates.

In terms of the affordability of the RLW for employers, stakeholders recognised that pay rates are complex and vary across and within employers. Examples were given of employers who pay different on-the-job and off-the-job training rates to apprentices, and of apprentices in the engineering sector who were paid below the RLW in the first two years of their apprenticeship but who reach comparable RLW levels by their third year and beyond. Paying the RLW is not a simplistic consideration and process for employers and there was a relatively high level of uncertainty about its impact on employers and what this may mean for apprentice numbers going forward.

What did GA and MA apprentices think of the RLW? It should be noted that for those apprentices already paid above the RLW there was no suggestion of, or appetite for, a levelling down of their pay to the RLW. In general apprentices:

• recognised the issue of low pay in some MA apprenticeships and were broadly supportive of moves towards the RLW;
• thought low pay rates were associated with some 'cheap labour' MA apprenticeships which were poor quality not only in terms of pay but were also associated with limited prospects of continued job security and 'being kept on';
• thought low pay rates made some MA apprenticeships (e.g. in construction) unattractive to young people and were a barrier to uptake, particularly for those in older age groups (with more domestic commitments) who could not afford to take these jobs); and
• thought that age-related pay bands were merited because less experienced staff in training should be paid less than more experienced, skilled employees.

Some typical examples of their views are outlined below. These examples highlight a number of important issues for apprentices and the link between wage (or rewards) levels and job satisfaction, commitment, motivation (e.g. willingness to work additional hours); psychological self-esteem and being valued at work; retention and turnover; and, the disincentives (or barriers) to take on an apprenticeship for those in older age groups with domestic financial commitments. For example:

"I know there's people who don't have my wages and they feel exploited. If you pay better wages you get happier people, people who feel appreciated. I worked more hours last week but I don't mind that, they appreciate me and I don't mind giving that back but others really do mind doing that"

[GA, age 28, Engineering]

"You do see low wages with some modern apprenticeships, some get paid buttons. I get paid alright…people who've left here (i.e. employer) it's partly down to the wages, they can't keep it going." [MA, age 34, Early Years]

"You wouldn't associate a good wage when being an apprentice but I'm lucky to be in a position where I get a good wage, get regular pay rises and reviews…the problem of wages are in modern apprenticeships and people working full-time working and doing a hard graft without getting a lot for it, so I get the bit about the real living wage. My partner is looking for a modern apprenticeship just now and the wages on offer are not enough to support a household. If you're independent (living arrangements), it's not enough to keep it going and a bit more would make it more attractive to more people. You can talk all you like about wanting a career pathway but in your circumstances it all comes down to the money."

[GA, age 22, Engineering]

"Low wages are exploitative. People accept these low paying jobs as the only way to get the learning. I'm lucky, I'm well-paid but other apprentices are on half the money we're on. It isn't fair but there has to be a baseline…these apprentices end up leaving after the apprenticeship because they haven't been treated well. Here we're always told that having an apprenticeship isn't a job guarantee but I don't know anyone who has been paid off afterwards."

[GA, age 31, Engineering]

These comments illustrate the importance of a fair wage for apprentices in a range of circumstances. The RLW reflects a calculation based, as the name implies, on the hourly wage required to live in the UK (outside of London). The Scottish Government strongly supports the adoption of the RLW by employers, and this is reflected in the Fair Work First criteria. Any departure from this criterion potentially signals that a wage that someone can live on is not required of employers in receipt of public support and undermines the effectiveness of the Fair Work First criteria in delivering fair work.

However, policy initiatives relative to apprentices' pay (for example, the National Minimum Wage Apprenticeship Rate) acknowledge implicitly that that training rates of pay are not equivalent to rates for the relevant job because of the training, administration and supervision costs to employers of supporting apprenticeships. This non-equivalence between apprenticeship pay and the going 'rate for the job' is also accepted in some collective agreements between trade unions and employers at sector-level, and indeed in this research, apprentices themselves were supportive of pay differentials between those in training and those fully proficient in a job.

Fully squaring the circle between these two positions is not possible. This leaves two options. The first - requiring that employers meet all Fair Work First criteria in relation to apprenticeships - is likely, according to the participants in this research, to reduce the number of available apprenticeship places, albeit that these fewer places would, other things remaining equal, be of a higher quality. It is worth remembering, however, that there is some limited flexibility for employers in the current Scottish Government Guidance on Fair Work First, and that as employers need access to skilled workers, the provision of publicly funded training for apprentices still represents a benefit to employers of participating in apprenticeship frameworks.

The second option acknowledges that the distinction between training and performing is a legitimate concern of employers in wage setting, and that there may be a case to be made for adapting the RLW criterion in Fair Work First in relation to apprenticeship training. Within this option, alternative scenarios were highlighted by research participants:

• some suggested that the RLW could not be paid at all to apprenticeships in their company or sector (on affordability grounds);
• others highlighted arrangements whereby training rates applied during formal training periods (for example, when at college) while higher rates applied while 'on the job', often in industries with negotiated agreements between employers and trade unions over apprentices' pay; and
• in some sectors, apprentices' pay was below the RLW in the earlier years of their apprenticeship but progressed to be above the RLW in later years, again, most commonly where there was a negotiated agreement in place.

These scenarios have different ramifications for policy on Fair Work First in apprenticeships. Turning to those employers concerned over affordability, these might either be exempted from the RLW criterion in some way, or given some additional financial support to meet the RLW criterion, and/or given a longer time period in which to make any possible adjustments. Exemption or delay, however, do not deliver the level of remuneration to individual apprentices on which they can live sustainably and cannot be longer-term approaches if the objectives of Fair Work First as envisaged by The Scottish Government are to be achieved.

Turning to variable pay rates for formal learning or training time, or variable rates under negotiated agreements on apprenticeship framework, these arrangements are implicitly (and sometime explicitly) based on either the time spent in formal training and/or the time to proficiency in a job. This might represent one way of addressing employer concern over the costs of apprenticeships, if the Fair Work First criteria differentiated between training time and wider job performance, with the latter paid at the RLW but some scope to depart from this in relation to training. This is, of course, more problematic to assess across quite distinct apprenticeship frameworks where the balance of on the job and formal training and where the specific needs of apprentices in pace of learning varies considerable. It is worth noting that the most recent Apprenticeship Pay Survey 2018/19 – Scotland (2020)^[15] highlighted that only 44% of Levels 2 and 3 of apprentices received on average at least one day of training per week (though this is higher in some frameworks, e.g. 71% in Hairdressing). These variations may be highly significant to the calculations that employers make about the affordability of apprenticeships (separate from constraints arising from employers' specific business models) and to their willingness to pay the RLW to apprentices, and both these variations and employers' assessments of costs and benefits are likely to be relevant to how the Fair Work First criteria of paying the RLW are likely to land.

It is, of course, important to stress that the existing Scottish Government guidance on Fair Work First implementation highlights the possibility of some flexibility in how the RLW criterion of Fair Work First might be tackled by employers. While The Scottish Government promote payment of the RLW, advocate that apprentices are paid the RLW throughout their apprenticeship and urge that payment of the RLW should not be used to limit pay rates, the Guidance suggests that employers on a journey towards paying the RLW are also exhibiting good practice: including where "the organisation is part of a local partnership working towards Living Wage Place recognition; the employer is actively reviewing the pay structures and developing an incremental plan for paying all staff at least the real Living Wage" (Scottish Government, Fair Work First Guidance, 2021:16).

Benefits of apprenticeships and likely impact of Fair Work First

Apprentices spoke about a range of benefits of their course of study and training. They were also able to articulate what the potential benefits of Fair Work First application to apprenticeships might be, such as setting minimum standards for employers that offer reassurance to those with little labour market experience and countering wider negative associations that some young people have about apprenticeships.

Apprenticeships identified investment in skills and training as the main overarching benefit that they receive from their employers. In this context, MAs spoke mainly about having 'hands-on' access to essential vocational training that allowed them to develop and/or complement their existing workplace skills and interests; the opportunity to start to build a career and essential work experience. For those that were undertaking MAs in order to upskill in their jobs, there was an emphasis on consolidating their continuing career development. GAs in particular were able to identify a relatively wider range of benefits from their apprenticeship. These were:

• access to accredited degree-level qualifications and higher education learning without being saddled with any student debt;
• accruing essential 'hands-on' vocational work experience and gaining employability skills while being paid, in contrast to their peers in further and higher education;
• access to the employer's pay, grading and career structures; and
• learning vocational hands-on skills that were seen as building blocks in career development;
• access to further learning opportunities (e.g. postgraduate studies) post-apprenticeship and the development of future career pathways; and
• access to employer early career support structures such as 'buddy' and 'mentoring' systems.

In reflecting on whether the presence of the Fair Work First criteria would have made the offer of an apprenticeship with their current employer more attractive, many GAs and MAs found this a difficult question to answer retrospectively. GAs and MAs overall had a clear recognition of the benefits of their own apprenticeship training choices and pathways (see above). If they were new apprenticeship entrants, most argued that they would have chosen their current employer irrespective of whether there was an explicit commitment to Fair Work First in their role/offer. In other words, they were able to identify that their current apprenticeship was one that they wanted and that their employer had a good reputation. While not explicitly related to the Fair Work First criteria, these insights reinforce the views of apprentices, employers and key stakeholders previously outlined in this Report that fair work practices improve employer reputation, with positive implications for the attraction and retention of apprentices. For older apprentices in relatively shorter-term MAs (i.e. who were those more likely to see themselves as employees), they were more likely to say that it would have made little if any difference to whether they took on MA training as they were already working for their employer and assumed that accredited MA apprenticeship training courses were quality-assured.

However, five of our GA and MA apprentices were very clear that the Fair Work First criteria could give prospective apprentice entrants a degree of reassurance about the quality of their apprenticeship and employer, alongside a set of minimum standards that covered areas such as how they would be treated at work and what they could expect to receive in wages. For those with relatively little labour market experience, Fair Work First could provide an important reassurance about the type of employer that they would be working for and about what they could expect as part of an apprenticeship - an important counter against the negative 'cheap labour' stories that were recounted by apprentices in many of our interviews. For example:

"Before I got this job I've got a few mates who did apprenticeships in construction and they complained about wages and how they're treated. Brought these issues up in my job interview here but it would have been good coming in as a new apprentice to know that my employer used fair work because that would have told me something about them, that they looked decent. Got an assurance (from employer) that this apprenticeship wasn't a way of getting cheap labour before they send you on your way. That helps a lot in people's decisions to know that you're not being used as cheap labour"

[GA, 25 years, Engineering]

"Being on a low wage for four years isn't an option for a lot of people and that real living wage part (of Fair Work First) would make it more attractive to more people, it makes a difference to people if they heard they would be getting decent money"

[MA, 32 years, Electrical Engineering]

"It would be reassuring to know about fair work coming into an apprenticeship, especially if you're getting fair pay and knowing that you're not going to get treated badly."

[MA, 40 years, Mental Health]

"I've been in some places where it's not fair work so I think of it (Fair Work First) as a positive and if the government is moving into that area and trying to make sure apprentices have a better work experience then that's a good thing and would be helpful for people to know there are some standards expected of their employer."

[MA, 38 years, Health & Social Care]

"Good to talk about fair work right at the start of people going into an apprenticeship as a minimum standard at work and knowing that your employer is signed up to that. It's reassuring for people and would help with some of the negative things you hear about apprenticeships: low wages and bad treatment."

[GA, 28 years, IT]

The quotes from apprentices (above) provide a powerful insight into the relevance of fair work to apprentices and potential apprentices, but also highlight that better understanding of fair work can help equip (especially younger) apprentices with knowledge of workplace rights and expectations, and knowledge of what good employment looks like, that can be an asset in their work experience and working life. In turn, this highlights the potential role of Fair Work First in bringing more people into positive engagement with apprenticeships.

Mechanisms for embedding Fair Work First

There was little specificity in the interviews on how best to embed Fair Work First within the apprentice role/offer with the exception of trade union stakeholders who thought that embedding fair work into apprenticeship provision through rigorous conditionality and through collective bargaining agreements where applicable was crucial. There was a recognition by some stakeholders and employers that the Fair Work First criteria could help with delivering minimum standards and providing clear early expectations and reassurances to apprentices about the standards and quality of their employer. This is consistent with the views of a quarter of the apprentices. Some research participants also made references to the potential link between the Fair Work First criteria and the Young Person's Guarantee but were unclear about the position of Fair Work First in relation to this wider initiative.

Stakeholders and employers were more likely to focus on embedding Fair Work First among employers through dialogue and persuasion, specifically, through generating greater awareness of fair work, identifying potential benefits to employers, and in so doing extending its influence and embedding it in existing workplace practices. This reflected a wider concern among some that fair work was not a sufficiently prominent issue for employers and among employer groups. Not surprisingly, some stakeholders and employers used this as an opportunity to focus on the need for greater levels of awareness-raising and dialogue about fair work among SME and micro employers, and the need for greater advocacy on what the benefits of fair work are for employers of all types. In this respect, the profile of fair work and its associated benefits had to be raised across employers, sectors and in workplaces in order for Fair Work First to be embedded effectively.

In the roundtable, trade union and employers' representative stakeholders drew attention to the role of sectoral agreements in ensuring delivery of fair work to apprentices and the need for nuanced alignment with existing collectively bargained agreements. Existing collective agreements provide an important mechanism for embedding a fair work offer to apprentices that is agreed and supported between employers and trade unions, and the structured bargaining processes around these agreements provide for both flexibility and adaptability in aligning Fair Work First with existing agreements and for transparency in how apprenticeships operate across sectors and apprenticeship frameworks.

Incentivising the adoption of Fair Work First

In terms of the issue about whether greater conditionality should be attached to apprenticeship funding in terms of the Fair Work First criteria, there was a clear recognition and acceptance across stakeholders and employers about the principle of conditionality and public sector funding. In short, stakeholders recognised that public sector financial support for apprenticeships should have conditions attached that require employer compliance. The issue for stakeholders and employers was what the specific conditions would be, how these would be applied and the consequences for employers of failing to comply or meet conditions. The issues to be addressed concerned the need for clarity on:

• the specific conditions required to meet the Fair Work First criteria (i.e. how these are defined and what practical steps they require from an employer):
• how conditionality would be monitored, and the need to avoid conditions acting as merely a 'tick-box' self-report exercise by employers that could render conditionality meaningless in practice;
• accountability and who would monitor compliance;
• the costs associated with any monitoring system; and
• the types of evidence and actions expected of employers that would constitute compliance.

Only a few stakeholders argued that failure to comply should mean that apprentice funding should be withdrawn from employers. The majority view was that the greater the level and depth of conditionality, the greater the likelihood that more employers would simply opt-out of taking on an apprentice: particularly SME employers with less access to and investment in, dedicated internal HR business supports and functions. Some stakeholders and employers highlighted that greater conditionality risked over-complicating the process of apprentice funding, making it more prohibitive and more of a 'stick' than a 'carrot'. The preference among most stakeholders and employers was for a system that was generally 'light-touch' about conditionality and compliance, recognising that many employers will be unaware of the debate on fair work in Scotland and on Fair Work First requirements. They wanted a 'light-touch' approach - an approach that sought to gradually bring employers along - that did not appear prohibitive or might increase the number of employer actions to secure apprenticeship funding.

There was no clarity or consensus about specific measures that may be used to incentivise employers' alignment with FWF. Where employers tended to address this issue was by calling for greater levels of financial support to facilitate the delivery of the RLW and to address any costs arising from the implementation of the Fair Work First criteria. Some employers proposed solutions involving deployment of the Apprenticeship Levy to support any additional costs, despite this not being an option in Scotland (as distinct from in England), highlighting either confusion over or dissatisfaction with how the levy operates in a devolved Scottish skills context.

Some stakeholders suggested that formal accreditation of fair work or Fair Work First employers could act as an incentive to employers who could use this to enhance their own reputation, making them more attractive to existing employees and potential recruits. Others, however, spoke of a cluttered accreditation landscape and were not supportive of further accreditation.

The roundtable event confirmed the desire for a 'light-touch' approach with sufficient time for employers to adapt and to ensure that training providers could explain fair work and Fair Work First to employers.

Guaranteed apprenticeships?

The majority of stakeholders and employers emphasised that the overarching principle in recruitment practice was finding the 'right person' for an apprenticeship that matched their skills, abilities, capabilities and interests. Four employers queried the use of the word 'guarantee' and whether employers could be expected to provide certainty to those applying for apprenticeships about securing a place. That said, most stakeholders and employers were broadly supportive in principle of guaranteed apprenticeships for those facing labour market disadvantage, such as those coming from care backgrounds or with disabilities. The inclusion of those with disabilities was an interesting example to use in this context because it raised a number of practical issues for some research participants that may not be raised in relation to other disadvantaged groups. Consequently, these participants noted that there were a number of individual and structural issues faced by employers in relation to those with disabilities. These included:

• the availability of resources to assess individual capabilities and the levels of support that may be necessary to help people entering and sustaining employment;
• the potential scale of workplace adaptations (and costs) and whether these could make employment prohibitive for many SME apprentice employers; and
• that these factors would limit the types and opportunities available to many people with disabilities unless there were specialist employers already working with these groups or the availability of specialist support services.

Despite existing provision to support employers employing people with disabilities, there was no reference among research participants to this provision.^[16] On the issue of adjustments, there was no reference by research participants to the potential of home or flexible working as a possible aid to people with disabilities, although experience of both during pandemic-related workplace responses might provide more robust future insights about the scope for combinations of home and/or other forms of flexible working to support disabled people to better access apprenticeships.

More widely, some public sector employers spoke about initiatives in their organisations in recent years which looked more closely at their external recruitment channels and whether these were open, inclusive and supportive of diversity to ensure that they were not missing out on talent, or compounding barriers and disadvantage for particular groups, such as disabled workers and those from minority ethnic groups. Some examples were also given of these organisations bringing in external advocacy and support groups to help shape their recruitment process. The concern was to ensure as much as possible that recruitment was as attractive as possible to groups in the wider population and fair to all potential applicants.

Advice and support on fair work and Fair Work First for employers

Most of the interviews conducted for this research were carried out before the publication of Fair Work First guidance in January 2021 and specifically before publication of the Implementation of Fair Work First in Scottish Public Procurement: SPPN 3/2021.^[17] Consequently there was less information available to research participants on how Fair Work First might operate in practice at the time of interview than currently exists.

Stakeholders made a number of suggestions about forms of advice and support that might be made available to employers to enhance the provision of Fair work in apprenticeships, some of which have subsequently been addressed in current Scottish Government guidance on Fair Work First. These included:

• ensuring that fair work occupies a more visible place in Scottish Government policy agendas, and clarification of where fair work sits in relation to other policy developments in apprenticeships, such as the Young Person's Guarantee;
• defining what fair work is and what the (higher-level) Fair Work First criteria mean in practice for an employer (e.g. defining what is an inappropriate Zero-Hours Contract);
• the need for strong, independent, persuasive advocacy of fair work to raise awareness among employers and drive a fair work agenda. This includes raising awareness among members of the HR community and other relevant networks;
• working with the Scottish Apprenticeships Advisory Board (SAAB) to reach SME apprentice employers in different sectors to discuss fair work;
• the need for clarity about what is required and expected of employers to meet the conditions attached to funding for apprenticeships;
• making a strong case to employers on the benefits of adopting a fair work approach (in particular how investing in people is linked with greater employee productivity and commitment), and demonstrating this through employer case-studies that illustrate the benefits to employers of adopting fair work;
• providing additional information and engaging in dialogue with employers on fair work through agencies, training providers and trade bodies; and
• focussing specifically on channels that engage with SME employers.