The 6-month window to tackle your Driver Shortage
It's been widely reported that the UK is suffering from a shortage of LGV Drivers (recent figures suggest that this number is somewhere between 60,000 - 76,000). It's reported that the average LGV Driver is 56 years old and it's anticipated that by 2024 100,000 of the UK's current LGV Drivers will retire.
In summary, the shortage is a problem now which is only going to get worse in the coming years. Thankfully, Rishi Sunak may have inadvertently given you a 6-month window in which to ease some of your driver hiring issues at a very low cost. This article explains how.
SWAPs Aren't For Everyone
Larger operators including Arrow XL, Eddie Stobart, and Whistl have turned to government funding as a solution. Through Sector-based Work Academy Programmes (SWAPs), these employers are working with local job centers and ourselves to find & train their next generation of Class 1 and Class 2 Drivers. As SWAPs are gov't funded, employers pay no fees for referrals, interviews, or placements which allows them to hire newly qualified Cat C and C+E drivers at no charge.
But, it appears that not all companies can take advantage of this approach. For some firms, their insurance prevents them from hiring either young and/or inexperienced drivers due to potentially high premiums/excess charges. If this applies to you, some additional gov't funding has been made available which could help you overcome this hurdle.
The Accidental Solution and a Golden Opportunity
Rishi Sunak recently announced that the employer cash incentive for hiring new apprentices 'aged 25 years and over' has been increased to £3,000 and extended for 6 months. As a result, employers will now receive a £3,000 grant from the UK Gov't for each new apprentice that they hire before the end of September 2021.
Therefore, you're not restricted to just hiring young apprentices. As long as you're employing someone on an apprenticeship programme - you can hire people of any age and still claim the £3,000 funding. Aside from having the flexibility to hire from any age category - you also have the freedom to spend the incentive payments as you see fit. It's this autonomy that gives you a number of interesting options over the next 6 months.
Option One: Promote From Within
The employer cash incentive could significantly reduce the cost of developing your next generation of drivers in-house. If your fleet includes 3.5T vans and 7.5T trucks, you could use a 'wheels-to-wheels' scheme to upgrade those existing drivers into Class 2 licences. You'd simply pay for their Cat C licences commercially, hire Express Delivery Operative apprentices to backfill their roles and then use the apprenticeship incentive payments to recover your costs.
You could also do something similar with your Class 1 vacancies by commercially funding C+E licences for your current Class 2 drivers, hiring LGV apprentices to replace them and using the incentive grant to recover your costs.
The benefit of this approach is that your existing drivers will already have demonstrable driving experience which could keep the insurance costs down. An example is below;
Similarly, if you have warehousing operations, a 'warehouse-to-wheels' scheme could enable you to promote your existing warehouse workers into LGV driver roles and use the employer incentive funds to cover the cost of their licence acquisition. At the same time, you could use warehouse apprenticeships to backfill those vacancies. An example is below;
Option Two: Hire Externally
The cash incentive scheme could help you widen your talent pool, especially if you can only hire experienced drivers. By hiring apprentices into other areas of your business (admin, freight forwarding, transport planning, warehousing), you can access the £3,000 for each apprentice hire and use the money to cover your costs in other areas.
For example, if you have Class 2 driver vacancies, you could hire drivers with 7.5T experience and use the apprenticeship incentive payments to pay for their Cat C licences. Similarly, for your Class 1 driver roles - you could hire experienced Class 2 drivers and use the cash incentive to fund their C+E licences. Again, hiring experienced drivers could help to minimize insurance costs.
Option Three: Follow the SWAP Model
Through Sector-based Work Academy Programmes, you can hire C1/Cat C/C+E qualified drivers to fill your vacancies for free. However, these drivers are likely to be more expensive to insure due to their lack of experience. Therefore, by hiring apprentices into other areas of your business, you can use the funds raised from those incentive payments to cover any increased insurance premiums/excess charges.
However, if you're hiring 7.5T Delivery Drivers / Cat C LGV Drivers - there is a more direct way of using apprentices. An example is below;
How can we help you?
System Group can support you in the following ways;
We can create SWAPs to help you interview and hire new drivers with C1 / Cat C / C+E licences for free.
We can deliver commercial driver courses for Cat C and C+E licence acquisition
Through our complimentary resourcing service, we can source, screen and supply apprentices for your business
We can deliver the apprenticeship programmes for those new employees.
We can guide you through how to access the employer incentive payments.