UK advertising in a digital age Contents

Chapter 3: Workforce

Introduction

97.In this Chapter we explore the nature of the workforce sustaining the advertising industry and the skillsets that it requires. The industry is highly diffuse: across the different sectors of the market a variety of business models are used in advertising. Roles include creative, accounts, business strategy, technology and analytics. We examine the skills needed for this industry and where there are possible skills gaps.99 In order to succeed, the industry must recruit from a broad talent pool and be open to people from different backgrounds. We therefore consider how the industry can improve the diversity of its workforce. We consider the international workforce in further detail in the final Chapter.

98.Although a few conglomerates dominate the industry, the majority of businesses are SMEs and a large portion of the workforce are freelancers.100 The7stars, a media agency, explained that freelancing was a “natural bedfellow” with creative and media businesses: “There’s a growth in the role of agency as a ‘little black book’ of freelance talent who call in specific skillsets or vertical experience for a client brief.”101

99.Advertising tends to benefit from, and contribute towards business clusters (see Box 5). Nearly 50% of advertising businesses are based in London. Other significant hubs include Bristol, Birmingham, Edinburgh, Glasgow, Newcastle and Manchester, which is the largest outside London.102 Within these hubs, advertising plays a special role in supporting and being supported by other industries. Stephen Woodford of the Advertising Association explained:

“Around advertising you will find technology people, web design people, photographers and film-makers, and so on and so forth. It tends to have an ecosystem around it that supports a much broader breadth of the creative industries.”103

Box 5: Business clusters

“There is no single agreed definition of a cluster. However, clusters are usually seen as the intersection of place and sectors, connecting high concentrations of firms, institutions (e.g. [higher education institutions], cultural institutions, trade associations, government bodies) and supply chains to one another through a cohesive place-based ecosystem. They have a key role to play in fostering agglomeration effects, supporting emerging innovations and attracting investment and talent to drive self-sustaining local productivity improvements. Innovative and knowledge-rich industries like biotech, digital, financial services and automotive tend to succeed when they concentrate in certain places.”

Source: Written evidence from HM Government (ADV0016)

Skills for advertising

100.Many of the skills required in the advertising industry span the creative sector. The traditional advertising skills of copywriting, media buying and art and design have now been supplemented by an array of digital skills and data analytics (see Box 6).104

Box 6: Advertising skillsets

Creative: copywriting, art direction, graphic design, content creation and web design.

Media strategy and delivery: media planning and buying and search engine optimisation.

Market Research: consumer research and behavioural analytics.

Client service: team management and leadership, account management, project management and social media communications

Digital: software and system development, statistical analysis and database management

Source: Written evidence from the Advertising Association (ADV0019)

101.There is currently a general concern that there is a shortage of Science, Technology, Engineering and Mathematics (STEM) skills. The Government’s White Paper Industrial Strategy: Building a Britain fit for the future stated that these “skills are important for a range of industries from manufacturing to the arts”. Noting that 40% of employers had reported a STEM-graduate shortage, the Government said that it would invest a further £406 million in maths, digital and technical education in England to address the shortage of STEM skills amongst the workforce.105

102.The majority of our witnesses, however, agreed with the analysis of the Institute of Practitioners in Advertising that, in the future, the advertising industry will need “STEAM graduates: science, tech, engineering, arts and maths”.106 This does not mean that the industry requires a mix of individuals with STEM skillsets and of individuals with arts skillsets, but rather individuals who have a mix of these skillsets.

103.Leo Rayman, Chief Executive Officer of Grey Advertising London, said that the “emergent skills gap now, and therefore tomorrow, is specifically in the blend between these creative skills and computer science”.107 James Murphy, Chief Executive Officer of adam&eveDDB, elaborated further:

“The new generation of people in our industry are required to be much more multi-faceted because they are trying to blend strategic, creative and reductive communication skills with an understanding of technology and technical channels that was not required before”.108

104.The Government recognised this need for a mixed skillset in their written evidence:

“Successive reports from Brighton Fuse and Nesta have highlighted the importance of combining arts and science (i.e. STEAM) skills to drive forward the sector and wider economy. The skillset of the advertising industry is especially diverse, and ranges from creative skills—copywriting, art direction—to digital skills—prototyping and graphic design—to analytical skills such as behavioural science”.109

105.The English education system, however, encourages young people to specialise much earlier than other nations such as Scotland. In England, students traditionally study three A levels over two years. By comparison, in Scotland, students generally take 4 or 5 Highers over one year with the option of additional Highers being taken in their final school year. The emphasis on specialisation in England continues into the degrees offered by universities.

Digital skills gap

106.The rapid advancement and evolution of online advertising has resulted in an ongoing unsatisfied demand for digital skills.110 James Murphy explained that the “people we need for the evolving part of what we do, which is in digital technologies, ad tech and data, are in incredibly short supply”.111 Mr Murphy also told us that advertising had to compete with other industries that could pay more for this limited supply.

107.Many witnesses said that the digital skills gap should be addressed in schools. Mediacom told us that “the Government needs to look at school curriculum and support the next generation of employees who will be working in the digital world and ensure they are fluent and capable”.112

108.The Minister of State for Apprenticeships and Skills, the Rt Hon Anne Milton MP, told us that the “National College for Digital Skills is already up and running” and the Government’s approach is about “making sure that we grow the sort of skills in this country that make us the best in some areas that we have otherwise neglected”.113 Ms Milton also told us that the Government had invested in computer sciences in schools and to increase the take-up of STEM A-levels.

Arts subjects

109.In part as a result of the Government’s efforts to increase the take-up of STEM subjects, some witnesses felt that the arts were being neglected in schools. Nigel Moore, Production Director at Fuzzy Duck Creative, said that “from an education point of view it feels as though there has been a stepping back from creativity and more of a push towards the traditional core subjects”.114

110.The English Baccalaureate (Ebacc) was introduced in 2010 as a measure of school performance based on the performance of pupils at GCSE level in English, maths, history or geography, science and foreign languages. According to the Ideas Foundation, there has been “a reduction in time for creative and arts subjects” since its introduction.115 This corroborates evidence we heard in our inquiry on skills for the theatre industry. For example, one witness told us that arts subjects such as drama were being “squeezed out in a lot of schools by a narrow focus on attainment and the understandable anxiety about league tables”.116 The Education Policy Institute report stated that some “19,000 fewer pupils took arts subjects at key stage four [in 2016] compared with in 2014”.117

111.The advertising industry, like other creative industries, requires workers with a fusion of artistic and science (STEAM) skills who can use digital skills creatively. Unfortunately, the education system encourages children to specialise in either arts or science subjects.

112.There is a shortage of individuals with the requisite digital skills and the industry must compete for these with other sectors. We welcome steps taken by the Government to improve this. We are concerned, however, that in its efforts to promote these subjects, arts have been side-lined in the curriculum and in measurements of school attainment such as the English Baccalaureate.

113.We recommend that the Government undertake a review of skills needed by the future economy and whether the education system reflects the needs of growing sectors, such as advertising and the creative industries. This will be increasingly important in the face of rising automation. In particular, the Government should review whether it is still appropriate for young people to specialise in either arts or science subjects at an early stage. Subjects should be introduced that blend arts and sciences for this fusion of skills is essential for the economy.

114.We recommend that the English Baccalaureate must include the measurement of one arts subject. This will ensure that the arts are properly recognised both by schools and the school league tables.

The role of universities

115.Universities provide the entry route for 70% of those who work in the advertising industry, and some businesses exclusively employ graduates.118 But many of these graduates have not studied a relevant course. Pulse Films, a production company, told us that they were not aware of “a single individual working within advertising who studied marketing or advertising. Most tend to come from humanities courses or from film making backgrounds or simply stumble into advertising as a nonconscious decision.”119

116.Some of our witnesses were critical of advertising courses at universities. Stephen Woodford told us that “there are lots of marketing and advertising courses out there. Some are very good. The quality is variable”.120 Pulse Films explained that “as with most non-vocational higher education programmes, there is a clear disconnect between the commercial and technical requirements of students entering the advertising industry and the subject matter taught on courses”.121

117.James Murphy, Chief Executive Officer of adam&eveDDB, noted of current higher education vocational courses that “some of the things learned on those courses did not feel relevant to a business that is not terribly theoretical in the way that it works”.122 The Direct Marketing Association (DMA) thought there was a “lack of industry experience and awareness in universities”.123

118.Professor Douglas West of King’s College London acknowledged that universities are “on the back foot, in that industry reacts much more quickly than we can react”.124 This was because universities have to take some three years to plan, market and launch courses.125 Kate Burnett, Managing Director of DMA Talent, agreed: “It is very difficult, if you are in full-time education, to stay on top of the latest thing that is happening in mobile marketing or social media”.126

119.The News Media Association told us that the increased availability of work-based placements would remedy graduates’ lack of creative and technical skills and “involve closer collaboration between higher education institutions and employers”.127

120.Some of the witnesses praised existing collaboration between universities and the industry. The7stars media agency said that “many universities … push for students to study a sandwich course in order to gain that relevant knowledge. During this sandwich year, students can really get to grips with the technical side of the job”.128

121.Kate Burnett stated that the DMA has an “accreditation programme whereby we set a syllabus that the university can follow … which covers all the major areas somebody working a junior [digital] marketing role would want to learn”.129

122.We heard that some advertising companies were actively working with the education sector to ensure that students are provided with the necessary blend of skills. We heard that Framestore, a company that specialises in special effects, had a partnership with the Arts University Bournemouth to create post-graduate courses in the visual arts. Sir Martin Sorrell, Chief Executive of WPP, told us that WPP runs technical colleges in China, India and South Africa but none in the UK130 while the7stars, a media agency, runs a university outreach programme in the UK. Although there are positive examples of industry and education partnerships, the Advertising Association stated that “closer relationships between the industry and university/college marketing courses should be encouraged so that we foster the right skill-sets and combine practical knowledge with academic knowledge”.131

123.Some witnesses commented that the mission of universities is broader than creating tomorrow’s workers. Professor Jonathan Hardy at the University of East London said that the “role of higher education provision across media and marketing communications is not to be a service provider for ‘industry’”.132 It was incumbent on universities to “open all routes to students to relevant careers across relevant ‘industries’ (plural), meaning all relevant sectors”.133

124.Professor Sean Nixon thought universities should provide students with a wider perspective on values and ethics:

“Someone has to decide what data to capture through the design of algorithms and this need to be informed by a debate about values and ethics. Similarly for the advertising industry, social responsibility needs to be woven into the kind of data they buy or generate and what they do with it”.134

125.The advertising industry’s requirements of the UK’s higher education system are rapidly changing whilst the industry’s traditional source of new entrants—universities—struggle to keep pace.

126.We recommend that universities and the advertising industry work more closely with one another to create focused training and strong local connections. There are a number of examples of good practice in this regard but many university courses are disconnected from the needs of industry.

Diversity

127.Having a diverse workforce that reflects the various demographics of the UK, including ethnicity, gender, class and disability, is essential if advertisers are to understand better the consumers their clients wish to influence and with whom they need to communicate. These demographics also need to be reflected in advertising, for example onscreen. Advertisers’ understanding and respect for all those with whom they seek to communicate is essential to the reputation of the industry and the trust that audiences have in it.

128.In common with other creative industries, as we found in our report Skills for Theatre: Developing the Pipeline of Talent, many of our witnesses thought more diversity was needed in the advertising industry. Alex Lubar of McCann London said:

“We get the greatest amount of creative output of the highest quality when we have a convergence of many different types of talent whether that is a mixture of international talent, of cultural talent or of individuals with different socioeconomic backgrounds. It is that melting pot that creates the greatest possible output”.135

129.Professor Sean Nixon stated that “The overrepresentation of public school and elite-university-educated white men and women does not help the industry to speak to many of its key markets. Whilst recruitment needs to be based on merit, the industry ought to be more proactive in broadening its social composition”.136

130.Black, Asian and Minority Ethnic (BAME) employees make up some 13% of the advertising industry workforce which is slightly higher than their representation in the UK-wide population.137 However, the Ideas Foundation said that “given the London-centric current nature of creative agencies there should be 17.8% BAME employees”.138

131.Leo Rayman of Grey Advertising London said that the advertising industry “sounds a bit perhaps like a middle-class white person’s game”.139 Mr Rayman told us that there are a number of barriers to diversity to the industry. Under-represented communities are often not familiar with the opportunities on offer from the industry or look down on advertising as a career in favour of more traditional professional career paths such as medicine.140

132.In order to overcome prejudice against the industry, Mr Rayman said that Grey Advertising London was conducting a diversity audit of what they produce onscreen as well as their production workforce.

133.Attitude barriers may be due to the industry’s lack of senior BAME role models.141 Mr Rayman highlighted that careers of BAME staff can plateau in the industry as they lack the advice networks to navigate their way into senior positions. BAME staff make up only 9% of the senior level workforce in the industry although this is higher than the FTSE 100 company average of 3.5%.142

134.With regard to gender, the Ideas Foundation stated that there is a near 50:50 gender split in creative agencies but “women are under-represented in creative and technical positions, and are also under-represented in senior management positions”.143

135.Class is perhaps the biggest barrier to the industry with 92% of advertising industry employees from a “more advantaged background”.144 This compares to 54% of households which fell within the category ABC1 (non-manual) in a 2015 survey.145

136.With regards to the disabled community, Mars UK in 2016 ran a successful advertising campaign which featured people with disabilities. One of the world’s leading advertisers Procter & Gamble has taken positive steps to make sure that most of its advertisements are accessible to blind people through the addition of audio descriptions.146 Stephen Woodford of the Advertising Association said that on disability “we have a long way to go, but we have made some great strides in recent years”.147

Recruitment practices

137.A number of witnesses told us that the lack of diversity can be attributed to the reliance of the advertising industry on informal recruitment networks. Nicky Unsworth, Chief Executive Officer of BJL, said that “lots of youngsters coming into our industry tend to know people like us or their parents”.148 By contrast, “working class BAME students often lack access to the networks through which … opportunities arise”.149

138.In 2014 a Creative Skillset Workforce survey found that, across the creative industries, 56% of respondents had found their job through informal recruitment methods whilst 48% had done unpaid work at some point in their career.150

139.Another factor inhibiting diversity is the industry’s use of unpaid work experience placements. Chief Executive of Grey Advertising London Leo Rayman said that the “work experience system [has] historically favoured kids with middle-class parents who can provide funding for them to live in London and float around various companies like ours until they find an in”.151 Dr Jane Tonge of Manchester Metropolitan University commented that there was an industry “expectation that people can afford it”. While potential entrants can bear the cost of unpaid internships for a month at most, they “cannot work for free for a long time, because they do not have the financial resources. They need to pay their rent”.152

140.The Sutton Trust estimated that a month’s unpaid internship in London costs a minimum of £1,019 excluding travel expenses. In Manchester, the equivalent cost is £827.153 Professor Jonathan Hardy of University of East London, stated that “The internship economy can be both exploitative for those within it and highly exclusionary in its mechanisms and operation”.154 Manchester Metropolitan student Farah Bahsoon told us that “I did five internships while I was doing my master’s, and I got no pay at all. I know that has changed: there are now placement opportunities through university.”155 Paul Bainsfair of the IPA said the industry had realised that unpaid work placements are “just not acceptable and people are being much more responsible now about making sure that these placements, as they are called, do get paid for their efforts”.156 Mr Rayman stated that diversity can only be achieved by paying prospective entrants a living London wage.157

141.There are signs of some commitment by industry and the Government to improve recruitments processes. For example, Leo Rayman stated that “we have been working quite hard on our application process to remove both names and academic background from the CV to enable a broader range of people to come into the industry”.158

142.Mr Rayman told us that apprenticeships “assist us with the diversity challenge”.159 Mr Rayman noted that his company Grey Advertising London is developing an ambassador panel who can go out and “speak on behalf of an association, the IPA or individual companies”.160 Grey Advertising London has also convened a cross-agency taskforce in order to share diversity best practice ideas.

143.The Minister of State for Apprenticeships and Skills, the Rt Hon Anne Milton MP, stated in regard to people from BAME backgrounds, “we have specific targets on ensuring participation in apprenticeships by people from those backgrounds in particular”.161 The then Minister of State for Digital, the Rt Hon Matt Hancock MP, said that “effort is needed from the whole industry—we support it but cannot do it on our own—to ensure that everybody gets the opportunity to take these jobs”.162

144.Individuals from all communities and backgrounds should have access to employment in the creative sector. Improvement in diversity will also allow the advertising industry to access a larger talent pool which better reflects the advertisers’ audiences and will help them understand their audiences better. However, industries that fail to provide clear and fair recruitment routes deter entrants from disadvantaged socio-economic groups and members of the Black, Asian and Minority Ethnic (BAME) community.

145.We recognise that the advertising industry has taken effective measures to improve diversity and to ensure that individuals of different ability, gender, ethnicity and class are properly represented in the industry’s workforce and ‘onscreen’. We recommend that in developing new routes to entry and when recruiting people from a range of backgrounds, the industry takes care to avoid its employees believing career progress requires compliance with industry stereotypes.

146.We recommend that the industry should continue to show leadership and improve representation at senior levels. This is critical to embedding throughout the industry recognition that—as its business is to understand and influence citizens of all kinds—there are no barriers to success for people of all kinds. We therefore recommend that barriers to entering the industry such as informal recruitment procedures need to be removed. The Government should clarify, if necessary through legislation, that all internships and work experience programmes of more than four weeks should be remunerated and Her Majesty’s Revenue and Customs should take enforcement action against non-compliant businesses. The industry should develop and implement best practice such as ‘CV-blind’ recruitment processes, and encourage outreach and mentoring programmes.

Careers advice

147.Lack of awareness of the opportunities for careers in advertising on the part of children and their parents present a significant barrier to entering the industry. Many children and young people do not know what the advertising industry entails and the diverse range of roles that are on offer from the advertising sector. Belinda Peach, Director at Peachy, a digital agency and training consultancy, told us that the problem is “awareness for the parents, the teachers and the students. It is still a grey area, and they do not understand what is available.”163

148.Paul Bainsfair said that the Institute of Practitioners in Advertising (IPA) were “surprised to find schools one mile from Soho where none of the pupils had even thought of a career in advertising. It just was not on their wish list or, indeed, had never even occurred to them.”164

149.Christian James, Managing Director of If, told us: “We are still seeing career advisers in school, struggling to articulate, even at a basic level, the opportunities and the rich lifestyle and rich life choice that you can make in this sector”.165 Nicky Unsworth, Chief Executive Officer of BJL, an advertising agency, stated that advertising is not an “industry that people understand. People understand what doctors and teachers do, but advertising is a little more abstract for many people.”166

150.Some witnesses said that advertising had a lower status than other careers such as accountancy or law.167

151.We heard how early intervention, including through careers advice in schools, is important in raising awareness of advertising as a career option. 168

152.According to the Government’s Careers Strategy, there is no “consistent approach across primary schools and limited … best practice for schools to use when planning their activities.”169 In 2018, the Government will provide £2 million to test new career activity programmes or expand existing programmes in primary schools.170

153.Some witnesses questioned whether schools have the capacity to offer interactions with employers to their students. Paul Bainsfair stated, “It is quite noticeable how crammed the teacher’s day is and how hard they find it to create time just to get someone from the outside to come and talk”.171

154.The Government observed that “students from disadvantaged groups, and those who are unsure of their aspirations, have been shown to be the least likely to receive careers guidance … this is particularly important for children from disadvantaged backgrounds who may lack a diversity of role models with experiences of different jobs and careers.”172 Research from the Education and Employers Taskforce found that a young person who has “four or more encounters with an employer is 86% less likely to be unemployed or not in education or training and can earn up to 22% more during their careers”.173

155.Ms Milton told us that “successive Governments have tried, with the best possible intentions, to make careers [strategies] work in schools, but they have failed”.174

156.In 2014 the Government established the Careers and Enterprise Company (CEC) to provide strategic co-ordination between employers, schools and colleges.175 The CEC has invested over £10 million in careers interventions which were focused on areas of the country that the report described as “most in need of support.” Around 250,000 young people have received help through this funding. Ms Milton noted that the CEC was working “in half of all schools and we would like to see it rolled out across the country.”176 The CEC will launch a new investment fund of £5 million by September 2018 to provide mentoring and guidance to the most disadvantaged pupils.177 The Creative Industries Sector deal includes a creative industry-led careers programme which is intended to reach at least 2,000 schools and 600,000 pupils over 2 years.

157.The Government’s Careers Strategy said that before the end of 2020 “schools should offer every young person seven encounters with employers—at least one each year from years 7 to 13—with support from the CEC”.178

158.Professional careers advice is crucial to ensuring that the advertising industry has access to a diverse talent pool, including young people with digital skills. Comprehensive careers advice and employer interactions should start in every primary school and continue throughout pupils’ school careers. This will ensure that children and young people are fully aware of the range of advertising and creative industry roles available to them. We welcome the Government’s commitment to providing resources for careers advice at all levels of education.

159.We recommend that the Government must provide more resources to deliver sufficient careers advice and employer interactions for all communities throughout the UK. The Government must also provide more resources to ensure greater employer interactions with primary school pupils and young people who have not yet chosen their GCSEs. In return, the industry should step up its campaigning efforts to promote advertising as a career to communities around the UK. The advertising industry must also provide more learning tools to schools with a view to introducing pupils, parents and teachers to the roles available in the industry. This learning provision should be supplemented with more visits to schools by advertising practitioners.

160.We recognise that there are great time pressures on school timetables. We recommend that the Government should encourage schools to make time for employers to interact with children by taking account of such interaction activities when measuring school performance.

161.We recommend that universities careers services should promote the opportunities offered by the advertising industry to digital and data students.

Apprenticeships

162.Many witnesses welcomed the principle of apprenticeships as a means to widen the industry’s talent pool. James Murphy, Chief Executive of adam&eveDDB, observed that the advertising industry has “defaulted to two streams of people coming in, one of which is the very classical, high-quality academic background, a small number of universities and … work experience on the other hand.” Mr Murphy further explained that work experience “favours people with contacts, so one of the things we hope to get from the apprenticeship scheme is that we will draw on a much wider and much healthier gene pool ultimately”.179

163.Sir Martin Sorrell, Chief Executive of WPP, thought that university education has a “cachet or a premium attached to it”.180 Sir Martin pointed to Germany where “an apprenticeship programme in engineering or whatever it happens to be is not looked down on or regarded in a different light from a university education”. He noted that in the UK higher education system, that the “practical application of the education we receive may not be as strong”.181

Apprenticeship levy

164.Since 6 April 2017, the Government’s apprenticeship levy guidelines require companies in England with a pay bill of over £3 million to pay to Her Majesty’s Revenue & Customs 0.5% of their wage bill toward the levy.182 The revenue plus a contribution from the Government goes into the employer’s apprenticeship service account. Box 7 explains how funds raised by the apprenticeship levy are used.

Box 7: Apprenticeship levy

Employers in England that come under the scope of the apprenticeship levy are required to register for a digital apprenticeship service account. The Government will add a 10% top up to the employer’s service account funds.

Non-levy paying employers must pay 10% of apprenticeship training costs. The Government will meet the remaining 90% of the cost.

Funds in the apprenticeship service account go towards training and assessment costs. The funds cannot be used to pay apprentices wages, travel costs, on-the-job-training programmes, work placement programmes or the cost of setting up an apprenticeship programme.

Employers can only train their apprentices using training providers who are registered with the Office for Standards in Education, Children’s Services and Skills (Ofsted). Employers can be their own training provider if registered with Ofsted.

Unused funds in the apprenticeship service account expire after 2 years. From April 2018, employers will be able to share up to 10% of their levy funds with other organisations.

There are currently two routes for apprenticeship training:

Apprenticeship standards are set by employer trailblazing groups and cover the core skills, knowledge and behaviours an apprentice will need for a specific occupation.

Apprenticeship frameworks are work-related vocational or professional qualifications that have both work and classroom based training. All frameworks should be replaced by standards by 2020.

Source: ‘How will the apprenticeship levy work?’, The Telegraph, (25 October 2016): http://www.telegraph.co.uk/education/2016/10/25/how-will-the-apprenticeship-levy-work/ [accessed 15 February 2018], ‘The Apprenticeship Levy: the ultimate guide for employers’, The Telegraph, (5 May 2017): http://www.telegraph.co.uk/education/stem-awards/energy/apprenticeship-levy-employer-guide/ [accessed 15 February 2018], ‘Spotlight–Skills and Apprenticeships, How the apprenticeship levy works’, The New Statesman (6 March 2018) [accessed 7 March 2018], The Institute of Apprenticeships, ‘Apprenticeship frameworks and standards: the main differences’ (1 August 2017) https://apprenticeships.blog.gov.uk/2017/08/01/apprenticeship-frameworks-and-standards-the-main-differences/ [accessed 22 March 2018]

165.The Minister of State for Apprenticeships and Skills, the Rt Hon Anne Milton MP told us the advantage of the Government’s apprenticeship scheme was that it was employer-led:

“Employers are the ones who decide what standards they need and what skill shortages they have. We need to make sure that we have the infrastructure to back up what they want to do so that they can make the best use of their levy.”183

166.Kate Burnett of DMA Talent thought that the “levy is a good idea in principle because it forces apprenticeships on to the agenda of businesses that perhaps would not have thought about it before”.184 Ms Milton said that the levy has “kick-started business and public-sector employers into realising that they cannot sit back and say, “We have a skill shortage”; they have to do something about it”.185

167.Several witnesses were concerned, however, that the apprenticeship scheme does not work well for SMEs. Belinda Peach, Director at the Peachy agency, said that the problem with apprenticeship levy is how it will work in practice for smaller employers who comprise most of the industry.186

168.Tobin Ireland, Chief Executive Officer at Smartpipe Solutions agreed: “You do not have time to train people and make sure you are crafting a programme for them”.187 The Commercial Broadcasters Association recommended that “the current apprenticeship scheme needs to be more flexible so that people on short-term contracts, which are common in the creative sector, can benefit”.188

Training standards

169.The rapid change experienced by the advertising industry makes it hard to set apprenticeship standards for the industry. Kate Burnett of DMA Talent said that those standards which do exist are not specific enough for their designated jobs and are soon out of date.189

170.Paul Bainsfair, Director General, Institute of Practitioners in Advertising (IPA), said that the apprenticeship levy “feels like design by committee”.190 Of the approved apprenticeships which were eligible for the scheme, Mr Bainsfair did not believe that “many fit our industry. There are one or two that might, but they do not exactly”.191

171.The IPA stated that the Government body which approves apprenticeship standards, the Institute for Apprenticeships (IFA) which was established in April 2017 takes “two years to approve an industry standard. Our industry will not have a standard until 2019”.192 The Minister of State for Apprenticeships and Skills, the Rt Hon Ann Milton MP stated that 300 standards were awaiting approval.193

Impact of levy costs

172.Several witnesses were concerned that the Government’s apprenticeship levy would threaten training already offered by the industry.

173.The Institute of Practitioners in Advertising (IPA) stated that their programme for trainees had been developed over the last 30 years but was now under threat due to the impact of the apprenticeship levy on “agency budgets”.194

174.Kate Burnett noted that the apprenticeship levy scheme was “restrictive in terms of what people can spend that on”.195 Henry Faure Walker of Newsquest stated that it was disappointing that his company were “unable to offset the levy cost against internal training, because that is much more [fitted to] our needs”.196 The IPA stated that the levy requires “employers spend a disproportionate amount of money on training apprenticeships versus other agency employees”.197

175.The IPA told us that the levy was acting “as an additional tax on business”198. Sir Martin Sorrell, Chief Executive Officer of WPP, agreed and noted that despite the levy costing WPP millions of pounds “the pure financial benefit we get in making a contribution to an apprenticeship programme is very small”.199 Sir Martin said that the levy had not led to WPP “building apprenticeship programmes that are of value to us or our industry”.200

176.Several witnesses noted that the cost of the levy put an additional strain on UK businesses. Henry Faure Walker stated that it will cost Newsquest £500,000 in 2018: this was a “significant amount of money for a business that is under some structural pressure”.201 Some feared that the cost would force employers to cut jobs. The IPA stated that agencies are taking the levy from the cost of the headcount so the “real impact is a negative one”.202

177.Paul Bainsfair of the IPA stated that, although the apprenticeship levy was well-intentioned, “I am not sure it is a good fit for our industry”.203 The IPA reported that only “30% of the available apprenticeship levy has been taken up”.204

178.Some struck a more positive note. Stephen Woodford stated that it was “probably overly cumbersome for an ad agency to set up its own apprenticeship scheme, but we can do these things as an industry.205

179.The Rt Hon Anne Milton MP told us that she was open to suggestions on how to improve apprenticeships.206 The Minister stated that “the whole change of emphasis on skills is to put employers in the driving seat and make sure that they devise the apprenticeship standards they need to get the right people in the industry”.207

180.The Department for Education announced in January 2018 that the number of people taking up apprenticeships had dropped by some 27% in the first quarter of the 2017/18 academic year when compared to the same period in 2016/17.208

181.We welcome the willingness of the advertising industry to use apprenticeships to improve diversity. However, the Government’s apprenticeship scheme is not appropriate for the advertising industry or the wider creative sector. It is failing to provide courses of adequate quality. The slowness in approving apprenticeship standards is limiting the scheme’s usefulness. Many small businesses lack the means to utilise the apprenticeship scheme properly. The inappropriateness of the levy for the creative industries was also noted in our previous report on skills training for the theatre industry.

182.We recommend that the Government should undertake a comprehensive review of the apprenticeship scheme to ensure that it is suitable for the creative industries. Under the review, the Government should investigate how the period for the approval of training standards could be reduced and whether small advertising businesses could pool resources into a shared apprenticeship levy account.


99 Skills and education are devolved matters. This Chapter therefore applies to England only.

100 Written evidence from the Ideas Foundation (ADV0037)

101 Written evidence from the7stars media agency (ADV0006)

102 Q 27 (Paul Bainsfair)

104 Skills and education are devolved matters. This Chapter only applies to England.

106 Written evidence from the IPA (ADV0023)

109 Written evidence from HM Government (ADV0016)

110 Q 32 (Alex Lubar)

112 Written evidence from Mediacom (ADV0004)

115 Written evidence from the Ideas Foundation (ADV0037)

116 Select Committee on Communication, Skills for Theatre: Developing the Pipeline of Talent, (3rd Report, Session 2016–17, HL Paper 170)

117 Education Policy Institute, ‘Entries to arts subjects In Key Stage 4’: https://epi.org.uk/publications-and-research/entries-arts-subjects-key-stage-4/ [accessed 3 April 2018]

118 Written evidence from HM Government (ADV0016) and see Q 53 (Tobin Ireland).

119 Written evidence from Pulse Films (ADV0003)

121 Written evidence from Pulse Films (ADV0003)

123 Written evidence from Direct Marketing Association (ADV0021)

125 Q 9 (Professor West)

127 Written evidence from News Media Association (ADV0011)

128 Written evidence from the7stars media agency (ADV0006)

131 Written evidence from the Advertising Association (ADV0019)

132 Written evidence from Professor Jonathan Hardy (ADV0009)

133 Ibid.

134 Written evidence from Professor Sean Nixon (ADV0005)

136 Written evidence from Professor Sean Nixon (ADV0005)

137 ‘People from ethnic minorities still facing major jobs gap in UK, The Guardian, (7 October 2017): https://www.theguardian.com/world/2017/oct/07/ethnic-minorities-jobs-gap-bame-degrees [accessed 13 March 2018]

138 Written evidence from the Ideas Foundation (ADV0037)

141 Q 44 (Leo Rayman)

142 Written evidence from the Ideas Foundation (ADV0037) and Q 5 (Stephen Woodford)

143 Written evidence from the Ideas Foundation (ADV0037)

144 Ibid.

145 ‘UK became more middle class than working class in 2000, data shows’, The Guardian (26 February 2016): https://www.theguardian.com/news/datablog/2016/feb/26/uk-more-middle-class-than-working-class-2000-data [accessed 30 January 2018]

146 Marketing Week, Why are brands failing to market to deaf and blind consumers?, (31 October 2017), https://www.marketingweek.com/2017/10/31/marketing-to-deaf-and-blind-consumers/ [accessed 6 March 2018]

149 Written evidence from Professor Jonathan Hardy (ADV0009)

150 Creative Skillset, The Creative Media Workforce Survey 2014 – Summary Report, (May 2015) https://creativeskillset.org/assets/0001/0465/Creative_Skillset_Creative_Media_Workforce_Survey_2014.pdf [accessed 3 April 2018]

152 Q 157 (Dr Jane Tonge)

153 The Sutton Trust, Internships - Unpaid, unadvertised, unfair (20 January 2018): https://www.suttontrust.com/wp-content/uploads/2018/01/Internships-2018-briefing.pdf [accessed 3 April 2018]

154 Written evidence from Professor Jonathan Hardy (ADV0009)

164 Q 20 (Paul Bainsfair)

167 Q 45 (Kate Burnett)

168 Written evidence from the Ideas Foundation (ADV0037)

169 Department for Education, Careers strategy: making the most of everyone’s skills and talents (December 2017): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/664319/Careers_strategy.pdf [accessed 3 April 2018]

170 Ibid.

173 Ibid.

177 Department for Business, Energy & Industrial Strategy, Building our Industrial Strategy: Green Paper (January 2017): https://beisgovuk.citizenspace.com/strategy/industrial-strategy/supporting_documents/buildingourindustrialstrategygreenpaper.pdf [accessed 6 September 2017]

182 Department for Education, Apprenticeship funding: how it works: https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work [accessed 5 February 2018]

188 Written evidence from the Commercial Broadcasters Association (ADV0027)

190 Ibid.

191 Ibid.

192 Written evidence from the Institute of Practitioners in Advertising (ADV0023)

194 Written evidence from the Institute of Practitioners in Advertising (ADV0023)

197 Written evidence from the Institute of Practitioners in Advertising (ADV0023)

198 Written evidence from the Institute of Practitioners in Advertising (ADV0023)

202 Written evidence from the IPA (ADV0023)

204 Written evidence from the IPA (ADV0023)

208 Department for Education, Apprenticeships and Training Press Release, (25 January 2018): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/675884/SFR_06_2018_quarterly_apprenticeships_and_traineeships.pdf [accessed 5 April 2018]




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