Sam Sherwood-Hale spoke to Richard Toy, CEO of Auctus Management Group (AMG), about their recent investment and the future of the rail workforce
In February this year Barclays launched a new £370 million lending fund to boost jobs and economic growth in the East and West Midlands. AMG was the first company to secure funding from the Barclays Midlands Growth Fund to support its further expansion. Richard Toy is CEO of AMG, prior to that he spent thirty years in recruitment – picking up awards for his work with SkyBlue.
What inspired you to start Auctus Management Group?
We created AMG in 2012, prior to that I set up and ran SkyBlue, Carilion’s recruitment business from 2000. We built that up into an award-winning company, then Carillion decided to change it from a standalone company into a more group corporate driven entity. I didn’t agree with that new direction, so I started AMG with the goal of growing a professionally trained workforce rather than just helping to move the same aging workforce around the industry.
We immediately focused on bringing new people into the sector, rail has always been very good with its mantra: ‘it’s always been done that way so why change?’. We prefer to be disruptors, when we started there were seven companies established in the sector for Track Warning Systems, the first thing we did was establish a business model that was more customer service focused and we are now effectively the only company providing this service, which has evolved in to a diverse range of service driven by customer demand.
In my opinion rail isn’t used to having a focus on customer service, it’s focus has always been operational delivery. The construction sector was similar but that has changed a lot in the last five years, rail is moving in the right direction but it’s quite a big sector to change. A lot more could be done to integrate companies into some of the infrastructure discussions by improving communication. If we want trains running on time we need to remove the increasing number of speed restrictions, we need to look at all the projects jointly instead of separate packages of work where multiple contractors can be working within the same area but with no joined-up approach.
Last month Auctus Training Solutions had a total of 12 rail courses running, what sort of skills areas are they focused on?
We are a gold accredited national training provider though the National Skills Academy for Rail (NSAR), we can deliver all of the rail competencies and expanded this to include construction sector courses.
As a group we are one of the nine delivery partners for the Midland Metro Alliance, our role within that is the principal partner to supply skilled labour and design training packages to attract candidates who may be unemployed, NEET’s, ex-forces, disabled etc. and train them with our college partners to work in new sectors and reduce the skills shortages.
We have a strong ethical culture that supports equality, diversity and inclusion to ensure we widen the talent pool as far as possible to meet the demands for skills.
How essential are Auctus Training Solutions and Rail Safety Solutions to the overall vision of the Group?
RSS is currently 95 per cent of our turnover. When I set up AMG we were backed by Birmingham City Council, all the finance from this investment by Barclays Midlands Growth Fund goes into the Group and then the delivery is through ATS and RSS.
RSS delivers physically out on worksites, we have eight divisions split into people and price package delivery units, originally RSS was a track warning systems business, we now do vegetation management, track access and level crossings, civils package works, drainage, access points, as well as OLE, S&T and safety critical labour, we then bought Carillion Rail Welding in April from PWC following the Carillion collapse. The company is based in Doncaster but we’ve expanded it out nationally and clear leadership and support is already driving growth.
ATS provides training not only for the group to improve the competency of it’s staff and workforce but also for many clients and has access to many funding streams to support new entrants into rail and light rail sectors.
Given your experience in recruitment and employee development which areas of the rail industry do you think are most in need of new skills?
Controller of site safety and supervisory roles. A lot of people move to controller of site safety as the first level of management, there’s nothing currently that gives people in this position actual management training. So, if you’re trained a certain way throughout previous jobs you then become a controller of site safety and then continue to just manage that way.
Having a consistent work bank which allows you to ensure that all apprentices are being engaged is also key. Much of the workforce is contracted on projects, the industry needs to understand there needs to be a continuous work bank for companies to invest in people. A lot of the big companies have moved away from directly employed staff and we think there should be a move back, but first there should be a work bank, and that’s where the industry has fallen down.
As an employee if you can’t see a work bank you might leave for more stable work and this attitude ultimately impacts on skill progression and management training.
All of Network Rail’s contracts are zero value frameworks, in Control Period Five there was £37 billion worth of work but no guarantee for any one company that the work is actually going to be awarded. At AMG we’ve gone the opposite way and just invested, but if you’ve got 2,500-3,000 companies that are accredited as Railway Industry Qualification Suppliers, those companies need a guaranteed work bank to hire and develop a permanent workforce.
In the June issue of Rail Professional, Mark Coleman of the National College for High Speed Rail wrote that the next generation of engineers will need to be experts in high-speed rail. Do you agree that high-speed rail is the most important area for new skills and do you think enough is being done to get us there?
It is one area for skills. We still have 22,000 miles of infrastructure that needs a skilled workforce to maintain, there’s also the digital railway, there’s a whole set of skills that need to be considered. High-speed rail as a digital railway will require fewer people to maintain it in the long term, we can’t lose sight of the fact that there’s 13,000 engineers required annually in to the Network Rail Infrastructure workforce each year.
The average age of a Signalling worker is 59 whilst the overall age is 47, skills is a global rail issue not just High Speed.
We have to capture the knowledge that’s going to retire and keep it within the rail sector. ATS under the new apprenticeship standard are running the only City & Guilds Level Three rail engineering apprenticeship program in partnership with Colas Rail. This programme currently has 16 apprentices with a further cohort to start in September covering OLE, Signalling, Permanent Way and S&C track renewals. Our block release format has provided Colas with a structured apprenticeship programme which is delivering fantastic results and quality individuals to support their own growth plans.
How will the investment from Barclays Midlands Growth Fund help benefit your customers’ during Control Period 6 and beyond?
Our focus now is all about gearing up for CP6, the spend is increasing, we’ve got to have a structure in place before April 2019, the funding from Barclays will be used to make sure we have the infrastructure in place before that time comes so we can deliver for our customers. Barclays made the best overall offer to allow us to meet this demand.
What are the biggest challenges facing Auctus Management Group and the Industry over the next five years?
For us we don’t see Brexit currently being a problem, as long as you have a clear strategy for how you’re going to develop people from the ground floor up instead of poaching and moving people around. We’re now developing our apprenticeship program, younger people need to be given a chance, we’ve got to change the mentality around blue hats (recent trainees) and ensure they are supported by the industry when on site.
We need to get away from the mantra I mentioned, the more young people we bring into the sector the more discussions around innovation we’ll be having. It is starting to gather pace, but it’s hard to break the mould in the rail industry.
How will the organisation be helping the Government to meet its apprenticeship targets laid out in its infrastructure skills strategy?
We are an apprenticeship provider through ATS, when the Office of Rail and Road took out a lot of the funding for CP5, training fell away for most companies. For CP6 this has to be the focus for all companies, we’ve pioneered and continued with this model of training investment that we can replicate internally to carry on growing RSS.
In what way is technology creating a safer, more productive and efficient worksite for your customers?
AMG is the only company that provides track warning systems, Germany operates four hundred track warning systems a day, in the UK we probably run four or five. Under our track warning system, we can take a week out of a customer’s delivery program.
The perception in the industry is that track warning systems are unreliable and too expensive. Under the safety hierarchy the warning system should be part of the planning process.
The rail industry is not the best for planning, there are always good intentions but engaging with everybody to deliver a project is one of the areas that can be improved from both a safety and cost perspective.