Workers at Norwich training firm asked to take a 20pc pay cut
Staff at a Norfolk training provider are being asked to consider a 20pc pay cut to help ride out a funding shortfall caused by a dramatic fall in the number of apprentices being taken on by firms.
Bosses at EAGIT, a specialist engineering training provider based at Hurricaine Way in Norwich, have made the proposal in a bid to balance the books and avoid the need to lay people off after the number of apprentices referred to the company halved in the last 12 months.
David Shorten, chief executive, said staff were currently being consulted on the plan with a decision likely in January.
If accepted, the pay cut would be across the board for all staff, but the EDP understands that the plan has sparked fears among some EAGIT staff that such a large cut would leave them struggling to make ends meet.
'The number of apprentices being recruited in the sector isn't as expected,' Mr Shorten said. 'While we expect things to improve next September we have to agree a budget between now and then. The problem is that to be an apprentice you have to be employed, but because of the confidence in the manufacturing sector at the moment and the numbers being employed aren't what they should be,' he added.
'What we are saying to the staff is that we have got this budget shortfall and we need to make some cutbacks this year to balance the books.
'We are asking the staff to accept a temporary salary reduction in order to balance the books this year. We have promised to reinstate that next year, providing the economy is where we expect it to be.'
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The government has made great play about boosting the number of apprenticeships, while Norwich North MP Chloe Smith also visited the training centre earlier this year.
Yet the move comes less than a month after Great Yarmouth firm 3Sun stepped in to secure the future of 10 apprentices being trained by EAGIT by offering them jobs amid fears that government funding changes was putting firms off.
And it also comes as another Norfolk firm, Banham Poultry recently introduced a temporary staff pay cut – thought to be in the region of 5pc.
Mr Shorten said the proposal was a reflection of the tough economic climate.
'It's been a bit of a double-whammy,' he said. 'Some of our bigger employers who would normally send five or six apprentices have decided to have a consolidation year – effectively taking a year off recruitment.
'The number of apprentices is about half of what we would expect it to be in a normal year, and although we have funds available from the Skills Funding Agency, we aren't able to draw those funds unless we can find employed apprentices.
'What we are trying to do is conserve the capacity so that we can respond when the situation improves.'