It’s a great way to inject finance to pay for training in the sector…
Many people today are looking to credit unions as a responsible source for small loans, offered at a competitive market rate for whatever they require.
This is why Skills for Logistics is sponsoring – with industry partners and financial adviser Promethion – the opportunity to establish a credit union that will provide a cost efficient source of borrowing for the logistics sector.
There is a clear need in our industry for this exciting initiative to attract people into our sector and develop and support our existing colleagues.
The Logistics Guild Credit Union will operate like any other savings and loan institution.
However, it will not retain a profit; once expenses have been met – in the same way as the old building society model – any surplus generated will be used for the benefit of its members, including dividends on savings and training bursaries to help the Sector.
In terms of governance the LGCU will have a supervisory board comprising technical experts.
Why is Skills for Logistics involved in a credit union? Because it is a great way to inject finance into our sector to pay for training. Moreover, it will support the entire sector – from the bottom to the top.
For example it can attract job seekers wishing to become an LGV driver who are unable to turn to high street banks or their parents to finance their LGV licence or DCPC.
It can also support an owner operator or logistics manager who wants to study for an MBA.
While students entitled to financing under the student program may not find an LGCU loan competitive, those not entitled may be interested.
The LGCU links in nicely to the concept of “Employment Training”, which will be appreciated by employers seeking pre-trained/qualified people.
Instead of the government giving individuals money for free, or employers footing the cost, by giving individuals access to a low cost loan that can be paid back either in full or in part with an employer contribution, the employer lessens their risk. This will enable employers to use the money that they have available for training much more effectively and train more people.
When it comes to attracting staff and competing for individuals the LGCU can be incorporated into the company package. The salary sensitivity in our sector is a constant threat to staff retention and investment in people. But you can create loyalty by helping people to develop and by advertising to them that you want them to develop and want to support them up the career ladder in the organisation. Staff retention is one of the LGCU’s key bottom line benefits.
By supporting employees to take on a loan to help them develop with more training they are more likely to develop with their existing employer.
Many sectors see this as necessary up-skilling of the whole industry and their companies see it as a natural thing to do, particularly where companies cannot afford to take trained people because they are too costly. Companies in the logistics sector must have faith in themselves as employers and trainers – particularly those who claim to be top companies, because if such claims have any veracity, trained employees will want to stay where they are to build their career.
Credit unions need a common bond and membership requirement. It can be either geographical – such as a London Borough – or occupational, such as The Police. There are too many standard occupation codes across the logistics sector for a credit union, so the Guild offers the ideal common bond. The Logistics Guild is, and always will be, free to join without further obligation. But members then have access to the Credit Union, which will be the Guild’s flagship scheme. While providing a means of practical support for anybody who works in our sector, the Logistics Guild will not in any way tread on the toes of unions or sector management bodies.
It will be complementary, particularly with the credit union putting finance into the system that will help more people to take lower, higher and professional body qualifications.
In a world of reduced public spending and one where commercial finance either doesn’t want to know or is far too costly, the LGCU is a great way to inject finance into our sector.
To move it forward, the logistics sector needs to get behind it. Employers can engage in a number of ways: in addition to employer sponsorship the LGCU needs co-operation from employers in terms of payroll deduction for employee loan repayments, which is an essential risk mitigation step for a credit union. Employers can also help by marketing the benefits of the LGCU to their workforce.