In April 2017, an Apprenticeship Levy was introduced, which required organisations with an annual ‘pay bill’ of over £3M to invest in apprenticeship programmes. The levy’s core objectives were to develop vocational skills amongst UK’s workforce and to increase the quantity and quality of apprenticeships. For many businesses, offering apprenticeship programmes was unchartered territory and therefore required considerable forethought to ensure that what was put in place was fit for purpose.
Almost six months have passed since the introduction of the levy, and below, we reflect back on what has changed and how businesses have been responding to the government-led initiative.
These are the thoughts and takeaways from an HR Leadership Think Tank held on Tuesday 26th September, hosted by Peel Hunt’s HR team. This Think Tank sought to discuss the topic of “The Apprenticeship Levy: 6 Months On”.
What has changed since the Introduction of Levy?
First and foremost, the eligibility criteria to become an apprentice has changed, allowing anyone of any age or skill level to join the programme. MA and MBA students, in particular, have become unlikely beneficiaries of the levy. To be an eligible apprentice in 2017, one must reside in England with Scotland, Wales, and NI rolling out their own programmes in 2018. So, what does the apprenticeship entail?
The apprenticeship is:
- A modular programme of learning that lasts a minimum of 12 months and a day
- Available to anyone of any age, for existing or new employees at any level
- A nationally recognised and accredited course – “Standard”
- Organisations can work together to create a Trailblazer standard if relevant standards do not currently exist
- Achieved by on-the-job training and at least 20% off the job study (dependent on how the
programme is set up, i.e. mentoring, team meetings, site visitors, e-portfolios).
- Assessed at the end of the programme by certified assessors against standards
- The level of learning can vary from GCSE (2) to Masters Level (7)
Businesses: Spending Your Levy
The levy is taken out as tax from a business’s bottom line and is placed into the digital apprenticeship system where the system holds the fund as a digital voucher. The levy is only allowed to be spent on training and development of apprentices. Below are common answers to FAQs regarding the spending of the Apprenticeship Levy:
- Levy vouchers will be valid for two years. If the vouchers are not claimed, other organisations will be able to use that money towards training within their own organisation.
- The levy allowance is to be paid in 12 equal monthly installments to registered trainers.
- The Government is focused on providing STEM training in apprenticeships.
- Once the levy enters the digital apprenticeship system, the money is no longer owned by the business.
- Some organisations give a ‘golden pot’ at the end of the apprenticeship to motivate those to stay through the programme.
- In 2018, larger organisations are looking to spend up to 10% of the levy pot to upskill their
employees even if they aren’t required to pay the levy.
- Organisations can wrap bitesize training into a 12-month programme to be able to use money within the levy pot.
When discussing the apprenticeship programme internally, it’s important to flip the conversation from being based around money and costs to being based around skill development opportunities and chances to learn.
Questions to Consider Before Starting the Journey
- What is your organisation already doing from a talent/learning perspective?
- What is the culture around learning?
- Is learning a new skillset something that is considered positive or is it viewed that someone isn’t quite as skilled in their job?
- Are your workers tech-savvy? Is your workforce ready for e-learning or would your employees prefer classroom learning? What skills does your organisation have internally?
- Know these answers in order to properly negotiate with training suppliers to deliver the best training solution for your workforce.
- How should your organisation engage line managers and learners?
- Internal engagement should not be underestimated. People actively choose the
apprenticeship programme over going to university with the mindset that they “risked” giving up university to enroll in the apprenticeship programme.
- Internal engagement should not be underestimated. People actively choose the
- At the end of the apprenticeship, will the employee have a better job?
- Ensure that your organisation can meet expectations and provide opportunities at the end of the apprenticeship or at least increase the breadth to their existing job role (Government will audit this)
Throughout the apprenticeship programme, it’s important that line managers become mentors and are responsible for the learner, providing work for the employee and on-the-job training.
Defining Apprenticeship Strategies
There are many misconceptions surrounding the apprenticeship programmes. In reality, there are many tiers of apprenticeships, the programmes can be quick to complete, and the programme can provide incredible learning and advancement opportunities for employees to improve their skillset without having to pay university prices.
Important strategies and questions around implementing the apprenticeship strategies in your organisation include:
- Whose responsibility is the apprenticeship programme? Is it mostly HR’s?
- Should an organisation treat the levy as a tax or simply just use it?
- Decide to use the levy, and implement a strategy. Tap into TA insights.
- Start with a pilot group of external hires. Get funding for salaries and start with a small number to make the process as noninvasive as possible.
- What are the costs for talent/succession?
- Why spend £1000s on headhunters to find senior leaders when you can be developing your existing workforce? This helps feed the talent pipeline with people who are engaged and willing to learn.
- What careers are partial to apprenticeships? I.e. Tech, HR, Finance, etc.
Introducing the apprenticeship programme within an organisation allows the company to acknowledge weaknesses and find where there’s room for improvement. Tie apprenticeships into your long-term business strategy since the business now has a pot of money available to train workers.
Existing Employees and Training
The apprenticeship programme builds skillsets within existing employees and is extremely cost effective for the business. The trainings don’t have to be brand new initiatives either. Simply build training programmes using existing training modules so that your company can access the levy’s pot of available funds.
There are countless training providers available, and it’s difficult to examine the quality of each provider as many don’t have tenure in the particular training space. It’s important to use referrals and recommendations to understand which training provider will be the best for your business.
Some topics to consider when deciding on a training provider:
- Understand the provider’s strategy and match this with your company’s needs.
- Identify meaningful training for the right people in the right role.
- Retain a level of control (and awareness) by not giving away the entire training process to one provider.
How to Identify the Best Talent for the Apprenticeship Levy
There’s an inherent risk with the apprenticeship programme as it takes employees away from their normal day-to-day work tasks, which in the long term is a small price to pay for advancing employee skillset.
- What does great talent/future leadership look like? How do organisations define this talent,
intellect, potential, values, motivations, emotional stability, etc.? Take data and facts back to
business and help eliminate bias and beliefs.
- How should an organisation find talent for the programmes? Don’t pigeonhole talent based on degree, university attended, etc.
How Should an Organisation Measure Success?
The Apprenticeship Levy was created as an immediate fix to a 5-year plan to increase apprenticeships throughout the UK. It’s important to initiate a pilot programme within your organisation to determine its level of success. To be able to measure the success of the programme within your company, be sure to:
- Create metrics surrounding the quality of each hire, i.e. are apprentices getting up-to-speed quickly and what is the return on investment of those staying within the programme?
- Find out how the apprentices feel about the company, brand, etc. It’s important to ask questions to know how to tailor the programme for future apprentices.
The Apprenticeship Levy provides opportunity for employees to grow in their current positions, achieving new success with “free” training.