Employers need more help in navigating the Apprenticeship Levy 0

Apprentices levyAccording to the latest governmental statistics, apprenticeships reached a record high in 2014/15 with over 871,000 apprenticeship participants within the UK. The majority of these were in the service sector, and almost three quarters were concentrated in three sectors: Business, Administration and Law; Retail and Commerce Enterprise and Public Services and Care. Last year the government announced its plans to introduce a new UK-wide levy on large employers in a bid to fund apprenticeships and to create 3 million more apprentices by 2020. Due for implementation in April 2017, this levy promises to have a significant impact on the existing apprenticeship landscape. As the implementation of the apprenticeship levy draws nearer, it is rising to the top of companies’ HR and Finance agendas, as businesses attempt to work out how to reap a return on investment, with the Confederation of British Industry (CBI) calling for the Government to put off its introduction.

Of the 20,000 companies falling under the levy’s influence, several businesses have welcomed the scheme as a tool for incorporating apprentices into their business plan, but others have argued that the levy risks damaging existing training schemes, promoting quantity over quality and adding unnecessary financial burden to their businesses. Consequently, the CBI has demanded that the levy be delayed and be subjected to a ‘radical rethink’.

Whilst the levy has been hugely beneficial in terms of apprenticeship awareness, several teething issues need to be addressed in terms of the incorporation of UK businesses and young apprentice candidates.

In a sense, the Strategic Development Network is correct to argue that the levy is a ‘step in the dark’ for the majority of businesses. The levy’s ambitious time-scale, for example, is leaving businesses with little time to make necessary preparations or to get their heads around the intricacies of the scheme. In many cases there is a far bigger problem however; there are businesses that are still not aware of the levy and its potential impact. One CEO of a business with a £10m+ payroll bill that I met this week was genuinely surprised by the ‘news’ of the levy when I introduced it to him.

As the British Chambers of Commerce recently highlighted, many businesses shy away from apprenticeship investment due to a fear that apprentices are not cost or resource efficient. Even more concerning are reports of employers cutting back on existing training schemes in a bid to deal with any burdens of the levy. It is not surprising in some ways, that companies can quickly become more concerned with getting their money back from the levy than with using the scheme as a means of delivering their long-term talent strategy through an effective apprenticeships programme.

The government’s aim to create three million more apprentices by 2020, for instance, is currently one of the biggest criticisms, due to concern that it will force quantity over quality. A common question from employers that strikes at the heart of this concern is a really simple one, but potentially challenging to answer. ‘How do I select the right training provider?’. Ensuring that this question is asked and answered effectively will be critical to the quality of apprenticeships in the future. The right relationship with the right training provider will help make sure that training delivered through apprenticeships is relevant, high quality and underpins the individual employer’s values and these are all important factors for success.

Strong and effective engagement with the right provider will ensure that the right candidate develops the right skills, in the right way. When viewed in this light, it is clear that the selection of the right training providers really is important as they are building the skills that are crucial to an organisation’s future success.

The right candidate ‘fit’ is an important part of this recipe. Apprentice recruitment is the first step in a long-term relationship between employer and employee; simply assessing if they have completed the apprenticeship qualification successfully really does miss the point. For young candidates, there are numerous factors to consider, including career progression, work environment as well as ‘pay and rations’.

For employers, apprenticeship recruitment is too often lost amongst other programme details. Yet apprentice recruitment is just as important as other roles within a business and warrants equal, if not more, time and focus. This is because the most significant return on an apprentice investment will often occur years after their initial employment. Ensuring they are a good fit to the values and aspirations of the company before they are hired makes far more sense than doing it 2 years down the line.

At GetMyFirstJob we have seen first-hand the incredible apprentice-employer achievements that occur when recruitment and training is carried out effectively. Indeed, during a recent survey at GetMyFirstJob, 90 percent of our SME database claimed that apprentices added energy to the work force, helped increase productivity and contributed to long-term growth. Increasingly, our experiences are also enabling us to provide support for organisations on how to respond to the levy, to build talent pipelines and to establish effective and positive relationships with training partners – all of which can help set the foundations for future success.

I personally believe that the apprenticeship levy has the potential to deliver a major and positive change to the UK’s vocational system. At best, it will deliver significant benefits to UK businesses. At worst, the changes will drive providers and employers to simply chase the funding. For success, all employers of apprenticeships – whether they pay the levy or not, whether they are public or private must be clear on exactly what they want to achieve through their apprenticeship programmes.

Whether this is to address current skills gaps, produce a work force for the future, or even develop skills to support the growth of an entire sector, clarity about the objectives of any programme must be identified in order to ensure the correct recruitment and delivery decisions.


David AllisonDavid Allison is Founder and MD of GetMyFirstJob.co.uk, an innovative web platform that improves the speed and quality of matching young people to the right training provider and employer.