On the anniversary of the Apprenticeship Levy, the Open University highlighted that, although 50,000 organisations have paid £1.39bn to the Apprenticeship Levy, only 8 per cent of the funds have been used - a meagre £108m. Is the answer to greater take-up changes to the scheme, or should organisations change their approach instead?
In its study 'The Apprenticeship Study: one year on' , the Open University identifies a number of barriers to a greater take-up, namely:
- The burden of researching, registering and managing the implementation of the scheme, as well as the time it takes to set-up the apprenticeship.
- The cost associated with creating a new position - including wages, which must be covered by the employer, and come in addition to enforced pension auto-enrolment and increases in national minimum wage. Over a quarter of organisations surveyed wanted Apprenticeship Levy funds to be made available for salaries.
- The time required out of work for studying. Around a quarter wanted to see the obligatory 20 per cent off-the-job training removed.
- The shortage of local providers and the mismatch between the needs of the business and the programmes offered. Around a third of businesses wanted to see more flexibility in course content, and nearly a quarter called for the Apprenticeship Levy funding to pay for other forms of training, as well as modular training.
Government chose to mainly address the latter by recently introducing new apprenticeship standards and updating existing ones, so that more courses could be offered. It has also made the Levy accessible for the training of suppliers .
However, concerns over the additional wage cost are an indication that organisations might be missing a trick and solely using the Levy for new (young) employees. With MBAs and higher level apprenticeships being offered, it may be time for organisations to change perspective and think of the Levy as a way of upskilling their existing and more senior workforce.
Upskilling with apprenticeship
Unlike traditional apprenticeships, there is no age restriction to the funding offered through the Apprenticeship Levy. Nor is there a requirement to create a new position. In fact, the Government guidance highlights that it is suitable for 'an existing job role, where the individual needs significant new knowledge and skills'. When four out of five companies are worrying about filling the skills gap, there is a prime opportunity to consider how the Levy can be used for upskilling existing workforce and delivering the organisation’s people strategy.
There are hundreds of apprenticeship subjects and professions to choose from, including aerospace, engineering, nuclear and IT. It suggests many opportunities to address the challenges brought to the workplace by digital transformation. There are also seven levels of qualifications, which no longer limits apprenticeships to school leavers and enables further development of the graduate workforce. You could even use apprenticeship training to widen your pool of applicants for hard to fill positions; recruit for strengths, attributes and cultural fit; but commit to train for skills!
The Levy could also be the key to management training. Only 20 per cent of British managers reportedly have a formal qualification in management . Yet a study by Investors in People estimates that bad managers cause an £84bn loss to the economy each year . The Chartered Institute of Management considers improving management and leadership as 'key to solving the productivity puzzle and critical to our economic success'. Bearing in mind that some MBAs have been registered with the apprenticeship service, you could even use the Apprenticeship Levy to support your leadership team development.
Align apprenticeship with business strategy
To make the most of your funding allocation, consider taking the following steps:
- Review your business strategy: what are your objectives? What will your employees need to be doing in four or five years’ time? What skills will they need to do that?
- Conduct a skills audit to identify the skills of existing staff, comparing those to the skills your organisation will need in the future and identifying the gaps.
- Identify suitable apprenticeship provisions but also assess what might be missing.
- Support and engage employees in their development aspirations: review appraisals, encourage your managers to have development discussions, consult on your plans and generally encourage a culture of learning.
- Once you are clear on your needs and who might benefit from the scheme, start the conversation with your local providers or contact the National Apprenticeship Service.
Remember that funds are only valid for 24 months from the date of issue, so time is running out, if you want to make the most of what you have already paid in!
If you would like to discuss your organisation’s people development needs, please contact Caroline Bellanger Wood.