Why the Apprentice Levy Can’t Be Pigeonholed
We are living through extraordinary times. Disruptive tech innovations, dizzying political upheavals and growing public demand for action on issues from inequality to the environment are all contributing to a landscape of unprecedented change. But we are still clinging to outdated ideas of how, and when, we should gain new skills.
The use of apprenticeships is a great example of how old-fashioned thinking can hold a business back. Apprentice start figures have seen a decline in the last three years and are well short of the government’s initial three million target. In isolation, these figures paint a stark picture of the usefulness of the levy in driving apprenticeship uptake. Further, the ways in which the apprenticeship levy IS being used have sparked furious debate amongst sector influencers.
The pervading narrative is that apprenticeship learning should be limited to young people fresh out of school. This is a myth that many employers also believe. In recent research of 510 UK mid-market employers carried out by Grant Thornton UK LLP, we found that 44% of respondents don’t currently use apprenticeships as a means of upskilling their people. In addition, over half (56%) still believe that apprenticeships are designed for employees at the beginning of their career and 42% think the focus is on new recruits.
It’s time to change these outdated attitudes.
We know from our 2018 Planning for Growth research that 92% of UK mid-market employers will need skills that don’t currently exist in their workforce in the next five years. Recruitment of new and entry-level talent will be vital in addressing this gap, but upskilling current employees is equally important.
According to our employer research, 56% of organizations are already using the levy to fill these skills gaps by investing in current employees. The levy is a flexible tool that covers all levels of apprenticeships, from level 2 (equivalent to GCSEs) all the way to Masters’ level qualifications; it is available for existing employees as well as new recruits and has no age restriction. As such, it helps employers to effectively address three of the biggest issues faced – skills development, diversity & inclusion and top talent retention.
Currently, 43% of mid-market employers say that the
levy enables them to develop a diverse workforce. As a firm, we have fully embraced the
introduction of the apprenticeship levy.
We currently have over 800 apprentices in the business ranging between
level 3 and level 7 and accounting for approximately 15% of our UK workforce.
A key focus is broadening our talent pool to build greater diversity of thought and better serve our clients’ needs. We use levy-funded apprenticeships as a catalyst to remove barriers in recruiting talent. University is a fantastic way to gain skills, but it’s expensive. Apprenticeships allow people, no matter what their background, age or career stage, to earn and learn at the same time, gaining qualifications without the costs.
“I’m finding that there’s a common misconception of what an apprenticeship entails,” she explained. “Even some of my larger clients are telling me they don’t employ apprentices, so they’re really surprised when I share my own experience of completing the Executive MBA. Once I explain that they’re paying the Apprenticeship Levy every month and could be using the funds to develop, incentivize and potentially retain their best talent, they see it in a whole different light.”
Tax Director Mandipa Soni completed a Senior Leader Masters’ Degree Apprenticeship (Executive MBA) with a distinction earlier this year.
Grant Thornton has also directly supported over 2000 organizations in implementing levy-funded training. Working closely with a small number of training providers we have co-developed a range of apprenticeship programs and supported the training organizations to take these to market at scale. Again, these range from level 3 through to level 7.
ABM, which provides facility service solutions across the UK, is currently using the levy at every level of the business. Since developing a catalog of apprenticeships, the business has enrolled 23 mid-senior managers on our leadership programs offered in partnership with Activate Business School. ABM hopes the new apprenticeships will build managers’ confidence, enabling them to lead more effectively.
There is still a huge opportunity to educate more employers on the range of powerful commercial benefits that come from the strategic deployment of levy-funded apprenticeships. When delivered against clearly defined business needs, skills development through apprenticeships can deliver outstanding results on a wide range of critical issues. Clinging to old fashioned ideas will leave you behind.
About the author: David Hare leads Grant Thornton’s talent solutions team, supporting clients to drive business performance through their people and skills strategy. He has extensive experience working on the skills agenda across the public and private sectors. David’s specific focus is around the introduction of the apprenticeship levy – working tirelessly to change the perception in the market, from it being an additional payroll tax to an opportunity to develop a workforce for the future.