MAKE THE MOST OF APPRENTICESHIPS IN YOUR COMPANY SKILLS, STRATEGIES + SPENDING
Foreword
Contents
Apprenticeships are undergoing a major reform
3
Stripping it back: What’s an
in England. The government wants to improve the
Apprenticeship?
quality and quantity of apprenticeships to address critical skills gaps in the country. To help make this
4
The Benefits of
happen new standards are being developed to
Apprenticeships
better meet industry needs, and funding support for employers has been introduced via the
Myth-Busting
Apprenticeship Levy and co-investment.
Apprenticeships
Apprenticeships offer a valuable way to recruit,
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The Apprenticeship
train and retain highly skilled new or existing staff.
Reform
But with so much complexity surrounding the
whole process, how can companies ensure they are
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The Levy Explained
system? And what are the options for those who
Support for Non-Levy-
don’t pay the levy?
Paying Employers
To help get things on track we’ve put together a
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What Can You Buy With It?
is, the benefits of apprenticeships, and how
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How to Invest the Funding
companies can best leverage the opportunities on
in the Most Effective Way
9
Overcome the Challenges
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What are Other
Companies Doing?
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Find an Apprenticeship
Training Provider
Useful Resources
getting the most from apprenticeships and the levy
straight-talking explanation of exactly what the levy
offer. Let’s get started.
Sources • •
UK Government Education & Skills Funding Agency
STRIPPING IT BACK: WHAT’S AN APPRENTICESHIP? An apprenticeship is a particular type of vocational education that typically combines practical training in a real workplace with classroom learning. Apprenticeships aim to equip learners with the practical knowledge and skills needed to enter the workplace or progress into a new role. They often result in a qualification. Apprenticeships are assessed against levels, as with all qualifications in England, ranging from 1 to 8. The higher the level, the higher the level of demand required to complete it.
NAME
LEVEL
QUALIFICATION EQUIVALENT
Intermediate Apprenticeship
Level 2
5 GCSE passes
Advanced Apprenticeship
Level 3
2 A Level passes
Higher Apprenticeship
Level 4/5
Higher education certiciate/diploma or a foundation degree
Level 5/6
Bachelor’s Degree
Level 7
Master’s Degree
Level 8
Doctorate
Degree Apprenticeship
THE BENEFITS OF APPRENTICESHIPS FOR EMPLOYERS
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Secure highly skilled and invested staff
•
Keep aware of, and aligned with industry standards
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Develop and motivate an existing workforce
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Enjoy improved performance and results
FOR LEARNERS •
Gain industry-aligned practical knowledge and skills
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Take an alternative route to higher education
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Be ready to enter the workforce or progress in a new role
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Earn while you learn!
MYTH-BUSTING APPRENTICESHIPS Q: Aren’t they just for school-leavers? A: No. Apprenticeships are open to people of any age and any career level. Q: Aren’t they only used for trades such as building or plumbing? A: Apprenticeships are valuable for staff of any industry looking to learn practical, role-ready knowledge and skills. Q: Aren’t they secondary to academic education, like degrees? A: They aren’t, they’re just a different route to employment that emphasise both practical and academic competencies. And the majority of apprenticeships offer qualifications, including degrees.
Read more about changing attitudes towards apprenticeships.
THE APPRENTICESHIP REFORM The government has an ambitious plan to achieve 3 million apprenticeships in England by 2020 and vastly improve the quality. Here’s why: •
To address critical skills-shortages (even more pertinent in light of Brexit)
•
To evolve education and employment options that keep up with the country’s diverse and changing needs
•
To better meet the needs of employers, learners, training providers, industry, and the country as a whole
How is this happening? Apprenticeships are being redesigned and a new funding system has been introduced.
Apprenticeship standards Apprenticeship standards outline what an apprentice will be doing and the skills required of them, by job role. The standards are being designed and developed by employer groups known as ‘trailblazers’, in order to standardise skill levels within different sectors, meet industry needs and improve the quality of apprenticeships as a whole. You can find the apprenticeship standards that have already been approved on the government’s website. More will be added once they’ve been developed and approved. “The standards are being designed to standardise skill levels, meet industry needs and improve the quality of apprenticeships as a whole.”
THE LEVY EXPLAINED The Apprenticeship Levy is a tax introduced as part of the government’s initiative to proactively increase the quantity and improve the quality of apprenticeships across the country. Employers in England can invest this money, along with additional government funding in apprenticeships - according to specific rules. The tax came into effect on 6 April 2017. The tax applies to all UK employers with an annual pay bill of more than £3 million, who need to pay 0.5% of their pay bill towards the levy. The pay bill refers to payments to employees that are subject to employer Class 1 secondary NICs. Take a look at the Estimate my apprenticeship funding page to obtain a breakdown of your organisation’s levy commitment. How does it work? Eligible employers report and pay the levy to HMRC through the PAYE process. Employers in England can then use their individual apprenticeship service account to access funding for apprenticeships, choose approved training providers and manage payments. The
government applies a top-up of 10% to the funds that enter the account each month. Funds will expire 24 months after they enter the account unless they are correctly spent on apprenticeships. Employers who aren’t connected to another company or charity will receive a £15,000 allowance to offset the levy payment each year. This equates to 0.5% of £3 million and means that the employers’ spend is on the portion of their pay bill that is over £3 million. Scotland, Wales & Northern Ireland All UK employers pay the levy, but authorities in each of the UK nations manage their own apprenticeship programmes, and outline how funding is spent on apprenticeship training. View the apprenticeship authorities in: • Scotland • Wales • Northern Ireland
SUPPORT FOR NON-LEVYPAYING EMPLOYERS For employers who don’t pay the levy, support is still available! Pay 10% of the apprenticeship training costs and the government will pay the rest (90%), up to the funding band maximum. This is known as ‘co-investment’. You can’t yet use an apprenticeship service account to manage funding and training - but you’ll get support for this when possible.
WHAT CAN YOU BUY WITH IT? •
Apprenticeship training and end-point assessment with a training provider on the Education & Skills Funding Agency’s Register of Apprenticeship Training Providers
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Training must last a minimum of 12 months and 20% of the apprentice’s time must be spent on off-the-job training
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You can only use funds in the account to pay for apprenticeship training and assessment for apprentices that work at least 50% of the time in England, and only up to the funding band maximum for that apprenticeship
THE LEVY CANNOT BE SPENT ON: •
Wages
•
Work placement programmes
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Statutory licences to practise
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The cost of setting up of an
•
Travel and subsidiary costs
apprenticeship programme
HOW TO INVEST THE FUNDING IN THE MOST EFFECTIVE WAY The levy is a huge shake up for recruitment and training as we know it. During its infancy, it’s incredibly important for companies to do as much research as possible into exactly how the levy - and other government funding - could benefit their business. Taking on an apprentice is a huge commitment, but also a huge opportunity, and knowing exactly how to make the most of the funding will play a major role in how successful it is for your company. Read some top tips for investing the funding in the best way for your organisation:
Understand your options Ensure you fully understand exactly what funding you’re entitled to, how much you will physically have to spend and outline any other potential costs of taking on an apprentice. Make sure your L&D/HR department and managers are all involved.
Explore the possibilities Could you use this as an opportunity to transform your workforce development strategy? Could you use it as a motivational initiative to develop and retain existing staff? Could you take on apprentices for specialist roles you hadn’t considered?
Analyse your skills gaps Look at where your company has historically had to spend money on staff development and ask a provider to match this requirement to an apprenticeship standard. Utilise your levy instead.
Do your homework Research everything you possibly can about apprenticeship training providers and their experience, as well as how their offering fits your needs. Think about long-term objectives and find people you trust and feel comfortable working with.
Make a business-driven case Calculate the ROI of apprenticeships in your organisation. Conduct a cost-benefit analysis. Talk to different teams. Talk to other companies. Consider the investment for the future of your workforce. Create a long-term strategy alongside your recruitment plans.
Make sure you spend it! If you’re not going to consider the levy as another tax, then make sure you spend it while you can. Funds will expire 24 months after they enter your account unless they are correctly spent on apprenticeships. Try to utilise it if you can.
Learn more about upskilling existing staff via apprenticeships.
Seek help Invest in specialist advice from apprenticeship services. They can help you conduct skills gap analyses, manage your fundingand supply training. Or take a course on the apprenticeship levy to ensure you’re getting the most out of it.
Remember If you have questions: talk to the approved training providers. They’ve been through a rigorous process to get on the approved provider list and will be able to work with you to see how they can offer training that meets the requirements of the levy, the apprenticeship standard you want to deliver, and the specific needs of your company.
OVERCOME THE CHALLENGES Challenge 1: The 20% off the job rule Apprentices will need to spend 20% of their time ‘offthe-job’. This is by the far the most concerning problem for employers. Most businesses can see this being applicable to new starts, but not to current employees. Potential solution: Understand that apprentices don’t necessarily have to be physically away from your organisation for 20% of the time. They just need to be doing something that isn’t part of their usual role. Utilise this time to get them helping with different projects, learning from others, and studying for the qualification aspect of the apprenticeship. Challenge 2: The minimum length of training The government has introduced a minimum length for apprenticeship programmes, in order to ensure apprentices have the proper time they need to develop. However, this also applies to mature seasoned professionals, who expect to be fit for their new role in a matter of months, not years. Potential solution: The key thing to remember is that apprentices will be working and earning while they learn. Help educate your workforce and support them through this new approach to taking on new roles: implement a learning culture that supports and embraces apprenticeships - and demonstrate the value and successes through pilot programmes.
“Those who complete an apprenticeship at level 4 or above could earn an average of £150,000 more over their lifetime.”
Challenge 3: The cost Employers are concerned about the costs of apprenticeships: from administrative costs to time lost through training, not to mention paying salaries for apprentices. The levy funding only covers training costs, not wages - so salary money has to be available before the levy can be utilised. Potential solution: This is all about planning. Calculate the ROI of investing in an apprentice you’re likely to retain vs. the costs of hiring and losing people who might not be as qualified or motivated to make their role a success. And educate your company. Help your entire organisation understand that apprenticeships are a long-term investment, just like any other workforce development programme. Apprentices will be putting the skills they are learning into their roles immediately, so you will be able to benefit from their training immediately.
Remember The government’s apprenticeship initiative is designed to help with costs, not make them unmanageable. Seek specialist advice or take a course in how to utilise the funding: if you follow the rules correctly there’s no reason the investment won’t reap long-term rewards.
“While some companies already have detailed apprenticeship investment strategies in place, the majority still don’t understand the implications or have a plan.�
WHAT ARE OTHER COMPANIES DOING? At findcourses.co.uk, we speak with employers and training providers on a daily basis, and apprenticeships are dominating many of the conversations. One of our main findings is that companies - even the largest corporations - are still uncertain about the levy and what it means for them. While some already have detailed apprenticeship investment strategies in place, the majority still don’t understand the implications of the levy or have a plan, and some non-payers don’t realise that other funding support is available. The key thing to take away from this is that while the levy payment itself is established, it’s still early days for how companies choose to act on it. The complexity surrounding the levy is still being unpicked, but for those who’ve hit the ground running - here’s what they’ve found. The approach is varied Many employers have taken a cost-benefit approach, with some saying that because of the 20% off the job rule, it makes it impossible financially to deliver apprenticeships and therefore they are just viewing the levy as a tax, and passing on this cost to customers. Others are embracing the levy and utilising it for staff development and a recruitment tool.
Management is a first port of call There has been a noticeable upturn in the interest in developing managers at all levels. Many organisations are focusing on apprenticeship management programmes in the first year, as they know where their managers are, and can monitor its impact more rigorously. Specialist areas are popular The levy and new apprenticeship standards have been welcomed by companies in sectors that previously didn’t have specific apprenticeships for specific roles. For example, in procurement. Previously, procurement companies could only access generic business administration apprenticeships, which left them paying separately for training in the crucial procurement skills. Other popular apprenticeship roles include data analysts and cyber security professionals. While it’s important to be aware and learn from how other companies are utilising the levy, it should only be a small part of your organisation’s research and planning strategy. One size never fits all, particularly when it comes to the changing nature of business and innovation. Why not take the lead in your sector and set the precedent for making the levy a true success?
FINDING AN APPRENTICESHIP TRAINING PROVIDER So, you’re on board. You’ve got your head around how the levy works and what funding support is on offer. You want to invest in new apprentices. You’ve chosen your apprenticeship standard or framework. You’re ready to start. But how do you go about finding a registered apprenticeship training provider who can deliver the right training for your company? findcourses.co.uk has a dedicated apprenticeship training section to help you connect with the right providers. Simply search for your preferred apprenticeship, fill out an information request form, and we’ll help connect you with providers who can deliver the training in your area. Alternatively, you can browse our provider list and contact providers directly. The approved apprenticeships listed on our site typically outline key information you’ll need to know, such as: • • • • • •
Level Typical length Entry requirements Suitable roles for apprentices Qualifications: practical and/or theory-based Professional registration
If the standards for a particular role you’re looking for aren’t yet developed, we’ll help keep you updated on when they are. It’s as simple as that! And if you’re not quite ready to take on new apprentices, you can browse what’s out there and read up on apprenticeships to help inform your strategy for the future.
USEFUL RESOURCES
Full levy and funding specifications: UK Government View apprenticeship authorities in: • • •
Scotland Wales Northern Ireland
Calculate your apprenticeship funding: Education & Skills Funding Agency See approved apprenticeship standards: UK Government Read more about apprenticeships: findcourses apprenticeship hub