The Apprenticeship Levy

The government’s reformed apprenticeships initiative includes a compulsory levy for companies that have a payroll of £3m or more.

The Apprenticeship Levy

For levy paying companies this is a ‘use it or lose it’ tax which can be turned into an investment in the business and when managed effectively will support your existing talent management and development strategies. However, some firms are still either unaware of the fact that they will have to pay the levy from 1 April 2017 and/or unprepared for making the most of it.

The following six-point plan is a useful tool for turning the apprenticeship levy into an investment in the business:

  • Get to know the levy, the rules and how they will affect your business.
  • Identify the job roles and job families which might be offered as apprenticeships either internally as development pathways or to support recruitment.
  • Review your current investment in learning and training and identify whether any of that spend contributes to the delivery of apprenticeships.
  • Research the new apprenticeship standards and map your roles.
  • Set up the resources to deliver apprenticeships including researching approved apprenticeship training and end point assessment providers (which must be two separate providers for training and assessment).
  • Build apprenticeships into your business operations.

What the apprenticeship levy is also doing, beyond its practical purpose, is challenging HR/learning and development/organisation development functions to take a strategic view and demonstrate some measurable returns on investment. This is combined with the need to think strategically on the role of HR in assuring the implementation of the Senior Managers Regime, and 2017 will be a busy year for this function of the business.

So, here are some key considerations for those within levy-paying firms with responsibility for delivering on apprenticeships:

  • External recruitment – if you are planning to use apprenticeships as part of your recruitment plans, you need to know how and where you are going to promote the opportunities to ensure that you attract the candidates you want. This might open up new and cost effective recruitment strategies for your business.
  • Selection – whether you are using apprenticeships as part of your external recruitment and/or your internal development plans, again you need to consider how you are going to identify the right candidates?
  • On-boarding – focus on the on-boarding process and consider how you are going to maximise your retention and reduce attrition rates.
  • Training and learning – will your in-house team/learning resources provide some of the training or do you need external delivery partners? If the latter, how will they be selected?
  • Performance and supplier management – how are you going to manage the performance of your apprenticeship suppliers and programmes?
  • Success measures – how will you demonstrate to the business that they have received value from the investment in apprenticeships.

Apprenticeships offer a unique opportunity to show value-add and for many HR directors and those in charge of learning and development, demonstrating ROI from the levy is critical. A focus, therefore, on how apprenticeships deliver real measurable outcomes ensures the engagement and support of the whole organisation, from operations to finance. Outcomes include:

  • Reducing recruitment costs.
  • Improving staff retention.
  • Reducing attrition.
  • Improving productivity.
  • Improving levels of certification and qualifications held within your workforce.

With some strategic planning and a clear link to key business priorities, the apprentice levy should not be seen as a drain on resources, but rather as an initiative that can add real long term value to the business.