Government figures indicate that in 2017-8 just over 19,000 of the UK’s 1.5 million employers will qualify for the apprenticeship levy.

This equates to 1.3% of employers nationwide, and these businesses are expected to generate £2,675 million towards apprenticeships each year.[1]

However, as of December 2017, currently just 12,500 apprenticeship service accounts are registered on the system which equates to around 65% of the total 19,150 companies who are eligible.[2]

In fact, new research by Evolve Learning Group Ltd and West London College shows that only one in three (32%) of employers who qualify for the levy are taking advantage of it to train new and existing staff. This suggests that a lot of the levy funding is going unused.[3]

This shows that many businesses are still confused or sceptical about the benefits of the apprenticeship levy to them. According to recent statistics 63% of managers still haven’t heard of the apprenticeship levy.[4] 

Common misconceptions

As so many individuals and companies remain unaware of, or doubtful about, the positive impact that apprenticeships and the levy can have on their business it is vital that better communication about the benefits is established.

In this blog we try to address some of the common misconceptions and challenges that exist around apprenticeships and the apprenticeship levy. 

“Apprenticeships are a poor replacement for Higher Education.”

For a long time, apprenticeships were looked down on as they were considered a lesser qualification than a university degree. However, many apprenticeships nowadays range from Intermediate Level 2 (GCSE equivalent), up to Higher Level 7 (Masters equivalent).

Apprenticeships have also previously been associated with ‘the trades’, whereas they are in fact available across a number of industries including HR, IT, finance, management training, marketing and design. This means that a broad range of people can undertake an apprenticeship at the level that suits them based on their prior experience and career aspirations.

For this reason, increasingly, employers are starting to recognise apprenticeships for the role they play in developing highly skilled and capable employees. Careers advice within schools has also started to consider them a credible and worthwhile option for school-leavers.

“Apprenticeships are a burden to the employer.”

Apprenticeships are not only an alternative to University; they are a great way of teaching competencies and work behaviours in addition to theory and knowledge, helping organisations develop a strong talent pipeline. Any initial outlay such as investment in time is quickly recouped as the result is a trained, work-ready employee that knows the business. Think of it future-proofing your business. 

“The apprenticeship levy is not worth the hassle.”

As an employer, you may not have a choice about paying the apprenticeship levy, but you do have a choice about how you use you levy funds. And it’s simple, you can either use them to pay for approved apprenticeship training from a recognised training provider or watch the available funds disappear when they expire in 24 months.

Employer deductions which are made automatically via normal PAYE schemes and transferred directly into an online Digital Apprenticeship Service (DAS) account are subject to an additional 10% top-up payment each month from the Government. This money is then available to the employer to invest in apprenticeships. The problem is that many employers are not making the most of their apprenticeship levy funds for some of the reasons given below:

  • Employers are confused about the new rules
  • Employers are unsure about the impact of the limit on funding availability
  • Employers are putting off setting up a DAS account which is simple to do and easy to maintain and update
  • Employers are viewing the levy as an additional business tax or a burden

“I don’t want to hand over training to an external company.”

You don’t have to! Apprenticeship programmes should be designed along with the employer, maximising all of the on-the-job and off-the-job experiences on offer. However, an outside perspective can be hugely beneficial and may highlight new ways of approaching your business that have not previously been considered. This specialist insight gleaned from an external apprenticeships provider can set your programme apart from those of other companies.

In addition, external apprenticeships are delivered by professionals skilled in  training and teaching; ensuring that any training is properly received. They also have a wealth of experience in delivering a wide range of apprenticeships, giving them in-depth knowledge of many of the areas you may choose to train staff on.

 “So, is it worth it?”

This is a common question, and it is one that both employers and training providers such as ourselves are battling against every day.

The term ‘apprenticeship’ or ‘apprentice’ implies a junior role. For the majority of apprentices, this is the case. It is a junior role. It’s a learning role. An entry role. However, there are also apprenticeships out there for people that are:

  • Changing careers
  • Moving into a leadership or management role
  • In the same job, but having to undertake fundamental new skills e.g. IT
  • Wanting to get back into a career after taking time out to be a parent or carer

Whether the apprenticeships your company invest in are to train up new staff at entry level to become the capable and efficient workforce of the future, or to support existing staff to develop their careers, the additional funds that the levy generates provides an invaluable platform for your company’s development and success.

In conclusion

Since the apprenticeship levy was introduced last April it has certainly been a source of confusion and uncertainty to many businesses across the UK, but at Gi Group UK we know that the benefits of undertaking apprenticeships are manifold.

Apprenticeships help organisations build a skilled and capable talent pipeline, helping to fill the much publicised skills gap. They also create loyal employees that feel invested in and understand your business. And let’s not forget, it makes complete commercial sense.

While we foresee the implementation of the levy being an ongoing task for UK businesses it is one which is certainly worth the initial time and effort as putting in place an effective apprenticeship framework will go on to benefit your company for years to come.

To find out more about the Apprenticeships or the Apprenticeship Levy click here or contact the Gi Group Employment, Learning & Skills team at apprentice@gigroup.com.

 

[1] https://www.onefile.co.uk/explore/education/2-of-employers-are-set-to-pay-the-levy/index.html

[2]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/682464/SFR13_2018_Appandlevystats_Feb_Commentary.pdf

[3] https://www.thehrdirector.com/business-news/apprenticeships/millions-pounds-apprenticeship-levy-money-unused/

[4] http://hrnews.co.uk/shocking-figures-reveal-extent-confusion-scepticism-unawareness-surrounding-apprenticeship-levy/