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People strategy

Here’s How to Make the Apprenticeship Levy Work for You

Richard Alberg

woman-working.jpegThe Apprenticeship Levy is just a month away — here are a few simple tips to help you and your organisation get the maximum amount of value out of the new programme.

I’m sure you’re aware, by now, that next month the government will be rolling out its new Apprenticeship Levy, which will affect UK businesses with an annual payroll of more than £3 million. Below, I’ve outlined some of the key details of the new levy, as well as how you can properly prepare for the change.

“Use it Or Lose it”

There’s been plenty in the news in recent months about the forthcoming Apprenticeship Levy, but at the end of the day, it all boils down to one question: is it a good or bad thing for organisations?

I’d argue strongly that the Apprenticeship Levy isn’t just some irritating piece of legislation that businesses must learn to live with. It’s actually a huge opportunity for companies in highly technical sectors that are struggling with a growing UK skills gap.

Although the UK has had an apprenticeship system in place for years, the new levy, which officially goes into effect on the 6th of April 2017, will introduce several significant changes from the previous system.

Firstly, there’s going to be a massive increase in available funding. Currently, about £1.5 billion is spent annually on apprenticeships in the UK. Just doing the maths, the new levy (which represents 0.5% of the total payroll of all qualifying organisations) will generate almost £3 billion per year. In other words, the market is going to effectively double in size. This is going to have a huge impact for those companies willing to be proactive and capitalise on the new resources at their disposal.

These funds will go into a “levy account,” and the firms can use them to invest in apprenticeship recruitment, education and training within their organisations. The key change here is that in the past, apprenticeship funding was effectively free, and now companies must pay for it upfront, whether they end up using it or not. As such, I’d expect that companies will be motivated to see a healthy return on the investment they’re required by law to make — after all, if you don’t have a say in the matter, you might as well make the most of it, right?

Building a Brighter Future

One of the most important (and least-known) changes is who actually qualifies for government funding. Under the current system, anyone who’s been to university is automatically ineligible for apprenticeship training. This Spring, however, the funding will be available for all types of workers. Resources can be used for graduate onboarding, technical skills training for current employees, leadership development and so on.

A retailer could start training a standout middle manager for an eventual executive role; or, a tech firm could pluck a highly motivated (but inexperienced) software engineer directly from university, then provide a structured learning journey that transforms them into a capable, highly valued member of the team.

How Can Organisations Make the Most of the Apprenticeship Levy?

While a segment of the apprenticeship market will consist of existing staff, much of the investment will go towards people who are new to the workplace. This presents a challenge for employers, especially when recruiting younger candidates: when your talent pool has little or no real-world experience, how do you effectively distinguish the best from the rest?

In high-volume campaigns, you can’t possibly interview each and every candidate, at least not on the phone or in person. Automated screening tools and video interviewing software enable organisations to get a better sense of an applicant’s softer skills without taking on an unmanageable amount of real-time conversations in the early stages of recruitment.

How articulate is Mary? Does Fred have a sense of why he’s applied for this role? What kind of interesting experiences has Jane had in her life? These are the kinds of questions that are ideal in a video interview, which then allows you to quickly identify top prospects and invite them to an in-person meeting.

At the end of the day, the new Apprenticeship Levy is an opportunity, not an obstacle. I don’t think any employer could argue that investing in new skills and career development training is a bad idea — why should we feel any differently now, just because it’s required by law?

Richard Alberg

Richard Alberg is the CTO of Corndel