The levy will require all UK employers with a pay bill over £3 million each year to invest in apprenticeships. All employers will be able to select an apprenticeship framework or standard, choose a provider and an organisation to assess apprentices, and post apprenticeship vacancies.
Research from the National Apprenticeship Service indicates 80% of companies that invest in apprentices report an increase in staff retention as well as boosting the bottom line.
Annette Allmark, director of strategic policy at People 1st, the hospitality consultancy firm, said: “Apprenticeships are a fantastic route to develop the critical skills required now and in the long-term. They are critical when considering that the annual staff retention bill in hospitality is £274million and the industry needs 1.3 million skilled staff by 2024 to operate effectively and remain competitive.”
The government is applying a monthly 10% top-up to the funds businesses have for spending on apprenticeship training. For every £1 that enters an account, businesses get £1.10. Funds will expire 24 months after they enter an apprenticeship service account unless they are spent on apprenticeship training with a training provider.
Businesses with any existing schemes that started before May 1st will have to continue funding training for apprentices under the agreed terms at the time the apprenticeship started.
There are two different types of apprenticeship training to choose from. Apprenticeship standards cover a specific job role and apprenticeship frameworks are a series of work-related vocational and professional qualifications. Frameworks will be phased out by 2020 as the government moves to employer-led apprenticeship standards.
For those not paying the levy, the government is helping employers prepare with a co-investment initiative. The government asks for a 10% contribution to the cost and will pay the rest.
People 1st offers the following advice to employers:
Understand the apprenticeship levy and the impact to your business
- To make sure you maximise the return on your levy investment, you need to act now. Whilst many employers have their levy strategies well underway, the funds only expire after 24 months so there is still time to put in place a strategic plan.
Develop a well-planned apprenticeship strategy that reflects the needs of your business
- It’s critical that you get the buy-in of the business more widely and that you communicate the goals of the new apprenticeships clearly. Pull in all the relevant stakeholders and ensure that they all understand what the introduction of the levy will mean to the business and are all involved in creating fulfilling programs that meet the standards.
Make it work for you
- Think about how apprenticeships can be used to develop your talent, increase retention and boost productivity: The new-style apprenticeships have been developed by employers and form progressive career pathways. Look across your business and explore the new standards, covering entry level through to managerial roles, to see which of them can be used to develop the skills you need.
Access the available support
- The new apprenticeships present employers with an opportunity to develop skills and improve staff retention, but there’s a lot to think about in preparation - our free network can help.
Bartlett Mitchell, which currently offers a scheme that has placed 34 apprentices across its business, believes the levy is a move that facilitates the investment in new talent and offers more opportunities to young people.
Ian Thomas, CEO of Bartlett Mitchell, said: “We have been working with apprentices for some time so this is not new to our business. The introduction of the levy hasn’t significantly changed our programme as it was already in place. It has simply encouraged us to look at the forthcoming business needs in coming years as we evolve the future programmes.
“We are already working in partnership with the apprenticeship services provided by the government. As a business that is fundamentally about food, next year, we are going to focus on apprenticeships for chef de partie roles. Investing in such roles is hugely important for the sustainable growth of the business.”
Compass Group UK & Ireland was delivering 500 apprenticeships per annum before making a commitment in March 2016 to increase its delivery by 300% by the end of 2017.
Melanie Hayes, resourcing and development director, Compass Group UK & Ireland, said: “We absolutely see the implementation of the levy as an opportunity, as it enables us to invest more than ever in our employees to help them be the best they can be. As a people powered business, we see the value in training our colleagues and giving them the opportunity to progress within their careers.
“Additionally, we have also made an investment in developing our career pathways so that an apprentice can see how their future career could progress within our business. We’ve found this really focuses people and enables them to do the right training to get where they want to be.”
CH&Co works with a dedicated education and training provider, Learning Curve Group, to assist the company in the delivery of its apprenticeships. The catering company also has its own Chef Academy that focuses on culinary skills training and centres on the various levels of apprenticeship qualifications.
Alison Gilbert, group human resources director, CH&Co Group, said: “CH&Co Group is committed to making the levy an opportunity within the business. Our plan is to ensure that our core food and service apprenticeships are fully levy funded, but we will also encourage higher level apprenticeships. Why wouldn’t we? The government is funding 90% of these and the business 10%, so qualifications that might not have previously been accessible, such as degrees, are now something we can offer as part of our training and development programme, which is fantastic for our employees and also for our business.”