Up-skilling and re-skilling the British workforce has been a key area of concern for businesses. The Apprenticeship Levy was implemented, in April 2017, to help the productivity of businesses. Having a productive business helps organisations with pay, which in turn helps with the cost of living, which then helps to having a better economy. Employers with a £3 million-plus annual wage bill are now required to pay 0.5% of their annual payroll each month as a levy tax. This tax was then set aside for the companies to access, provided it was for approved apprenticeship training. But what about smaller companies? Henley Business School give their advice on how SMEs can take advantage of the apprenticeship levy scheme.
Understand the difference in rules for different-sized SMEs
If a business has a pay bill of under £3 million, they can access 95% of funding from the Government towards training for up to ten employees, but they will need to contribute 5% of the apprenticeship costs. Additional costs may apply based on the vocational sector and type of qualification, and it’s worth noting employers cannot salary sacrifice this from the apprentice. 100% of the cost of apprenticeship training is provided by the Government for businesses with fewer than 50 employees or if the apprentice is aged 16-18. SME’s should also look to partner with large levy paying organisations as these larger organisations can transfer unused apprenticeship funds to other organisations including SME’s.
Up-skill and re-skill existing workforce or hire new employees?
Apprenticeships don’t just have to be for new and young employees. They are potentially available to all, provided employers can evidence a need for new learning. Apprenticeships are a great way to invest and up-skill existing employees, helping organisations improve their employee engagement, but, the UK has an ageing workforce, so it is vital that organisations look to build the capability of their future managers and leaders by recruiting young people. New employees can bring fresh ideas and help drive positive innovation and change.
Organisations need to take a strategic look at what their own aspirations are. Senior teams need to review the knowledge, skills and behaviours gaps in their workforce before identifying the apprenticeships they can best utilise and from which they can gain the maximum benefit.
Choosing the right apprenticeship for employees
There are nearly 800 different apprenticeship standards from levels 2-7. The Institute for Apprenticeships (IfATE) is the place to see what apprenticeship standards are currently running. Each standard will also have a list of Education Skills Funding Agency (ESFA) approved training providers that employers can choose from. Some standards will have multiple training providers. Employers should consider the duration of these apprenticeships (including the end-point assessment) and whether they can fully support the apprentice over this time frame. Individual apprentices will also have different preferred learning methods, so employers should check how the training provider delivers the learning. When recruiting a new employee, employers should check if the individual is eligible to receive apprenticeship funding for that particular apprenticeship programme.
Ensuring a successful apprenticeship experience
Individual apprentices are often highly committed individuals, but they need the support of their organisations, especially their line managers. Ensuring the line manager is committed to supporting the apprentice with the application of learning and allowing them to apply their new skills and behaviours to their roles is crucial for success. Find a training provider with supportive apprenticeship tutors who will work with the apprentice and the line manager to help facilitate this.
Dot the i’s and cross the t’s
The Government set up the apprenticeship levy. SMEs new to apprenticeships must take the time to read through all the information available on the Government website. A good training provider can also help sift through what individual organisations need to know.
