Five tips for getting your organisation ready for the apprenticeship levy
by Andy Bates, CFO at Gloucestershire College
As a large employer in the area, the college is currently putting its plans into place to support staff development using our apprenticeship levy payments. To help you do the same, I have put together a list of five things to consider. Although the responsibility for apprenticeships and training may not sit with you directly, I would encourage all senior finance and operations managers to get to grips with the opportunities apprenticeships offer, and the plans your organisation has in place in order to maximise the return on your levy payments. Even if your company will not be paying the levy (i.e. if your annual UK wage bill is less than £3 million), I hope you will still find my advice useful
- Work out how much you will have to spend on apprenticeship training The amount levy payers will have to spend on apprenticeship training and assessments from May 2017 relates to how much levy their organisation will pay. Your levy payments will be calculated at a rate of 0.5% of your UK wage bill, less the government’s allowance of £15,000. So if you expect your wage bill to be £5 million in the next financial year, your levy payment will be £10,000. The amount you will have available to spend (or your digital vouchers) will be this, plus 10% - a confirmed top-up from the government. The only caveat here being if you employ UK staff outside of England, in which case the amount you have to spend would be slightly lower
- Identify current training budgets that could be covered by your levy payments Once you have an idea of the amount you will have to spend, it’s time to start thinking about what the money could be used for. Most medium to large organisations have training programmes in place to encourage continuing professional development that will enable growth. Take a look at your existing training programmes and see which of these could be run as an apprenticeship. This could be anything from management training to marketing qualifications and training for IT support staff. Remember that your levy payments can be used to train existing staff.
- Consider additional upcoming training requirements Every organisation will be looking ahead to identify where future growth will come from. Take a look at your five year strategy and see what new training requirements your staff may have. Are there new skills they will need such as digital marketing? Or do you need to improve your customer service in order to compete? Putting staff through marketing and customer service apprenticeships could be one way of helping you gain strength in the areas you need it most.
- Think about areas of the business in which you might want to recruit new apprentices Where does your organisation have skills shortages and in what areas might you be lacking in the future? Perhaps you need more trained engineers to work with specialist equipment, or more software developers who can bring innovation into your teams. To help fulfil these requirements, take advantage of the free apprenticeship recruitment service we offer at Gloucestershire College.
- Increase your understanding of what apprenticeships are of on offer and how they work Even if you have been involved with apprenticeships before, the scope of apprenticeships is always changing. At GC, for example, we offer more than 35 different apprenticeships from accountancy and team leading, to civil engineering and professional cookery. Having a good idea of the possibilities will enable to you to ensure the best return on your levy payments.
For some large organisations, utilising their levy payments may not be a priority – the levy may simply be seen as an extra tax to take into account when making financial projections for the future. If this is you, I would point out two key statistics that have recently been brought to my attention. Firstly, 75% of apprentices stay with the company they do their apprenticeship with - in many cases at Gloucestershire College, this figure is even higher. This loyalty will not only reduce your recruitment costs, but also improve your chances of a high performing workforce in the future.
Secondly, 89% of apprentice employers say that apprenticeships have helped improve the quality of their product or service. Whether this is via up-skilling existing staff or bringing in fresh talent, ignoring the opportunity to improve doesn’t make great business sense.
I get regular updates from the GC Business Hub team on new companies that we are working with to help them prepare for the levy. Hopefully this article has helped make you think about ways you can do the same. I would encourage you to make use of our business consultants who will work with you to map the right apprenticeships to your training and recruitment requirements.
For more information visit www.gloscol.ac.uk/levy or call the GC Business Hub on 01452 563403.