There have been lots of frightening percentages concerning Apprenticeships thrown around over the last few months;
- 41% fall for apprenticeship starts since the introduction of the Apprenticeship Levy
- 38% drop in starts for 16-18 year old’s
- Only 55% of Apprenticeship Levy paying employers are registered on the Government Apprenticeship Service
I had a conversation the other day with a lovely HRD which gave me a lightbulb moment and made me question; are we trying to get ‘People People’ to change into ‘Money People’?
- People People are focused on the growth of skills and talent in their organisations; meeting legislation and ensuring growth targets are achieved
- Money People are focused on maximising the potential of the income against not spending unnecessary money
The Apprenticeship Levy was introduced on 6th April 2016, as part of the Education Reform, and it requires organisations with a paybill of £3million or more per year to contribute a 0.5% Apprenticeship Tax (Levy) through the PAYE structure.
This means we have ‘Money People’ wanting to try and spend their apprenticeship levy (because this has been taken from their forecast bottom line), but we have People People not wanting to generalise skills development who are also mindful that for every apprentice ‘enrolled on an apprenticeship’ they will lose a full day of resource which will need to be backfilled.
The ‘Money People’ do not want to increase their salary spend (to backfill the gap) – but the business cannot sustain the loss of valuable skills already operational.
Now some would question the short sightedness of this approach, and only 2% of employers in the UK are set to pay the Levy; but (and it’s a BIG but) 43% of these businesses are SMEs. I think the answer to why only 55% of Apprenticeship Levy paying employers are registered on the Government Apprenticeship Service, i.e. utilising their Apprenticeship Levy is clear; 43% of businesses are not operationally set up to multi task from Finance to HR!
They are however in an excellent position to re-route their diminished training budget towards apprenticeship for their senior team members looking for higher level professional programmes, this explains the published increase in Higher Apprenticeship starts during 2017/18 being up by 27%.
What are your thoughts regards the situation I’ve identified? After spending 15 years+ in management positions within the apprenticeship arena – never have the apprenticeship operating rules been reformed so radically. Is your business weathering the storm or feeling like it is drowning? If you are looking to implement an apprenticeship programme, recruit an apprentice or maximise your apprenticeship levy, please do not hesitate to contact me. The Apprentice Employment Agency works across the UK helping businesses strengthen their apprenticeship offer. We partner with the best training providers and our specialism is multi-site/ apprenticeship discipline apprenticeship management.
Jacqueline Lovewell is a commercially focused apprenticeship specialist with over 15 years experience at a management level, providing innovative and creative solutions that deliver apprentice success for organisations of all size.