Tasmin Raynor highlights how businesses large and small can utilise the Apprenticeship Levy for a different way to develop people
According to ManpowerGroup’s latest Talent Shortage survey report for 2024, UK businesses face a widening skills gap, with cross-sector shortfalls reaching an 18-year high of 80%. With many also facing financial pressures, they will be seeking innovative and cost-effective ways to train and upskill their teams.
Businesses who do not need to pay the levy will only pay 5% towards the cost of training and assessing an apprentice
One increasingly popular way to address skills shortages is through apprenticeships. This week is National Apprenticeship Week, an annual event that celebrates skills development and apprenticeship training. It also highlights how businesses can use apprenticeships to transform their people and their performance. Many companies do not realise that they can also do this with the financial support of the Apprenticeship Levy and receive up to 95% of the training costs covered by the Government.
Apprenticeships offer an alternative way for companies to build their workforce for the future – ensuring people gain the right skills and remain up to date, and they can bridge skills gaps. Strategically, this helps businesses grow, stay competitive and improve employee engagement by facilitating career progression. They can offer companies an innovative way to improve their recruitment and retention rates. A 2022 report from the Department of Education found that 62% of apprentices stayed working for the company that trained them after completing their apprenticeship and 76% of employers said that training existing employees as apprentices improved their staff retention.
Accessing the Apprenticeship Levy
For employers in England, the Apprenticeship Levy has transformed the apprenticeship landscape. Launched in 2017, the Levy requires employers with a pay bill of more than £3 million yearly to invest 0.5% of their payroll into the levy. If firms pay the Levy, they will receive funds to spend on training and assessing their apprentices, and the government will add 10%.
Whilst many small and medium enterprises (SME) are under the impression that they cannot access Apprenticeship Levy funds, it is, in fact, the case that businesses who do not need to pay the levy will only pay 5% towards the cost of training and assessing an apprentice. The Government will pay the balance (95%) up to the funding band maximum. This is known as ‘co-investment’.
Employers who do not pay the Apprenticeship Levy can reserve funds up to three months in advance of the expected apprenticeship start date. Also, as of April 2023, small employers who did not pay the levy will no longer be limited to a maximum of 10 new apprenticeship starts – they will be able to recruit as many high-quality apprentices as their business needs.
Employers may also be eligible for additional funding and support depending on their apprentice’s circumstances or if they are a small employer employing fewer than fifty employees.
Accessing funding has also become more accessible and efficient for smaller employers. Non-levy paying employers can now reserve apprenticeship funding through a digital platform known as the Apprenticeship Service. This digital approach has simplified the process, making it easier for SMEs to participate in apprenticeship training.
Once funding is reserved on the platform, it is allocated for a specific apprenticeship start date and is available for three months. This time-bound reservation system requires employers to plan their apprenticeship needs with a degree of precision, ensuring that funds are utilised efficiently and available to those who are ready to start apprenticeships.
By making apprenticeship funding more accessible and manageable, it is expected to encourage a wider range of employers to invest in training, thereby strengthening the talent pipeline and supporting economic growth.
Boosting coaching and mentoring skills through apprenticeships
Companies may also gain tangible long-term benefits by using apprenticeships to coach and mentor their employees to enable them to develop leadership skills. Coaching and mentoring are essential skills in today’s collaborative business environment. They enable individuals to guide and support their colleagues and foster a culture of continuous learning, mutual respect, and holistic growth. By equipping employees with coaching and mentoring skills, SMEs ensure they can perform their current roles more effectively and are prepared for future leadership positions.
Chris Duerden from education provider, Explore Learning in Leeds, recently completed the ‘Coaching Professional Level 5 Apprenticeship’ through professional coaching firm, The OCM. This apprenticeship includes approximately 308 guided learning hours over a 14-month programme, which can be delivered virtually. It is aimed at employees from any role or level within an organisation who act as an internal coach and/or deliver coaching in support of the organisations coaching and mentoring strategy.
Chris works in learning development, and although coaching was already part of his job, he wanted to develop formal skills and gain a professional qualification. The apprenticeship enabled him to do this while ensuring he maintained his work-life balance.
Discussing the apprenticeship Chris said: “I learned effectively by having a bit of theory or knowledge and quite quickly being able to put that into practice. This is what the apprenticeship allows you to do: you read something and then get the opportunity to then jump into something practical, and everything is nudging you in the right direction. It is seamless in being able to make an impact on my development and on my job and my work.”
For Chris, one of the key benefits of the apprenticeship is career progression. He said: “I feel much stronger in my position, and I think the way the people view me in the organisation is much stronger too. From a career development perspective, the course has helped build my confidence and I could now look at jobs at a higher level in the future because of the skills I have gained, which is great.”
Chris adds: “I highly recommend doing an apprenticeship. It is well structured, and the people running the apprenticeship are there to support your end goal. Everyone is working towards helping you gain better skills. The whole purpose for doing the apprenticeship was to build my skills and get better at coaching, and it absolutely delivered that.”
Apprenticeships offer an excellent opportunity for businesses to invest in upskilling their people. In doing so, they are also likely to improve retention, build the talent pipeline, and contribute to organisational growth and success.