Why the apprentice levy can’t be pigeonholed

Employers need to stop thinking about apprenticeships as something that should be limited to young people fresh out of school, says David Hare

We are living through extraordinary times. Disruptive tech innovations, dizzying political upheavals and growing public demand for action on issues from inequality to the environment are all contributing to a landscape of unprecedented change. But we are still clinging to outdated ideas of how, and when, we should gain new skills.

The use of apprenticeships is a great example of how outdated attitudes can hold business back.  Apprentice start figures have seen a decline in the last three years and fallen well short of the government’s initial three million target. In isolation, these figures paint a stark picture of the usefulness of the levy in driving apprenticeship uptake. Further, the ways in which the apprenticeship levy is being used have sparked furious debate amongst sector influencers.

A recent report by education think tank EDSK labelled half of the apprenticeship courses in the UK ‘fake’, claiming that funds from the apprenticeship levy have been spent on jobs that are just relabelled degrees or training courses. The report goes on to suggest that using the levy for experienced employees makes it “farcical”.

This type of narrative perpetuates the idea that apprenticeship learning should be limited to young people fresh out of school. It’s a myth that many employers also believe. In our recent research of 510 UK mid-market employers, we found that 44 per cent of respondents don’t currently use apprenticeships as a means of upskilling their people. In addition, over half (56 per cent) of those surveyed still believe that apprenticeships are designed for employees at the beginning of their career and 42 per cent think the focus is on new recruits.

It’s time to change these outdated attitudes.

We know from our 2018 Planning for Growth research that 92 per cent of UK mid-market employers will need skills that don’t currently exist in their workforce in the next five years. Recruitment of new and entry level talent will be vital in addressing this gap, but upskilling current employees is equally important.

According to our employer research, 56 per cent of organisations are already using the levy to fill these skills gaps by investing in current employees. The levy is a flexible tool that covers all levels apprenticeships, from level 2 (equivalent to GCSEs) all the way to Masters’ level qualifications; it is available for existing employees as well as new recruits; and has no age restriction. As such, it helps employers to effectively address three of the biggest issues faced – skills development, diversity and inclusion and top talent retention.

Currently, 43 per cent of mid-market employers say that the levy enables them to develop a diverse workforce.  As a firm, we have fully embraced the introduction of the apprenticeship levy. We currently have over 800 apprentices in the business ranging between level 3 and level 7 and accounting for approximately 15 per cent of our UK workforce.

A key focus is broadening our talent pool to build greater diversity of thought and better serve our clients’ needs. We use levy funded apprenticeships as a catalyst to remove barriers in recruiting talent. University is a fantastic way to gain skills, but it’s expensive. Apprenticeships allow people, no matter what their background, age or career stage, to earn and learn at the same time, gaining qualifications without the costs.

Grant Thornton has also directly supported over 2,000 organisations in implementing levy funded training. Working closely with a small number of training providers we have also co-developed a range of apprenticeship programmes and supported the training organisations to take these to market at scale.  Again, these range from level 3 through to level 7.

There is still a huge opportunity to educate more employers on the range of powerful commercial benefits that come from strategic deployment of levy funded apprenticeships. When delivered against clearly defined business needs, skill development through can deliver outstanding results on a wide range of critical issues. Clinging to old fashioned ideas will leave you behind.

David Hare is director at Grant Thornton UK