Apprenticeships in the UK - or rather, the lack of people taking them - has been in the news recently. The Government has admitted that its 2020 target of 3 million apprenticeship starts won’t be met, and there are many theories as to why this is the case.
First things first – the basics. All businesses who have a wage bill of over £3 million (roughly a third of UK firms) pay 0.5% of that bill as an Apprenticeship Levy. They can then claim all of that money back, plus an additional 10%, to train apprentices and/or upskill existing employees.
Yet in the 12 months to January 2019, only 22% of employers had actually claimed their levy back – and approximately £3 billion is expected to be left unspent in the next financial year. When you consider how skills-short the market is right now, especially when it comes to digital needs, should businesses really be leaving all that resource on the table?
Why aren’t we seeing more of an uptake of apprenticeships?
A few key stats for you:
- 25% of employers aren’t actually aware of the initiative
- 40% view it as a tax
- 77% expect to see no benefit from it
Now, the Government clearly needs to do more in terms of raising awareness of what the initiative is and the benefits it has. But when it comes to those last two statistics, I couldn’t disagree more.
This is something which can be directly used to benefit your business. Financially it costs you nothing extra – it’s your money after all, with a Government bonus on top! Remember, it’s not just about bringing on new apprentices. This levy can be used to upskill existing staff. This is crucial. Not only is it a cost-effective way of getting new skills into your business, but it creates a more loyal and motivated workforce; in turn, increasing retention rates. Imagine the impact on staff morale if they know their employer is investing in them as individuals.
But from speaking to various clients, it’s clear to me that the biggest problem is the actual process. Managing an apprenticeship and training programme is not just a quick spreadsheet and PowerPoint job. Nor is it something which can be properly implemented in just a couple of months. It takes a significant amount of time, effort, and expertise, which causes a real headache for a lot of businesses. This is where specialists come in.
Reaching out to experts is the logical way to get better results. If you wanted to undergo a big rebrand, for example, you would outsource this to a specialist agency with a proven track record. The same applies to training needs.
We’ve already seen an explosion in recruitment outsourcing in recent years. It’s become one of the fastest-growing outsourcing markets in the world, increasing by around 15% over the previous three years. This is due to a recognition that finding the right talent is a specialist job, especially in candidate-led markets. The days of a single HR function managing the entire recruitment lifecycle are long gone!
Apprenticeships and upskilling are part of this lifecycle, and the market is crying out for specialists to manage this on behalf of businesses. That’s why Lorien has formally introduced the Apprenticeship Activation Programme.
Aside from the fact that this programme is completely cost-neutral (paid for from a business’s existing Levy fund), the biggest benefit is that it allows them to leverage genuine market expertise. Recruitment partners have a huge breadth of visibility across the whole job market. They are specialists in all aspects of the talent process and should be able to offer additional value.
At Lorien, we work hand-in-hand with our clients to identify the skills needed to help meet their growth targets. We then attract apprentices and completely manage their training programme, tailored to the needs of the individual business.
Likewise, we work with managers to identify which current employees need development, and then we upskill them. We’ve actually been running this for some of our existing clients already. Currently we’re in the middle of an upskilling programme for one of the UK’s largest car manufacturers and the biggest thing we’ve noticed is the impact on engagement levels within the selected teams. It’s important to remember that personal development opportunities often make or break whether an employee stays with a company.
I’ve listened to a lot of job-related debates over the years, and a couple of the questions which keep popping up are:
- How do we as an economy cope with the growing demand for skills that are so hard to find?
- How do we make sure that in a few years’ time, we don’t have a generation of people left behind by the digital/AI boom?
There’s no magic bullet solution, but something like apprenticeships can have a huge impact.
Let’s invest today’s resources in tomorrow’s talent.