Lauren Brown: Apprentices face new challenges for business thanks to government Levy

When George Osborne, the former Chancellor, announced the introduction of an Apprenticeship Levy for British employers in his 2015 summer budget, there was universal concern from over-burdened businesses with what might have looked like another complex payroll tax.

Lauren Brown, Developing the Young Workforce West Lothian.

On the surface, however, The Apprenticeship Levy is a simple proposition. From April this year, UK employers with a wage bill of £3 million or more must give 0.5 per cent of their payroll directly to the government. This money will raise £3 billion by 2020, which will lead to the creation of three million high quality apprenticeships.

Of course, as with any significant change, there are questions and concerns about the impact of the Levy. Yet, it is much less complicated and much more beneficial than it may first appear. The Levy provides firms with a unique opportunity not only to shape in-work training, but also to reap the benefits that come with having Apprentices as an integral part of the workforce.

A regular criticism of the focus on apprenticeships is that businesses that tend to recruit graduates will not benefit from the Levy, but are still expected to make the contributions. However, it would be short-sighted for large businesses looking to attract and retain the best talent to ignore the potential for apprenticeships to play a key role in their recruitment plans.

Modern apprenticeships

This is particularly so with the arrival of innovative Graduate Level Apprenticeships, which have the benefit of supplying companies with a stream of junior staff who have both the academic rigour that a degree instils, and the practical and professional job-ready skills that many businesses say are in short supply. In fact, the expansion of the Apprenticeship family to incorporate models such as the Graduate Level programme demonstrates to employers that staff can be developed using more than one type of Apprenticeship framework. Furthermore, the tide is turning more generally on the perception of apprenticeships, and their increased prominence through the Levy will only add to this.

More choice for 16 to 18-year-olds is a good thing and will inevitably lead some talented young people to ask; ‘is a traditional university education right for me?’ or even more pertinently ‘do I have to choose between work and a university education – can I do both?’

For employers, offering Graduate Level Apprenticeships is also a good thing, helping to set them apart from other business in terms of talent attraction as the prospect of university student debt becomes ever-less appealing. Talent attraction is, however, not the only benefit for an employer. The Return on Investment (ROI) which comes with the Apprenticeship Levy can add significant value to an organisation, from acting as an ‘enabler’ to boost productivity, to ensuring staff are fully competent and confident in all aspects of their role. The downstream advantage of this helps maintain high staffing levels, improves a company’s reputation and addresses future skill shortages. Furthermore, Apprenticeships can serve to up-skill existing staff, which provides a great opportunity to nurture and motivate existing talent.

To maximise this ROI, it is important for businesses to use the Levy as an opportunity to evaluate company goals and to decide how workforce planning can align with future business aspirations. What are the gaps and opportunities that exist? Who is currently employed that could progress to the next level? Once a business is clear on its workforce needs and understands the allowance available to develop its workforce, it can begin to maximise the opportunities within the Levy.

Modern apprenticeships

This could include focussing Apprenticeships within target areas of the business, or using Graduate Level Apprenticeships to develop the managerial and professional skills required for effective succession planning. As the Levy beds in, attitudes to the workplace will unquestionably change. Education and training will no longer be viewed as an added extra but a core part of the workplace – more young people will be mentored from school and at Developing the Young Workforce here in West Lothian and throughout Scotland, we are seeing some excellent examples of this being the case.

In time, as confidence in apprenticeships grows and ex-apprentices become more senior, certain organisations offering apprenticeships could start to rival traditional universities as a hallmark of quality. But all of this will only happen if we get behind the Apprenticeship Levy and embrace the opportunity it presents; by recruiting enough apprentices, engaging with Graduate Level Apprenticeships and establishing a parity of esteem between vocational and academic education.

Lauren Brown, Developing the Young Workforce West Lothian.