How will slow uptake in use of apprenticeship levy affect your hiring strategy?

We can all list off an initiative undertaken by any government that’s been a little confusing, unlikely to take off or seemingly nonsensical.  Regardless of political leanings, it seems that the launch of the Apprenticeship Levy in April of last year might still be stuck at the starting gates for many businesses and in turn, will affect how you hire in the FE and training space.

The aims of the levy were clear. In brief, the scheme requires companies with an annual wage bill of over £3million to pay 0.5% of their overall staff cost into the fund.

Businesses can then draw a certain amount with a 10% subsidy on from this pot to invest in training and improve the overall quality of apprenticeship schemes on offer.

A Department for Education spokesperson said: “Our apprenticeship reforms have put control back into the hands of employers so they will gain the skilled workforce they need to compete globally.”

The levy has put the spotlight on building functional skills for the job market at present. When it comes to hiring, it means that we look at how we skill learners. It is a shift that requires employers to be at the heart of the system.

The problem has been the adoption. At present, stats are indicating that fewer than four in 10 eligible businesses say they fully understand the apprenticeship levy. The research by Evolve Learning Group and West London College saw that just 32% of employers who pay the levy were using the funds to train new and existing staff. In London, that sits at just one in six employers using their apprenticeship levy funds.  A month following the Levy 1 in 4 UK firms admitted that they had never considered recruiting apprentices, and claimed that either the qualification was not suited to the business or the schemes would require too much time from the management teams.

The government has said that there will be a ‘period of adjustment’ but that they are ‘on track’ to deliver 3 million high-quality apprenticeships by 2020, stating that they have had over 1 million starts since May 2015.

So what does this slow adoption of the apprenticeship levy mean for your FE institution?

Clearly, companies aren’t rushing into spending their levy pot. In fact, some are ‘gaming’ the system and are establishing their own academies rather than outsourcing to colleges/training providers like you. That makes for a tricky situation. Instead of focusing just on the day to day, FE institutions are going to start feeling the pinch when it comes to recruiting for people who are capable of guiding and working with these employers who haven’t been showing signs of interest in the levy.

The fact is, we have seen signs that savvy training providers and colleges are already thinking about how to get employers by recruiting sales directors and managers who are confident, well versed and able to help build more stable, long-term relationships with companies both large and small, all with the incentive for employers of reclaiming the levy.

The benefit of the slow adoption is that you have more time to prepare.

Steps to help:

  1. Hire sales superstars

The very best sales superstars are able to get access to levy paying employers –helping to generate more income. Why not read our blog on hiring to see how a great recruitment process could attract elite performers from other industry sectors?

  1. Hire efficiently

When it comes to big hiring decisions, don’t just look at cost and don’t cut corners. Aim for both efficiency AND quality in internal operations/systems and processes so you minimise wastage. Don’t ‘jump the gum’ with candidates either – keep your cool when you recruit and sanity check their expectations vs your own – for example, does a potential hire’s perception of performance match with profitable performance?

  1. Brand synchronicity

Make sure your employer brand syncs well with your own brand – quality providers are usually specialists as per any industry.

There is still a huge skills shortage in the UK but there will always be a requirement for training.  Get the right people in place now and you will be able to thrive, regardless of what the future holds for the government’s plans for the levy, if you can get the right people to open the doors to the employers with levy investment pots ready to spend.

Next Steps

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