The government’s Apprenticeship Levy will be a boon to business rather than a hindrance to productivity according to a survey of industry leaders.
Hundreds of business leaders who took part in the poll said that they expect productivity and revenues to be positively impacted as a result of the scheme, introduced by the Government in April 2017.
The news comes after the latest figures from the Department of Education reveal that levy-funded apprenticeships at higher or degree level jumped by 424 per cent in September. Decision makers initially voiced concerns when the Levy was announced over the feasibility of training a large number of apprentices, the costs involved and the lack of information available on the Levy.
This latest poll has found that the tide has turned on this initial cautious reaction. The majority (76 per cent) of leaders surveyed stated the levy is positive for business, with only nine per cent believing the opposite. The majority of those who use the levy funding are planning to recruit and train graduates (51 per cent), and hoping to invest in upskilling existing staff (46 per cent).
The study of 300 senior decision-makers, commissioned by Pareto Law, explores the value of the recently introduced Apprenticeship Levy, and whether businesses believe using funds to invest in new and existing staff training is really worthwhile.
The Apprenticeship Levy charges businesses with a payroll of over £3 million a 0.5 per cent rate, which is used to fund apprenticeships and quality training. The government contributes ten per cent to the amount paid, and the fund is held in a dedicated government account to be paid directly to training providers.
More than two-thirds (65 per cent) of business leaders surveyed stated that investing in training like the new apprenticeships increases company revenue, while 70 per cent have seen a boost in productivity as a result of apprenticeship and training schemes.
The survey found that 30 per cent of businesses are planning to use their levy to fund some form of technical training, but the findings suggest that soft skills are more of a priority for employers, with more than half (60 per cent) responding that training in soft skills has already had a positive impact on their business.
Customer Service, Leadership and Sales Development training are at the top of the investment agenda for the levy-paying businesses surveyed, scoring 32 per cent, 31 per cent, and 26 per cent respectively. Demand for return on investment (ROI) on levy investment is also placing sales training high on the agenda of over 25 per cent of businesses throughout the UK.
Examining what employers look for when hiring a new member of staff reveals a strong correlation with the findings on apprenticeship training priorities. Communications skills (22.3 per cent) and sales & business development skills (20 per cent) are ranked the highest, above even industry knowledge (18 per cent), or a relevant degree, (15.67 per cent).
According to participants, the benefits of utilising the levy extend further than an increase in productivity, with 40 per cent of business leaders saying that investing in training makes staff feel more valued, while 35 per cent said it helps foster a more committed and motivated workforce.
Jonathan Fitchew, CEO and founder of Pareto Law, comments, ‘Businesses have been unclear about what the Apprenticeship Levy entails and how it can benefit them. Levy pot predictions have already fallen by £100 million, and based on the amount of UK businesses eligible for the levy, there’s a potential £1.2 billion not being taken advantage of this year alone. But for the companies already putting the levy into practice, we wanted to get a clearer picture of what UK really thinks of the Levy.
‘We’re always talking to decision makers about what affects them and their businesses, and we commissioned the poll to delve deeper into what they really think about the levy and its potential to help their companies.
‘We’ve found that, despite any initial trepidation, employers are already taking advantage of their levy pots after seeing positive results from wider training programmes. With over half of business leaders planning to recruit new graduates, and then use their levy to fund the training, it’s clear that the changes made will widen opportunities at every level.
‘The tide has definitely turned on the Apprenticeship Levy – and it should be seen as a real opportunity to bolster your company’s workforce and upskill the talent of the future.’
See also: The benefits of employing apprentices for small companies
A third of businesses say apprentices will be top source of talent
With the apprenticeship levy making life easier for businesses to hire apprentices, research suggests that businesses will look for apprentices as their top source for talent this year.
A third of businesses view apprentices as the most valuable source of emerging talent in 2018. That is according to a poll of over 2,000 senior HR professionals carried out by Alexander Mann Solutions.
The data comes following the introduction of the Apprenticeship Levy in April last year – an initiative which is designed to boost the number of young people entering vocational training – and despite the fact new apprenticeship starts reportedly dropped 59 per cent immediately after its launch.
Previous research from Alexander Mann Solutions found that over two thirds (71 per cent) of senior HR leaders believe the Apprenticeship Levy will ultimately create a new route into the workplace to supplement or rival graduate intake.
In its latest survey, Alexander Mann Solutions, the global talent acquisition and management specialist found that graduates remain the favoured talent pool for entry-level recruits, with just under half (47 per cent) of respondents naming university leavers as the most valuable source of emerging talent this year.
However, 28 per cent of respondents admitted that they were finding it more difficult to fill graduate roles this season, with just 12 per cent reporting that sourcing and securing the relevant skills is currently easier than it has been in other cycles.
Sandrine Miller, head of emerging talent consulting at Alexander Mann Solutions, says, ‘As these findings suggest, leaders are certainly reassessing where they source fresh talent. And while graduates remain the preferred choice for the highest percentage of businesses, there are signs that the tide is shifting.
‘UCAS reported last year that university applications have decreased by 4 per cent, And while there will always be demand for graduate-level talent, HR Leaders are increasingly considering the benefits of developing talent in house, where the role allows, as part of a wider total workforce strategy.
‘News that new apprenticeship starts have fallen by 59 per cent since the Apprenticeship Levy was introduced is most likely indicative of how businesses are reassessing long-term needs – and taking the time they need to plan, and implement new programmes. In other words, it’s the calm before the storm.’
Further reading on apprentices
