Unlocking the potential of the Apprenticeship Levy

Unlocking the potential of the Apprenticeship Levy
In April 2017, the new Apprenticeship Levy will come into force. This presents employers with an excellent opportunity to bring in new talent or up-skill their current workforce through apprenticeships – yet many employers continue to struggle with how best to integrate this into their wider workforce and business strategies.

As part of the Government’s aim to introduce three million new apprentices by 2020, the Apprenticeship Levy will see all UK employers with an annual pay bill of more than £3 million required to pay a Levy of 0.5% based on their PAYE bill. They can then use this Levy to pay for the training costs of apprentices.

It is a major legislative change, and informed employers are using this as a catalyst to review their entire workforce planning process afresh and invest in the training of their future workforce.

What’s changing?

Going forward, there will be no restriction on the age of apprentices. There will be few restrictions on the previous qualifications an apprentice can possess. And, with more and more qualifications being mapped to the apprenticeship system, they now cover the full range of qualifications – from school leaver to degree level.

In essence, for the first time, there will be an apprenticeship qualification to meet almost any skills gap within an organisation. This will be fully paid for via the Levy – whatever the level of qualification, and no matter the age of the apprentice. And where the employer either doesn’t pay into the Levy or has used up their contribution, the Government will pick up 90% of the outstanding cost.

This all presents employers with an excellent opportunity to bring in new talent as an apprentice – or to up-skill their current workforce, by converting existing workers into apprentices.

The new war for talent?

When the Levy is introduced in the spring, the challenge for employers will be competition for talent. Many organisations will use their Levy to recruit additional workers to join their company as an apprentice. Making your apprenticeship proposition as compelling as possible for prospective candidates will be crucial, in order to stand out from the crowd.

We expect the number of apprenticeships on offer to dramatically increase. With so many employers fishing in the same talent pool, it’s important that they understand what motivates and appeals to their ideal candidates, and tailor their attraction strategy accordingly.

Getting the selection element of your strategy right will be crucial too. The very nature of apprenticeships means you can’t judge someone by their existing skills and experiences. After all, you’re looking for a blank canvas that you can nurture. Building a hiring process that unlocks an individual’s hidden potential will be vital.

At ManpowerGroup, we can help organisations to navigate these new, unchartered waters. We’ll help you to unlock the potential of your Levy pot, by advising you on how the Levy can be used to support your wider talent strategy, providing advice on the training partners and qualifications available, and different employment models, where appropriate.

To find out more about how we can support your organisation through the introduction of the Apprenticeship Levy and beyond, visit: manpowergroup.co.uk/apprenticeships

This article first appeared in the sixth edition of The Human Age newspaper.