Apprenticeship levy to pay dividends for English employers

Half (54%) of business-decision makers at levy-paying organisations say they are already making use of the apprenticeship levy, but there’s still a long way to go to make sure all organisations in England are using the funding effectively, according to new research from The Open University.

Of those not already using their ‘levy pot’, three in 10 (29%) say they already have concrete plans for the funding, but it seems that one in five (18%) are at risk of missing out on higher level training, as they have no current plans to make use of the apprenticeship levy..

The Apprenticeship Levy, introduced to increase investment in training, was launched in April this year costing 0.5 per cent of an organisation’s wage bill (if it totals £3 million a year or more) – and has been met with mixed reactions from employers, with three in 10 (28%) saying they were not fully informed about the levy.

Now, three months on, The Open University’s research shows that some of the initial uncertainty remains. One in five (18%) of employers say they don’t know how the apprenticeship levy works and 2 per cent say they don’t know anything about the Levy at all.

However, with so many (80%) senior managers saying they have good knowledge of how the levy works, the potential benefits are already becoming clear. More than four in five (85%) believe it will have a positive result on their organisation, with even more (87%) confident that the levy will benefit UK productivity, and the economy as a whole.

Mirroring an industry-wide focus on better training (a key tenet of the UK Government’s Industrial Strategy), many organisations in England are looking to use the levy to boost the skills of their workforce. More than two thirds (68%) of employers report they have increased the number of higher apprentices in their organisation and half (53%) have increased the number of degree apprentices, which will help to produce the higher-level skills needed to plug the UK skills gap.

Nearly six in 10 (58%) senior managers say their organisation will use funding from the levy to offer training to existing employees, with a focus on areas where skills are lacking – management and IT2. Many are using the apprenticeship levy to build these skills within their organisation, instead of paying to bring them in from elsewhere, with more than six in 10 (63%) employers planning to divert some of the funds to bettering employees’ management skills (65%) or boosting digital skills in their organisation (70%).

Senior managers can see both the benefits to their organisation, and their employees, with 90 per cent believing the levy presents an opportunity for workers to reach their full potential. With potential gains for all, around two thirds (68%) of business decision makers are feeling more positive about the apprenticeship levy now than three months ago.

Steve Hill, External Engagement Director at The Open University, says:

“With 0.5 per cent of many organisations’ wage bills going into a levy pot to pay for work-based training, the pressure is on for employers to see the benefits, and use the funds appropriately. But this research paints a positive picture for businesses, where organisations are already seeing the apprenticeship levy not as a tax, but as an investment.

 

“Understanding that improving skills and productivity can boost the bottom line is crucial to the success of the apprenticeship levy. Better training leads to more motivated and better skilled employees – who are engaged with and loyal to an organisation. By investing in training and development, the return on investment of the levy will be seen in more productive and efficient staff.”

 

Author: Editorial Team

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