Why HR professionals must harness the potential of the Apprenticeship Levy
Tim Campbell, Head of Client Services, Emerging Talent, Alexander Mann Solutions
It’s now been four months since the Apprenticeship Levy was introduced, and while it’s still early days, the general consensus seems to be that the project is already beginning to fulfil its objectives.
According to research by the Open University, over half of the employers who pay into the pot (54 per cent) have already accessed their allocated funding and another 25 per cent plan to in the near future. But how can HR professionals best harness the potential of this game-changing initiative?
Alexander Mann Solutions recently produced a white paper which explores how big-businesses are responding to the Levy’s introduction: The Apprenticeship Levy – how to turn a major social change (or an unwanted tax) into a robust talent strategy, which is based on in-depth interviews with organisations including BAE Systems, Barclays, BT, CapGemini, GE, HSBC, Jaguar Land Rover and Santander.
Crucially, the paper finds that from an HR perspective, the introduction of the Levy presents a rare opportunity to engage in meaningful conversations with both finance and general management teams about what is needed in terms of future talent sourcing and development. Thanks to funds being automatically ring-fenced for this crucial area of training, professionals in the function are now spending less time trying to convince, and more time effectively engaging with senior stakeholders.
The fact that significant funds are being shifted into the people development arena means that HR professionals within larger firms will no longer need to hard sell the value of CPD to other areas of the business. And this has the potential to have a positive impact on engagement, development and, subsequently, staff retention.
While, from a government perspective, the Apprenticeship Levy is fundamentally designed to boost UK skills development and talent pipelines, from a business point of view, the growth of such a provision must be linked to strategic business needs.
A report by the CIPD in 2016, Employer Views on the Apprenticeship Levy, found that 40 per cent of organisations which had calculated the cost of the Levy believed its introduction might cause them to reduce investment in other areas of workforce development. However, our research suggests that HR teams are making the funding fit individual talent development strategies – rather than doing something differently because that’s what the funding suggests they can do more easily. In fact, our sample included no examples of organisations rushing to proliferate low level training simply to recoup Levy funds. Instead, all were focused on how they could use apprenticeship models in a more imaginative way to deliver what the organisation actually needs.
The introduction of the Apprenticeship Levy is no doubt offering organisations an opportunity to galvanise thinking around the sourcing and the development of talent, as well as question how emerging talent will be managed in the future. It’s worth noting that separate research from Alexander Mann Solutions found that 71 per cent of employers foresee that the Levy will ultimately create a new route into the workplace to supplement or rival graduate intake, with our contributors commenting that, at the point of graduation, those who have come through the apprenticeship route are often more ‘business savvy’ and ‘work ready’.
Ultimately, the introduction of the Levy seems set to revolutionise the way we attract, engage and retain top talent – not only with regards to emerging talent, but also wider workforces. According to the 2017 CBI/Pearson Education and Skills Survey, 63 per cent of the businesses questioned said they planned to reconfigure existing training into apprenticeships, while over half planned to create new apprenticeship programmes, and 46 per cent expect to increase apprenticeship places.
However, only by working together to share best practice and shape government thinking on the day-to-day detail of implementation will HR leaders be able to fulfil the promise that the Levy appears to offer. Instead of being bound by traditional perceptions of apprenticeships, it’s important that businesses shape new models that meet the specific needs of the organisation, both now and in the foreseeable future. HR leaders must harness the potential of the initiative by directing funds towards solving existing and predicted future workforce challenges, while communicating the message that apprenticeships are a compelling alternative to conventional career paths.
– Tim Campbell, Head of Client Services, Emerging Talent, Alexander Mann Solutions