The apprenticeship levy: where are all the apprentices?

The low volumes of apprenticeships (a 26% reduction since this time last year) and the increasing gap between the government’s 3 million target and current levels has been widely reported this week.

I am not surprised this is the case, nor am I blasé about our current position. I expect the volumes associated with levy-paying employers to pick up  as we move into 2019, not least because we are coming up to the one year anniversary of the levy and that in turn, puts us 12 months away from the first ‘use it or lose it’ month. The pressure will come from finance departments and senior leaders to minimise the loss of funds, assuming the employer hasn’t chosen to write-off the levy as a tax.

My lack of surprise is based on the current challenges faced by employers paying the levy.

It is not enough to have registered with the Apprenticeship Service allowing access to levy funds. This is  the start point in what is needed for a large employer to make the levy work for them, assuming they intend to use it, which I sincerely hope many do.

In my experience of working with levy payers across a range of sectors and being a trustee of a levy-paying organisation, there are common requirements and issues emerging. I empathise with the leaders and managers I work with as they grapple with operationalising the apprenticeship levy. I hope I am supporting them to see the benefits of apprenticeships once they get through this first year of change.

So, I have captured below some of the key reasons I think we’re seeing a slow start from the levy-payers.

  • The capacity to manage the levy

The management of the levy more often than not falls within the remit of an HR team. A team, not only struggling to find the capacity to develop their own knowledge of apprenticeships but also required on a day to day basis to manage the co-ordinated use of a significant pot of money. There is rarely additional resource budgeted to allow for this, at least in these early days.

Had a proportion of the levy been made available to employers to allow them to develop this capacity internally to manage the use of the levy, we may have seen their ability to respond come earlier. I still believe there is time for such a policy consideration to have a positive impact.

  • Central co-ordination versus devolved decision-making

Apprenticeship recruitment pre-levy could be undertaken at a local level, by budget holders, in accordance with relevant organisational policies and processes.  The levy has changed this. I’ve witnessed this first hand in my role as a governor on various school boards. Historically, when the Headteacher chose to recruit an apprentice, they did. As long as the school had the budget to do so, there was no requirement to involve the local authority in such a recruitment exercise. With the levy, this requires a degree of discussion with whomever controls the central levy fund, either in terms of decision-making or the processes associated with the apprenticeship service. This is not an insurmountable problem but in the short term, it has created a blockage.

  • Building an internal market

Unless the employer has an existing strategy to utilise apprenticeships within the organisation, there is a need to build an internal market, where strategic leaders and departmental managers are not only made aware of the levy and the detail associated with employing apprentices but also the detail of how to engage with them. Make no mistake, this is a major change initiative and whilst no doubt there will in time be a top-down strategic approach, I ask the employers I work with to consider the ways in which they can nudge the decision to use apprenticeships into the day to day norm. For example, the simple question, when a vacancy arises, have we considered if an apprenticeship is suitable for this role? Where an interviewee doesn’t quite meet the mark, have we got the capacity to develop them into the role? In some cases it will be suitable, in others not but at least managers have an easy way to build this into their thinking. Developing interest takes time, investment and a strong will to make it work; particularly where the default position is to recruit at graduate level.

In summary, until an employer has developed processes which allow for the thinking behind apprenticeships to be part of ‘the things we do around here’ both in terms of recruitment and training we have a long journey ahead of us.

  • The capacity and capability to employ apprentices

I have on occasion, seen initial enthusiasm of departmental managers dissolve as we unpick what is needed to employ an apprentice in their area. I feel strongly that apprenticeships add significant value to businesses, having employed them myself. Equally, I recognise that it requires the capacity to provide good quality mentoring support and time to consider how a proportion of the apprentice’s time away from the day job whilst in training can be managed, without it impacting on the workloads of other members of the team. This is not such an issue if an employer is recruiting an apprentice in addition to their existing headcount. However, in difficult economic conditions for many large organisations, this isn’t how they intend to use apprentices.

  • Finding apprenticeship training providers

It is not unusual for a levy payer to have made the decision to undertake a procurement exercise to build a framework of suitable apprenticeship providers. This is a resource hungry, time-consuming process. For many, it is still underway. As we move towards the apprenticeship service payments for end-point assessment going directly to the end-point assessment organisations, as opposed to via the training provider, the same will happen again next year I suspect. Whilst procurement processes are being undertaken, any apprenticeship activity has more or less stopped. For those who have not undertaken such an exercise, the question of how to source high quality apprenticeship provision is high on their agenda but is further down the list than establishing internal interest in the first instance.

  • Availability of suitable apprenticeship standards

It is well documented and acknowledged by the Institute for Apprenticeships that the process for developing and approving apprenticeships is too slow. If we are to make significant headway into moving from frameworks to standards this has to be a priority. Whilst the frameworks will remain for some time to come, the standards are broadly, easier to understand and engage with from an employer’s perspective (I appreciate this may not be the case for all sectors). However, in the main good apprenticeship providers are recognising the value of the standards and making headway to move provision from frameworks to standards where they exist. It is difficult for employers new to apprenticeships to get to grips with some of the basics, having to explain the differences between frameworks and standards isn’t something they have time for.

  • Employer providers

There is an increasing number of employer providers. This is unsurprising given the obvious incentives to deliver apprenticeships to your own organisation, therefore recouping at least some of the levy. For new employer providers we double the change initiative they are having to deal with; on the one hand they are having to understand how to get best value from the levy as an employer and on the other, establishing an apprenticeship training provision. I speak to employer providers regularly and encourage them to divorce the two in their thinking, in the early stages. One is a function of HR (or similar), the other is a supplier of internal services to them. Whilst I appreciate it isn’t always as neat as this, establishing boundaries around the relationships and processes for engagement will pay dividends in the long run.

I have already shared some cautionary notes on quality of apprenticeship delivery as an employer provider in a previous post. I am concerned that we will encounter quality issues as an unintended consequence of a growing number of employers seeking to access the levy pot.

In summary, I don’t believe we have any reason to panic due to the overall volumes at this stage. I remain encouraged about the level of exposure of apprenticeships to large businesses as a result of the levy. I do however believe we need to recognise that change is so much more than the levy itself if we are to avoid employers walking away and putting this in the ‘too hard’ box.

I would welcome your comments on my observations or indeed your own experiences.

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