The introduction of the Apprenticeship Levy has been a hot topic of discussion within HR circles since its announcement in late-2015. And while it’s no secret that the initiative has been a point of contention for some business leaders in the past, HR professionals are already capitalising on the opportunities it presents.
Alexander Mann Solutions recently produced a white paper which explores how big-businesses are responding to what one contributor coined, ‘The most fundamental change in our education system in years’. The Apprenticeship Levy – how to turn a major social change (or an unwanted tax) into a robust talent strategy is based on in-depth interviews with organisations including BAE Systems, Barclays, BT, CapGemini, GE, HSBC, Jaguar Land Rover and Santander amongst others.
What I find really encouraging about the interviews we conducted for this white paper, and the wider discussions I’ve had with other senior HR figures since, is the fact that major employers in the UK are embracing the introduction of the Levy.
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 type of training, professionals in the function are now spending less time trying to convince, and more time effectively engaging with senior stakeholders.
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. While every single organisation we spoke to had, perhaps unsurprisingly, calculated how many additional apprenticeships they would need to create in order to recoup the whole of their Levy payment, all said that any growth in provision would be linked to strategic business needs rather than a blind pursuit of financial ROI. This may not necessarily be achieved through investing in expanding headcount, but upskilling existing employees.
That said, 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 moving forwards. 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’.
The research has also revealed further opportunities around improving the inclusion of individuals from under-represented groups, with the majority of contributors agreeing that the new round of apprenticeships have the potential to tap into under-utilised pools of talent and consequently generate significant workplace diversity benefits.
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. 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. 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 ‘new’ apprenticeships are not just a viable, but a compelling alternative to conventional career paths. Those who succeed stand to gain significant competitive advantage over their rivals.
