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Upskilling: 3 reasons you should be using your Apprenticeship Levy

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Productivity in the UK reached an all time low in 2013. Data from the G7 summit showed Britain lagging behind many of our European neighbours in terms of gross domestic product per hour worked out in current prices. After a lot of analysis, it was evident that as a country, we were failing to provide a whole lot of development opportunities for our working population.

Action was taken in the form of establishing the Apprenticeship Levy, a tax which large companies had to pay into, and reclaim in the form of training for their staff. Of course, apprenticeships have been around for centuries - the first one on record in 1563. This was when the Crown banned the “exercise of any art, mystery or occupation except [if] he shall have been brought up therein seven years at the least as an apprentice”.

Fast forward to 2015 - the Chancellor of the Exchequer announced a new plan to push apprenticeships via the Apprenticeship Levy. The Levy called businesses into action like never before. Suddenly, employers were obliged to take a long hard look at the opportunities they were giving their staff to upskill, paying into a centralised learning pot via an unavoidable tax.

My journey so far

My apprenticeship journey started last year when an advocate of all things apprentices joined our business. She had spent the last decade setting up programmes for some of the UK’s largest companies and was so passionate about their potential. Her enthusiasm rubbed off on me and encouraged me to explore my self development through an apprenticeship.

To be honest, I was slightly hesitant to start. One of the government’s stipulations of doing an apprenticeship is that 20% of your total workload (within working hours) is put towards your learning. Accounting a fifth of my working week towards my apprenticeship seemed crazy - how on earth was I going to find the time to juggle this level of self development on top of my regular responsibilities? It seemed selfish to some extent, but I couldn’t have been more wrong.

My leadership and management apprenticeship has been the best career opportunity I’ve had. I’ve learnt an incredible amount about myself and the way I manage and lead others, as well as the more theoretical side to business and project management, which is otherwise hard to pick up in a day to day role. Rather than taking away my time, it’s made me more productive and efficient, as I tackle challenges from a considered approach.

Here's why you should be using your apprenticeship levy.

It’s free

The most obvious reason employers should use their levy is that it’s funding gifted by the government to upskill the company’s workforce. It poses a significant boost to training budgets and provides an opportunity to leverage savings and benefits, especially if you don’t already have an apprenticeship programme in place.

A considerable saving can be made on National Insurance costs as a result of apprenticeships. Since April 2016, employers of apprentices under 25 are not required to pay secondary Class 1 NI contributions on earnings up to the Upper Earnings Limit.

Many levy paying employers who solely operate in England also overlook the fact that they can put up to 110% of their contribution towards the training and assessment of their apprentices. This is because the levy is calculated on UK wide payroll costs - it’s part of the transferred funding from central government to local or regional administration - so the proportion of the levy that applies to England is based on the size of the English payroll for any particular business. This means that if your company only operates in England, then you can spend 100% of your levy contribution plus an additional 10% added by the government.

Guaranteed value

The content for each apprenticeship (known as a Standard) is put together by a group of industry experts known as trailblazers. These individuals sit across businesses, the public sector and academia to ensure that the content is effective to plug the skills gap you’re trying to fix in your company.

Unlike a lot of training courses which are recycled year after year, apprenticeship standards must be continuously updated to stay in-line with industry expectations. Your apprenticeships will be exposed to the cutting edge of their position - and might end up knowing more than your senior staff.

It’s a bug bear for some, but the 20% dedicated on-the-job learning obliges your apprentices to stay on top of their workload. It encourages them to manage their time and review content regularly. Many L&D initiatives naturally get pushed aside as employees prioritise their main workload over additional development. However, as a government requirement, this 20% learning is non negotiable.

The learning takes shape in several different forms. It differs between training providers and standards, but you can expect your apprentices to go through a combination of coaching sessions, workshops, e-learning and seminars. By the time they’ve gone through assignments, experiments and their EPA (end-point assessment), you can guarantee that your apprentice will have developed a confident, holistic understanding of the topic and role.

You’ll create a culture of learning and self development

A recent survey revealed that 73% of employees believe morale is improved when apprentices join the team. The statistics really speak for themselves. Learning and enthusiasm in the workplace truly is synonymous.

This could be down to a huge range of factors, but based on personal experience, I can vouch for having a new lease of life from integrating this amount of learning into my schedule. It’s allowed me to generate new ideas, new approaches and new ways of working. It’s also worth noting that apprentices are often new to the world of work, which means that they bring a fresh, diverse perspective from the norm.

Apprenticeships have the power to push employees to reach their full potential. The work is engaging and enjoyable, offering a change of scenery from day to day work, where innovative thinking led by research and self learning is cultivated and encouraged. The support network of manager, apprentice coach and cohort also facilitates positive change and drive.

Final thoughts

It’s common to get stuck in a rut at work and it may feel safer or easier to stick to the status quo. However, when someone is continuously learning and trying new things out, this creates an refreshing atmosphere of curiosity. It’s been reported that 86% of employers believe apprentices help to develop relevant skills for the organisation’s benefit.

If you do one thing this week, it should be to reflect on your company’s capacity to bring on apprentices. Whether that’s offering the opportunity to your existing staff to upskill, or hiring new talent, your apprenticeship strategy should be top of the agenda to ensure that your business is staying ahead of the curve.

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