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The Apprenticeship Levy: Employer Plans, Perspectives & Predictions

employers discussing the apprenticeship reform

How are employers feeling about - and preparing for the Apprenticeship Levy?

apprenticeship levy

The Apprenticeship Levy is coming into effect in April - but with the reform right around the corner, how are employers planning to respond? Do they know enough about it? Do they have a plan? And what are their major concerns? Findcourses has put together the results of its recent employer survey, along with other key findings, to help establish the lay of the land.

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There's still uncertainty.

Almost 60% of employers we surveyed still don't know how the levy will work - and a quarter know a little - but need more information. The majority feel they haven't received enough government support or guidance on the impact of the levy. 

This feeds into the reason why over half of surveyed employers don't know if the levy will have a positive impact on apprenticeships in their industry - or indeed in England - it's just too soon to say when most companies don't have a fully formulated plan or understanding of the new system.

pound sign

Just another employment tax?

All levy-paying employers we surveyed are concerned about the expense of the levy payments in some form. And how they spend it will differ depending on company size and industry. 

A survey from XpertHR found 60% of employers with over 1,000 members of staff do plan on increasing their numbers. However Matthew Lewis, employment partner at Squire Patton Boggs believes that many employers, such as the NHS, will not recoup the levy that they pay, and will therefore simply see it as another employment tax - particularly those that have no need for structured training that could fall within the scope of an apprenticeship scheme.

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SMEs are not fully prepared.

The XpertHR survey also found that SMEs, across all industries, are most likely to struggle. Only around half (53%) of medium-sized companies and a quarter of smaller ones reported that the levy will result in them either increasing their use of young apprentices or employing them for the first time.

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Too restrictive.

Despite the development of employer-led apprenticeship standards, some organisations believe the levy itself is too narrow in scope and does not support all the training employers need. They'd like the levy to also cover traineeships and wider training programmes.

If the quality of the apprenticeship training is in doubt, this could be another reason some employers will not recoup the levy that they pay.


lightbulb

Still in the dark.

With all the focus on implications for levy-paying employers, non-levy paying companies are still unaware of how they too can benefit from the new funding system. 74% of non-levy paying employers we surveyed still don't know that the government is offering co-investment funding for apprenticeships.

If you fall into this category read our guide to how the levy will work.

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Not yet a game-changer?

The majority of findcourses-surveyed employers are still thinking of apprenticeships - and planning to source them - in the traditional way. Most are looking for entry-level apprentices; they'll use training providers they've used before and they don't plan on using the government approved training provider portal to find training.

For many employers, the levy is not expected to bring major change as 37.9% of employers from the XpertHR survey still state that it won’t impact their recruitment of young workers.

Summing things up

So there you have it: with the levy coming into effect in a matter of days many employers still don't know how they're going to respond. As with most major reforms, it's shrouded in uncertainty, but general patterns indicate that big companies do intend to invest their levy money in apprenticeships, but it will vary wildly between industries and apprenticeship needs. SME's are most likely to struggle - both with the financial implications and being able to make full use of the initiative. 

There's also a clear lack of information for non-levy paying employers needing to know more about how they can get funding for apprenticeships - and how they fit into the new funding system. 

Quantity over quality

The impact on the quality of apprenticeships is another major concern for most employers. With all the focus on funding and the need to spend it, the quality of apprenticeship training is falling somewhat into the background. If employers don't need apprentices - or don't have the resources to support them effectively - then the funding becomes redundant, and another tax they'll just have to accept.

The bigger picture

It's not all doom and gloom however. For those who understand how they can benefit from new funding - the opportunities are exciting. 

There's hope that once the system comes into effect, traditional views on apprenticeships will evolve and employers of all sizes and industries will place more value on apprenticeships at all career levels. Sheila Attwood, Pay and Benefits Editor, at XpertHR reiterates: “Apprenticeships are a valuable part of the UK economy, and many employers are successfully using them as a way of boosting the skills of their employees. Businesses should also think more broadly about apprenticeships and not just see them as a way to recruit new starters. Other training that they have perhaps put off due to cost, could be undertaken as an apprenticeship, as long as it meets the new criteria set out by government.”

It's definitely a case of only time will tell.

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Last updated: 06 Apr 2017

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