SMEs can be forgiven for thinking that the forthcoming changes to apprenticeships brought in by the Apprenticeship Levy won’t have any relevance for them.
However, as well as a tax on larger employers to drive apprenticeship take-up, the government’s revamped apprenticeship training also offers a wealth of opportunities for smaller businesses looking to offset their current training spend, or kick-start a workforce development programme.
In this guide, we’ll explore how SMEs can take advantage of the Levy to offset their current training spend, kick-start a workforce development programme or take on new staff in vital areas.
A brief introduction to the Levy for Smaller firms
Alongside the launch of the Levy, the government is also completely overhauling the way apprenticeship-based training works.
Eligibility requirements, such as age and pre-existing qualifications, are being done away with, while a new set of standards are being created in collaboration with employers to help apprenticeship training better-meet the needs of specific roles within their sectors.
Apprenticeship funding for non-Levy payers is also being revamped, with the government stumping 90% of the costs, while employers need only contribute 10%.
How SMEs can use the Apprenticeship Levy to offset current training spend
If your company’s currently running a training programme, the forthcoming changes to apprenticeship-based training could enable you to greatly reduce costs.
As mentioned, eligibility requirements are being phased out, making it easier than ever to enroll existing employees - regardless of their age or prior qualifications.
The government’s in the process of developing 500 new ‘Trailblazer’ standards with the help of employers for a huge range of occupations, so it should be fairly straightforward to find one that suits your needs. And if you can’t, you can always join a Trailblazer group for your industry and have a say in developing training that works for you.
Course content on these new standards is also a lot less prescriptive than previously, offering even more flexibility in terms of how you can deliver training to fit the needs of a specific role to a tee. At the end of their training (provided they pass end point assessment), they’ll also gain a qualification - which can be equivalent to a degree, or even a masters, depending on the standard in question.
However, it’s worth noting that anyone enrolled in these courses will require 20% off-the-job training. While this aims to help them brush up on the theoretical knowledge related to their qualification, it can differ greatly depending on the apprenticeship and may necessitate regular absences from the workplace.
How SMEs can use the Levy to kick-start their training program
Even if your organisation hasn’t made any concerted efforts in training to date, the launch of the Levy could provide the perfect opportunity to start.
Taking the government’s co-investment into account, apprenticeship-based training can cost a fraction of many commercial or private-sector courses and those enrolled will get receive both tailored training to make them more effective in their roles and a recognised qualification.
There’s also a range of extra funding available for organisations taking on young adults, or that are situated in deprived areas. Similarly, depending on your local authority and whether you meet specific criteria - your company might also be eligible for grants like AGE (Apprenticeship Grants for Employers).
On an employee engagement level, investing in training your staff can be a real morale-booster. Beyond providing fresh skills they can apply in their day-to-day work, they’ll also be up-to-date on the latest regulations governing their role, how best to utilise new technologies and be more willing to take on more responsibilities.
Using the Levy to take on new staff
While the term ‘apprentice’ may have connotations of taking on young, entry-level staff, the removal of eligibility requirements means you’ll have a much wider range of options when it comes to recruiting new staff.
That’s not to denigrate the potential of taking on young people, however, and many businesses have seen great successes when taking on apprentices from the traditionally favoured age bracket.
These workers tend join the workplace with no bad habits or false expectations, enabling companies to mould them into an ideal employee. And figures from a survey of 100 UK employers from last year found that nearly 80% of employers went on to offer their apprentices a full-time role once their training was complete.
There’s also a wealth of extra funding available for both employers and the providers that are servicing them when it comes to taking on a younger person. And employers with fewer than 50 staff won't have to pay any training or end point assessment costs when taking on apprentices between the ages of 16 to 18.
When it comes to apprenticeship-based recruitment and training, there’s no one-size-fits-all solution, so if you’ve got any questions - don’t hesitate to let us know via LinkedIn or Twitter.
And if you’re looking for bespoke advice, or someone to take the reins on your apprenticeship strategy - be sure to get in touch with our Levy team today.