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People 1st: ‘Businesses unprepared for the apprenticeship levy still have time to achieve a return on investment’

The apprenticeship levy kicks in today and every business with a payroll totalling £3million or more will have to invest 0.5 percent of their pay bill into apprenticeships. For businesses that have not yet developed a coherent apprenticeship strategy, performance and talent management expert People 1st confirms there is still time to maximise the levy investment to develop talent and increase productivity and retention.

Whilst many businesses have comprehensive plans in place, a number of employers affected may be concerned that they’re still not ready for the levy or that their apprenticeship strategy is not fully in place. Where that’s the case, People 1st assures that those businesses are not alone; there are many organisations that aren’t yet ‘apprenticeship-ready’ and won’t be delivering apprenticeships from day one.

Annette Allmark, director of strategic policy at People 1st, comments:

“While the levy has kicked in, the funds will only expire 24 months after they first enter a business’ apprenticeship service account, so there is still time to put plans in place. However, it is critical that businesses take steps now to develop an effective strategy that ensures apprenticeships reflect the needs of their business.”

According to People 1st, an effective strategy should take the following factors into account:

  1. Apprenticeships represent an opportunity to develop talent, increase productivity and drive retention, so they shouldn’t be viewed in isolation. It’s crucial to engage the leadership team and involve all other relevant stakeholders in developing a strategy that is aligned with the business’ broader talent strategy.
  2. The levy has bottom-line implications. Therefore, it is particularly important to partner with the finance team to agree how to define the return on investment. This process includes careful financial modelling to ensure a thorough understanding of how and when the business will use the levy.
  3. Embrace the flexibility. The new-style apprenticeships have been developed by employers and form progressive pathways to support career development. They are much more flexible and, as the training is not prescribed, businesses can decide on the combination of training that reflects their needs. Explore the new standards, which cover entry-level through to managerial roles, and look across the business to see which ones can be used to develop the required skills.
  4. Make it work for your business. It’s important to understand what training programmes the businesses already has in place and what parts of the standards these meet. This will help identify the gaps in provision and how these are going to be filled.

    If using an external training provider, businesses should check that they are listed on the register of apprenticeship training providers to be confident that they have the capability to deliver quality apprenticeships. People 1st’s gold standard apprenticeship provider scheme is also being established to help visitor economy businesses identify employer-endorsed providers that deliver an outstanding service and achieve the best results.

    Alternatively, to deliver the training in-house, businesses will need to apply to the register of apprenticeship training providers. A guide on the process is available from gov.uk.
  5. Learn from other businesses. A number of leading businesses have made fantastic progress. Center Parcs, which employs around 7,500 people across the UK, felt that the apprenticeship levy represented an opportunity to refresh and revitalise its existing apprenticeship programmes and develop a long-term strategy. The Center Parcs team wanted to build a programme that blended their existing management and development training and fit in with their development strategy.

    People 1st worked with them to create strong, bespoke apprenticeship programmes that not only meet the new, employer-designed standards, but will maximise their apprenticeship investment and attract top talent. Read their story here.
  6. Networking and collaboration is critical. Embedding the new standards into your talent strategy will enable you to gain a return on investment as well as providing a valuable progression route for both new and existing employees. It can be a steep learning curve, but there is plenty of support available and learning from other organisations is vital. People 1st’s free-to-join Apprenticeship Network of over 150 leading employers provides exclusive updates and support.

Find out more about the new apprenticeships and the levy