UK employers will be encouraged to take on more apprentices following the introduction of a new levy this month. But which businesses are expected to pay, how much they have to put in, and on what they can use the funds? And why should they consider taking on apprentices?
If you’re an employer with a pay bill over £3 million each year, you must pay the new apprenticeship levy, but you can also use it to fund your own apprenticeship programmes. Funds in a business’s apprenticeship service account – and funding provided by the government through co-investment – can be used to pay for apprenticeship training and end point assessment. This must be with a government-approved training provider and government-approved assessment organisation, which can be found at the government website’s “Register of apprenticeship training providers” page. Once the apprenticeship training has started, monthly payments will be automatically taken from the business’s account and sent to the provider.
Funds can’t be used on other costs associated with apprentices or wider training. For example wages, statutory licences to practise, travel and subsidiary costs, managerial or brokerage costs, traineeships, work placement programmes or the costs of setting up an apprenticeship programme.
Smaller businesses, with pay bills under £3 million, will not be required to pay the levy. Non-levy paying employers will share the cost of training and assessing their apprentices with government – this is called ‘co-investment’. From May 2017, they will pay 10% towards to the cost of apprenticeship training and the government will pay the rest (90 per cent), up to the funding band maximum.
Apprentices offer a lot to their employers: they are trained in the specific skills and job role the company requires, and research shows that employers find apprentices make the most loyal employees. A survey showed more than half of employers offering apprenticeships say that apprentices stay in the business longer than other recruits. They complete assignments, attend classes and will be assessed by an assessor on a regular basis. However, this usually takes up just one day a week. Apprentices usually work a minimum of 30 hours a week.
Apprentices are often associated with more vocational roles and employers in industries like trades, construction and beauty, but there are also frameworks for many other roles suitable for a vast array of companies, regardless of industry, such as in business administration, accounting, and human resources.
Jack Denton, co-founder of start-up business AllAboutSchoolLeavers.co.uk – a website dedicated to informing people about apprenticeship and school leaver options, as well as posting the UK’s top school leaver jobs – agrees that apprentices bring a lot to a business. “They are fresh, eager to learn and want to get stuck in,” he says, of the two apprentices the company took on last year. “It also gives us a new perspective on what we’re doing as a business, as they are also consumers – young people who have just left school – and it's beneficial to have a variety of points of view.”
Jack says setting up the programmes was surprisingly easy: “We consulted with a few training providers that specialised in the type of apprenticeships we wanted to employ and they really guided us through the entire process, it's their bread and butter.” He also thinks the training side of the schemes is more straightforward than it might seem at first. “For us, it's been flexible and we've been able to move around study time to fit in with the needs of the business,” he says.
“Of course, when you employ an apprentice you're aware that you are taking on an apprentice and part of that is giving them time to build their knowledge and skills and in the end that's to our advantage in the end, as we're building for the future and see our apprentices as integral to that and a pathway to attract and keep great talent in the business.“
For more details on apprenticeships and information on the process of setting up various programmes, how much school leavers of certain ages should be paid, and information on training providers, visit AllAboutShoolLeavers’ dedicated recruiters pages.