The Apprenticeship Levy: making it work for your leadership needs

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From the start, 2017 was dubbed a year of change. Whilst widespread political upheaval was a driving force behind this, significant change is rife elsewhere. In the UK, this year we’re seeing somewhat of a revolution when it comes to the skills agenda.

Investment in infrastructure and innovation is a clear priority for the government in 2017. In last month’s Budget, the Chancellor announced £500m plans for a radical overhaul of further education and the roll-out of T-levels.

And this month, the Government’s new Apprenticeship Levy comes into force, requiring all employers with an annual pay bill over £3m to invest 0.5% of that bill into a central apprenticeships fund.

These are significant shifts which will take some getting used to. But if organisations are smart, they can use the changes to target and address longstanding limitations with the UK talent pipeline. 

Recognise the leadership lag

The UK has a large and growing leadership and management skills gap. Research from ILM revealed that less than a third (31%) of employers feel confident in their supply of leadership talent for the next three to five years.

This leadership lag is one of the main contributors to our poor productivity when compared with other G8 nations.

Targeted and effective leadership development is essential to overcoming this issue.

That does not simply mean training those at the top, which is so often the default approach. The democratisation of the workplace means that key leadership skills such as collaboration and communication are needed throughout an entire career.

By equipping leaders at all levels with skills like coaching,  problem solving and motivating others, employers can ensure they’re future-proofing their talent pipeline, and ultimately having a positive impact on UK Plc.

With the Levy soon in place, it’s the perfect time for employers to address gaps in their leadership pipeline using the funding available to train and develop apprenticeships in the core skills their business needs.

Understand what it means for your business

Many employers still consider the Apprenticeship Levy to be a tax, when actually it’s a great opportunity for organisations of all sizes to improve their staff training and skills development across the workplace.

Whilst around 14,000 businesses across the UK will be required to pay into the Levy, every employer can benefit from the extra funding available.

Large and medium sized businesses paying into the Levy can use all the money they put in – plus an extra 10% from the Government – to fund their own employee training.

They can even adapt existing management programmes to meet the requirements of the new apprenticeship standards.

Smaller businesses who aren’t paying into the Levy can still access the funding and will only have to pay 10% of any apprenticeship training costs.

And businesses with less than 50 employees find themselves in something of a win-win situation; they don’t need to pay into the Levy, and for any apprentices under 19 the Government will cover 100% of the training costs.

Reassess the role of apprenticeships

Too many people are still under the misapprehension that apprenticeships are just for technical or vocational skills, and a route to recruiting and training inexperienced, entry-level staff.

In fact apprenticeships offer a valuable way of upskilling staff at all levels, from longstanding employees to new recruits, graduates through to the C-suite. 

Nor are they just about technical development; they can be used to invest in the essential skills that will transform your business performance, including often neglected leadership and management training.

With further uncertainty and change ahead, the UK needs managers with the skills and practical experience to lead through uncertainty. As leadership responsibility is increasingly being pushed down in many organisations, frontline staff carry more responsibility and act as decision-makers every day.

By using apprenticeships to upskill these employees, they can learn the skills they need to fulfil the requirements of their role whilst working, enabling them to immediately apply their knowledge to drive workplace performance.

A shift in employer perceptions is needed, to recognise the huge value of practical application in developing great leaders.

Make the most of the opportunity

With the arrival of the Levy come the new Trailblazer apprenticeship standards. These have been developed by employers, for employers, to define the professional standards used to train and assess apprenticeships within their industry.

This means business leaders can embrace the next generation of apprenticeships, in the knowledge they have been designed with their specific needs in mind.

To keep up with these changes, an increased focus on the independent assessment of apprenticeships is vital.

A growth in the quantity of apprenticeships should not sacrifice the quality, and with the new standards created by employers, they need to be robustly measured to ensure that apprentices have the requisite skills, knowledge and experience they need to hit the high industry benchmarks.

Employers and providers should therefore work closely together, firstly to supply staff with the training that will stand them in good stead in their specific industry and in their business, and also to validate that training with effective and trustworthy assessment.

If this is achieved, the ability of apprenticeships to future-proof organisations, sectors, and indeed UK plc with a steady supply of talented and skilled people will quickly become evident.

This is an exciting, if eventful, time for the UK’s HR and training professionals, but they will have to step up with confidence to take advantage of the changes afoot.

About John Yates

John Yates ILM

John is the Group Director of ILM, the UK’s leading provider of leadership and management qualifications.

ILM is dedicated to continuously improving leadership, management and coaching skills – both in the UK and internationally – ensuring businesses and individuals are equipped for the working world now and in the future.

As well as setting ILM’s strategic direction, John serves as Director of New Ventures at the City & Guilds Group, where he oversees a £2.5m venture fund which seeks to support innovation in how skills education is delivered.

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