Employers ‘more positive’ about apprenticeship levy a year on

By Claire Churchard

- Last updated on GMT

Return on investment: employers are more positive about apprenticeship levy
Return on investment: employers are more positive about apprenticeship levy

Related tags Apprenticeship levy Rate of return

The majority of employers are confident that they will receive a positive return on investment (ROI) from the money they’ve paid into the apprenticeship levy, according to a survey of members of the People 1st Apprenticeship Network.

The survey of 81 employers, which included 61 levy paying employers, showed that 69% believe that they have a coherent plan to ensure ROI from their levy contribution. This is in spite of the finding that 62% do not have a process in place to measure these returns.

Introduction of the apprenticeship levy

The apprenticeship levy came into force in April 2017. It affects employers with a payroll over £3m and requires them to pay a levy of 0.5% on their annual pay bill, which they will only be able to redeem when they employ and train apprentices.

People 1st estimates that visitor economy (hospitality, retail, travel, tourism and passenger transport) employers will contribute approximately a fifth of the total levy bill.

More than half of employers, 59%, said they were planning to spend their entire levy pot and almost three quarters said the apprenticeship standards ensure that this type of training teaches the knowledge and skills they need for their workforce. Hospitality employers in particular said they find apprenticeships are a “valuable recruitment tool”.

However, a significant proportion, 30%, reported that the levy had had a negative impact on learning and development budgets.

Employers at different stages

Martin-Christian Kent, executive director of People 1st, said: “The results present a largely positive picture of how businesses are implementing the levy and the changes, and it’s encouraging to see the value that employers are placing on the new apprenticeship standards in terms of the benefits they present.

 “It’s clear from the findings that employers are at very different stages and while the vast majority are making significant headway, it is concerning that a considerable percentage of levy-paying employers are still only just embarking on their journey, which could undermine a positive return on their levy contribution.”

He said the most pressing challenge continues to be the extent to which the rest of the business understands and are buying into the changes. Managers in three-quarters of the businesses surveyed are still described as having a “poor or very poor” understanding of apprenticeships.

More work to do

Another area of concern is that only one in five of those surveyed have registered as an employer-provider, with only four out of 10 believing they have all the information they need to be able to do this.

Many employers also said they want clearer information about how they manage and record the 20% off-the-job training.

Kent said there is clearly more work to be done to address concerns and to bust a variety of myths and misunderstandings that have built up. “There are also opportunities for businesses to use evaluation techniques to help engage stakeholders from across the organisation and overcome specific barriers.”

Daniel Thwaites director of people & development Joanne Carlin said: “We have found that paying the levy has sharpened our focus on providing apprenticeships. With the support of People 1st we got a head start on how to work with the reform and created a strategy where apprenticeships are the fuel for our learning academies. We also have a great provider who has worked with us in adding extra value into what we offer. Due to this focused approach we’re able to plan over a longer term what we’re going to do and how it’s being funded.”

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