The apprenticeship levy is coming, so we might as well make the best of it. And how we do that is by thinking smarter and working together to make the scheme succeed for us
This coming week (6-10 March) happens to be National Apprenticeship Week, but apprenticeships are front and centre in people’s attentions for plenty of other reasons as well.
The government’s recent housing white paper referred to apprenticeships as a key element in addressing the skills shortage, which was well analysed by last year’s Farmer Report. Apprenticeships are, according to the white paper, one way of helping the UK “build homes faster”. Meanwhile, the government’s Industrial Strategy, published in green paper form at the end of January, included a pillar specifically relating to skills, and this paper, too, places significant emphasis on the use of apprenticeships.
Admittedly, for many of us, hiring apprentices is not a matter of choice. We’re now just a month away from the start of the apprenticeship levy. It is naturally focusing our minds, as 0.5% of companies’ payroll will be paid into the pot (with an allowance of £15,000 to ensure that companies whose PAYE bill is less than £3m will not have to pay). And the only way for companies paying the levy to benefit from it is to use their vouchers for training apprentices they hire.
For many companies, coming on top of the existing CITB levy, this new levy is tough. Nonetheless, we can keep a positive attitude. Indeed, it is in our best interests to work within the spirit of the national scheme, and focus on what industry and the broader economy need, not just work the system and hire apprentices in order to recoup one’s money.
So, how do we do that?
- Start with the business strategy in mind. Consider what success looks like and what KPIs need improving. Then explore what type of apprenticeships can deliver the best return on investment to achieve those needed improvements. Apprenticeships that don’t have a real long-term benefit to the company may end up benefiting nobody.
- Use apprenticeships to re-skill the existing workforce. This is a legitimate use for apprenticeships and is in keeping with the continual need to ensure our skills base keeps pace with evolving economic demands. There is enough flexibility in the apprenticeships model to apply it to mid-career re-training or even re-launching new career paths.
- Recruit apprentices in non-construction specialisms, such as finance, IT, or HR. There are new apprenticeships standards being developed that apply to all sectors, and larger firms in our sector should take advantage of this. It’s not just about the construction trades that we normally associate with apprenticeships.
- Use higher and degree-level apprenticeships. Admittedly, there have been some challenges in obtaining final government approval to allow some of the proposed “trailblazer” higher and degree apprenticeship standards to be put into use. But these approvals are forthcoming, and the standards are well-aligned with real business needs as well as the quality expected by professional institutions.
- Think about the parents. For many younger apprentices, it is their parents who play a huge role in the decision-making process. We need to demonstrate to parents that apprenticeships – especially the higher and degree options – are a legitimate alternative to an academic route.
- Encourage the supply chain to hire apprentices. From 2018, the government will introduce a facility that will allow apprenticeship levy payers to pass on some vouchers to other companies. In the meantime, there are plenty of good practice examples of contractors actively encouraging their supply chain to hire apprentices, and helping with the process. Of particular note, the CITB offers a range of ways to make hiring apprentices easier for small companies, such as direct advice and counsel to guide companies step-by-step through the process, and grants to help with mentoring and other employment costs.
In a post-Brexit world, the next generation of workers – whether tradesmen, technicians, or managers – will have to be home grown
I should highlight also that the CITB is working closely with the government to ensure that the new apprenticeship standards are aligned with the full range of business needs, as well as developing innovative ways to help individuals achieve basic literacy and numeracy requirements.
As I mentioned earlier, in some ways there is not a choice of whether or not to hire apprenticeships. But what is a choice is how we go about it.
Don’t forget that we are in a war for talent. Yes, in some way this is a competitive issue, with many companies competing against each other for the limited skills available. But it is also a collective effort: as a sector, we have to convince more young people to join us. In a post-Brexit world, the next generation of workers – whether tradespeople, technicians, or managers – will have to be home grown.
Apprenticeships are not a silver bullet solution for this, but we would be foolish not to take advantage of the opportunities we now have to make apprenticeships a stronger, more integrated part of how we boost our sector skills and more broadly restore national pride in our profession.
James Wates is chairman of Wates Group, the CITB and Build UK