Learning to leverage the Apprentice Levy


10 Feb 2017

Apprentice Levy, Data & Insight

Learning to leverage the Apprentice Levy

As more and more young people opt for work experience over university, apprenticeships are moving even further into the spotlight. (Because, let’s face it, earning money is much more appealing than a huge student loan.) And unlike the old days when apprenticeships were mostly for craft roles within trades such as carpentry and construction, there are now more opportunities than ever. When the Apprentice Levy comes into effect in May 2017, this choice is only going to increase. So, what does this mean for you as an employer, and how can your organisation make the most out of it?

So what is this ‘Apprentice Levy’ that everyone keeps talking about?

With so much information online, we won’t go into all the details. But from May 2017, the Levy basically means that every company with a pay bill over £3million will be automatically charged 0.5% of their total bill by the government. This money will then be held in a ‘locked down’ account, to be used solely for apprentice training (run by government-approved providers). Given that all organisations will be charged this amount (not just those who currently recruit apprentices), rather than throwing this money down the drain, it gives companies the much-needed incentive to invest in future talent.  The government believes that the Levy will create an additional 3 million apprenticeships by 2020.

 What does this mean for you?

Because of the Levy, fewer students will go to university, which means fewer people will apply to your existing graduate scheme. As a result, you’ll need to re-think your strategy for pipelining young candidates. After all, they are your future talent.

With the anticipated increase in apprenticeships, candidates will be overwhelmed with the choice they have. To stand out, you need to really think about your attraction message and strategy.

If you’re giving apprentices world-class training, you’ll also need to provide current members of staff with the opportunities to progress and succeed. Otherwise, you may risk them leaving for somewhere that does.

Recruiting more apprentices will also change your culture. You need to focus on this, and make sure your existing staff aren’t alienated by eager and enthusiastic young people coming into your organisation.

Despite the extra work this might bring for you in the short term, let’s not forget about the value that young talent brings…

It’s really important to have young people and fresh talent within your company. They bring a diversity of ideas and an enthusiasm to learn and develop - which means you can mould them to become future leaders within your organisation. And, as we’re now a tech generation, absorbing everything through computers and mobile devices, companies must adapt to keep up with the latest trends. Having young, tech-savvy individuals can help you be more effective and supports new ways of working.

Because of all this, we say let’s welcome the Apprentice Levy and all it has to offer with open arms, and minds. Apprenticeships are definitely the way forward, we just all have to learn how to make sure it benefits everyone.

At Penna, we’re already seeing the benefits of offering young people opportunities to succeed. Which is why, instead of having a Head of Early Years (or equivalent), we have a group of graduates and apprentices (which we’re both a part of) who look after the attraction and recruitment of our future talent schemes. Acting as ambassadors, we also attend conferences, pull together thought leadership articles and promote our early in careers schemes, both externally and internally. And having both come from Penna graduate and apprentice programmes, candidates can relate to us, and see how it’s benefited our own careers.

So if you want to talk about the apprenticeships, the Levy or anything else related to future talent, just get in touch. We’d love to talk.

Laura Damon and Hannah Harman are Senior Client Partners at Penna