At the beginning of last month [April], apprenticeship funding saw a significant change with the introduction of the apprenticeship levy, and arguably the main winners being the SME community.
Employers with a wage bill of more than £3 million a year now have to contribute 0.5% of their total bill to apprenticeship funding, with an offset allowance of £15,000. The Government has introduced this as a way of increasing the quality and provision of apprenticeships nationwide. This will create an additional three million much needed apprenticeship starts by 2020.
SMEs who are just over the £3m wage bill threshold only need pay a minimal levy that will be offset by the £15,000 allowance – for example, a company with a wage bill of £4m will pay a £20,000 levy. Employers whose wage bill is less than £3m and with more than 50 employees will receive 90% of the cost of employing an apprentice from the Government. That leaves just 10% for them to pay. Those with fewer than 50 employees will receive a £1,000 government payment and £1,000 to the training provider for any apprentices they take on. They will only have to contribute 10% towards the total costs of training apprentices over 21 years old, whereas before they had to pay the full amount.
Despite these benefits, according to research we’ve undertaken at Weston College, 38% of SMEs are still unaware of the changes. And yet the same study also revealed that 58% of businesses do not believe their workforce contains the necessary skills and knowledge for their future requirements.
Apprenticeships are a vital part of meeting the economy’s future needs, but there is still a fair way to go for them to be seen as equal to traditional degrees and higher education.
Apprenticeships don’t just have to be for young entrants to the marketplace – they can be for upskilling existing workers or retraining older workers as the working population continues to age.
All good training providers should be willing to meet with you to discuss your business and identify any skills gaps. Ensure they work closely with you to draw up a bespoke training plan that meets your business needs.
Training providers can and should advise you on all the available funding to support apprenticeships. If you qualify for levy payments, they can help you maximise the return on your investment.
Work closely with your training providers during the recruitment process to ensure the needs of your business are being met. It can be a good idea to host an assessment day to see how well candidates fit into your organisation.
Think about the development of your own teams so they are knowledgeable about apprenticeships and can offer support to incoming apprentices.
Ensure a successful integration into the workplace. This is likely to be their first experience of the workplace, so set some basic guidelines as to what is expected, such as timekeeping, dress code and use of mobile phones.
Be prepared to provide ongoing guidance and support. This will ensure real progress and enable you to shape them to meet your firm’s needs, focusing their training where it will be most useful for your business goals.
Please be assured that all your details and any conversations will remain completely confidential at all times.