Apprenticeship Economics: A new public-private education investment partnership
The latest DfE Apprenticeship stats show that over 15,000 employers have now activated their Apprenticeship levy; that’s c75% of levy payers. Understandably it those with the largest levies that have been quickest to take action, of those with a ‘substantial’(£100k+) levy 90% have activated their account.
And although they have so far only spent c15% of the money that they have paid in – they have committed twice that amount (c £1bn). And between them they have created a new Apprenticeship market.
Thus, in a literal sense the levy system is working and has brought about a new public-private educational investment partnership, something that has been a policy aim for successive governments.
It is a market that is fundamentally different to those that operate in Schools for example where it is the state or parents who pay.
And it is of a different scale to the other commercially funded work-based learning programmes run by colleges and universities such as sponsored HNDs and Foundation Degrees etc.
The closest equivalent is the student loan system which another public-private hybrid but based on individual not employer contributions.
Understanding the levy cycle from an employer perspective
The levy wasn’t created by employers, so it is does not have organic commercial origins – rather it was imposed on them regardless of whether they wanted or needed it.
However, of those employers who are making use of their funding there has emerged a fairly typical journey:
- Investigation: What is this levy, how does it work, is it worth us engaging in its usage or is it better for us to ‘write it off’ as a tax?
- Set-up: If we are to use it, how will we manage it? Creating a Levy management structure and processes, most often working through a central L&D / HR function
- Provision: Procuring and or appointing a provider(s) and through the joy of contracting – or becoming a provider ourselves
- Begin: Learning begins, either on pilots or fully-fledged schemes
Typical large levy paying organisational journey 2017-2018
So, what will come next? For many it will be trying to…
5. Evaluate: What return has this investment in training generated?
Wave 1 Levy employers are now at the stage where they are thinking that we have now committed £X to apprenticeships both in terms of actual levy payments, but also in internal resource and ‘off the job’ training time. But apart from counting the number of learners starting and the number of achievements, what has this given us and how can we measure its impact?
Kirkpatrick** is perhaps the most commonly used framework for measuring the impact of training and an obvious place to start.
The Kirkpatrick model of training evaluation
Reaction – ‘How did it feel’, is the first level of measurement and most training providers will have an initial ‘happy sheet’ in place to capture this.
But there are also some macro measures of satisfaction in operation which are interesting to look at:
‘Good ideas are good ideas forever’
Some readers may recall the ‘Employer’s guide to training providers’ that was launched in 2008. It asked employers to rate their provider ‘out of 5’ after each funded training engagement.
The system was intrinsically linked to the Train to Gain scheme and when that folded so did the fledgling rating system.
But now that online ratings are more established and recognised the ESFA have had another go: Apprenticeship Feedback Service
Levy paying employers are now being asked to leave a ‘rating’ against the providers that they have used.
Customer reaction is a key element of a successful market and so it will be interesting to see if this latest incarnation of the system works any better and lasts any longer than previous versions.
Satisfaction is still high
Alongside this newcomer, there is the often-overlooked FE choices annual survey of all Apprentices and their employers.
Results from this survey show consistently high levels of employer and apprentice satisfaction – although employer satisfaction has dropped slightly in 2017.
In particular last year, employers reported that their ability to bespoke apprenticeships has reduced. Very interesting if an impact of the move to ‘standards’ has been to limit employer’s ability to bespoke courses to fit their exact needs.
Capturing the Return on Investment (ROI) is the real key
Results – Evaluation and feedback are helpful but measuring Return on Investment remains the Holy Grail for training managers.
A bit like with Marketing, it is very hard to measure the impact of training as there are so many variables it becomes hard to isolate the specific impact of the training intervention.
It is particularly hard with the English Apprenticeship as it is an all age, all level programme and thus vary variable (Swiss and German studies can assume all apprentices are the same age and study at the same level etc).
However, with so much being invested here it is important that we try.
Common measures of training impact include:
- Staff retention and progression &
- People, performance and productivity
But unless you set up a solid data capture system from the start it can be hard to track these and articulate them in £ monetary values.
To try and find some real hard evidence, post reforms, Kaplan have engaged Warwick University (I.E.S) to update “The Net Benefit to Employer Investment in Apprenticeship Training” their seminal (2012) study. Specifically, to measure the impact Apprenticeship as a method of training Accountants.
But as well as producing a specific study in this particular field we are hopeful that it will produce an updated methodology and metrics that will be useful for other employers and providers – and as ever we are happy to share our workings out…
It also worth noting that the National Audit Office are also now reviewing the impact of the reforms, “Delivering value through the apprenticeships programme” and although their perspective is very heavily weighted towards the tax payer and notions of ‘deadweight’ it will be interesting to see what they find in the Spring.
2019 will the year of results in Apprenticeships – when End Point Assessment takes off and individuals, employers, government and the wider sector start to see what return this investment might bring us all.
Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial
** Kirkpatrick evaluation model taken from ‘Businessballs.com’
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