We are fast-approaching Spring, and the much-discussed Apprenticeship Levy is just around the corner. Every expert has had their say, and opinions on its implementation and viability have been as polarising as they have been plentiful. The imminent levy has been labelled everything from an “investment in skills at all levels” to a downright “stealth tax” on large businesses – but while most of the conversation has centred on the impact on businesses and apprentices themselves, there is one question lurking in the background: how will the Apprenticeship Levy affect recruitment for training providers?
As of April, all employers with an annual wage bill of £3m or more will be required to commit 0.5% of that bill to training apprentices – a minimum of £15,000. Employers will have access to their funds (including a 10% top-up from the government) through a new apprenticeship service account, to spend on their own schemes. They will have two years to use it before the funds expire and are gone for good.
Before the introduction of the levy, an employer’s contribution to their own apprenticeship schemes could be nominal, instead taking advantage of the government’s own central pot to fund their programs. With an abundance of training providers ready to dazzle prospective clients with pitch-perfect pitches, an employer could take a back seat, safe in the knowledge their government-funded apprenticeships budget would be managed from start to finish by their provider – a cursory glance at results against agreed KPIs a sufficient indicator of success.
Not any more.
The immediate impact this will have on large businesses charged the levy is clear: with financial responsibility shifting to employers in this new “use it or lose it” era, they will now be duty-bound to pay close attention to their apprenticeship schemes. What’s more, the onus will be on the training providers they partner with to deliver sector-leading training programs that gives a return on their client’s investment, whilst being desirable to would-be apprentices. With the bar inevitably rising in apprenticeship schemes across all industries, training providers will themselves be looking to raise the bar internally, thus increasing the demand for higher quality staff at all levels, including trainers and assessors.
One thing is abundantly clear: the culture surrounding apprenticeship training has to change, and will change dramatically when the levy comes into effect on April 6th, 2017. Employers will be taking more than a passing interest in their apprenticeship offering, and training providers, under pressure from clients, will have to re-double efforts to ensure they are delivering on their promise of stand-out apprenticeship schemes. From this perspective, the levy can only be a good thing for apprentices, and the industry as a whole.
For recruiters, the levy will open up the game for those with access to the best talent on the market. With a genuine need to source the best candidates available for their vacancies, training providers will be forced to aim higher and wider in their search. The trickle-down effect from employers could potentially be enormous, and for small, boutique recruiters, the upper hand may be theirs. With a genuine emphasis on building sincere relationships with both training providers and talent, a reputation for delivering quality over quantity may well result in small recruiters holding all the aces in this funding reshuffle.