If you’re a big business, you might ask what’s the point of transferring your apprenticeship levy to other organisations. “It’s a faff”, “you have to help the small business with their apprenticeship account”, “it’s not our business-as-usual activity”.
All these are, some would say, legitimate reasons not to bother with levy transfers, yet there are big businesses that go out of their way to transfer their unspent levy funds to SMEs. So, why do they do it? And how do they avoid the hassle other large businesses find so irritating?
In this article we hear from Nicola Drury, UK Apprenticeship Lead at Amazon, to understand why Amazon pledged to transfer £2.5 million of their unspent levy funds to support SMEs and their apprentices across the country…
But to start with, tell us a little bit about apprenticeships at Amazon
“This year we celebrate ten years of offering apprenticeships at Amazon. A lot has changed in that time. The first year we onboarded just six apprentices, but since then (and particularly after the apprenticeship levy introduction) the number of apprentices we employ in the UK has grown substantially to over 1700 – including both new apprentice recruits and existing employees upskilling.
“A bit like the Amazon logo, our apprenticeships go from A to Z, with dozens of standards covered and more and more teams across the UK and Ireland wanting to get involved each year. It really is an exciting time to work on apprenticeships at Amazon!
“Alongside our own apprenticeship offer, as an employer, we are very passionate about skills and champion apprenticeships across the region – providing opportunities for our employees and local communities to gain new skills and helping businesses to adapt and evolve their workforce through apprenticeship training. This is why we support apprenticeship initiatives such as flexi-job apprenticeships and apprenticeship levy transfers.”
How do apprenticeship levy transfers work?
“As one of the UK largest employers, we pay into an apprenticeship levy. The money in our levy account is ringfenced to spend on apprenticeship training, but if we aren’t able to invest it all – the funds expire after 24 months, going back into the Treasury.”
“Before that point, we can transfer our remaining levy funds to other businesses, covering the cost of training apprentices in their business. This means the money doesn’t go back to the Treasury and is still invested in apprenticeships.
“I don’t think of the remaining money in our levy account as ‘ours’. The levy gives employers an opportunity to invest in skills training, and if you have funds remaining it makes sense to support other businesses to invest in skills too. Being able to transfer money to small businesses is quite a privilege.”
When you’ve got your own apprenticeship programmes to oversee, are levy transfers not a bit too much extra work though?
“I can understand that view, but over the years we’ve developed a way of working that makes it practical.
“When we first decided to transfer our apprenticeship levy, we contacted the 1,000s of small businesses using the Amazon platform to see if they wanted to make use of transfers. There was interest, some of the questions which would come up were ‘lack of understanding about what an apprenticeship is’ and ‘how it works’, ‘what training provider should we use’, ‘which standard is best for my employees’, ‘how to set up a DAS account’, etc… Even though the questions were covered there was clearly a need for a more personalised support service for the SMEs.
“It’s then that we started using intermediaries to handle levy transfer requests. We now work with a number of Combined Authorities and agencies such as Supplytrain CIC (a flexi-job apprenticeship agency) who can provide more support to the small businesses than we’re able to. For example, offering initial apprenticeship advice, assessing a company’s readiness to take on an apprentice and managing the SMEs apprenticeship account on their behalf.
“Using intermediaries makes levy transfers much more manageable and allows us to support more businesses than before.”
Do you have criteria around which apprenticeships you will support?
“Not now we use intermediaries. As I mentioned before, for me it’s a privilege to be able to support the increase of apprenticeships across the country, I don’t think it’s right for us to be too prescriptive, plus it has to be manageable, and each region has different skill gaps.
“If we were to say we’d only fund digital or Level 2 apprenticeships, for example, this would be difficult to manage as there are always anomalies or regional skill priorities that need to be considered.
Some people say that, as SMEs only have to pay 5% of the apprenticeship training costs, they should be willing to pay instead of receiving a levy transfer?
“At the moment, it can be financially challenging for a number of small businesses to invest in skills or hire employees who require training. Transferring levy relieves some of the financial burden. If the saving of a levy transfer allows an employer to buy their apprentice a better laptop or invest in more support – that’s got to be a good thing.”
“There are 100s of stories of how Levy transfers have made a difference to individual people and businesses. For me, this is what levy transfers are about. Being about to support SMEs to invest in tomorrow’s talent, just like we do internally here at Amazon, is well worth the effort!”
Read some of the apprenticeship stories that amazon has supported with levy transfer…
EasyTots is an innovative parenting brand that designs products to support weaning. Helen Davies, Founder and CEO of the business, has enrolled her employee Steph Halsall onto a Digital Marketing Apprenticeship.
Steph Halsall, Content Creator and Marketing Assistant at EasyTots said:
“I have been on the apprenticeship for a couple of months and it has already given me a deeper understanding of the power of marketing. The off-the-job training is allowing me to fulfil my potential at the company and I now feel confident enough to manage an entire marketing campaign. The support from Amazon with online seminars has also been invaluable to my development.”
Helen Davies, Founder and CEO of Easy Tots added:
“As an Amazon selling partner, knowing that the company has a programme to help small businesses like mine adds so much value. The training will means Steph can directly apply her new knowledge to our brand and we are given the tools to support her as she grows.”
Adopstar is a fast-growing advertising and marketing agency based in Devon. They use apprenticeship training to support new and existing employees to learn new skills and progress in their careers, without having to leave the local area. They won South West SME Apprenticeship employer of the year in 2022 and came second at the National Apprenticeship Awards for the quality of the apprenticeship opportunities they offer.
Theresa Benson, Managing Director at Adopstar, said:
“It’s important to us to bring people through apprenticeship training, but we did not know there was a cap on how many apprenticeships a non-levy paying businesses could offer in a year. We have grown from 20 employees to 45 in a year and wanted staff to have thorough training alongside their roles, so we were delighted when Amazon were willing to transfer levy to us.
“The transfers meant we could employ more than 10 apprentices in a year – from 16 year olds up to 40 years olds – and continue the learning culture we have implemented here to help individuals and the company to grow. If it wasn’t for Amazon and the levy transfer, my business wouldn’t be where it is today.”
Corksol distribute a natural breathable building coating made from Cork, that has won numerous awards and featured on Grand Designs. Corksol used Chamber Talent, a flexi-job apprenticeship agency run by Mid Yorkshire Chamber of Commerce and Supplytrain CIC, to recruit and support an apprentice in their business for the first time.
Chris Heaton, Marketing Manager at CorkSol, said:
“Following the success we had employing people through the Kickstart scheme, we were keen to help another young person start their career, but weren’t sure of the best way.
“We heard about Chamber Talent and were really impressed with the support.
Supplytrain found the right apprenticeship programme and training provider for us, and shortlisted an impressive calibre of candidates. We were delighted to bring Laura into our team, and being able to access levy transfer from Amazon was the icing on the cake – as the saving made on training costs has allowed us to reinvest in Laura’s on-the-job development.”
Looking for more info?
- Visit the Amazon Apprenticeship website to find out more about apprenticeships at Amazon.
- Visit the Government website to find out more about transferring levy funds.
- Visit Chamber Talent if you want support employing and managing your first apprentice or to share apprentices across employers, with a levy transfer obtained for you.