Laurie Olphin writes:
The big question - Why are companies either not spending their levy quickly enough, or writing it off as a tax from government?
After having spoken to several large businesses about the new changes with apprenticeships in the last 18 months, we have many different viewpoints on this key question.
First we have some statistics to show that businesses are not taking to the apprenticeship reforms since they have been brought in.
Employers have used just under 14 per cent of their apprenticeship levy funds in the first 18 months since the policy was introduced in April 2017 - Via FEweek.
From April 2019, levy-paying employers will be able to share more of their annual funds with smaller organisations, when the levy transfer facility rises from 10 to 25 per cent.
The latest figures, released on October 26, revealed that apprenticeship starts for July were down 43 per cent on the same month in 2016, before the introduction of the levy.
The reforms have changed the fundamental cost in apprenticeships for business, in terms of time invested and money invested. Before the reforms, most of the apprenticeships were free to businesses and would not take much staff involvement and would have little impact on production or output. The government have changed this to mean that the companies have to be more forward thinking whilst investing in their staff, and also more involved in the process. This is a great ideal, as it should be a more considered process than the aforementioned "Train to Gain" which was more "bums on seats, tick box exercise" than actual investment, even if the training was very valid.
Now these companies need to know a whole different system, where HR managers must know the ins and outs of the training tax and how it works. This requires training. They also must now allow the candidate 20% of learning and development time during work hours. This has been poorly branded as "off the job training" which makes it seem like 20% less productivity of that employee than before. Although a good ideal to strive for, it has had seriously negative feedback from the majority of businesses, because they cannot afford the hit that this implies to their bottom line.
This does not have to be the case however, as many companies are already hitting some criteria within the 20% off the job training's rules. This is why companies must consult with training experts to understand how to maximise the benefits of the new system as well as minimise the negative impact on bottom line.
We approach the new changes with a comprehensive consultation process, where we like to go through your processes and understand the challenges that might be faced, then fit around those challenges as best we can. This also combines with our knowledge of the levy (with employees who have been employed by the ESFA) to put in place a long-term plan to manage your levy/training pot without having to worry about overspending or underspending your levy money. Above is a success story of 50 employees finishing this year with Aerospace Engineering company "Senior Aerospace - Bird Bellows", with minimal impact on bottom line, as well as being well integrated into the training future of the company, so that the ethos of training is followed through with ease and constant communication directly from manager or learner to Axia Trainer or Tutor.
Have a chat with us today about how we can help with your training plan with minimal disruption to production