Over the next few months, businesses will start preparing for the Apprenticeship Levy, giving them the opportunity to invest in three million new apprentice positions. Offering a chance to equip a generation with a variety of new skills and experiences, could the levy be the solution to the growing multi-industry skills gap that we’ve been looking for?
What is the Apprenticeship Levy?
The Apprenticeship Levy is a means for businesses to afford more training and opportunities for new apprentices or up-skilling current staff across the UK. In April 2017, the levy will see businesses whose pay bill is over £3 million a year, pay in 0.5%. The money can then be claimed back via a digital account for use in hiring new apprentices and building upon the skills of their employees.
The £3 million threshold comes as a result of the £15,000 levy allowance, and those whose pay bill is too small will instead have 90% of their funding for training provided by the government. This system prevents smaller businesses – arguably those who could benefit the most from apprenticeship schemes – from missing out, whilst getting larger businesses to pay into a universally beneficial idea.
The levy also comes with extra caveats for employers. Organisations that take on an apprentice who is either aged 16-18, or a designated care leaver, will receive an additional £2000 per trainee. Due to apprenticeships being a devolved matter, however, Wales, Scotland, Northern Ireland and England will all have differing terms and conditions exclusive to those regions.
How Have Businesses Reacted?
Reaction to the levy has been largely mixed, with many businesses split between supporting the idea of better training opportunities, and opposing the method the government is using to deliver such an initiative.
Following the EU referendum, many business groups had asked for a delay on plans to introduce the levy in 2017 due to the economic uncertainty of a Brexit decision. Similarly, fifty-five Labour MPs have also made their protest to the levy well-known by suggesting that it could in fact halve the amount of funding available.
Despite negativity from some businesses, the government has made it clear that it’ll be pushing on with the levy regardless – much to the delight of its supporters. Professionals in favour of the levy have pointed out the importance of apprenticeships – and that the move is a good idea.
It should be noted that we’re currently facing a historic skills gap in a number of industries such as construction, engineering and some areas of technology, and the Apprenticeship Levy could go some way to resolving the issue.
Apprenticeships at Kaleida
At Kaleida, we believe in nurturing talent through apprenticeships to broaden skills and technical know-how. In return for this investment, we benefit from an apprentice’s developing skills and are able to contribute to the future of the industry.
We have now placed three .NET software development apprentices and one system support apprenticeship. We recognise that the best developers are the ones who are hobbyists, i.e. already coding at home in their bedrooms. Young adults have grown up with technology, it’s second nature to them. Our apprentices are hungry to get their hands dirty and get coding. If you can cherry pick the best young adults early on, give them the opportunity to get involved in real life projects, they very quickly add real value to the development team.
We have now placed three .NET software development apprentices and one system support apprenticeship. We recognise that the best developers are the ones who are hobbyists, i.e. already coding at home in their bedrooms.
When looking at apprentice applicants, we look for good communicators with a can do attitude. We would love our apprentices to stay with us and help us grow our software development team but we also realise that there’s a big wide world out there for them to explore and we wish them luck whichever way they decide to go. The apprentices we’ve had so far have absolutely helped us as a business.
Two of our apprentices, Harry Parker and Jack Scotson qualified twelve months ago and both added real value within their first 12 months.
Harry has proven himself a very bright young man. He rebuilt all our developer PCs saving us a massive £12k. We had to replace all our development PCs to high spec kit. It was going to cost £23k with HP or Dell (our usual suppliers). Harry suggested he could help. He spec’ed out and built a PC which we tried and tested for a few weeks to make sure all the drivers were compatible. Following a successful pilot, he rebuilt the remaining PCs over the course of 2 days. Not only did we save the company a considerable amount of money, the kit was also a higher specification. We’ve had no problems with the computers but even if we had, Harry made sure they all had a third party warranty on them as good as the HP or Dell kit. He even thought to get a finance deal in place to spread the costs. Amazing!
Jack is another very bright young man. He was working on client projects within six months of joining us, initially as a tester to get a feel for how we work and the types of solutions we deliver. He soon became a valuable member of the development team, working on multiple projects alongside our development team, delivering quality code to budget and time. We are pleased to report that he has since been successful in finding a new role with Intechnica who are IT Performance Experts. We wish him every success.
“The apprenticeship has set me up for success because it has taught me key skills for working in an IT workplace and also offers a well-paid job at the end of my course. I plan to stay in this job at Kaleida and better my skills and gain more experience to allow me to move onto earning more money. Since I started here I have gone on to developing a new website in ASP.net and MVC with which I intend to release and earn additional money via advertising and sponsors.” Stephen Clarke, Kaleida apprentice
Can the Levy Solve the Skills Gap?
At the heart of the skills gap are two factors: disinterest and a lack of opportunities. By opening up apprenticeship places to more young people across multiple industries and disciplines, we’re tackling both of these factors head on. Arguably, businesses have the chance here to play a larger role in a struggle which has seen the construction industry alone in desperate need of 44,690 new professionals each year to reach 2020 growth estimates.
Unfortunately, though, it would be altogether too ambitious to pin all hopes of a resolution to the skills gap on this single initiative, but it’s worth understanding that it has the potential to push us into the right direction.