Apprenticeships are big news right now. During April and May there are some crucial ‘go start’ dates for a number of reforms to apprenticeships, all with an objective to increase the quality and quantity of apprenticeships.
To ensure you’re up to speed, and can make newly informed decisions on whether apprenticeships are right for your business, below is our guide to ten things you should know about apprenticeships in 2017.
1. From May 1st apprenticeships are funded for people of all ages (including graduates!)*
From May 6th apprenticeships training will be funded at an equal level for all adult learners, so whether your apprentice is 18 or 60, 90% of the training cost will be covered by government. And if your business has less than 50 employees and your apprentice is 16-18, 100% of the training cost will be covered. Prior to this change there has been little or no funding for over 24 year olds so this is great news as it allows people at all ages and stages of the business to benefit from developing their skills – something far more in keeping with a life long learning approach to careers these days. The change happily coincides with more apprenticeships being available at higher levels too, indeed gone are the days when apprenticeships just applied to entry level positions. Another welcome development is that having a degree is no longer necessarily a barrier to doing an apprenticeship. *As long as the apprentice is learning ‘substantive new skills’ the apprenticeship could be eligible for the 90% funding.
2. From May 1st your business must ‘co-invest’ 10% towards training
‘Co-investment’ is a key word in the new funding system. As of May 6th businesses are required to co-invest 10% towards the cost of the apprenticeships training. This represents great value for money, as you can offer at least one year of intensive skills development to an employee and only have to pay 10% of the cost. Apprenticeships have been proven to deliver increased staff loyalty, lower recruitment costs, and a boost in productivity. The co-investment required is likely to be an extremely cost effective method of gaining the skills your company needs compared to alternative routes, not to mention the other benefits it brings.
3. A grant of £1000 is available if you take on a 16-18 year old
A grant of £1000 will be given to all employers that employ a 16-18 year old apprentice, irrespective of business size or payroll amount. And, if your business has less than 50 employees the government will fund 100% of the 16-18 year old’s training costs too.
4. You can train an existing employee on an apprenticeship
Although this isn’t new, it’s definitely worth reiterating. Your apprentice doesn’t have to be a new addition to your business. They can be an existing employee that would benefit from the quality and focused training, and the subsequent career development, that an apprenticeship can offer. The apprenticeship doesn’t have to be in your core business area either. If you’ve got an excellent office manager that currently manages the finances, could they develop their skills to become the in-house Accountant? Could your administrator develop into the Marketing Manager for the business? The skills of your team could develop at the same rate as your business.
5. Newly designed apprenticeships are being made available to employers
Apprenticeships have been experiencing a major refresh, not just in terms of funding, but in terms of content too. For the last couple of years the government has been encouraging and supporting groups of employers (known as trailblazer groups) to rewrite, and develop from new, apprenticeships that apply to job roles in their business. This has been to ensure that apprenticeships are completely fit for purpose and employer led. These new apprenticeships are called apprenticeship standards. By 2020, all existing apprenticeship frameworks will be switched off and all apprenticeships will be structured around the learning outcomes and assessment plans of the new standards. The introduction of standards is part of the government’s objective to increase the quality of apprenticeships, and this, along with the legal protection for apprenticeships, makes them an increasingly appealing option for apprentices and businesses alike.
6. 20% of the apprentices’ time must be spent ‘off the job’ learning, but that doesn’t necessarily mean in a classroom
According to the new funding rules, the apprentice must spend at least 20% ‘off the job’ on activities that constitute learning. However, before you think that means your apprentice will be at college one day a week, be aware that the 20% could encompass a whole range of learning activities that will both develop the apprentice and bring benefits to your business too. This might include coaching from an experienced employee, online learning and webinars, attending workshops, mentor support, and research. Also, the 20% isn’t necessarily done on a weekly basis. It might suit your business better for this to be done in chunks of time, or for a couple of hours a few times a week. Your training provider will be able to advise how the off the job requirement will work and will be keen to try and fit it around the demands of your business.
7. Larger businesses are getting to grips with paying the Apprenticeship Levy right now
Businesses and organisations with an annual wage bill that exceeds £3 million are currently experiencing their first month of paying the compulsory Apprenticeship Levy. The levy is calculated at 0.5% of a business’s annual wage bill, minus a £15,000 allowance. The reason it’s called an Apprenticeship Levy is because levy payers can recoup their payments to pay for apprenticeships training. To do so they must register on the Apprenticeships Service, where they can use the amount they’ve contributed, plus a 10% top up from government, to spend on apprenticeships training. The new levy is encouraging many larger employers to upscale their apprenticeship activities and therefore will be a significant driver in helping the government achieve its £3m apprenticeship starts target.
8. The National Minimum Wage for apprentices and abolished NI contributions make apprenticeships an affordable choice for small businesses
Growing a team is a significant investment for a small business, and apprenticeships can offer an affordable way to bring on new members of staff that will grow their skills in line with the business’ growth plans. The minimum wage for apprentices aged 16-18, and for apprentices over the age of 19 and in the first year of their apprenticeship, is £3.50. Many employers pay more, and particularly for older apprentices it may be appropriate to do so, but if you’re taking on a junior member of staff and this is the only way to employ them this can be an affordable option. An added incentive is that as of April last year, employers no longer need to pay National Insurance contributions for apprentices under the age of 25.
9. Finding the right training provider is key!
A critical success factor in an apprenticeship is an effective partnership between the training provider and the employer. Finding the right training provider for your business is essential, shop around to find out what different providers can offer you, and be sure to ask other employers what’s worked for them. Questions to ask a potential training provider might include; whether they’ve got some candidates that would be interested in your business (if you’re recruiting), how the course will be delivered, the experience and background of the teaching staff, the possible progression routes, and how well the apprenticeship will integrate with the demands of your business. A good training provider will be able to answer these questions and more, and will be enthusiastic about helping your business make a success of the apprenticeship. Get more ideas on questions to ask from Apprenticemakers. You might also consider finding out if an Apprenticeship Training Agency could provide additional support to your small business too.
10. Developing mentoring skills can help make the apprenticeship a success
Once your apprentice (or apprentices!) are in place you’ll want to do what you can to ensure they’re happy in the business, and ideally providing a return on investment as soon as possible. One way to do this is to develop mentoring skills that can help you empower your apprentice, drawing on their resourcefulness to achieve their work and study requirements. You might even appoint an existing team member as a mentor which can develop their management skills and free up your time too. Apprenticemakers provides mentor training to businesses and organisations, and is also helping smaller businesses develop mentoring skills too.
Key dates for apprenticeships in 2017:
Feb 13th – Registration opened for the new Apprenticeship Service which enables levy payers to access their levy fund (plus the 10% government top up) and pay their training providers online too.
April 3rd – The Institute for Apprenticeships (IfA) started its first official working day. The IfA has a remit to oversee the quality of apprenticeships standards and assessment plans.
April 6th – Businesses with a payroll exceeding £3m were required to start paying the apprenticeships levy to government, calculated as 0.5% of their annual payroll, paid monthly.
May 1st – The new funding structure for apprenticeships comes into operation and is applicable to all businesses.
Throughout the year – new apprenticeship standards are coming online all the time, gradually replacing apprenticeship frameworks which will be phased out by 2020.
Where to find more information
Apprenticemakers’ new interactive guide to apprenticeships which includes info on the new funding and an overview of the apprenticeships journey for business.
Infographic showing the 4 main areas of funding for SMEs from May 6th.
Gov.uk’s guide to employing an apprentice.