HR leaders at organisations with payrolls over £30m per year across the country will no doubt all be preparing for the implementation of the Apprenticeship Levy on the 6th April. The levy, which was first announced in the 2015 Summer Budget, requires all employers operating in the UK – with a pay bill over £3 million each year – to invest in apprenticeships. But what benefits, or indeed disadvantages, will the levy have for HR and Recruitment functions?
The levy requires organisations to contribute 0.5% of their paybill, and in return employers will receive funds through a digital account and access to additional funding provided by the government through co-investment which can be used towards training additional apprentices or, alternatively, to upskill current workers through more advanced training.
APSCo understands the value of vocational training, and broadly supports measures to pipeline future talent both within the recruitment profession, HR function and beyond. However, it is no secret that there are concerns that the incoming Apprenticeship Levy will impact the recruitment profession disproportionately in comparison to other sectors.
This is largely due to the way in which the levy describes ‘large’ companies. The definition of a large company is directly linked to the value of its payroll means that even SME recruiters, which manage PAYE for temporary workers, could quickly find themselves contributing to a scheme from which the struggle to see any real benefit. So how can HR leaders at recruitment agencies make sure they are making the best of use their contributions?
While these funds cannot be used to pay for wages, managerial costs, placements or traineeships, the introduction of the levy changes the funding structure of apprenticeships, passing control directly to employers. Many remain sceptical about the benefits of the levy, but if employers fail to use their funds, they’ll lose them – it’s that simple. So the best way organisations can benefit from the levy is by investing in apprenticeships.
Apprenticeships have long been positioned as schemes for young starters, however money paid into the scheme, and associated government co-investment, can also be put towards training existing employees to a higher level than the qualification they already hold. The levy offers employers with an opportunity to reassess their involvement with apprenticeships, and how they fit into wider learning and development initiatives. By proactively identifying areas in your organisation where training is needed most, HR professionals have the opportunity to upskill employees in areas which may have previously been put off due to the perceived costs of additional training
Apprenticeships can enable companies to bring on board or retain bright individuals, with pre-requisite core-competencies, and up-skill them with the expertise and attitude they need to perform well with an organisation and thrive within its culture, to the benefit of the entire profession. We can’t escape the levy, but HR professionals can ensure that their organisations reap the benefits.
