6 March 2019 | By David Lowe Community

Managing misconceptions to make the apprenticeship levy work for businesses

As we celebrate National Apprenticeship Week, Alliance Manchester Business School’s Dr David Lowe looks at why there is still a missed opportunity for businesses

Millions of pounds worth of apprentice levy funds are currently sitting unspent in businesses’ levy accounts. And as we near the end of the scheme’s first two years, much of this is likely to be lost by firms yet to get to grips with the potential opportunities.

Regrettably, there are still significant misconceptions around the levy and discrepancies are rife between sectors around how to use it.

Launched as a way to address the major skills gaps in Britain, the apprenticeship levy has not been the silver bullet for productivity it was initially billed as. Much of this is down to business’ perceptions of how much value they are seeing from their levy payments. In fact a YouGov survey we commissioned earlier this year suggested that 29% of businesses still see the levy as just another tax on business.

The challenges that can be addressed

One of the major challenges faced by many British businesses is a fundamental lack of formal development opportunities for managers tasked with leading teams and boosting productivity.

More often than not, so-called ‘accidental managers’ achieve powerful positions through inherent intelligence, commitment and by exceling in their specific field of technical or professional expertise. While these are all traits that should be prevalent in leaders, firms are missing out on the business and leadership skills required to get the most out of a team and ultimately achieve growth.

Apprenticeship levy funds, which are paid by all businesses with a wage bill of over £3m, can be used to fund apprenticeship training from entry level right up to business management level master’s degrees or MBAs – something only 13% of employers and 14% of employees are aware of.

Away from the stereotypes

The very term ‘apprenticeship’ triggers images of school leavers on day-release courses – an idea that often simply doesn’t resonate with senior leaders and their already hectic schedules.

The concept of 20% off-the-job training which forms a part of all apprenticeship schemes is frequently misconstrued as requiring those with already busy jobs to take their full-time roles down to four days a week. But this is simply not reflective of a how senior level apprenticeships really work.

More often than not that 20% can be made up with tasks that might be outside of their usual job role but that can still contribute to the growth of the business in real time.

In reality, senior level apprenticeships are very much concerned with giving leaders, and future leaders, the skills they need to meet the specific needs of their business and their sector.

A partnership approach

There is certainly a job to be done in re-educating people across both the private and public sector about the opportunities provided by the apprenticeship and what an ‘apprentice’ actually looks like in 2019.

One way this can be addressed is by taking a partnership approach to apprenticeships where businesses and providers work together to create schemes that both meet the core levy standards but also fill the specific needs of that business or industry. There is still a level of unease around the real value of long-term formal leadership training, but by taking this approach businesses can start to see the benefits of upskilling their senior leaders right from the start.

Our level 7 apprenticeships include an MSc Management Practice and an MBA option, both suitable for senior leaders and rising stars. Levy paying businesses can access the courses on a fully funded basis with SMEs and other non-levy paying businesses paying just 10% of the course fees.

The apprenticeship levy is ready and waiting to alleviate skills, retention and productivity issues for business, but leaders need to act now to join the dots.

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