To mark National Apprenticeships Week, we take a look at the new Apprenticeship Levy. This will come into force from next month, following the Westminster Government's announcement that three million apprenticeships will be created by 2020.
From April, large employers – with a pay bill over £3million each year – will be required to contribute to the new levy to help fund apprenticeship training for UK businesses.
The OU's Vice-Chancellor, Peter Horrocks discusses why this is important news for The Open University and how employers and educational institutions can play a leading role:
The Open University is very involved in apprenticeship schemes. Why is this such a key part of the OU’s strategy for the future? And how has it adapted?
The OU has always had a strong heritage in work based learning and we have for a number of years worked with partners to deliver apprenticeship programmes to companies such as Unilever, Visa and Telefonica. Employability of our students is a key pillar of our strategy so working directly with employers to define Standards and deliver apprentice programmes to meet their workforce planning needs is an ideal fit for the University.
Over the past 12 months we have launched three Standards (Chartered Manager, Digital and Healthcare), have recruited operational and business development teams, committed funds to develop five further standards (including Policing, Nursing, L7 Management, Accountancy) and have established an innovative alliance with KPMG to build a best in class consortium of providers across a range of Standards and Levels. Importantly, it should be noted that the OU is a UK-wide national provider and we are able to meet the needs of employers with large distributed workforces in a very flexible manner.
Are enough educational institutions supporting apprenticeships?
A number of Higher Education Institutions are entering this market – some of these are truly committed to workplace learning but there has been criticism that others are simply repackaging existing academic programmes. The OU is planning to form partnerships with innovative HEIs that share our commitment to work-based learning.
Whilst many institutions are engaging in apprenticeships, it is important that there are clear progression pathways for students up to the higher level apprenticeships. For this, institutions will need to work together to support the transition from Further Education to Higher Education, enabling apprentices and organisations to develop the higher skills needed.
From your perspective what do most organisations need help or support with when it comes to talent recruitment and development? (E.g. diversity, skills gaps.)
One of the reasons we partnered with KPMG was because a number of our customers were struggling how to integrate apprenticeship programmes into their strategic workforce planning. Beyond this there was often confusion about the levy and sometimes limited knowledge about the practical things that were needed to hire apprentices such as policies, processes and reporting responsibilities. KPMG are able to guide customers through this process.
Apprenticeships provide a valuable opportunity to help address social mobility challenges, but the recruitment of individuals needs to be fit for purpose. That’s why the OU is exploring Strengths based Recruitment, which is designed to increase diversity and help apprentices discover their own strengths, whilst identifying potential fit for role and organisation.
With an aging population and higher skills deficit, employers need to have the capabilities to upskill and reskill their new and existing workforce, apprenticeships enable employers to develop work-relevant skills and apply them directly to the workplace.
Apprenticeships can also be used to develop and motivate staff, and provide more flexible training opportunities for non-traditional students for whom full time face-to-face education isn’t an option. This could have the effect of helping to retain staff, and corporate memory, within the organisation.
What are some of the benefits of apprenticeships?
The clear benefit for the individual is that they get paid for the period of the programme, hopefully develop practical skills and experience, avoid high levels of student debt and stand a decent chance of being retained by the company once they finish the programme. Those candidates already in employment could up-skill themselves and career changers could re-skill. Employers have since the beginning of time been critical about the quality of young people leaving schools, colleges and universities. They have the opportunity to define apprenticeship standards, influence the design of programmes and demand from providers the things that are crucial to the development of their apprentices.
The focus tends to be on 18-year-old school leavers, but in 2015/16, 44% of new apprentices were 25 or over. The decline in mature learners has been attributed in part to debt-aversion to higher fees and a reduction in employer training budgets. However, higher and degree apprenticeships provide another vehicle for lifelong learning, allowing mature learners to gain a degree whilst in work, funded by employers. This will ultimately be to the benefit of individuals, employers and the economy.
Do you have any key advice for leaders when it comes to the apprentice reforms and Apprenticeship Levy?
My clear advice to employers would be to accept that the levy is happening and actively influence providers to deliver precisely what they need to meet their workforce planning requirements.
In planning apprenticeships programmes, leaders should look ahead at future workforce requirements, and use apprenticeships to combat skills gaps, promote diversity in organisations and provide meaningful progression opportunities for staff.
The OU and KPMG have launched a partnership to enable employers to identify and fulfil future training needs for degree apprenticeships. The partnership has been designed to offer employers a high quality, scalable and accessible service and includes three initial higher level apprenticeships programmes:
• Healthcare Practitioner Assistant Higher Apprenticeship
• Chartered Manager Degree Apprenticeship
• Digital and Technical Solutions Degree Apprenticeship
It will bring together KPMG’s expertise in workforce analysis and the OU’s track record in delivering apprenticeships and high quality online learning supported by expert tutors.
Find out more about what the Apprenticeship Levy means and the OU's guide for employers on how to maximise apprenticeships and read more about the comments from Peter Horrocks and other leading business and education commentators in Critical Eye.