Andy Cheshire looks at the impact of the Apprenticeship Levy on food and drink manufacturers
When the Apprenticeship Levy was introduced in April 2017, many employers were sceptical about whether it could work, and it was seen in some cases as just another tax. As a result, some businesses put a hold on their commissioning of apprenticeship programmes while they got to grips with it. However, in the second half of 2017, many businesses started putting plans in place for getting the most out of the levy, and this meant giving careful consideration to the quality of the training product they were buying.
As manufacturers will know, the levy means that businesses with a payroll of more than £3 million will be charged 0.5 per cent of their payroll outlay towards apprenticeships, with the aim to raise £3 billion annually for four years to fund three million new apprenticeship places.
Back in November, the Department for Education (DfE) reported that just 48,000 people had started an apprenticeship in the months May to July 2017, compared with 117,800 in the same period the year before. The biggest drop was in the lowest level ‘intermediate’ apprenticeships, which led to some groups suggesting that the levy was being used to weed out low quality apprenticeships which enabled employers to source cheap labour. However, what we have experienced is the opposite effect – the number of quality apprenticeships is actually increasing, as we have seen a 20 to 30 per cent uplift in the programmes we are running in the food sector.
Quality, not quantity
Pre-levy, many programmes were offered as ‘free training’ with, in some cases, little understanding of what was being offered. The levy now encourages the employer to be involved in the specification and purchasing of the programme, which is leading to much better quality programmes.
Large businesses that started with the levy straightaway are therefore seeing massive benefits from the programmes they have commissioned. For programmes we have run with food manufacturers, they have reported very positive business benefits, with professionally trained staff demonstrating more confidence and delivering greater productivity and efficiencies for their employers.
The food and drink sector is clearly recognising the benefits of apprenticeships. Bakkavor, for example, has been able to make quantifiable savings from implementing quality apprenticeship programmes at its Meals site in Wigan, UK. Since the levy was introduced, it has enrolled 49 of its existing staff on apprenticeship programmes and taken on 10 new young apprentices. The Wigan business has reported significant savings in terms of cost and time efficiencies. As testament to this, the number of existing staff apprentices and young apprentices is set to increase dramatically in the coming months across Bakkavor’s UK business.
What large food manufacturers like Bakkavor have been able to do very cleverly is make the best use of the levy to upskill their staff. The business has created talent pipelines with visible pathways for employees to progress through the company, which is helping to improve retention rates, enable it to be seen as an employer of choice and continue to attract the best quality candidates.
Through offering quality apprenticeship programmes, Bakkavor expects to see recruitment costs reduce, as well as engendering commitment to continuous and sustainable improvement on site. It has also enabled the business to fund new programmes like lean manufacturing, which have direct business benefits.
Some employers have put significant extra resource into developing a strategy for getting the best out of the levy. This should include working with apprenticeship providers to develop programmes based on generating quality in the longer term, rather than short term wins, as a result of a true partnership between the employer and training provider.
As apprenticeship numbers have clearly declined across many industries in recent years, more needs to be done to encourage uptake by both businesses and young people. It is anticipated that more young people, who traditionally would have gone to study for a degree at college or university, may now see an apprenticeship as a viable option with paid training and opportunities for progression in the future. They are also being seen favourably as a way to avoid getting into debt.
From a provider’s point of view, finding the right candidate for an apprenticeship can be a challenge, but focusing on effectively matching candidates with the right programmes is the key to long term success and positive outcomes for employers. Maintaining a high retention rate with apprentices can be a result of delivering programmes that are based on structured learning, supported by workplace coaching, strong mentor support and blended learning and assessment, backed up by the use of the latest technology. There is a need to focus on generating quality outcomes from apprenticeships through the End Point Assessment (EPA), not just the inputs that the individual is required to undertake. For example, the 20 per cent ‘off the job’ training requirement of the levy could be a barrier to some businesses to offer an apprenticeship, as can the 10 per cent employer-funding requirement for SMEs.