The Apprenticeship Levy – Providers, Be Prepared

Introduction

The launch of the Apprenticeship Levy has introduced a range of new challenges and learning for providers and their sales teams[1]. The structure and controls around the Levy mean that those organisations with a strategy in place for dealing with this new framework will be best prepared to engage with providers and ensure value for their contributions.

However, current evidence[2] shows that many employers are demonstrating a lack of awareness, preparedness or understanding of the mechanics of the Levy system. This introduces a new dynamic to the sales cycle for which providers will need to design.

We have drawn up some probable scenarios that provider sales teams are likely to experience, the impact of these and the mitigations to address those gaps. The current wisdom, in both the HR and L&D sectors, centres around the following three areas of concern:

  • Lack of Awareness
  • Lack of Preparedness
  • Lack of Knowledge

Our analysis should encourage a review of aspects of the Operating Model that you have invested time, money and effort into developing over the last years and months.

Awareness

Many articles from the HR[3] and L&D journals[4] point to a widespread lack of awareness among affected employers about the impact of the Levy. This suggests that the bulk of employers have put little thought in to the opportunity that this new approach to Apprenticeships provides.

In the absence of this awareness, it will be challenging to work with an employer on the specifics of an engagement plan until the impacts and opportunity are assessed. The fundamental questions that need to be answered include:

  • Are we liable for the Levy?
  • What is our exposure?
  • How will this impact our Training Budget?
  • How does the Levy system work?

These are questions that can be readily answered and there is already a depth of high quality analysis and recommendations available, particularly from the CIPD[5].

From a provider perspective, this raises questions about how your Operating Model is tuned to employ the most appropriate resources in the most timely manner. It may not be appropriate to have your key business development team co-ordinating awareness and Q&A activity. On the other hand, it will provide you with a first mover advantage and the basis of a trusted relationship.

Areas to consider include:

  • Development of contact centre based expertise to support employers through the early stages of understanding of the Levy, its costs and opportunities
  • Development or sourcing of basic awareness material to provide to employers through your website or portal
  • Development of an engagement timeline to maintain the momentum through this early stage of the sales cycle
  • The impact that this, still sizable, group of employers will have on the conversation assumptions made in business planning

Preparedness

Understanding the concepts behind the apprenticeship levy is one thing, addressing internal employer processes, strategy and finances to get to a place where they are confident of progressing is quite another. The ability to draw down on supplemented cash for investment in development of capability is obviously a draw but experience (reference) has shown that an opportunity-led approach is likely to result in a poor experience. 

Analysis[6] shows the following issues are being experienced by HR and L&D organisations: lack of availability of suitable candidates; time to prepare; pump prime funding; senior management buy-in as well as a range of other challenges. If these issues are not addressed and resolved, the journey involving employer and provider is likely to be rocky.

From a provider viewpoint, supporting these organisations through the development of a coherent Apprenticeship strategy, although time consuming may bear greater benefits over the longer term.

Areas to consider include:

  • Templated material and Presentations that step through preparation activities that employers may want to engage in
  • Candidate sourcing, filtering and engagement strategies to support the employer in assessing and developing candidate pools from within or without their organisations
  • Financial model templates that allow organisations to understand how they will recouple their .5% levy or indeed the scale of the benefit from the fact they fall below the threshold

System Knowledge

With employers now having a more direct role in drawing down on funding for Apprenticeships, managing the quality of delivery to their staff and signing off on the payments to providers there is a level of capability that needs to be retained within the employer organisation. To ensure a smooth reconciliation and payment process providers will need to consider the support required by these functions, at least in the early stages of the contract.

Centralisation of administration of this activity within the employers is likely to place an even greater burden on already hard pressed HR and L&D functions. The need for business partners to liaise with their operational businesses in order to fulfil the end-to-end processes inherent within the Levy system approach should not be underestimated in terms of effort and the likelihood of latency in processing approvals and payments.

The rigour required by the ESFA in terms of the information provided is yet to be tested but history says that providers should err on the side of caution.

Providers, therefore, should be considering

  • The provision of ‘training’ to employer organisations in the processes required to support the Levy system and processes
  • The requirement for active and engaged Account Management function to support customers through reconciliation and payment processes
  • Clear progress reporting that supports onward approvals within the employer organisation

Conclusion

Early stages of the Apprenticeship Levy will be a challenge for all concerned. Building long-term relationships with employers can only be supported by pre-empting their challenges and developing solutions that develop a smoother arrival to the point of commissioning work.

4OC supports Apprenticeship Providers in recognising the challenges highlighted above and redesigning the current Operating Model to be in the best situation to adapt and grow their business.

Contact 4OC

If you want to discuss any of these matters or have other challenges that you want to address relating to the Levy, Contact us or call our HQ on 0207 9283127.

 

[1] http://www.hrmagazine.co.uk/article-details/hr-community-reacts-to-apprenticeship-levy-update

[2] http://www.hrmagazine.co.uk/article-details/hot-topic-the-apprenticeship-levy

[3] http://www.hrreview.co.uk/hr-news/103343/103343

[4] http://www.personneltoday.com/pr/2017/03/survey-reveals-31-of-people-in-the-public-sector-are-unaware-of-the-forthcoming-apprenticeship-levy/

[5] https://www.cipd.co.uk/knowledge/fundamentals/people/routes-work/apprenticeship-levy-guide

[6] http://www.hrmagazine.co.uk/article-details/the-apprentice-levy-and-degree-apprenticeships-its-not-too-late

 

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