You’re hired!

Adam Bernstein
Friday, December 18, 2020

Lord Sugar and Donald Trump may have popularised the term ‘apprentice’ and ‘you’re fired’, but there’s much more to the concept. Implemented well, with of course, willing candidates, apprenticeships are a great entrée into the worlds of learning and work.

And examples show that print has made some use of government backed schemes. Back in July, Print Scotland described the 2020 Scottish Print Apprentice of the Year winners as the industry’s leaders of tomorrow; in August, Renz (UK) took on an apprentice to complete a two-year BPIF Level 3 business administration course; and in the same month, the BPIF welcomed new government support incentives announced in July aimed at keeping apprenticeships going during the Covid-19 crisis.

Defining the government’s scheme

Before going further, we need to define the term ‘apprenticeship’. As far as the government is concerned, to qualify as officially sanctioned a scheme must be open to anyone aged 16 and above and it should usually run for a fixed term of between one to four years, or until a level of qualification is reached. Apprentices must spend a minimum of 20% of their time training and must be paid at least the national minimum wage.

Even though courses have existed for quite some time, back in 2017 the government changed the way that apprenticeship funding works by introducing the Apprenticeship Levy, a new co-investment rate to support employers who do not pay the Levy, and a National Apprenticeship Service. Mark Stevens, a senior associate at law firm VWV, says of the Levy that it “effectively created a pot of funding for employers to able to create apprenticeship roles within their organisations”.

But while the Levy is a cost – a tax if you will – on employers, Stevens estimates that less than 2% of UK employers actually pay it as the Levy is only charged at a rate of 0.5% on annual pay bills in excess of £3m. In ‘exchange’ for the Levy however, each employer receives an allowance of £15,000 to offset against their payment. This minor detail is held in an annual state of flux since, as Stevens explains, “new guidance is published each year for Levy-paying employers and so working out which terms and conditions apply will depend on what year the apprentice started their employment”.

The new incentives complicate matters further. But despite their muddying the waters somewhat, Karly Lattimore, managing director of BPIF Training, considers them as “offering fantastic value for money” as they’re worth up to £3,000 to an employer when taking on an apprentice. The support is available both for employers who pay the Levy and those that do not.

Under the scheme, which was announced in July, from the start of August until the end of January 2021, unless it is extended, the government will pay employers to hire new apprentices the sum of £2,000 per individual for those under the age of 25 and £1,500 for those aged 25 and over. This is in addition to the existing £1,000 payment that was already in place for new 16-18-year-old apprentices and those aged under 25. It’s of note that the incentive can cover any of the costs associated with supporting a new apprentice in their workplace including facilities, uniforms, travel and wages.

In practice, Lattimore says that Levy employer costs and the new incentive payments mean that smaller employers contribute just 5% of the cost of an apprenticeship.

Overall, the theory is that apprenticeships should be an attractive way for an individual to be able to study and earn an income at the same time.

Stevens thinks that the government is pleased with the levy. He cites data from April 2019, where it was reported that “the latest figures show that since the levy was introduced on 6 April 2017 it has directly supported 312,900 people to start their apprenticeship journey”.

Covid-19 got in the way

But it should be no surprise that Covid-19 has made life very difficult for anyone in the world of employment.

The young, in particular, have been hit badly. The government reacted with the Kickstart Scheme. Highlighted by Stevens: “It gives funding to employers specifically to create work placements for 16- to 24-year olds who are on Universal Credit. Each employer is able to apply for funding which covers 100% of the National Minimum Wage for those on the programme (or National Living Wage depending on the age of the apprentice) for 25 hours per week for a total of six months.” Further, employers can also get funding to cover employer National Insurance contributions and employer minimum pension automatic enrolment contributions. There is also a £1,500 grant available for start-up costs.

For Max Walkington, head of Data and Compliance at the BPIF, the scheme is considered in a positive light. He says that his organisation is “keen to embrace any initiative that encourages growth and employment opportunities for businesses... it’s an excellent pre-apprenticeship programme for those who are currently furthest away from work.” He cautions though, that employers should be aware that they can only take on a young person who has been referred by the DWP. However, the BPIF can support firms with the required employability training to increase the chances of longer-term work. Also, the BPIF can help print access the grant.

There’s a catch, however. The scheme doesn’t necessarily work for small employers, as a minimum of 30 job placements must be offered by an employer for them to be able to apply. That said, those 30 placements can be spread out until the end of December 2021. As Stevens advises, “if an employer is not able to offer that number of job placements, it may be that another organisation, such as local authority, charity or trade body [like the BPIF] can act as a Kickstart gateway, in order to help that employer apply for funding.” That of course, places an obstacle in the way.

Nevertheless, as Walkington has seen, apprenticeship schemes have been hit hard by Covid-19. From 23 March – the start of lockdown – to the end of July 2020, he says that 58,160 apprenticeship starts were reported, down from the 107,750 reported over the same period a year ago – a 46% decrease. Says Walkington: “This is hardly surprising given the current climate; employers are less likely to take on an apprentice and training providers are less able to deliver training. Many providers, BPIF included, have had to change their delivery models overnight to accommodate new ways of working and a shift to remote delivery.” The problem for apprentices which Walkington points out is that “there is also much uncertainty around the long-term impact [of Covid] – it remains to be seen whether employers will be able to keep on apprentices when their programmes have come to an end”.

It seems to make sense that the government uses outcome-based measures to determine the success of training programmes such as apprenticeships. On an optimistic note, Walkington says that “the last set of published data showed that 91% of apprentices progressed into a sustained positive destination (employment or further training) after completing their apprenticeship, but that figure will not be as high this year.” Even so, he thinks that “apprenticeships have consistently provided opportunities to individuals who might not have otherwise been given a chance”. He adds that the BPIF “has hundreds of success stories” and has provided training opportunities covering entry-level positions, all the way to senior management programmes, funded through employer Levy schemes or via
government subsidies.

A panacea to get the young into business

Naturally, the opportunity to earn an income while studying and acquiring new skills should be a good incentive for getting an individual into work. But the financial implications of the present economic climate and the current incentives are likely to be key for employers, particularly with the challenging circumstances arising from the Covid-19 pandemic. The point for Stevens is that there’s a bigger picture: “That the opportunity to train a new generation of skilled workers is clearly important for the wider economy.” However, he’s bothered that there could be a slight stigma to being called an apprentice compared to a university student: “According to government statistics, when the levy was introduced in 2017, there was actually a drop in the number of people starting apprenticeships… this may be because young people still believe that A-levels and university degrees are the only way to get recognised in a crowded and competitive job market.”

Even so, Walkington would still describe apprenticeships “as an excellent opportunity to people of all ages to develop and enhance new and existing skills.” He says that good programmes “provide a clear career path and progression routes and more often than not, these are long-term and sustainable roles.” And unlike traditional education routes, apprenticeships are very much vocationally designed so that everything that is taught is relevant to an individual’s job role. Further, as Walkington emphasises, “apprenticeships aren’t just for young people, they are also for existing staff of all ages and provide an excellent way of providing training and continuing professional development”.

Abuse of the apprenticeship regime?

While apprenticeships work for some, there has been some abuse of the system generally. As Stevens explains, “apprenticeship training takes place at targeted levels, for example a Level 2 apprenticeship is equivalent to GCSEs, whereas Levels 4-7 are the equivalent of first year of university degrees to master’s level. In recent years, statistics have shown a marked increase in the number of schemes being offered at levels 6-7.” On the face of it this isn’t an issue. But delving more deeply it has been reported there have also been a number of cases where employers are labelling courses as ‘apprenticeships’, “perhaps,” as Stevens tells, “in order to access the training levy, when those courses are more akin to degree courses, or in fact employment for people who are already highly skilled.”

Think tank EDSK has previously suggested that one answer to this problem is to defund higher level programmes to stop this “rebadging [of] management training and professional development courses for more skilled employees”. Beyond that, Stevens thinks that scrutiny of providers is undoubtedly needed, and employers and training providers alike need to be held accountable for funds they are spending that come from the Apprenticeship Levy. Allied to this, it makes sense for training to be vetted to ensure that it offers both value for money and quality.

But from a BPIF standpoint, Lattimore isn’t aware of any intentional abuse of apprenticeship programmes within print. However, she says: “With a whole host of government-based initiatives – apprenticeships, traineeships, and the Kickstart scheme – all for slightly different audiences, it has been tough for employers to establish which is the best fit for their workforce needs.”

She adds: “It is our responsibility to ensure that employers are choosing a route which has the best chance of securing sustainable employment, with apprenticeships being key.” The BPIF has put together a clear and concise document, Training Opportunities, to help employers decide which programme is appropriate.

More effective apprenticeships

So, there’s a question to pose here – can apprenticeships be made more effective? Possibly.

Stevens takes the line that apprenticeships do need to be made more accessible and introduced across a wider variety of sectors. But at the same time, he says that employers must be transparent about what apprenticeships they are offering and how they are using levy funding. They also should document the apprenticeship and the expectations around the role so that all understand the nature of the relationship from the very start.

For the BPIF, Lattimore would like the use of Apprenticeship Levy funds reviewed so that employers have “more freedom to use it for further workplace training outside of apprenticeships”.

Nevertheless, Stevens advises that with Brexit and the continuing impact of the pandemic creating more uncertainty, “employers will need to carefully manage their workforces, whilst young people are increasingly having to use their initiative as to how they can make themselves standout to employers”.

In summary

It is undeniable that the economy needs a pipeline of skilled workers and executed well, apprenticeship and allied programmes could well produce the leaders that print needs for the future and at low or no initial cost. However, employers need to approach the process with altruism and good intentions.

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