Announced in the 2015 budget, and made law in the Finance Act 2016, the apprenticeship levy system has been brought in to encourage new apprenticeships in the workplace. However, as many businesses are finding out, the apprenticeship levy can also be used to train existing staff too.
The Apprenticeship Levy
For employers with annual wage bills in excess of £3 million, this is paid for through a wage bill funded scheme at 0.5% of the total bill – the monies are then held by HMRC in a digital fund. A 10% contribution is added to each payment every month and employers have the ability to then use this for their apprenticeship training needs.
Those companies who do not have a wage bill of £3 million per annum will instead pay 10% towards the cost of training; this is paid directly to the provider and the government pay the remaining 90% (to a maximum). As organisational skill requirements change and the perception towards apprenticeships follow suit – now, more than ever, existing staff can be and should be encouraged to complete apprenticeships.
4 Benefits of Using The Apprenticeship Levy to Train Existing Staff
No longer simply a tool used to allow unskilled/entry-level school leavers to enter the workforce; apprenticeships provide opportunities for an existing workforce to continue their education. Using the apprenticeship levy to train existing staff has many benefits you may not be aware of. Here we look at 4 of the top benefits of using the apprenticeship levy to train existing staff.
1. Improved Retention
Investing in your existing staff helps to allow and encourage them to feel more confident, continuing to invest in you and your business. Statistics show that companies who enrol in apprenticeships programmes have a significant increase in the levels of retention. Staff may not feel as though they need to leave companies to pursue their training or educational desires and in fact, may find themselves able to progress within your company and bring their experience and expertise to new facets of the company.
2. Reduce the costs and risks often associated with recruitment and training
Whilst recruiting new staff can be seen to help by adding a fresh new perspective to an existing workforce; there is no denying the cost implications and risks involved in hiring new employees. By building on your existing staff’s skill levels through apprenticeships can reduce the time and money spent hunting for the skills required in an unknown employee and rather allow your existing loyal staff to upskill and fill the gaps you identify within your organisation. In addition to the cost-saving implications in regards to reduced recruitment; there is also the ability for your existing staff to train to degree level without the associated costs of gaining a degree.
3. Improve production
By helping your staff to become more skilled and qualified in their work you, in turn, help them to work more productively and effectively. This means that your company can continue to grow – with staff who keep abreast the latest techniques.
4. Tailored to your specific industry needs
One of the major advantages of apprenticeships programmes is that they are occupation focussed rather than being qualification led. Apprenticeship standards specifically meet the needs of the employer and the industry. This means that your employees are truly earning skills and knowledge which directly relates to your industry and their occupation.
It is important to recognise and acknowledge the needs for development among your existing staff. Accessing apprenticeship programmes with the benefit of the apprenticeship levy is certainly a “no-brainer”. Existing staff are able to earn while they learn; continue to bring increased levels of knowledge and training to your company – investing in them whilst they, in turn, continue to invest in your company.
To find out more about how your business can benefit from using the apprenticeship levy to train existing staff, get in touch with our team today. With over 20 years’ experience in providing training and professional qualifications, we are uniquely placed to deliver training and support to employers and apprentices.