Optimising the Apprenticeship Levy:

What the best corporates do to maximise their Levy

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Developing PeopleBuilding Capability

Driving Performance

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This report highlights how to generate maximum business benefit when integrating the Apprenticeship Levy into an L&D strategy. We reveal four examples of strategic best practice we see from large corporates in their approach to utilising the Apprenticeship Levy.

Since the launch of the Apprenticeship Levy in 2017 Corndel has worked with many of the UK’s largest employers to help them optimise its value and impact. Our clients often pay an annual Levy of more than a million pounds, some several times this amount. We help them to navigate accessing funds and integration into an overall Organisational Development strategic approach.

£2.8bn into the levy pot.

They spent £864m.

£2bn An underspend of almost in one year.*”

“In 2019 employers paid

Source: *Source: FE News, 20 Jan 2020.

Inertia surrounding integrating the Apprenticeship Levy into corporate L&D strategy has resulted in 45% of companies still not utilising their Levy (Grant Thornton 2019). In 2019, £3bn in Apprenticeship Levy funding in England dedicated to training and developing employees at all levels is currently sitting unused (ESFA 2019). With a simple strategic approach and intent, large corporates can easily use these funds to the benefit of their organisation.

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Resource the team properly - a multimillion-pound Levy doesn’t manage itself

In 2017 the Levy fitted into many HR Directors’ category of ‘important but not urgent’. Yes, it might be a couple of million pounds a year, but the CFO had already written it off, there were more important things going on and the organisation didn’t quite understand the Levy anyway.

In 2020, things are different. Adopters of the Apprenticeship Levy are now training teams of data analysts, filling recruitment gaps for software engineers and DevOps professionals, developing managers and leaders, reducing National Insurance payments and improving recruitment, retention and employee satisfaction levels by effectively using their Levy. They are securing competitive advantage in doing so.

These organisations didn’t do this by accident. They generally invested in empowering an accountable individual to develop a clear strategy to utilise an often multimillion-pound Levy. This didn’t mean handing responsibility for utilising the Apprenticeship Levy to an already swamped member of the L&D team or passing it to a junior individual to fix. Exemplars made a Board level decision to use rather than lose a significant Levy budget and then invested resource to make this happen.

Bupa has welcomed the opportunity to develop their people with the help of the Apprenticeship Levy. Their apprenticeship programme is actively supported by their Executive and Leadership Teams and they collaborate via a monthly Apprenticeship Board which sets priorities and manages their fund to make sure spending allocation addresses commercial need. Corndel works in partnership with Bupa to deliver a number of large-scale leadership and management development apprenticeships across the UK, all of which are Levy funded.

Recommendation 1:Ensure clear management accountability for optimising the Levy and allocate appropriate resource to:

a) Develop a Levy maximisation strategy

b) Properly implement it

c) Manage it on an ongoing basis

d) Review and adjust the strategy based on progress.

How Bupa manages its Levy

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Have a clear, ambitious, long-term strategy

Recommendation 2:With resource in place, develop a clear strategy that:

a) Is long term, bold and clear (e.g. over the next 3 years we are going to invest £4 million of our Levy in developing X, Y and Z corporate capabilities to support our business objectives)

b) Is clear about the intended business impact

c) Has Board approval and buy-in – it’s a multimillion-pound investment in your people.

L&D professionals are often caught in an annual cycle of struggling to secure training investment. The Apprenticeship Levy has turned this on its head. Indeed, organisations still approach us with a plea of ‘please can you help … the CFO has said we’ve got to spend this Levy money now’.

The annual grovel for L&D investment, and ‘the spend the levy now’ approach, suffer from similar failings. Both lack any long-term strategic thinking about the future needs of the organisation. They tend to lead to short-term, piecemeal, fragmented learning and development initiatives that have little executive buy-in and therefore limited longer term organisational impact.

The fundamentals of any good organisational development strategy should also apply to optimising the Apprenticeship Levy. What are the capabilities needed by the organisation going forward? What does programme success look like? Which functions would benefit from which available programmes? How do we measure progress? How do we utilise the Apprenticeship Levy to achieve this? Strategically answering these questions is key to optimising the Levy.

In developing a strategy, be bold. Whether developing data analytics, management skills or software engineering capabilities do not underestimate the demand from employees and the impact a scaled Levy solution can make. Organisations that have been ambitious have benefited from a multiplier effect. One person gaining the skill is great, many gaining it can, at its best, change both organisational competence and culture.

“It is a pleasure working with the Corndel team creating strategically aligned apprenticeship programmes, with tailored content to meet our specific business needs. Corndel are leading experts in the design, delivery and administration of a range of apprenticeship programmes and the team are all professional, pragmatic, agile and extremely customer focussed.” Julie Aspinall, L&D Manager at Société Générale UK.

“Corndel has worked as genuine partners with Phoenix right from the start, advising us on how we could make the most of the levy whilst designing bespoke programmes which meet the needs of each participant.” Tamar Hughes, Head of Talent Development at Phoenix Group.

Companies Corndel has worked with to help develop and implement a Levy strategy

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Integrate, join up and communicate

Large corporates are often complex. Common challenges include: poor communications, siloed divisions, different priorities, sub-cultures, different agendas. Even for the businesses that have embraced the Levy, organisational corporate communication and politics can get in the way.

Too often in large corporates the ‘Apprenticeship Team’ operates in isolation. The graduate recruitment team is pursuing one course, top talent programmes something different, early careers another. Management and Leadership development may also be a separate function.

In addition, irrespective of the Apprenticeship Levy, the L&D team often struggles to understand the training requirements of data and technology teams, adding a further complicating factor when seeking to optimise the Levy.

The issue of global programme consistency and the communication issues around this can also complicate the stakeholder landscape. Often Corndel have worked with international businesses to align a Levy programme to a global training initiative. In 2020 an apprentice can be a school leaver, a graduate or a mid-career employee. They may be a new joiner, or existing employee or career-switcher. They could be junior, senior, top talent or entry level team members.

To drive the optimal value from the Apprenticeship Levy it’s important that the broad nature of what an apprentice is in 2020 is understood across the organisation. With shared understanding and a conscious effort to integrate programmes, organisations can derive far greater value from the Levy as a whole.

Recommendation 3:HR and L&D leaders should:

a) Actively champion the understanding of what an apprenticeship can be within the organisation

b) Ensure that the strategy for spending the Levy is integrated within the organisation’s other HR and L&D functions.

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An apprentice can be any age,

any backgroundand at any level in their career.

Sean Williams, CEO, Corndel.

What makes them an apprentice is that, in additionto working, they are undertaking a recognisedpackage of productivity-enhancing training and accompanying study that gives them new

that employers recognise as valuable.

vocational skills

Sarah Betts is a Project Manager at Asda with considerable Management experience. She enrolled on the Corndel Level 5 Diploma in Leadership and Management to adapt her approach to stakeholder management and equip her with skills to progress her career.

“There was a benefit to the business because it made me a better leader and a personal benefit to me to improve in my role. I have taken so many things away from this programme.”

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Seek commitment and buy-in to Levy-funded programmes from across the whole business

Without question, the businesses we work with that are utilising the Apprenticeship Levy most effectively are those where the CEO or senior executive members have championed the programme.

Examples include:

• A FTSE 100 retailer whose CEO launched an initiative to build data analytics capability by training hundreds of employees with a Levy-funded initiative. There was significant improvement in people sharing skills across the organisation

• A global engineering and R&D company that has embedded an annual programme for school leavers and graduates to address its shortage of software engineering talent

• One of the world’s largest investment banks training over 100 managers a year through a higher-level coaching-based management and leadership apprenticeship programme. This programme has embedded a culture of developing people skills within a traditional financial services environment

Recommendation 4: Actively involve, seek endorsement and build champions for the organisation’s Levy strategy. If the Levy strategy is aligned with corporate objectives and backed by senior stakeholders, the pace at which it can be mobilised will be far quicker and its long-term impact much greater.

The above programmes are delivering significant strategic impact. Each represented a strategic initiative, backed by the Board, with clear objectives and representing a major investment of the organisation’s Levy.

In each case study, executive support generated momentum, enthusiasm and commitment to the programme. In contrast we still see large corporates where nearly three years into the Levy’s existence there remains inertia, dither and lack of commitment as to how best to use the Levy. This is proving costly.

• A leading professional services firm training both new and existing employees through a newly constituted talent academy utilising the Levy

• A major UK construction company saving £400,000 per annum National Insurance contributions by training its under 25-year olds on apprenticeship programmes.

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Source: *1: https://www2.deloitte.com/uk/en/pages/press-releases/articles/digital-skills-gap-narrows-but-still-persists-from-classroom-to-boardroom.html

PwC’s 2019 annual CEO survey shows that the availability of skills is a top concern for 79% of CEOs.75% of digital leaders in the UK believe their workforce does not have sufficient knowledge and expertise to execute their digital strategy. *1

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In summaryOptimising the Apprenticeship Levy for a large corporate is the difference between using or losing a multimillion-pound investment budget. In September 2019, the government revealed that employers have so far lost access to £133m of Apprenticeship Levy funds as the rolling deadline for spending the money passed.

The four steps of: 1) dedicating resource to ensure you utilise your Levy; 2) adopting a strategic long- term approach; 3) communication and aligning L&D functions to deliver it; and 4) ensuring executives back and champion the strategy, are simple but fundamental critical success factors.

The Author James Kelly is a Co-Founder and Corporate Development Director at Corndel. His career spans corporate strategy consulting at Deloitte, PWC and IBM, leading major UK and international joint ventures in the employability and skills sectors. He has previously worked as a Ministerial advisor on employment policy.

Find out more If you would like to hear more about relevant sector case studies from our clients and the opportunities available to your organisation, please contact us to set up a meeting, where we can get to understand your needs and requirements.

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About Corndel Since the launch of the Apprenticeship Levy in 2017 Corndel has worked with many of the UK’s largest employers to help them optimise its value and impact. Our clients often pay an annual Levy of more than a million pounds, some several times this amount. We help them to navigate accessing funds and integration into an overall Organisational Development strategic approach.

Our clients include: - AIG, ASDA, AON, BP, BUPA, Burberry, Capita, Cambridge University, Compass Group, EON, Fidelity, GKN, John Lewis Partnership, Legal and General, Marks & Spencer, Royal Mail, UBS, Société Générale, Wates, Zoopla and many others.

Awards won and shortlisted for in 2019/20:

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© February 2020