The new Apprenticeship Levy is a lucrative undertaking by the government that came into force as of April this year. It is an undertaking that will have to be met by any company that has an annual pay bill of more than £3m, or one with more than 100 members of staff who earn an average salary over £30,000.
Over the course of its first operating year, the retail sector alone will pay more than £230m into the Apprenticeship Levy. It’s anticipated to raise almost £12bn for the government over the next six years. The implications that the levy has for businesses are monumental - implications that have largely gone unnoticed thanks to the bureaucratic diction in which they are cloaked. My organisation has had to take stock and re-examine our business model in the face of this new variable of the commercial landscape. The levy will either serve as a needless cost or an exciting opportunity - it depends on your perspective, preparedness and approach.
With my considerable experience in sales and recruitment, I have seen many a government intervention when it comes to recruitment and training - but none as significant as this. A change in pattern or bottleneck in recruitment budgeting is a likely response from companies looking to combat the monthly cost of the Apprenticeship Levy. The initiative demands increasing flexibility from businesses when it comes to training. This shift in the method in which candidates enter the workplace signals a move towards greater diversity when it comes to candidate selection.
Companies nationwide will have to effect a rebalancing of strategy when it comes to recruitment. The term ‘apprenticeship’ is traditionally associated with school leavers entering a trade. But the new apprenticeship applies to multiple job roles, both vocational and non-vocational. Companies that hang on to what an apprenticeship used to represent are in danger of being left behind.
Businesses must invest in order to obtain a thorough knowledge of what this latest government initiative means. The apprenticeship levy will either act as un-recouped business outlay, or a spur towards greater learning and development that creates profit in the long term. It is entirely in the hands of the company in question as to which it should be.
Jonathan Fitchew is CEO of Pareto Law
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