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Employers confident they will see a positive return from the levy – People 1st publish annual apprenticeship pulse survey

07 March 2018

According to the latest apprenticeship pulse survey The Apprenticeship Levy - One Year On, published by performance and talent management expert, People 1st, nearly two thirds of employers in the hospitality, retail, travel, tourism and aviation sectors are either confident or very confident that they will see a return on investment from their levy contribution. However, fewer than four out of 10 (38%) have a means of measuring their return as it currently stands.

Better staff retention rates and improved skills and personal development were singled out as business critical benefits by nearly three-quarters (72%) of respondents as they align apprenticeships with the needs of their businesses. Hospitality businesses are also finding apprenticeships valuable as a recruitment tool.  

In relation to the levy more generally, the jury is still out. Almost four out of ten employers (36%) feel happier about the levy than they did 12 months ago, a quarter (23%) feel less happy and over a third (41%) feel the same.

The research, which coincides with National Apprenticeship Week and the up-coming first anniversary of the introduction of the levy, was designed to assess progress in implementing the changes to apprenticeships and to identify any barriers preventing employers seeing a positive return from their investment. It comes hot on the heels of a spate of negative coverage on the apprenticeship levy from some quarters.

Sixty one leading levy-paying employers in hospitality, retail, travel, tourism and aviation took part in the research. The sample was based on the views of employers from who are members of the People 1st Apprenticeship Network, which is made up of over 250 leading brands across the visitor economy.

Other key findings include:

  • Three quarters (74%) of respondents believe that the retail, hospitality, travel and aviation apprenticeship standards they are using include the relevant knowledge skills and behaviours required for occupations concerned.
  • Almost seven out of 10 (69%) employers say they now have a coherent plan in place for their levy spend.
  • Almost six out of ten (59%) employers are already indicating that they plan to spend their full levy entitlement.
  • Managers across businesses are still being cited as having a ‘poor’ or ‘very poor’ understanding of apprenticeships, according to three quarters of those surveyed.
  • Only one in five (20%) of respondents have registered as an employer-provider, and only four out of ten (41%) believe that they have all the information and support required to do so.
  • The majority of employers (44%) still want greater clarity in relation to the conducting and recording of the 20% off-the-job training.
  • Employers are asking for greater clarity over implementing end-point assessment. Half of those surveyed are taking advice from their training provider when it comes to selecting the end-point assessment organisation.

According to the report’s author, Martin-Christian Kent, executive director of People 1st:

“The results present a largely positive picture of how businesses are implementing the levy and the changes, and it’s encouraging to see the value that employers are placing on the new apprenticeship standards in terms of the benefits they present.

“It’s clear from the findings that employers are at very different stages and whilst the vast majority are making significant headway, it is concerning that a considerable percentage of levy-paying employers are still only just embarking on their journey, which could undermine a positive return on their levy contribution.

“The most pressing challenge continues to be the extent to which the rest of the business understands and are buying into the changes. There is clearly more work to be done to address this and bust a variety of myths and misunderstandings that have built up. There are also opportunities for businesses to use evaluation techniques to help engage stakeholders from across the organisation and overcome specific barriers.”

Kathryn Porter, director of youth strategy EMEA, Hilton and chair of the hospitality trailblazer, comments: 

“The levy for many employers presents a huge investment, but it’s also an opportunity. Apprenticeships are a significant solution to addressing the recruitment, retention and productivity challenges faced by the sector. Hilton has a history of employing apprentices and my role on the trailblazer has made the transition from the old to the new system much easier for our business, but we still encountered challenges along the way.

"However, I’m confident in saying the remaining challenges can be overcome and through People 1st’s Apprenticeship Network we are hearing some similar fabulous examples of how apprenticeships are being fully embedded into long term business strategies.”

Lloyd Thomas, group apprenticeship manager, Co-op and chair of the retail trailblazer adds: 

"Now that the levy has been in place for almost a year, we have found that it has enabled us to embrace the reforms and look at what our business really needs. It has helped with the lifting of the age restrictions as many of our colleagues that join us are more mature yet still want to train in a new career.

"Working with People 1st we have not only supported the creation of three retail standards but also worked on the creation of other more bespoke standards that we need to ensure that our apprenticeship strategy and our colleague strategy are completely aligned. This will ensure that we are able to use apprenticeships as the "golden thread" to our talent strategy providing the right colleagues, with the right skills, in the right place at the right time.”

The full report is available to download at: www.people1st.co.uk/Apprenticeship-pulse-report.