In the wake of Philip Hammond’s announcement that the annual levy transfer facility will rise from 10% to 25%, business development staff working for apprenticeship training organisations have a new opportunity to turn a policy announcement into business-winning practice.
In this blog, we give you three examples of new conversations you could have with levy-payers that will stimulate interest in a transfer and generate apprenticeship starts with SMEs.
What is the transfer and why does it matter?
Industry bodies have been reporting that their employers (for various reasons) are only likely to use about 60% of their levy longer-term.
Since May 2018, levy-paying businesses have been able to transfer 10% of their apprenticeship levy funds to non-levy businesses. The government is now increasing this to 25%, which gives business development staff a new opportunity to engage and support levy-payers make good use of this funding, even if they won’t be using it directly.
Remember, business development staff should be delivering solutions to employers, not selling them courses. The levy-transfer is a good example of this. It can be used to improve productivity, customer satisfaction and reduce long-term skills gaps, even if the levy-payer is not directly benefitting from the training.
But how? Below are three examples to get you thinking creatively…
Skill their supply chain
If a business does not feel in a position to spend all their levy-funds, they may be interested in exploring how a transfer could make their supply chain more efficient. This in turn could improve their own business performance.
Here’s an example:
A publishing company writes and produces education handbooks that are distributed to 1,000s of primary schools across the globe. Most of their staff are academic writers and designers. They are not necessarily looking to progress in work and this limits the opportunities for spending their apprenticeship levy. However, they rely on several specialist printing companies to bind books and create pop-up displays that appeal to children.
A training provider shows the levy-payer that transferring the levy will help them process an order quicker and keep their customers happy. The provider can do this by training their supplier staff on team leader apprenticeships, as this will improve the speed in which they can turn around an order.
Meet their corporate social responsibility (CSR)
Most large organisations have a corporate social responsibility policy – using profits to give back to communities and stimulate economic, social and environmental improvement. Essentially, it makes companies think long-term and improves customer loyalty. Transferring apprenticeship funds to charities and organisations that support the company’s social aims can enhance their CSR practice.
Let’s bring that to life:
A professional football club has a corporate social responsibility to their local community. They have their own ‘community arm’ which runs training programmes for young people not in education or training. Yet feedback shows them, many local businesses are disgruntled at their presence in the area as it impacts on parking arrangements.
A training provider shows them that transferring their levy to small businesses located near the club will enhance their reputation in the local community. The training provider engages suitable SMEs within close proximity of the stadium to deliver customer service apprenticeships to their staff. The SME does not have to pay the 10% employer contribution.
Support their industry through an Apprenticeship Training Agency (ATA)
Some levy-payers do not feel in a position to offer apprenticeships but know there are industry-wide skills gaps that push up their costs and delay projects. Finding a suitable ATA to transfer levy-funds to, that can employ apprentices directly, could support industry-specific small businesses. In turn this will reduce skills gaps in the industry and support the levy-payer’s productivity problems.
Imagine for a moment:
A large house building company subcontracts 90% of the work on building projects to local skilled tradespeople. However, they struggle to find enough tradespeople to complete the project to tight deadlines, which impacts on their customer satisfaction. They try to persuade their tradespeople to take on apprentices directly, but they do not feel in a position to offer full-time employment as they don’t have a year’s worth of work in the pipeline.
A training provider shows the levy-payer that they can increase the local talent pool and complete jobs quicker in the future, by using an ATA to employ apprentices on site. The training provider delivers construction apprenticeships to young people that are rotated around the levy-payer’s subcontractors (employed by the ATA) as the build goes up. This trains more people in the industry, so the levy-payer will have a wider pool of talent to call on next time they build in the area.
Things to bear in mind
- Think about how training can solve an individual business’s problems, even when you will not be delivering the training directly to them
- Offer to support the levy-payer with their online apprenticeship service account. Time and staffing will put them off engaging in this process
- Training providers without a non-levy allocation can deliver to SMEs through apprenticeship transfers. If you deliver niche training, think about targeting levy-payers that would be interested in supporting your aims
Need further support?
SDN provides bespoke consultancy services to training providers, colleges, universities and levy-paying employers. We have a range of Associates who can work with your business development, delivery or curriculum staff to adapt, improve and grow your apprenticeship offer. Contact us for details.