Give a brief overview of your time spent within the Education & Training industry and about yourself.
I’ve been involved in the Further and Higher Education sectors for nearly 20 years. Leading a number of organisations as MD and in senior Director roles. Both supporting the industry with consultancy services and as a provider of apprenticeships, aswell as other training services. For the past 2 years I’ve been immersed in the levy, creating innovative programmes with large corporate employers.
My passion is showing employers how to reinvest their apprenticeship levy as a funding mechanism for innovative programmes that achieve business goals. I create deliverable solutions that maximise the use of levy funds. Neutralising commercial training costs and use the HMRC approved scheme to save NI costs for under 25 year old apprentices.
My professional independent advice and guidance ensures that employers get solutions that are created with their interests at heart and that maximise the opportunities the levy offers and engages.
I also advise employers on how to identify and engage with the best training provider partners. For those employers who want to become an employer provider, I advise them on how to do it professionally.
Can you give an explanation of what the Apprenticeship Levy is, and who could be affected by this.
Since 6th April last year, organisations with an annual wage bill of more than £3m have been required to pay an apprenticeship levy. These organisations can then elect to re-invest their levy funds in the form of apprenticeships for new and existing staff. If after two years the funds are not re-invested the money is taken by the exchequer.
A year after the apprenticeship levy came into force, data published by the Open University showed a very low level of re-investment. Just 8 per cent of apprenticeship levy funds were re-invested in the 10 months following the scheme’s launch, with £1.28bn of the £1.39bn paid in by businesses “sitting unused” in accounts.
What challenges are Levy Employers facing regarding their Levy Funds?
The figures published by the Open University might suggest that organisations are writing the levy off as tax and choosing not to spend it. Whilst some employers are prepared to view the levy as a ‘sunk’ cost and have no appetite to re-invest their funds. The majority of levy paying employers simply don’t fully understand the levy, the opportunities it presents or how to re-invest their funds to address their business challenges.
I really feel for employers who want to get the best out of their levy. Unless they have internal levy expertise, they search the official websites which aren’t really that helpful. Their next option is to reach out to the training provider industry for advice and guidance. I’ve seen and heard some appalling advice from some training providers which is just wrong. This creates confusion for employers and gives rise to a lack of overall confidence in the training provider industry.
The good news though is that there are ways to overcome these challenges and for levy funds to be re-invested in exciting and innovative ways in partnership with those really good training providers.
How is the Levy going to affect Employers and how would you incorporate the Levy into their Business Growth Strategies.
We’re now over 1 year into the levy and the clock is ticking for employers who are yet to get to get off the blocks before the chancellor starts to take their funds in May 2019. It is therefore imperative that employers take action now. As the CEO of an organisation paying the levy each month, which is of course derived from hard earned income. I would want to re-invest it in areas of my business which could best benefit. For example, I might want to invest it in creating my future leadership and management talent. Or I might want to improve my customer facing activity to increase sales values for better retain customers. The point here is that the levy can be used as a funding mechanism to address this type of business challenge by increasing skills and competency.
Given your experience at Managing-Director level with Education & Training organisations Julian, how would Levy Employers get the best ROI from their Levy Funds?
Part of the answer is to engage the Learning and Organisational Development communities to embrace the levy as a fantastic opportunity for them to help realise their objectives rather than seeing it as a threat to their existence. For many years the Learning and Development professionals have seen training budgets cut, now they have the gift of the levy!
Gaining knowledge of the levy possibilities and understanding the art of the possible are keys to success, achieving this will allow these communities to see how the levy can really be used to support them to greatest effect. They can then reach out with confidence to those professional training providers who will work in partnership with them to achieve objectives.
The levy is a fantastic opportunity for the Learning and Organisational Development communities to further prove their value.
When developing a Training Strategy, what are the key considerations for levy Employers to ensure they get the best ROI?
There’s a great deal of negative discussion around the 20% off the job training rule, it’s often used as an easy excuse to do nothing with the levy. With better informed Learning & Organisational Development teams partnering with the professional training providers the 20% off the job training requirement will be factored into innovative programme solutions that have measurable ROI. If for example a project for increasing gross margin on manufactured products could be given to a team of managers as part of a contextualised Operational Manager Apprenticeship the ROI would be measured in cash terms and the 20% off the job training would become insignificant.
Choosing the right training provider partner is the ultimate key to success, the right partner will provide an end to end solution that includes working with the employer to create the programme solutions, engaging with the candidates, delivering high quality training right up to the end point assessment and managing progression. Employers need to be really diligent when choosing a training provider partner as getting it right can take the pain away, getting it wrong can prove to be problematic.
What has been your biggest learning curve/most painful mistake within this sector?
The Training Provider industry has historically been used to a quick transactional style of employer engagement and expected levy paying employers to engage equally quickly. This simply hasn’t happened, the hard lesson for the industry is that employers are now in full control, the levy is their hard earned money, they will spend it when they want to, with who they want to and how they want to, unfortunately some providers still have unrealistic transactional expectations. For many years the training provider industry has loosely talked about employer engagement, the levy has truly created it, where trusted long term relationships have to be earned and built.
We do hope you have found this interview insightful, if any of the issues mentioned in this article are affecting you or your organisation please do get in touch, with access to an extended network of industry experts we can connect you with impartial strategic advisors.