5 ways your business can benefit from the apprenticeship levy
Since April this year organisations with an annual payroll of more than £3 million have been required to pay the apprenticeship levy. Funds are paid into a digital account and can only be used towards the cost of apprenticeship training and assessment. But the levy isn’t just another business tax. Here are 5 ways in which your organisation can benefit from recent changes to apprenticeship funding:
- Increase Business Productivity
The apprenticeship levy is an opportunity to close the skills gap within your business and increase productivity. Research has shown that apprentices deliver an average net gain of £1,670 per annum to their employers, and hiring an apprentice long-term can typically deliver productivity gains of over £10,000 per annum. This figure can be almost double in the construction and planning, manufacturing and engineering sectors.
- Develop your existing workforce
This apprenticeship funding can be used to train and develop your existing employees, enabling them to gain a qualification at a higher level than they already hold, or at the same or lower level if they’ll benefit from gaining new knowledge and skills. The levy ring-fences funds for your organisation’s learning and development strategy, and is likely to produce more motivated, satisfied and loyal employees who feel valued by your investment in their professional development.
- Attract new talent
Once you’ve identified the skills your business is going to need in future you can use the funds in your apprenticeship account to develop a structured programme that attracts and retains the brightest new talent. With the rising costs of higher education many young people are investigating alternative career pathways, and by investing in apprentices who are just starting out you’ll be able to nurture home-grown talent with the most up-to-date and relevant skills your business needs.
- Get more out than you put in
The government will automatically top up the funds in your digital account by 10% each month, so you’ll get more out of the apprenticeship levy than you put in. That’s 10% additional funding towards the costs of training and assessing your apprentices. And if you don’t have enough funds in your account in a particular month you can still benefit from co-investment; this means that you’ll contribute just 10% towards any additional training and assessment costs not covered by your levy payments, and the government will pay the rest (up to the funding band maximum).
- Consolidate current programmes
Like many large organisations, you probably have multiple learning and development programmes in place, ranging from apprenticeships and talent management programmes to graduate training schemes. All training at levels 2 to 6 is eligible for apprenticeship funding through the levy, allowing you to consolidate your learning, development strategy and bring all of these programmes under one banner.
Interested to know more about the apprenticeship funding? Get in touch with our team of employer services consultants to find out about Seetec’s managed service and how you can make the levy work for your business.