1.1 What is the Apprenticeship Levy?
The Apprenticeship Levy is a tax, paid by employers with a pay bill of £3 million or more, which sets aside specific funding for workplace training. Companies who pay the Apprenticeship Levy have a pot of money set aside for training their employees, which can be accessed through their gov.uk digital account. The Levy has so far supported more than 313,000 people to start their workplace training journey, in areas such as leadership, management, data skills and project management.
As of 2020, the direct funding available for investment in apprenticeships was close to £2.5 billion.
The growth in apprenticeship funding shows the renewed commitment between the government and organisations to promote lifelong learning and development within the UK workforce.
Although the Apprenticeship Levy has existed since 2017, most organisations still aren’t making the most of their fund. The irony is that hundreds of England-based employees are lacking the necessary skill sets to drive productivity and growth within their organisations. Key drivers of productivity include having effective, resilient managers, and ensuring employees are engaged and motivated through lifelong learning.
1.2 How is the Apprenticeship Levy calculated?
If you’ve been contributing to the Apprenticeship Levy as an organisation, you need to know how much you have in the pot – this will help you maximize the benefits of the Levy.
The Apprenticeship Levy is 0.5% of your payroll for UK staff, along with a £15,000 allowance. The government then adds an additional 10% top-up to your levy pot.
The Levy provides businesses with digital vouchers that can be used to fund the cost of training and assessment for apprentices, as well as additional support and mentoring.
You can talk to your HR and L&D team to ask how your organisation is utilising the Apprenticeship Levy, and how you might best work together to ensure your tech skills gap is filled.
1.3 What are the benefits of using the Apprenticeship Levy for CTOs?
There are so many benefits of using your Apprenticeship Levy. You can upskill your employees in key areas to drive growth and productivity within your business, whilst keeping employees engaged, motivated and happy. You can solve skills gaps, such as in technology, to gain a competitive edge in an increasingly crowded marketplace and ensure your team stay curious and innovative. Other benefits include:
Digital Transformation and Technological Advancements - To maintain a competitive edge amidst digital transformation, tech apprenticeship programmes ensure employees continuously assess and integrate emerging technologies.
Cybersecurity and Risk – Apprenticeships equip employees with the knowledge to navigate evolving cyber threats, creating a resilient defence against cybersecurity risks.
Talent Recruitment - Apprenticeships strategically address talent scarcity by developing an internal pipeline of skilled professionals.
Talent Management and Retention - Beyond competitive compensation, apprenticeships foster a culture of employee development, addressing the digital skills gap for long-term talent retention.
Tech Worker Burnout - To combat burnout in tech roles, apprenticeships improve efficiency, meaning workload can be reduced. It also widens the talent pool, meaning tasks can be spread across different team members as they upskill, contributing to a supportive work environment.
1.4 Why are tech leaders underutilising their Apprenticeship Levy?
Despite the Apprenticeship Levy being a critical tool in building a skilled UK workforce, most organisations in England are yet to fully recoup their levies through continuous training, and this is particularly true in the tech apprenticeship space.
We know it can be done. So why are tech leaders underutilising their Levy pot?
Lack of knowledge - Once most companies hit the payroll threshold set for the remittance of the Apprenticeship Levy, they pay the tax but rarely consider what actual benefits recouping the funds would have on the company's skill set. Currently, there are at least 1.5 million employers in England. Only about 19,000 of these employers pay for the apprenticeship levy. What's more concerning is that out of these firms, only about 20% of those who pay for the levy fully utilise the available training and development programmes. The greatest hindrance is the lack of knowledge and buy-in amongst senior stakeholders within the business.
Perception of quality – Misconceptions around apprenticeships can put some learners and employers off. This shouldn’t be the case - apprenticeships have been proven to improve business outcomes whether through increased ROI, improved processes, or digital innovation. Corndel’s DevOps and Software Engineering programmes are developed in partnership with experts who have years of experience in industry.
The National Apprenticeship Service found that 96% of employers who had apprentices experienced at least one benefit of having them, with many naming up to eight. The CIPD noted that:
• 80% of employers have maintained or improved future skills in the business.
• 70% of employers have seen improvements in the goods and services they offer.
• 66% of employers have experienced improved staff morale
Concerns about retention – Organisations are unwilling to invest in employees if they are likely to leave part-way through or immediately after finishing their course. The good news is that Apprenticeships are likely to increase retention within organisations – in 2021, The Open University reported that 74% of organisations saw increased retention because of apprenticeship programmes.
1.5 What can I spend my Levy pot on as a tech leader?
Organisations can choose to spend their Levy on a variety of different programmes which will help them solve strategic objectives. Corndel offer programmes in:
Software Engineering - providing a long-term, sustainable solution to growing in-house coding talent.
DevOps Engineering – supporting learners to learn the tools, concepts and ways of working essential to thrive in a DevOps environment.
Data Engineering - supporting aspiring data engineers to learn advanced skills in data systems automation, cloud solutions, and analytics.
Leadership and Management (Levels 3, 5 and 7) – building effective, resilient line managers and developing much-needed soft skills within tech teams.
Data Analyst Degree Apprenticeships - equipping your future digital leaders with in-depth knowledge and understanding of key technology disciplines such as data analytics, DevOps and cyber security.
Business Change programmes - Enabling future-focused business change professionals with emerging technologies and change leaderships skills, helping to steer enterprise organisations through business transformation.
1.6 How have other organisations used their Apprenticeship Levy for tech programmes?
Zoopla: Using the Apprenticeship Levy to increase female talent in technology-based roles
Corndel developed and delivered a software engineering apprenticeship in partnership with Zoopla. Catrin Anderson, Chief People Officer at Zoopla explains the strategy behind this unique recruitment drive: “We have ambitious plans for the future combined with a commitment to innovation, so we are very excited to launch our first apprenticeship programme. In particular we want to give opportunities to women who are looking to forge a career in technology and innovation, helping us build a pipeline of talent that will benefit our customers for years to come. We are delighted that this cohort of apprentice Software Engineers is 70 per cent female; an impressive ratio given that only three per cent of females say technology is their first career choice.”
The Apprenticeship Advantage: Unlocking Tech Talent at Chubb Fire & Security
James Atherton, Development Manager at Chubb Fire and Security is a huge advocate of tech apprenticeships – he’s seen them work in practice. In his role, he manages a team of software and hardware developers to develop platforms which protect critical national infrastructure facilities throughout the UK.
He recently hired a new apprentice, Farhan Munshi, who is undertaking the Software Engineering apprenticeship programme with Corndel. The impact has been almost immediate.
“Our apprentice, Farhan, went away on the Corndel boot camp and came back a different person. Suddenly, all the technical jargon we were throwing around, he understood. We had planned to start with basic test projects, but it became apparent that we were wasting time. He needed to be challenged with more complex tasks. The difference was significant."
1.7 Getting started with tech apprenticeships: the CTO’s roadmap
Step 1: Connect with your learning and development team Find out if your organisation is currently utilising the Apprenticeship Levy, and how much budget might be available for technology apprenticeships.
Step 2: Identify training needs Conduct an assessment of the skills required in DevOps and Software Engineering within your organisation, and the benefits of nurturing these skills.
Step 3: Draw up a shortlist of potential learners (and look in unexpected places!)
There may be individuals within your wider team or organisation that are interested in DevOps or Software Engineering and who have the right skills to be cultivated by an apprenticeship programme. Draw up a shortlist of learners but look beyond just your immediate team.
Step 4: Use our business case template to get the buy-in you need
Our business case template, found on the next page, can help you clearly explain the benefits of introducing technology apprenticeships to a range of internal stakeholders, including HR / L&D and the Senior Leadership Team. Step 5: Get the ball rolling with Corndel and your L&D team
Work with Corndel and your L&D team to tailor the programmes to your organisation’s specific needs – and in 12 months' time, witness the new generation of tech talent which emerges.