How Retailers are spending their Apprenticeship Levy
Posted on 8th August 2021 at 19:00
4 strategies to get value from your Apprenticeship Levy in a Retail environment
In 2017 employers were able to start spending their apprenticeship levy. For some, the levy is still seen as a tax burden or an administrative hassle. In Retail margins are tight and along with the Living Wage, Business Rates and the impact of Covid-19, the levy could be written off as an unwanted cost. But over the last 4 years we have seen many Retailers go on a journey from anger, frustration or confusion, through to seeing that apprenticeships can be used to solve real problems in their business. Below we identify 4 broad ways Retailers are planning to use their levy.
We have spoken with over 50 employers, and also work closely with the Retail Trust to support their members. Many HR Directors and L&D Managers have found that once they feel confident in the ways in which the levy can be used, they can make use of it for business critical training. Training that improves retention and morale and boosts productivity.
When we started discussions, many employers were surprised to find out a few things about the levy:
You don’t necessarily need to increase headcount or recruit new staff – the levy can be used for existing staff, no matter how long they’ve been with you.
The levy can be spent on employees of any age, experience level, or qualifications – even if they have a degree.
Apprenticeships aren’t for those with low level skills, or those that aren’t ‘academic’. Apprenticeships are now offered up to degree and Masters level, and are for anyone that wants to develop their skills in a real job role.
You don’t have to market the programme as an “apprenticeship” if you don’t want to (recognising the misconceptions about the word apprenticeship). You can name your programme as you like, so long as you and your provider follow apprenticeship funding rules.
Your existing tried and tested programmes and training materials may be able to cover some elements of the apprenticeship.
We’ve found that there are 4 broad strategies that Retailers are using to spend their Apprenticeship Levy:
Strategy 1 - Creating a pipeline of talent
While you don’t have to recruit new staff, being able to offer candidates a job with support and training is an attractive recruitment tool, particularly in areas where the job market is competitive.
Strategy 2 - Succession planning and improving skills at entry levels
Retention is a challenge in many of the businesses we work with, and managers are reliant on hiring externally to find their future talent. To improve internal succession planning, retailers are using apprenticeships to improve the core skills of their entry level colleagues in store, warehousing and customer service. They are also investing in their junior managers, to make sure they are ready for their next step.
Strategy 3 - Upskilling specialist staff – Buying & Merchandising, HR, Digital, Procurement, Project Management
Apprenticeship standards, the qualification each person undertakes, are now in the hands of employers. Employers have designed them around real job roles, and the skills employers need now and in the future. This means that Retailers are able to find the qualifications they need for specialist roles including Buying & Merchandising, HR, Procurement and Project Management.
Strategy 4 - Improving people management and leadership across the business
All employers recognise how crucial their leaders and managers are to the success of each store, brand or department. But many L&D departments haven’t had the budget or opportunity to upskill their management in recent years. The levy provides a new opportunity to invest in future leaders. The Management standards cover many of the major pain points in retail, and these qualifications have resonated with the Operational and HR Directors we work with.
In the last year we have also launched the new Learning & Development qualifications so that L&D colleagues can also invest in the future of their own teams.
There are some other common themes in the way Retailers are approaching the levy:
Most are not paying the apprenticeship wage but mirroring their usual recruitment wage. With so many businesses adopting apprenticeships for the first time, this is an exceptionally competitive market for the top young talent.
Companies are running a competitive tender process or using their trusted partners to ensure they get high quality training tailored to their business.
Incentives are available to employers (like national insurance reductions and a grant for 16-18 year olds), but they’re not the driver of behaviour. Margins are tight in Retail and money is never wasted. But mostly the business case retailers are seeing is the reduction in recruitment costs, improved retention and productivity.
Which departments can Retailers spend the levy on?
Stores
Support Office
Online and Digital
Buying and Merchandising
HR
L&D
Finance
Customer Contact Centre
Warehousing
Find out more:
or Contact us for free advice on using your levy.
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