After months of anticipation, the Apprenticeship Levy has arrived, and is in effect as of 6th April 2017. Here Richard Marsh, Apprenticeship Partner Director from Kaplan, an Apprenticeship Training Provider talks to Lawyer Monthly about the benefits of the coming apprenticeship legacy in the country, and the social changes it will set in motion. Historical support for the article comes from Krista Cowman, Professor of History & Director of Research at University of Lincoln.
Apprenticeship schemes are by no means a new concept, and with a heritage of hundreds of years, they have tangible benefits to businesses and individuals. While many businesses already understand the true value of Apprenticeships, there is still some confusion among organisations when it comes to details and impacts of the Levy.
Finance professions, such as tax and accountancy, require on-going learning and first-hand experience of complex scenarios, making Apprenticeships an effective way of ensuring employees gain sufficient knowledge. The blend of practical experience and taught theory is a good combination for many individuals. Working, learning, and earning, makes Apprenticeships an attractive opportunity for young people, graduates and career changers, equipping them to become experts and valuable assets to any business or organisation.
The Levy is intended to increase the quantity and quality of Apprenticeships, supported by the new Apprenticeship standards, which will ensure that key skills, work experience and necessary qualifications are gained, with support from training providers. The ambition underpinning the changes is to encourage more apprentices and more businesses offering Apprenticeships.
To gain a better understanding of the influence Apprenticeships have and their importance in today’s business landscape, it’s important to look at their foundations and development over the past centuries.
Apprenticeships in society
Dating back to Tudor times, Apprenticeships have always centred around ‘learning on the job’. However, their popularity has varied through the ages, with legislation, business landscape and societal views influencing programmes and their prominence. Apprenticeships began to decline by the end of the 19th century, leading to calls for the government and philanthropic bodies to introduce legislation to support them. The Institute of Chartered Accountants in England and Wales (ICAEW) was established by royal charter in 1880, creating a robust system that benefited both employer and apprentice. Following the First World War, during which many Apprenticeships were suspended, the government reaffirmed its commitment to Apprenticeships, initiating the Interrupted Apprenticeships Scheme in 1919, where demobilised soldiers would be eligible for a higher wage if they returned to complete their Apprenticeships. A downturn in the popularity of Apprenticeships in the 1970s called for the government to revitalise schemes and their relevance, at a time when they were often considered a less academic path. In 1995 Modern Apprenticeships were launched, merging contemporary employment practices of equal opportunities with the traditional notion of Apprenticeships, ensuring taught skills were suited to the modern economy.
While traditional Apprenticeships originated in trades such as carpentry and textiles, their benefits have since been recognised in corporate environments, with their gradual introduction into a broad range of sectors and appealing to individuals from diverse backgrounds. Today’s Apprenticeship programmes in the finance sector have evolved to meet the needs of employers and the skills required by businesses, combining office-based with formal education to allow individuals to put theory into practice in everyday scenarios.
The reciprocal partnership
The importance of a reciprocal partnership has been fundamental since the early days of Apprenticeships, with schemes benefiting both employer and apprentice. In the mid-19th century, employers were limited to a maximum of three apprentices at any one time to ensure good quality training and sufficient attention for each individual. A fee would be paid by the apprentice’s parents or a charity, and in return apprentices would receive board, lodgings and training from their ‘masters’ or employers. Employers then benefited from free labour, which became increasingly valuable as the apprentice became more skilled.
Today, the idea of mutual investment between employer and apprentice remains, with Apprenticeships supported and overseen by training providers and the government to ensure high quality programmes and positive outcomes are achieved. For businesses, the benefits are clear.
The National Apprenticeship Service has found that 89% of employers say apprentices make their business more productive, and 75% find that Apprenticeships help to lower recruitment costs. In addition, 80% say that Apprenticeships will play a bigger part in their future recruitment plans. Employers also tell us that Apprenticeships are a great way to ensure diversity in their workforce and they provide effective development opportunities for managers as they have to use skills such as coaching and mentoring.
Alongside valuable experience, Apprenticeships have always offered individuals strong employment prospects. In the 1880s, Apprenticeships were seen as a positive alternative to ‘Blind Alley’ jobs – jobs that offered youngsters comparatively high wages when they left school, then fired them when they turned 18 to replace them with new school leavers. Throughout the history of Apprenticeships it has been common for employers to offer apprentices a full time paid position once programmes come to an end.
This is still the case today. Apprenticeships are an increasingly popular option for school and college leavers and those looking to change career, providing a credible alternative to traditional university degrees. Employers and HR teams work with training providers to ensure individuals meet their goals and gain the necessary qualifications, whilst fully integrating them into office teams to gain maximum practical experience. Alongside the Levy, there is further encouragement for businesses to get on board with Apprenticeship schemes. Within the finance industry, many courses are being refreshed and new ways to qualify are becoming available from professional bodies such as CIMA and ACCA. In addition, businesses can now receive a 90% subsidy plus £1,000 cash for any under 19-year old given an Apprenticeship, and National Insurance reductions for under-25s.
The Apprenticeship legacy
Throughout the heritage of Apprenticeships, businesses have adapted to social changes and legislative developments, seeing the quality and relevance of schemes improve in keeping with changing business landscapes. However, whilst the new Apprenticeship Levy demonstrates the latest advance, the opportunities and measurable benefits for both employers and individuals remain an ongoing priority. Whether they have an existing Apprenticeship programme or not, organisations across the finance sector should ensure they’re fully aware of the potential value apprentices can add, and the opportunities now available.
Kaplan is one of the largest and oldest Apprenticeship providers to the financial and accountancy industries. With knowledge and experience from many decades spent supporting training and development, they can advise and assist businesses on today’s Apprenticeship needs.