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APPRENTICESHIPS: LEVERAGING THE LEVY – Roundtable Report

07 December 2017     London
Hosted by theHRDIRECTOR.
Chaired by Jason Spiller.

Aston University

Hazel Cloke, Head of HR for Projects & Transformation – Capita Group Plc
Nicola Drury, UK Apprenticeship Manager – Amazon
Peter Hallard, Director of Organisational Development – Biffa
Suki Johal, Regional HR Manager – Bechtel Ltd
Stephen Maule, Group Head of Qualifications – Lookers
Stuart Mcpherson, Apprenticeship Contract & Quality Manager – Interserve Plc
Carl Rayner, Head of Talent, Development & Resourcing – Arvato CRM Solutions, UK & Ireland
Natalie Rayner, Head of Operational Learning – Royal Mail
Sally Silvey, Apprenticeship Development Manager – Transport for London
Charlotte Stacey, Head of Apprenticeships – BP
Becca Thurston, Apprenticeship Manager – Wessex Water Services Ltd
Sarah Worton, Client Director – Aston Business School
Terry Hodgetts, Director of The Centre for Executive Development – Aston Business School

The Levy is changing the landscape for L&D in the UK. Larger companies are now making significant levy payments and they need to decide how to make the best use of the monies stored in their digital accounts. The clock is ticking, as any left in the account unspent after two years are forfeited. As new apprenticeship standards up to Level 7 – and potentially Level 8 – emerge, there is an opportunity for employers to use the Levy as a tool, to develop people across the business, but there are a range of issues to consider.

How has the apprenticeship levy been Received, what are the key implications and what are businesses planning to do Differently, as a result of the levy coming into force?

Stuart McPherson: The impact has been huge. We’re an organisation that offers apprenticeships in many different job roles and our strategy was to utilise the large Levy input as much as possible, to offer our employees a wider range of apprenticeship opportunities that they had not previously been offered and to grow our number of apprentices each intake year. This has led to the reshaping of the internal L&D function – with issues like the 20 percent in mind – to enable us to manage and monitor the provision and outcomes.

Peter Hallard: We’re approaching it carefully, really focusing on what we design and deliver and identifying opportunities. But when you equate the benefit – that you are able to draw down your Levy, which otherwise would be unspent – against the challenge of taking people off the job for 20 percent of their time – as a framework, it looks quite marginal.

Becca Thurston: Although we’ve introduced the Levy, we were already on the journey of workforce and succession planning, exploring solutions. Three strong apprenticeship programmes were in place pre-levy and we’ve diversified our programmes and started to consider, not just what we term “entry apprentices”; but also how we can best use the Levy to support career development for existing staff.

Hazel Cloke: We have had a group graduate scheme for the last few years, and we work on a lean basis and use our specific businesses to deliver for us, with little central resource. So, what’s the implications of the Levy? It’s a tax essentially. We have gone through reviews on spend, but a significant consideration is the 20 percent time off. I think we will benefit from the higher levels of apprenticeships, and we will change our graduate scheme to come under the higher level.

Charlotte Stacey: We’ve always had Engineering apprentices, but it’s been quite scattered across different parts of the business. So, we’re embarking on this huge journey. Part of my role has been to better understand the mechanics of the Levy and opportunity for BP. Since then, we’ve moved on a lot in recognising that it’s a platform for us to do some great work internally.

Natalie Rayner: When it first landed, I don’t really think people understood it or thought of what we were actually going to do with it. Since then, we’ve moved on a lot in recognising that, actually, it’s the platform for us to do some really good work internally, which we’ve never done before. We need to think about what we can do to really maximise the opportunity the Levy brings.

Charlotte Stacey: I think the top of the business understands and so does HR, but for our middle manager population, the ones who are responsible for managing our people, there is still a lot of work to do there, but I think if we can do it, it’s got the possibility to add great value to our business.

Stephen Maule: When I started looking at the best use of the Levy, we identified that the traditional motor mechanic had become a scarce trade now. It’s very difficult for us to attract staff for most of the parts of the UK, and there was disconnect between the number of full-time technicians we employ, and the number of apprentices we invest in. The Group just wasn’t seeing what was happening.

Suki Johal: There’s a sense that we are paying for something here, so the business is starting to ask, “what are we getting back in return”? We are going through a transition, as traditionally, the entry level into the business has been graduate level, and apprenticeships were seen as craft employees. Changing that mind-set is the first challenge. In the UK, we’re actively looking at where in our business we could support apprenticeships.

Sally Silvey: We have diversified and started apprenticeships in professional services areas like finance and quantity surveying. The Level 6 Quantity surveying scheme has been running for a few years, since the standard was signed off. The Levy has really made us look at other opportunities for higher level apprenticeships and at how we can upskill our existing workforce through apprenticeships.

Charlotte Stacey: We’re looking at replacing some accredited learning using the Levy. An apprenticeship is more than just part-time study, the learner experience is enhanced and there are added benefits like mentoring, coaching and the ability to tie the learning into our values and behaviours. For me, that is the part that is missing, so more education around what an apprenticeship actually is, is going to be necessary.

Carl Rayner: We definitely see the Levy as a good thing, but I think the 20 percent is definitely the elephant in the room, because there is so many different interpretations, and it’s difficult then to explain to your business exactly what it means: Does it mean half-day, a day, three hours, a week?

Stuart McPherson: It’s very important to start your strategy for apprenticeships from a perspective of; ‘what are the current business objectives and skills gaps, and which programmes will help us close those gaps’? The difficulty around the 20 percent off the job, is about that financial trade-off. It’s a two-pronged approach that we’re taking. Firstly, it needs a really detailed explanation to the business of what does count and what doesn’t count within that 20 percent.

Terry Hodgetts: When organisations talk to us about ROI and that they are trying to bring people on board with the Levy, we look at their approach, their structure, their methods, in order to provide the best possible story for bringing people on stream. There is a big learning curve ahead for you and us providers, and success for both parties will be determined by mutual understanding, flexibility and agility and clearly communicated collaboration.

What areas of professional practice are seen as the best opportunities for investment from the levy plus what proportion of spend and resources should be vested in specialist technical skills.

Carl Rayner: This is why it hurts because, if we go back to the original pre-conception of why the Levy was imposed, to increase STEM, there are only an infinite amount of engineers or technicians that you take on, and the Levy will never pay for that amount of people, so it will increase skills in all the other diverse ones. But a proportion of it should be spent on technical skills and on higher apprenticeships.

Nicola Drury: Amazon is very much about growth, we need to rapidly upskill for new technologies, attract and retain talent. As a technical apprentice, you’re not going to fulfil this type of role until you have attained the necessary levels of skills, so the costs are always there.

Stephen Maule: The outputs of the Technical (Engineering) Apprentices are measurable. You can see what they make for the company and so we built ROI models to justify the use of the Levy. Off the top of my head, for every £1 that we invest, we will receive £20 back over seven years.

Becca Thurston: It is not just about introducing flexibility to enable upskilling to best utilise money. The Levy could provide the opportunity to impact on career choices. There is potentially an under-spend of Levy funds come 2020. To use Levy underspend for STEM career advice and guidance, for example? Until awareness levels of STEM industries are raised, and understanding for teachers, careers advisers and parents is increased, we risk another skills gap in ten years’ time.

The vexatious issues seem to be bringing people on board within the business to manage apprenticeships and getting to grip with levy, and the 20 percent off The job time issue.

Terry Hodgetts: Agreed, a key stumbling block is a lack of line manager awareness, it’s something that UK businesses need to improve. In terms of making the scheduling work, there was a paper that the IPPR published recently that pointed to a need for much greater flexibility and bite-sized chunks of learning, smaller components in the qualifications. It does strike me as inflexible to set a standard requiring the completion of a whole postgraduate qualification when it might be better to allow for a more bite-sized or component-led approach with shorter inputs and lower costs per apprentice. At present, the whole system, for understandable reasons, is heavy on oversight and highly inflexible as a result.

Peter Hallard: Employers need to take more ownership of content and delivery to be certain that they can create an experience that will be valuable to the learners.

Carl Rayner: Agreed, and my concern is that there’s an ambitious target for three million apprentices by 2020, and if corners are cut and standards lowered to hit the target, the ramifications for  employers are clear.

Apprenticeships are also being cited as critical to improving the skills in stem, so the pressure and jeopardy, both political and economy-wise, is there for all to see.

Suki Johal: Providers have a critical role to play in terms of maintaining standards. Employers need to define that first, to make sure that the knowledge and theory you as a provider are giving aligns with the practical experience that we are giving in the workplace.

Terry Hodgetts: That is one of the critical elements, how can we take these standard components and how can we build in the specific content that is necessary to make it truly valuable? When I look at the Level 7 Senior Leader standard, we can be quite creative to meet needs, whether it is for life sciences specialists, or helping people on deep sea platforms. At the higher level standards, we have a superstructure within which we should be able to plug in some very specific content that can make it unique to that organisation. The other critical element is the focus on skills as opposed to knowledge; the apprentice standard underpins this and hardwires that into the entire process.

Becca Thurston: We already deliver Level 5 leadership and management training, in partnership with a local university. We have crossreferenced our training with the apprenticeship standard and it’s not compatible, but the ability to use the Levy to support bite-sized training, related to the standard, would be a welcomed prospect.

Peter Hallard: Apprenticeships should deliver a sense of career-long learning. With higher level apprenticeships we now have the potential for an ongoing pathway of learning. In the future we can expect to see people not just completing one Apprenticeship in their career but a succession of apprenticeships, aligned to their developing career.

Stephen Maule: What was happening previously, you had funding driving behaviour. What must happen now is behaviour driving the funding. If Government is placing responsibility with employers, they must listen to what we want, in terms of outputs, to enable the debate about flexibility.

Carl Rayner: A modular approach would and should work, along with good stewardship from managers and clarity with CPD points to show progress.

Terry Hodgetts: We already have all the modules, but they’re built up into a programme. All we have to do is deconstruct them.

What is the best way to make the 20 percent off the job learning requirements of the levy work for all parties?

Becca Thurston: I have 17 years’ experience with apprenticeships, and there has always been a requirement for dedicated off-the-job training. We have always met this requirement. Is it now going to be audited under the Levy? Potentially, yes. Our providers offer us a means of collating that naturally-occurring evidence, ready for audit. We have developed a periodic review and tracker, mirroring that of the providers, which assess new skills learnt, how they learnt and who supported that training.

Sally Silvey: For middle to senior manager level, taking 20 percent out of their time is very different from an apprentice in terms of salary implications. Stephen Maule: I think the 20 percent off the job training is a bit of a red herring. Currently, we don’t have the products that fit. What we need is the modular approach, because it is viewed very negatively – what is available doesn’t fit the Levy criteria.

Terry Hodgetts: It is incumbent on providers to make this fit. The solution is, the more value that can be perceived, the easier it is to get around the 20 percent argument. It comes back to measuring the impacts and return on investment. Nobody at a senior level, from our perspective, should be receiving any development from the business for free. There should be something going back into the business and the business should be benefitting. There has to be a partnership between the provider, the employer and the apprentice at all levels.

What existing systems are in place for workplace mentoring and how might they be repurposed to support work-based learning supervision? What resources and skills need to be identified to underpin this activity?

Natalie Rayner: In Royal Mail, if you’re a manager and you want somebody to mentor you, you have to go and seek out that opportunity for yourself. We do have internal coaches, but that is not greatly publicised either. Something we are considering with our apprenticeship provider for the frontline population, is for them to take some of our workplace coaches into their organisation for a period of time and train them to become professional trainers, so when they are handed back to us, they have a whole new different skillset.

Charlotte Stacey: We also have various mentoring provisions in place across the organisation, supporting a variety of needs and employee groups. The issue is that they are not primarily designed to support workplace learning so they won’t be adequate to support the learning that might come from an apprenticeship. We haven’t really thought how we might bridge this gap yet in this new context.

Nicola Drury: We do have mentorship programmes, and you can go to a SharePoint site, sign up a mentor and they are very successful, but mentoring apprentices is a completely different ballgame. Engineering is different, as all our managers have been apprentices so they are very engaged in providing the support.

Becca Thurston: We have been exploring two new apprenticeship standards in development. One for coaching at Level 3, focusing on practical competencies, and one at Level 4 for mentoring, centered on encouraging further understanding, self-awareness and self-development from the apprentices. This will allow employers to use the Levy to train staff to better support apprentices. We have identified this as a skills requirement for staff working with apprentices on a daily basis. Our technical employees are very good engineers, but that doesn’t always provide them with the skills to make them excellent trainers.

Peter Hallard: We have spotted this as something that we want to put a huge amount of focus on. We want to celebrate these rolls as being important to the business and important to the learners. We will be almost going over the top with our mentoring community to make sure that they feel as if they are as much in the spotlight, if not more so than the learners because they are absolutely critical to the success.

Becca Thurston: Many supervisors on all levels are the unsung heroes of apprenticeships; without the mentor, apprentices just don’t achieve.

Stephen Maule: For us, it was quite an easy fit in our Technical side, the traditional garage area. The apprentice would be attached to a technician and that is a straightforward mentoring role.

Terry Hodgetts: People with the skills to coach and mentor is crucial. But one of the challenges across all industries is that many managers consider themselves coaches, but they’re not actually coaching at all. Part of the solution is to be clear about what we want workplace mentors to do and how we want to use them to help apprentices really make the most of that learning experience and apply it. The emerging standards is an important point, and it immediately raises the issue of providers adopting this and delivering coaching and mentoring support aligned to the standards. Maybe there’s a partnership route, an opportunity to build a provider network.

Stephen Maule: Knowledge sharing is a culture with younger employees. They may not be staying for long, but it’s second nature and mostly organic, through social media.

Becca Thurston: The coaching is very much the technical element and then we add pastoral care for the apprentices. This covers personal development, self-awareness and business appropriateness. For some young people, it’s what is needed for them to achieve.

Hazel Cloke: We have a mentoring programme – mentoring speed dating software – which matches people up.

Stuart McPherson: Mentoring and coaching is still a fundamental part of an apprenticeship, however  I think that role is changing. People can now quickly look up their technical knowledge. It is the issues surrounding behaviour and attitude and approach where a good mentor can have the biggest impact.

Carl Rayner: That’s the journey that we’ve been on, mentoring programmes set up, that are full leadership development programmes, and within our competency framework.

Suki Johal: I like the idea of using the apprenticeship Levy to train individuals on coaching and mentoring skills. The different roles of a coach/mentor for different types of apprentices needs to be clearly articulated.

Sarah Worton: I just think it’s about creating the climate for apprenticeships to land as positively as possible. This takes significant time commitment and a complete infrastructure to support the effective transfer of learning into the workplace.

The younger cohorts, they gain their information via their phone… the traditional idea of the old retainer and the new apprentice shadowing is a bit retrograde.

Terry Hodgetts: Agreed, the fundamental learning is a social process and one of the key benefits is mentoring relationships, fostering and supporting the social learning process, where individuals are learning from their environment, from their colleagues. They’re not just reading books, they’re not just ticking boxes, they’re not just getting technical data, they’re actually sense making through interaction.

Stuart McPherson: We’ve investigated looking at YouTube-style technology as an L&D platform, where our L&D trainers are more facilitators of content than they are deliverers of workshops. It means a big investment, but being able to replay that in a meaningful way is very helpful. Our training providers are always looking at ways to share content over Webinar platforms, or modules that can be recorded and replayed.

Nicola Drury: We really want to have face-to-face workshops for our apprentices in engineering and IT as it’s off site. But for our operational Team Leader scheme, the provider comes to the site, and the advantages are clear, because apprentices can bounce ideas off each other, have group projects and a sense of being part of a learning community develops.

Charlotte Stacey: There is a difference between millennials and Gen Z coming through which we haven’t fully understood yet, and how this might impact on our learning offer. There is a lot of Gen Z research now, and they are quite different as a generation. The introduction of the T levels in 2020, and the requirement for work experience is going to be fundamental. We are talking about how we can use our Levy funds.

Sarah Worton: Millennials are moving into management and leadership roles very quickly and the range of skills that they are going to need as young managers to actually engage, motivate and inspire about five generations of people in the workforce is very broad. I think we do need to challenge our thinking on the skills and knowledge they will need.

Terry Hodgetts: Agreed, Gen Z is our new audience, our new cohorts for the next five-to-ten years. Engagement is going to require a completely different approach, with this in mind.

What scope is there within organisations to enable managers to undertake detailed pieces of work, along the lines of internal consultancy projects, as part of their studies? This can provide a payback to the business but is there a danger of “death by 1,000 initiatives”?

Peter Hallard: Projects and internal consultancy activities are a great way to develop capability, but businesses only have a limited capacity to absorb new projects and proposed changes. Creating an expectation with learners that they can affect change across the business, and then not having the capacity to properly review and implement their ideas can be counterproductive. The beauty of apprenticeships is that the learning is directly related to the role that the individual has. If we can maintain that purity and that real strength of focus, then that in my mind can only be helpful.

Nicola Drury: Continuous improvement is fundamental to customer experience, so I think that is a strong indicator of ROI, because it’s something we can actually measure and share. With the growth of new technologies and processes we have so many opportunities for apprentices to make a difference through work-based projects.

Becca Thurston: If you have the right team leaders in place, then a project should have some validity within business. But you have to support them through any project, make sure it is suitable and positive for the business? So leadership is key to effectiveness.

Natalie Rayner: Due to the sheer size of the organisation, I don’t think you would be wanting to put people on consultancy projects. But what would work is, working within their own units, they can take ownership of continuous improvement and solving problems in their own departments. If you can make it relevant to their office, their job, and they can deliver results and see the impact of their endeavours, it is potentially an effective solution.

Suki Johal: Agreed, and apprentices shouldn’t just be given individual tasks, wherever possible, teamwork is such a powerful experience in development. Having apprentices work as a team on an internal business challenge or an external opportunity would be very valuable to all stakeholders.

Is what employers are offering, in terms of targeting and engaging younger cohorts, proving to be effective and pertinent to the new workplace?

Charlotte Stacey: Companies are going to have to change and innovate, and apprentices must also have the opportunity to innovative. The key is to set this up in a way that works for the business and replicates other such initiatives.

Suki Johal: Individuals coming through apprenticeship programmes now, have a sense of impatience that previous generations didn’t have, so we need to be giving them these opportunities to make an impact. They don’t want to wait two, three, four, five years until they are contributing.

Stephen Maule: One of the issues I see is that these standards are immediately out-of-date, as soon as they come out. There is no culture of continuous improvement about the actual content. Until the Trailblazing group comes back together, the chance of that changing fundamentally is minimal. What we are doing this year is to get a group of senior techs who sit with the apprentices and talk about the real-time problems that they are having in the garage.

Terry Hodgetts: High level apprenticeship is a challenge. The standard approach of the university with an undergraduate or postgraduate degree is, you have to do a dissertation as part of it and, historically, the easiest way to do that is a consultancy project. We need to think much more in the context of reflective learning and personal effectiveness in the job role and environment, rather than working on ‘solutions’ for the business.

If programme customisation is an important element to employers, how do we ensure that suitable customised programmes still conform to the published and approved standards?

 Peter Hallard: Our notion of the partnership between employer and supplier is still far too binary. The approach has got to be one of a true partnership; the ideal apprenticeship programme is not delivered entirely by one or the other, it is delivered by a combination of the two.

Becca Thurston: What still needs developing is, what is termed in the FE world as, ‘dual professionalism’; working to dual-skill, not only their staff in our environment, but also our technical staff in training. Providers are very happy for their staff to come into our environment and learn about the water industry, they seem less keen on teaching our staff to become assessors. Because they think we won’t need them anymore. It is that balance and that partnership which is key. It can work.

Stuart McPherson: Programme customisation for me is delivery model customisation, rather than the whole programme. It is more the partnership with the provider that is important. Secondly, if our training provider is working with us in partnership, will they be able to articulate our brand when they are delivering, in terms of language for example?

Carl Rayner: There needs to be consistency; it’s the ESFA now, but it was Biz, then SFA and ten different reps with them – our account manager has changed four times in the last year, whereas they should be the reliable bell weather of how we’re doing, qualitative information, rather than just relaying that this week there is another standard approved. The challenge is that we are now a quarter of the way through our first Levy pot. We have got two years to spend it and we are six months through it already and we’re still in this situation where it’s like going into a shop and saying here’s 25 percent of the money for a thing, but I don’t know what yet?

Suki Johal: Agreed, employers have to feel their way. There isn’t any clear guidance on even setting up an apprenticeship programme.

 How is the impact of learning development currently assessed within organisations? How might this approach be utilized and improved upon, in support of apprenticeship programmes?

Charlotte Stacey: There are many quantitative and qualitative ROI measures in place already and I would recommend not to invent new ones, just because we have apprenticeship learning, let’s actually use what we already have. An apprenticeship is about the knowledge, skills and behaviours and, therefore, what additional value that brings. We will want to measure that because that will support apprenticeship-style of learning, versus historic methods. For me, it is around the enhanced learner experience and the enhanced quality of learning. Those are two things I will want to measure.

Carl Rayner: This is the perennial discussion about long term investment, and we know that comes through against a short term budget. Some companies work on a year budget and if you can’t show that ROI within a year, it is seen as adding less value. You will have instant spurts of it, but it won’t be sustainable. How do you break that, because that is the commercial reality we are in?

Stephen Maule: You can’t embark on this on the basis of an altruistic “right thing to do” model, it has to be measurable in monetary terms that is indeed the reality.

Becca Thurston: The Skills Funding Agency, are developing an ROI tool for apprenticeship. It suggests some benchmarks for you to manage over a time period Whitbread, has completed the most amazing ROI piece on their apprenticeships, which is worth researching.

Carl Rayner: We recorded clear ROI on our leadership programme, a 30 percent reduction in attrition in our management population, we accredited our leadership programmes to a University, so they would receive 30 or 60 points towards their masters or their degree. We then saw the majority went on to complete their degrees, and most of them were funding it themselves.

Sarah Worton: You’re right about the necessity to base any cost and resource on business needs and objectives. But as L&D professionals, we have the platform and opportunity to really make a huge impact on the skills deficit, but also to promote and support social and gender diversity.

Terry Hodgetts: Agreed, and I think we all believe that there are some major gains and positives in apprenticeships and the introduction of the Levy. There are definitely some teething problems and frustrations, but nothing that cannot be overcome by collaborative thinking, communication and partnership.