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Levy at the Crossroads – Leadership Development – Roundtable Report

08 October 2019     London
Hosted by theHRDIRECTOR.
Chaired by Jason Spiller.

Emma Baker, Talent Business Partner – Volkswagen Financial Services
Heidi Coatsworth-Keady, HR Director – Capgemini UK Plc
Kate Fisher, Snr Director, People – Talent, Capability & Leadership – Asda
Lucy Harrison, HR Analyst – Apprenticeships & Skills – Ford
Julie Hyett, UK Talent Lead – Aon
Terry Hodgetts, Director – Aston University
Katy Kitsell, EMEA HR Head Of Culture & Engagement – Morgan Stanley
Melanie Lepine, Group Head Of Learning, Development & Talent – D&G
Helen McMullan, Head Of Talent Management & Development – NHS
Stuart Mcpherson, Group Contract & Quality Manager – Interserve Plc
Chris Townsend, Senior HR Director – ABM Industries
Michael Woodhall, Manager, Leadership & Prof Dev, EMEA – Ford
Sarah Worton, Client Director – Aston University

Levy was a greenlight for budgets to move into the L&D arena through legislation. But there are caveats with programmes funded via the levy, and the headliner is that they are relatively restrictive and tightly bound around qualification structures. So, what does this mean for the need and drive for more flexible and innovative management and executive development?


Stuart McPherson: Fortunately, our organisation had the foresight in 2016 to see it coming and understood that bringing in some expertise within the L&D function would help the business prepare for the introduction of the levy. There’s has also been an impact on the L&D strategy, the way we look at workforce planning, the training providers that we work with and the curriculum that we offer. As a business we have learned quite a lot in the first few years of implementing new Apprenticeships and utilising the levy, particularly within management development. Our approach initially was to recoup as much of the levy vouchers that we were contributing to the HMRC. The introduction of the levy was seen automatically as something that could supplement, if not completely contribute towards training costs. We needed to hit the ground running as we knew we would be contributing up to £400K a month and wanted to utilise as much of those funds as possible for the development our employees. So, in short the impact has huge and we’ve been on a journey.

Michael Woodhall: We are coming out of a significant restructuring and finalising the skills we will need for the future. Setting something up around leadership development specifically for the UK, above and beyond our existing corporate programmes, has not been a core focus. There is a recognition that, as our environment changes, we need to work in different ways, including an agile human-centred approach.

Chris Townsend: For us, the strategy is still being formed. We want to spend the levy, maximise our ROI and use it to resolve a strategic imperative. But we’ve yet to start having a dialogue around the value of apprentices and the levy fund as part of our L&D solution to drive our talent and succession strategy in the organisation. It’s about a balance, about not losing sight of where the organisation is. We have lots of great people doing very important jobs at a low level, and we can’t lose sight of that, because we have to develop and create career pathways, we have to help people aspire.

Julie Hyett: Never before have we had this level of talent investment to put back into the business. Aon was dedicated to apprenticeships before the levy was introduced, so our plan has been in place for a long time. Traditionally, we were an apprenticeship business, but like a lot of professional services companies we adapted to the fact that more and more people were attaining degrees. For a long period of time, we didn’t look at anything else, and unintentionally narrowed the talent pool, because we lost diversity of thought. When the levy arrived, we were already ahead in our apprenticeship strategy. That allowed us to ask the question; “how can we use this opportunity to reinvest the levy value into strategic workforce planning”?

Emma Baker: I think we’ve a real opportunity to reconsider this as we develop our talent strategy and knit together how we can utilise the levy to retain and develop people and succession plan to meet our future skills needs. We have a significant number of professional roles that could really benefit.

Melanie Lepine: We’re trying to encourage people to think about apprenticeships to make their budget go further. We’ve been thinking about how we can create professional qualifications through the apprenticeships. That presents a chunk of money to invest more broadly across the organisation, helping us to consider how we use it strategically to drive the business forward. We’re identifying diversity gaps across the company, even considering potentially using MBAs, to support some of those people.


Kate Fisher: We absolutely started with the view of time is the essence and not a penny wasted in respect of the apprenticeship levy. However, we soon realised that was massively ambitious, given many standards are still in development. So we reframed our focus to best optimise the levy against our skills needs. On a quarterly basis, we report to our Exec Board, both the activity we have undertaken and what we are forecasting – where we see future opportunities. This is to ensure our line managers are supporting our apprentices on programmes. The levy itself has not seen a reduction in our learning and development budget. On our level 6 and 7 programmes, we would like to see our providers actively working with our strategy teams to identify where their programme can benefit our organisation directly – for example, how can we better harness the assignments and dissertation requirements – to solve real business problems.

Helen McMullan: My organisation and other parts of the NHS see it as a tax, because it’s easier just to pay it. In the care industry, if you’re looking at nursing associate or degree nurses, you’ve all this clinical support for them, which then costs money, they can’t be off the job and you can’t backfill. It’s a tax, we’ve got to pay it, but we’re still investing in management programmes.

Sarah Worton: We need to work more closely together as providers and employers, to raise the profile of degree apprenticeships to a place where they can be viewed more strategically – rather than a quick dash to ‘spend the levy’ – to build greater levels of strategic commitment. We need to have the infrastructure right first, so that when the actual learning is about to land, there is an environment where people see the value of it and are willing to be part of the solution.

Terry Hodgetts: The challenge is that universities are rules-bound institutions and suddenly you’ve a bunch of people from Asda on an MBA programme, who are doing a strategic management module, and it would be ideal to make this action learning, very focused and very immersive. The problem is, that doesn’t fit the programme specification, against which programme quality is audited. So, this is where what could be a customised solution is being held back by the way the standard has been written, the way an MBA or MSc is delivered. As providers, we need to work out a better way of doing that. That’s why we’re now part of the Central Aston University Team, and our job is to start breaking down some of those barriers and influence from within. I think that’s a huge challenge for providers at the higher level, in terms of making it “feel” truly applied.

Heidi Coatsworth-Keady: We have really good apprentice programmes, but we need to be more innovative in terms of how we use the levy.


Julie Hyett: With professional qualifications it didn’t make sense to pay for them outside of the levy, if there was an apprenticeship standard that could provide them. We would effectively bepaying twice, so we took the decision to turn the standalone professional qualification tap off. All professional qualifications in our business are paid for via the levy and, when we focused on leadership, we came to the conclusion that the budget wouldn’t change, because not everybody wants to do a 12, 18 or 36-month programme. Somebody might just need a few sessions of coaching, perhaps a training course in personal impact. Plus not everybody would be eligible for an apprenticeship.

Kate Fisher: Similarly, we use our levy to support professional development across our organisation. There are very few instances where a professional qualification is gained which isn’t funded via the levy draw down. However, the opportunity to use the levy to fund more leadership and management is mixed. We have a number of core leadership programmes that are working very well. But when we consider how we to strengthen our succession pipelines or accelerate colleagues’ development, we find the levy to be less relevant, for two reasons: Firstly, we are most probably looking to see a positive outcome from this leadership intervention, which delivers in less than 12 months and a day. Secondly, we see better return on investment when the learning is more immersive and experiential in nature, and not all training providers are exercising that muscle yet – we attach real value to having learning which is leader led.

Michael Woodhall: I think we will retain our normal budget for leadership and talent development activities, because of flexibility with the different delivery mechanisms and because we want a corporate approach as opposed to a local one. That probably won’t change going forward. The levy may well give us the opportunity to reach more people, plus a more flexible approach to timing and structure of levy interventions would allow us to do more.

Melanie Lepine: Our budget has not changed. We did look at apprenticeships for our Team Leader development programme, but there were issues – we decided that the requirement for 20 percent of their time off the job in such operational roles was unrealistic. There’s also a need to think about how long the programmes take, so unless we start earlier – with middle managers aspiring to that higher level to drive retention – it really does feel like some of the apprenticeships are too long.

Stuart McPherson: Interserve has had a challenging year, it’s no secret, so when you are working hard to minimise costs, sometimes the training and development budgets are the first to be compromised. The levy offered an opportunity to reduce those costs and utilise funding already paid to the HMRC. However strong initial advice and guidance must be given, to ensure that learners who enrol are not only eligible from an ESFA perspective, but are suitable and have the capability and capacity to undertake these lengthy programmes. With this in mind, strategy is key.

Your apprenticeship agenda must be driven by the business itself. Taking a longer term workforce planning view on whether learning that is delivered through apprenticeship programmes will help solve these wider business issues ensuring a sustainable initiative that carries support from the wider business.

Melanie Lepine: Another challenge for us has been, who’s the right supplier? Who can we trust with our apprentice levy? So, the providers that we’ve found that are more able to adapt the programme tend to be less well-known.

Stuart McPherson: Working collaboratively with your providers is key to designing a programme that has a delivery model that is manageable and cost effective for your learners, whilst being sufficiently stretching to enhance knowledge and skills in a particular area. Great providers aren’t necessarily the biggest ones.

Julie Hyett: The training provider sector has struggled to keep up with demand. We found they haven’t been able to provide a managed service agreement which we would typically look for at this level of spend. We’ve ended up with lots of different providers, which isn’t ideal and takes a lot of management. We have ‘buying power’, something that smaller companies do not have.

Chris Townsend: Providers being flexible to the needs of the business is the real prize here, in terms of trying to sell leadership or management development as a key part of your overall talent strategy. If you’re trying to say, “the way we can do this and maximise our levy spend, is to put people onto an “off the shelf” programme – that’s quite a hard sell. Being able to say; “here’s a ringfenced cohort. It’s a programme, we’re going to give you volume, and volume equals money”, is ultimately effective.

Stuart McPherson: Our managers are very busy and often on client sites however bringing them together with a cohort of leaners from across the business who are undertaking the same programme has had a positive influence on their outlook. The ability to learn from others, share best practice and networking – just feeling part of a group is useful feedback.

Sarah Worton: The key point is partnership – as providers, we are really focused on understanding employer expectations. But in doing so, there are challenges for us around how we change the more traditional cultures. Being the voice of the customer is one of our key roles, and we need to keep making progress here, through innovation, flexibility and a willingness to evolve and learn from our partners.

Terry Hodgetts: This issue about employers managing providers is very important and, if I may be a little bit controversial, I think that providers have to manage employers a bit as well, it’s very much a two-way street. The 20 percent issue is a false perception that’s been set by the language. It’s part of everybody’s job description to develop themselves. It’s part of the job description of any line manager to support the development of their staff and, if you have a line manager that’s “too busy” to develop employees, there needs to be a serious conversation. Everybody needs to commit to this in the partnership.

Kate Fisher: Agreed, we have to find a way of ensuring that the commercial reality of the apprenticeship levy is not lost. We are making an investment in individuals, we need to help colleagues understand that this is not ‘free money’ and that a commitment is being made – in respect of the learning – which is reciprocal.

Helen McMullan: Every apprentice meeting I go to, everybody talks about the 20 percent. Let’s just accept that it’s here to stay and be creative about it and use the levy to fund a programme that’s appropriate and develops people, not just to spend the levy for the sake of it.


Michael Woodhall: We’re not looking to protect budget from the levy, or see it as a threat to our existing approach to development. We’ll continue to integrate it and leverage it more. There are grounds to justify a greater focus, but people may want real-time learning, on-the job experiences and interventions, which are more “bite sized” than a full apprenticeship. The performance gap is more straightforward to identify in IT or engineering. Having said that, the Level 7 standard for leadership is well aligned to the kinds of things we’re trying to achieve.

Heidi Coatsworth-Keady: There’s a challenge about what we do more locally, because of our global offering. It’s about how we deliver the programmes and setting the right culture.

Melanie Lepine: Development isn’t about a sheep dip. We need to have those more bespoke programmes. But there is a place for more consistent, generic upskilling for people who are, for example, new into a role.

Lucy Harrison: Agreed, the more generic programme has benefits. A lot of our workforce has been at Ford for a long time, so whilst upskilling them in bespoke internal programmes has a place, being encouraged to upskill them in a programme that is applicable to everybody, is also a good thing, because it gives people some external perspective as well.

Emma Baker: We have global programmes and with our digital transformation, there was the need for learnability. Some people want more bite-size learning. So there is a potential challenge with the perception of an apprenticeship; the academic route versus a more agile approach and with apprenticeships needing to be a minimum of one year, they’re not natural bedfellows, but there is room for both.

Stuart McPherson: The opportunity to be more forward-thinking about training and learning & development as a whole, as a result of the levy is Kate Fisher: We have data analyst and data scientist standards, which are skills that are now in high demand. Whilst those programmes may focus more on the technician or specialist, every leader also needs to develop capability around data and digital transformation and yet the leadership standards don’t reflect this sufficiently. Finding a hybrid between the two, to bring them together within a standard would be one way of meeting the needs of the business more fully.

Terry Hodgetts: The challenge within the apprentice levy is that you either do an apprenticeship on data analytics or one on management. So, a customised, non-levy route is likely the best solution. Regarding customisation and development of a fit for purpose solution – I’m going to say something perhaps slightly controversial – Universities are locked into qualification structures that have been there for a long time, and they’re locked into approval processes that make it very difficult to change those structures. That shouldn’t stop you as customers banging on the door, demanding that they provide greater flexibility. The only limitation to any of this is a sufficiently large cohort to make it work, and this is something that, as providers, we must be better at.

Sarah Worton: Apprenticeships at this level in leadership and management should be intuitive by design. There are a lot of moving parts to integrate, so it comes back to whether the business drivers and the needs are appropriately met by this type of learning. On paper, it’s a work-based learning qualification and a set of skills and behaviours which should enable someone to really accelerate their leadership capability. In reality, it should be central to much broader strategic issues such as talent management, succession planning and cultural change. Certainly, not a standalone intervention fuelled by a desire not to ‘waste the levy’. The art really is to have buy in, plus the strategic ownership and partnership.


Julie Hyett: We will launch our Level 7 MSc programme in Q1 of 2020. It’s part of a leadership pathway that we have developed to reflect the different levels of leadership in our business. We’ve worked really hard to customise the content to our business, so it feels almost like an inhouse programme addressing our business challenges and objectives in real-time.

Chris Townsend: If there’s a magic formula to give us flexibility without having the closed cohort, and whether that’s through digital delivery or different approaches, I think that’s the trick. That’s going to be a real factor in tailoring for specific business needs, rather than the merry-go-round approach of jump on and off that we’ve all had in the past.

Kate Fisher: We will focus on aligning the training provider to our strategy, to our business challenges, so those learners we are investing in can gain relevant experience on the business problems we need to solve.

Terry Hodgetts: I still view the rollout of the Level 7 senior leader standard as leading to the point where MBAs are finally becoming programmes that develop the whole leader that they should always have been. Secondly, within the construction of that standard, it is pitched at a particularly senior level, and I’m not sure that is appropriate. I think one of the best opportunities for the Level 7 standard – be it an MBA or an MSc programme – is for developing middle management talent and making them “promotion ready”. The drafting of the standard does not necessarily emphasise this, but if we look at the level 7 standard, in terms of supporting a talent pipeline, I would argue it makes a lot more sense as a strategic solution.


Kate Fisher: I would like to see greater flexibility from providers in the way the programmes are delivered. Within our own organisations, many of us are investing in creating learning that happens in the flow of work at the point of need. So how can training providers start to better meet the requirements of providing opportunities for the learner to learn at work, at their own pace and where and when they choose to do so?

Michael Woodhall: We’ve discussed personalised programmes and it does seem important that people in leadership feel that they are receiving “an experience” from the organisation, rather than just apprenticeship per se.

Stuart McPherson: The higher the level, the more we need to work with a training provider, to ensure a delivery model that is well targeted, flexible enough to minimise the cost of travel, but enriching enough, to accommodate shared learning experience and utilises innovative delivery platforms is key.

Emma Baker: I think we need to be better at understanding what standards and qualifications are going to be relevant, to help us move our business forward, to find the sweet spot and have the backing to use the levy in a more effective way. Melanie Lepine: Flexibility – around size of cohort and location versus personalisation – is important for us. We’re a relatively small company, so we’re trying to personalise, but that means we have to bring people together from different locations, which can create issues. We want to position this as helping people to see that they are future proofing themselves and their skillsets – and the programmes that we’re putting them on do not enable them to do that. So we need to make them much more flexible and supporting, so that people really grow in an agile way – rather than this very linear process.

Heidi Coatsworth-Keady: I work in the IT business where keeping skills up-to date is essential, so reskilling is of paramount importance to us, particularly amongst our junior community. We are seeing a lot of younger intake wanting to move on quickly – they want the skills that keep them current in the market. That’s a challenge for us keeping up with their pace of demand, along with everybody else’s. Having programmes that we can bolt on, that offer the relevant skills to our business, is critical.

Sarah Worton: Providers are having to evolve delivery models, whilst also improving the experience. Offering fully-blended learning tailored to meet each customer, is clearly going to add value and offer flexibility to meet different circumstances.


Stuart McPherson: We’ve lived in a world of rule change since the LSC. So it’s always best to ensure you keep in tune with the latest funding rules and guidance specifically released from the ESFA. Try to anticipate which rules might change and why. Also, ask questions and lobby for change. For example, wouldn’t it be great if we could utilise the levy to accommodate apprentice wages, to offset costs incurred by travel and lodgings? We certainly would have more buy-in from line managers, if we could use the levy in these ways.

Julie Hyett: We need to plan quickly for the best and prepare for the worst. The apprenticeship levy doesn’t appear to be a sustainable model. I can’t see us paying the same amount of levy in ten years’ time. I anticipate a slow down on new apprenticeship starts at some point, but it won’t be a complete plug pull on the funding, because there’s too much money in the system.

Stuart McPherson: In general, there is widespread support for the apprenticeship reforms, although a change in government may bring in different flexibilities and constraints in terms of how organisation can utilise their vouchers. There’s been such a seismic effort to move these reforms to where they are today – it would be a monumental task to do something fundamentally different.

Helen McMullan: I think we will see some changes over the next couple of years, so, if you have the levy, use it now while you can.

Terry Hodgetts: One of the issues that we need to address is that we’ve allowed employers to be too enamoured by the MBA badge, and I think there’s something specific about the MBA brand. It’s very attractive to employees and very unattractive to regulators, who have a particular view of MBAs. The fundamental issue is, right now, there’s a huge pile of levy money not spent and before too long that will change to an overspend and then what do we do? Does this perception of MBAs increase the pressure on regulators to do something about level 7 provision?

Stuart McPherson: It’s also the pre-apprenticeship piece – because of the constraints of the framework – if training providers are screening for maths and English and learners are coming out at pre-entry 2, then they’re not going to be able to access the apprenticeship in the first place. I totally agree with the need for developing leadership capability, but where’s the funding that’s to be directed at the gap? There isn’t a real clear line for us to be able to access that through training providers. So some training providers will be able to draw down on that funding and be able to promote programmes for you, but it seems to be disjointed in terms of access.

Sarah Worton: It is very complex and the rules are very restrictive. We’ve picked up from various channels that there are a number of interpretations of the original rules. I think there are areas to improve and lessons will be learned as the agenda progresses and experience builds. It’s difficult for both employers and providers to have a clear vision.


Michael Woodhall: I hope we end up with something that has the objective of upskilling UK PLC, to be competitive with future skills, and that there’s flexibility between employers and providers to do that.

Helen McMullan: If they increased the levy from 0.5 percent to 0.6 percent, but allowed you to spend half of that on backfilling, so you could take on some supernumerary staff or, in my world, clinical advisors to support people going through a programme, that would work. If you could use that money more flexibly, you would have many more sign up.

Kate Fisher: We have been exploring how we might transfer some of our levy, but what the recipient of your levy doesn’t want is a number of administration requirements that they are not set up to manage. This is one of the barriers we have come across, so it requires some creativity to make this work effectively.

Terry Hodgetts: Apprenticeship standards lock people into two or three year journeys leading to a full qualification. I would love to be able to use the levy to offer smaller components over a more extended time period – say do one part over a couple of years, then take a break and come back later. This could provide a more customised and flexible route for apprentices that better fit career pathways and life circumstances. Unfortunately, the apprenticeship standards are devised in such a way, and the rules are such that it is a whole standard or nothing.

Sarah Worton: Providers need to stick to the rules, co-operate and compete at the same time, with the main objective to create better choice and flexibility for learners. Some of this will be recognition of levels of prior learning – both formally and in terms of experience – which is where providers will have to be more market driven to facilitate this.

Julie Hyett: The future of the levy, particularly with reference to leadership development, is bright. I think it is a huge opportunity that everybody should be taking advantage of. It takes a lot of work and it’s hard not to be frustrated, but we keep going because the opportunity is immense. Reclaiming the value of your levy can help develop a better culture, better trained people, a more engaged workforce, higher retention rates, and ultimately, it can improve businesses.

Terry Hodgetts: There are challenges on a number of fronts. We, as a provider, recognise that. We would encourage you to hold your provider accountable and to work in partnership to make it work effectively. We’re going through this journey as a provider right now and I remain absolutely convinced that the potential impact for UK PLC, if we do this right, is hugely significant. But that’s only going to work if the providers and employers are open, transparent and challenge each other in a supportive partnership.

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