Date: 04/07/17 | Duration: 00:25:38
In April this year the new Apprenticeship Levy came into effect, which means for the first time businesses with pay bills of over 3 million have to contribute to apprenticeships. It is anticipated that the Levy will encourage more employers to introduce apprenticeships or expand their existing programmes.
In this episode we talk to employers, apprentices and apprenticeship providers to explore what the new world of apprenticeships could look like. What implications will the levy have for businesses and what opportunities could it provide potential candidates? With an increasing number of organisations offering apprenticeships, how can businesses stand out from the crowd? And could apprenticeship extend beyond the traditional 16-25 demographic?
Also in this month's podcast, cast your minds back to Ksenia Zheltoukhova and her partner Ryan McKelvey, who was one of the mere 7,500 men who in the past year decided to take advantage of shared parental leave, a legislation introduced in April 2015 allowing both parents to share a block of fifty two weeks leave after the birth of a child. This month, in their final conversation with us, Ryan and Ksenia sum up the experience after a year full of surprises...
View the full podcast transcript
Philippa Lamb: Welcome back. This month two podcasts in one: we catch up with new parents Ksenia and Ryan as the road test a year of shared parental leave. First though the Apprenticeship Levy.
Every time the economy recovers from a low point employers complain about skills shortages and it’s happening now but this time instead of focusing on undergraduates the government produced the Apprenticeship Levy. It’s been running since April and it’s had a lot of press but here’s a quick refresher on how it works from Ben Rowland. He's the co-founder of Arch Apprenticeships.
Ben Rowland: The levy is a new initiative from government designed to address the issue in which businesses want more skills but for whatever reason haven’t historically put the money aside to invest in those skills. And the mechanism for this is they’re calling it a levy, 0.5% of all companies pay bills over £3m.
PL: Serious money.
BR: So serious money and it’s going to be deducted monthly and it’s administered by HMRC, this is not a thing that you can try and wiggle out of.
PL: Everyone’s paying.
BR: Everyone’s paying this.
PL: These three young people at Glaxo Smith Kline all chose an apprenticeship over good university places and when you hear them explain why they did that you quickly understand just how appealing their choice may look to a lot of other school leavers.
F1: As much as I knew that I wanted a degree and I wanted to go to uni and progress in my education I was also ready to work. That's how I felt. I wanted to get the hands on experience as well as the education.
PL: I was the first year when it rose…
M1: To £9,000
PL: Yes exactly. So the funding was a big one. I’d really like to get to a manager role, that's my goal.
F2: It’s almost a fast track to where I wanted to be in my future career. At the moment I'm supporting project molecules so I get to see all the different molecules and all the different new drugs that are going through GSK and end up picking the lead lines for them. If I think of an idea or an experiment I want to do they’ll give me whatever equipment I need, whatever time I need in order to follow that through and to do my own research and eventually publish my own papers.
PL: These three are getting real experience in the workplace and gaining qualifications at the same time and they’re being paid so how is the new levy changing things?
Charlie Freeman: So I'm Charlie Freeman. I am the apprenticeship leader currently within NCFE.
PL: NCFE designs, develops and certificates nationally recognised qualifications and awards and according to Charlotte the new levy is already having a radical effect on the apprenticeship landscape.
CF: It’s had a major impact. Apprenticeships have been around for ages. I've worked in apprenticeships for the last 12 years but there's never been a time where government have had more of a focus on apprenticeships, it’s never been talked about as much as it currently is talked about. It’s on the radio constantly when you’re driving around in your personal life. In the old world it was very much they were reliant on contacting those prime providers through skills funding agency to access that training money. The levy yes it’s another tax that you'll need to be paying but now you have control of that money as a levy-paying employer on how you wish that to be allocated to your staff and your workforce for future skilling. So I see it as a real positive.
PL: The levy comes at a delicate moment for the UK economy. Industries from banking to engineering are reporting skills shortages and as we chart a course to leave the EU that problem could become even more critical to our future prosperity. At the same time anxiety about our political and economic future is playing into more anxiety about student prospects and student debt. So even though right now about a third of school leavers go on to university that number may fall if they start to see apprenticeships as a serious alternative.
BR: There’s this whole bunch of people who haven’t been to university for whatever reason and that number is growing as the tuition fees bite and as the stats continue to grow around the number of graduates who don’t get graduate jobs. So there's a growing number of young people who aren’t going to university and I think more and more companies are waking up to this and saying, “Well hold on a minute we’re missing out on that talent if we stick with our old fashioned, orthodox graduate programmes, or whatever programmes they have in place.
PL: Obviously in the past people thought about apprenticeships they thought about much more manual tasks, engineers, mechanics, that sort of thing, hairdressing. Things have definitely moved on since then and the sort of field you’re talking about, certainly from the young people we’ve spoken to for the series, those are the sort of fields where they might be dubious about going and doing an undergraduate course anyway because they perhaps feel those courses haven’t quite caught up with where the skills are. So are you finding the sort of young people who are coming to you straight out of school are people who might have thought about university but have clearly decided not to or is it a mix?
BR: It’s still a mix but it’s changed and we expect it to continue changing. So when we first started as a very new provider who no one had heard of we tended to get people who were, I mean they have become great and some of them are still with the business but they weren't people – they would say this themselves - who had lots of options. And that has definitely changed and as we’ve started working with people like Google and Facebook, people are getting to apprenticeships for the first time, that's really changed the understanding of which companies are doing apprenticeships.
PL: And the draw for school leavers.
BR: And therefore the draw changes, it’s changing the mix definitely. And interestingly we have apprentices who went to private school now as well who have traditionally been very much pushing the university route but now are opening themselves up, realising university isn’t right for everyone and that's been an interesting development.
PL: So this is a key thing to understand about where apprenticeships are now. It’s not like it was and it’s not just the levy that’s changed, it’s the range of subjects that they might train in and the sort of people coming in, age, capacity, intellectual and academic qualifications, it’s all changing.
BR: Yeah it’s all massively changing and people are now questioning why they should go to university.
PL: Charlotte is also starting to see a shift in the sort of people applying for apprenticeship places.
CF: We’re already seeing a massive change in the usage of that. The conversations that are coming through I think rightly so not just that it was manual but it was also lower level as well was very much the perception of apprenticeships and I think since the levy introduction it’s very much looking at them higher level apprenticeships, level five, level six, level seven apprenticeships where I think in the past it’s been more focused at that lower level.
PL: So what does that mean in terms of the people who will be doing them?
CF: I think there's going to be a massive mix. Historically funding for apprenticeships has been driven to increase and encourage almost that younger age, that 16 to 18 market.
PL: Just school leavers really.
CF: I think in this new world they’ve removed some of the eligibility requirements, so in the old world, because I’d gone through the old route of university and held a degree, I wasn’t entitled to do an apprenticeship in my new working world. In the new world it now frees that up.
PL: It’s a radical change isn’t it?
CF: It’s a massive change.
PL: So there's going to be a whole range of people who, as you say, actually can now do them, who couldn’t do them before and who might realistically think about them if their employers are promoting them so this might be, as you say, people progressing through their career or returners who’ve been out of work and coming back into work or career changers. The list is endless isn’t it?
CF: I think it is and I think it’s that stigma that's around the word apprenticeship and I think that's where we need to make the biggest change because when you're in an apprenticeship the perception is, I'm a young person.
PL: Is there a branding problem there do you think for organisations trying to encourage people to do that?
CF: Yeah I think that is a difficulty. I've worked in apprenticeships for 12 years and I've worked in that delivery side and even then there's always been funding available for 25+ learners within apprenticeship and over the years those rules have changed and so there's been an intake or there hasn’t been an intake. But the perception has always been quite difficult even when you sign up 25+ or adults, as they were classified just in the funding talk, onto an apprenticeship they almost didn’t want to be called an apprentice, they wanted to be called something different. I think it’s going to be really evident that you make it clear to the individual that they’re aware what they’re signing up to which ultimately is an apprenticeship standard. But how you advertise that and market that internally might be slightly different.
PL: And stigma is a big issue. Goldman Sachs offer five year apprenticeships leading to a degree where their employees work for the bank three days a week with two days at university. Their international chief of staff acknowledged that even when they’re backed by an international finance giant apprenticeships can still struggle to get traction, not with potential recruits but with their parents. They still think of apprenticeships as an inferior route to a good career. But the levy should help to shift that stigma, not least because more companies will offer more apprenticeship opportunities. Arch, Ben Rowland’s company is the leading provider of digital marketing apprenticeships in London, Manchester, Bristol and Birmingham and in recent years they’ve trained apprenticeships with companies we’ve all heard of like Google, Barclays and Facebook.
BR: From what we have seen the levy is working to the extent that it’s focusing large companies on apprenticeship programmes in a way that they haven’t been before.
BR: Absolutely and I think definitely we’re already seeing a whole bunch of companies who may have taken on a handful of apprentices before because they thought it was the right thing to do or they were experimenting with it and now suddenly talking about how do we use this for 20, 30 or 40 people a year.
PL: And then we get to the question of if they’re proliferating what about quality standards, just because there's more of them doesn’t mean they’re going to be great.
BR: I think that will be a big issue is how you maintain quality and particularly new sectors which are relatively immature where there isn’t a long tradition of training.
PL: Such as digital marketing. So the training providers will have to hire excellent people with industry experience, contacts and a desire to teach and that's a tall order. On top of that says Ben it’s also about enriching the experience for the apprentices and thinking hard about branding.
BR: Actually no matter how good the training is that you give to them if they’re not engaged it doesn’t really matter. So making sure they're engaged, making sure they’re on programme for the right reasons, and this is going to be particularly true for existing employees who may have been in the business for five years and if it’s presented to them as will you do us a favour by doing this apprenticeship so we can spend our levy, probably aren’t; going to be than engaged whereas a company saying, “Look we’ve set aside £10,000 to invest in someone’s personal professional development submit your application to be part of this programme,” I think you'll get people who are much more motivated.
PL: So if, as you expect, these schemes proliferate, employers who would never have thought about having apprenticeship schemes do get them up and running, they invest in them, there's a real opportunity there for employers isn’t there in terms of recruitment, because as you say it will become competitive and in the same way that graduates assess potential employers across a range of websites so that actually are they employers I want to look at, presumably can you see a time when it will be the same with apprenticeships?
BR: Yeah definitely and actually there's a small but subtle and important shift in how apprenticeships are going to be marked. So at the end now instead of it just being parcel for either you've got your apprenticeship or you haven’t there's going to be this end point assessment which is a moment at the end of the apprenticeship and each person on an apprenticeship programme has to go through that; it will be a portfolio built up over the duration of the apprenticeship, an interview and a test and you can either pass that or fail it. But you can also get merit or distinction.
PL: So you can effectively come out with a first?
BR: So you can effectively come out with a first, exactly, and I think it’s certainly something that's going to be a battleground for certainly the blue chip recruiters around their apprenticeship programme is come to us we’ve got the best rate of distinction achievements for our apprenticeship programme, would be a reason for a person to go there rather than somewhere else.
PL: So we’ve just arrived at GSK’s very impressive big campus out here at Stevenage. We’re here to talk to Steven Stewart; he's the man who runs the apprenticeship scheme here. They’ve got over 250 young people going through the scheme at the moment.
Stephen Stewart: Yeah hi my name’s Stephen Stewart, I'm the global apprentice lead for GSK so my role is to look after the apprenticeship programme, grow it in the UK, grow it internationally and maintain and improve the quality of it.
PL: So you relaunched this apprenticeship scheme, it’s not that long ago six or seven years ago 2011?
SS: Yes 2011.
PL: And now you've got over 250 apprentices going through the system.
PL: You don’t do the lower level apprentices do you?
SS: No we start at level three and then we have apprentices through to degree level.
PL: And obviously GSK is a huge organisation, do you use external providers at all or is it entirely internally designed and run?
SS: No we’ve got some really, really good partnerships with external providers and we have at the moment 14 routes in, so anything from engineering and manufacturing through to the lab scientist guys, through to supply chain logistics, IT, finance.
PL: One of their apprentices is Charlotte Windor, she’s eight months into the scheme. She's a biopharm upstream process research apprentice. Now initially that department didn’t have the funding for another apprentice so by the time she got her offer she was already on a highly competitive degree course at university.
Charlotte Windor: I was originally at Harper Adams studying bio veterinary science and I got an email from them saying that they were going to offer me a role. I decided to leave university and take on the apprenticeship.
PL: That's a big decision. So you ditched what must have been a very competitive place to get at the uni?
CW: Yeah it’s something I worked for. It’s a course that I wanted originally like since I was really young and it was really difficult for me to get onto it but I thought at the end of the day it was definitely the much better option.
PL: So what was it about the GSK apprenticeship that persuaded you to ditch a thing you’d been working for for a long time?
CW: It’s the sort of department I wanted to go into after I had finished my university course and it’s almost a fast track to where I wanted to be in my future career and the opportunity to also do a degree at the same time I thought it was a no brainer really.
PL: How's the split of work and study? Do you have a day a week studying?
CW: Yeah I have one day a week off studying and I work the other four days. So that one day I stay at home and do my own studying in my office at home which is really useful.
PL: So all in all it’ll be what five years to get to the point where you’ve actually nailed your degree and you've got the apprenticeship under your belt already is that right?
CW: Yes I’ll come out after five years with a BSc as well as an apprenticeship qualification and the degree I was on originally was five years. So it’s not much difference.
PL: And this way you get the work experience as well.
PL: Like many other organisations GSK is trying to figure out all the opportunities the new levy might offer.
SS: We’re still finding our way through it and we've still got a lot of questions. Where we’re seeing real opportunity is for existing employees and how we can use the levy to really look at our strategy workforce plan and look at our strategic capabilities and think where do we need new skills in the future? What we’re trying to do now, and we’re using the levy as a bit of an impetus to do this is to look at how we can use apprenticeships to help our existing staff who maybe have reached a career plateau or are maybe looking to try new skills and move into new areas of the business. A really good example would be someone who is trained up to level seven, level eight maybe in science or engineering and we want to put them in charge of a department, make them a manager, make them a leader. What we could do is put them on a standard management or leadership and train them up there. That really gives us that opportunity to get some senior people in and give them a new skill set using an apprenticeship and using the apprentice levy to do that. So it gives us that flexibility and it helps us address our strategic capability needs.
PL: It’s a great idea. I mean it has been suggested to us there might be a bit of a marketing, branding, issue around calling these things apprenticeships for older people because in their minds apprenticeship is just junior. Is that a thing that you might have to play with a bit do you think about how you actually present them?
SS: Possibly I think in terms of the existing staff we’ll have to position that really well in terms of their perception is that maybe they did an apprenticeship 20/30 years ago so they don’t want to feel like they’re going back to the start.
PL: And they might be senior, senior people mightn’t they if you’re thinking about returners you could have very senior people coming back and the idea of being an apprentice again.
SS: Yeah I think that challenge is not just for GSK but for people in the UK generally is to really get that term apprenticeship so people really understand that this can be anything up to degree level and beyond. I mean we’re looking at whether we can develop apprenticeships for people doing Masters or even PhDs in the future.
PL: That's interesting.
SS: So ideally guys like you've just spoken to like Charlotte who are in the first year they could go right through to Masters PhD level with us and have that complete continuum of skills as a lab scientist.
PL: Lizzie Crowley is skills policy adviser for the CIPD. She agrees that any mechanism that increases training is to be welcomed but she thinks the government has more thinking to do on the levy.
Lizzie Crowley: Apprenticeships are a great way to grow the skills and talent base of an organisation. However they are not the only mechanism that should be used to support skills and development within the workplace.
PL: When the government announced the levy last year the CIPD did a survey to unearth what employers thought of it and what its likely effect on apprentices and wider skills development might be.
LC: We actually found that a significant proportion of employers suggested that they would use the levy money to increase investment at level two apprenticeships at the expense of investment at level three. And level two apprenticeships are the equivalent of GCSEs and level three are A levels and above. Across all European countries level three is the norm and actually the government’s own evidence shows that there is no return on investment for level two apprenticeships, either to the individual, to the business, or to the economy.
PL: So that's a problem and you've identified a problem at the other end of the salary scale.
LC: And at the other end of the spectrum we’ve been hearing from a number of employers that they’re looking to use their levy money to focus on leadership and management apprenticeships and whilst there is an issue with leadership and management in the UK and we have a weakness there the vast majority of big employers already spend a lot of money on leadership and management training. Apprenticeships are a key mechanism to address intermediate level skills and that's where the biggest gap in the UK is. The OECD have been very clear in identifying we’ve got a big problem in the UK in the provision of intermediate level skills within our workplaces.
PL: So your sense is that the levy as it stands, largely, fails to address the very group that most people think of as apprentices, the school leavers, young people, first jobbers?
LC: These are all risks we’ve identified. It’ll be interesting to see how this actually plays out but we’ll be continuing to champion apprenticeships. However we do need to be ensuring that the government is closely monitoring who’s benefiting from this policy.
PL: As we record this podcast the government hasn’t had anything new to say about the levy but we’ll bring you news if and when it does.
In the meantime cast your minds back to new parents Ksenia Zheltoukhova and her partner Ryan McKelvey. Last year we followed their progress as they took advantage of the new shared parental leave legislation to split a year’s leave after the birth of their daughter. Ksenia stayed home with Maia for the first half of the year then they shared the care for six weeks before she went back to work and Ryan settled in for six months of childcare. Now Maia is eight and a half months old and we paid a last visit to their flat in London to find out how it had all worked out for all of them.
So this is a classic moment of working with babies and animals because of course Maia, who we were hoping to record for you all to hear, is not playing ball.
Ksenia Zheltoukhova: She's saying I'm not a performing monkey!
PL: I've got nothing to say. So Ksenia tell me how has it been going back to work?
KZ: Oh it’s been really, really good. The first week I came back I felt like I'm back in the game, I'm talking to adults again. It was brilliant.
PL: Yeah really fantastic. So Ryan has been telling us all about his time off and it sounds like it’s gone really, really well and he's kind of nailed it and found his own way.
KZ: Is that what he said?
PL: He did. So Ryan you took over the care of Maia back in February now so tell me honestly how has it been because it’s a big deal isn’t it? As you say looking after a baby with the two of you it’s fine, it’s fun, there's a safety net, on your own first week looking after a baby, first time ever, because I seem to remember you hadn’t so much as changed a nappy before you had Maia, how was it?
Ryan McKelvey: Yeah it was really good. I always look at it like when you learn to drive, you learn how to pass a test but you don’t really learn to drive until you’re on your own and it was similar actually with Maia as well until I was on my own I probably knew what to do but until I was actually dropped in at the deep end that's when I really learned.
PL: How did it feel not being at work? Was that really odd?
RM: It was odd not being at work I have to admit but I got used to it and I've actually really enjoyed being off with Maia and going back I feel this break has given me a renewed energy for work. I feel quite rejuvenated. I’m really keen to get back in there and hit the ground running I suppose.
PL: And I think looking at you it looks like you really feel it’s made a big difference to your relationship with Maia.
RM: Absolutely I mean the main reason for me doing it was creating a bond with Maia and I think it’s definitely done that.
PL: Now before I ask you how it’s been financially, which I do want to get on to, I just want to raise one little question with you which was I think when we first met you did have it in mind that you were going to write a book I think it was and perhaps start a business while you were looking after Maia, how has that gone on?
RM: Next question!
PL: Now I remember talking to you two about financial planning right at the start before you’d even had Maia and you’d been incredibly organised, spreadsheets, you’d done all the budgeting, you knew where you were, you were getting enhanced pay from your employer so you were quite confident that the money was going to be okay, has it worked out all right?
RM: We have had ups and downs with money sometimes because we’ve had some bills came in that were perhaps unexpected. You do need a budget and you really do need to be strict on it and we have at times slightly went over it and then we’ve had to be quite restrained the next few weeks. Yeah I would say the key thing is save up before you go off absolutely.
PL: So final question really of this long mini-series would you recommend it?
RM: I’d definitely recommend it. I think it’s brilliant you'll never get this chance again really. I’ll never get six months just me and Maia hanging out so it’s really nice and I feel like it is a bond we’ve created now which will hopefully go on for the rest of her life. And yeah it’s been really good for me. It’s nice actually to have a break from work, you work for ten years plus and it’s nice to have this six months off to allow me to take a step back and look at what I want to do and give me kind of renewed interest. So yeah I think it’s been brilliant for Maia and for myself.
PL: He told us that he doesn’t have a regret about doing it and that he'd definitely recommend it to others. How do you feel?
KZ: Yeah I would agree. So I think the benefits of it work in two ways, I think first of all being a mum and being a woman who was off at first it’s had tremendous benefits for me. In terms of going back to work early I feel like I haven’t missed out on too much going on at work and I feel like I'm confident going into work that I don’t have to worry about Maia being with a stranger for example in a nursery at this relatively young age. And secondly for our relationship and for Maia I think that has been a huge benefit that she's equally happy with both of us and she's confident being with both of us and it gives more freedom in doing things independently and relying on the other.
PL: So a good result all around for Ksenia, Ryan and Maia. But recent research from working families found that 48% of fathers would not take up their right to parental leave. The key reason – they couldn’t afford to and they were worried about how they'd be perceived at work if they did. So still work to be done there.
With some fascinating episodes to make after the summer the podcast team is taking a break in August. Our next episode will be out on the first Tuesday of September. Join me then. Have a wonderful summer.