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Apprenticeships could revolutionise your not-for-profit

Tom Pearce Tom Pearce

Apprenticeships are being used by organisations in every sector across the UK to develop new hires and upskill employees. But charities are lagging on the uptake. Tom Pearce looks at how they could revolutionise your not-for-profit.

According to the Office of National Statistics (ONS), out of the countries that make up the G7, the UK ranks among the lowest for productivity. We stand at around 16% in output-per-hour-worked terms.

This comes down to a skills shortage, and it's estimated that £6 billion is spent by organisations every year to try and tackle the availability, applicability, and accessibility of talent. One way that it's being addressed is through apprenticeships, which are a great way to develop your team and wider talent capabilities. Apprenticeships are structured development around a real job where your employees can learn, gain experience and still get paid while boosting career and role development.

As an employer, you can receive full government funding for the development costs and further financial incentives to support the employee costs, up to £6,000 per apprentice for some age groups with the recent funding extension. That's one of the reasons why private and public sector organisations continue to be advocates of apprenticeships where there is a clear resourcing and development need.

In comparison, the not-for-profit sector is utilising the scheme the least, with only 14% of charities offering some form of apprenticeship programme. That's why now is the perfect time to act quickly and get the most out of this government programme for your not-for-profit.

Why apprenticeships?

Apprenticeships offer an in-depth, practical learning and development approach beneficial for talent development at all stages in someone's career.

The schemes have helped improve staff retention, enhance organisational effectiveness, and transform organisations’ people and company development. You can hire a new employee to complete an apprenticeship or even develop the skills of existing employees.

The Apprenticeship Levy – not just a tax

The Apprenticeship Levy is payable for all organisations with a pay bill above £3 million per year. While paying the levy is compulsory, see this as an investment in your people and organisation and the sector's future more widely.

The Levy is a resource that helps to fund spend on qualifications up to master’s degree level. Recognised programmes can even be designed around your skill, resourcing and operational needs. Using the Levy means spending funds that you have already set aside, saving your learning and development budget for more diverse courses and targeted learning interventions.

Think beyond school leavers

While traditionally seen as a vocational opportunity for young people, apprenticeships are now a vehicle for upskilling more widely, including mid-career employees looking to specialise or retrain in a new career area. From Level 2 right to Level 7, they provide a gateway for social mobility and transformative career development, no matter the educational or career background of the learner.

Get qualifications while you work

Apprenticeships are a time and cost-effective route for those wishing to gain professional qualifications. Many Level 6 and Level 7 programmes can result in staff earning undergraduate or postgraduate degrees and professional qualifications.

These apprenticeships allow people to develop in the workplace whilst getting paid, bridging the gap between academic theory and practical application. Other programmes can deliver professional training certifications, such as CIMA, APM, CIPD, CMI or CITP awards.

Think your organisation is too small? Think again…

Smaller organisations with either limited or no Levy funds are still able to access apprenticeships through government co-investment. The government fund 95% of the training and development costs, with your organisation contributing just 5%.  The apprentice will need to be employed for a minimum of 30 hours per week for the full-time equivalent of at least 12 months, providing focused time for development around the role.  

Organisations with little or no Levy can also receive unspent Apprenticeship Levy from larger organisations’ Levy pots through the Levy transfer scheme.

If you’re struggling to spend it, share it

According to the 2021 Budget, it is estimated that between May 2020 and February 2021, around £1 billion has been paid back to the treasury in the form of unspent levy funds.

The levy transfer can play an important part in achieving organisational objectives, particularly around corporate social responsibility or perhaps giving back to the community by transferring funds to local supply chain businesses, the public sector or charities.

There are many great examples of organisations transferring their funding to others. Royal Mail pledged apprenticeship funds to the North West ambulance service to support their employer provider journey.

Kuehne + Nagel have also recently pledged thousands to support SME’s who have felt the downturn since the pandemic. Using the help of the West Midlands Combined Authority, they have helped Serenity Care UK secure management apprenticeships.

What’s in it for me?

The recent announcements by Rishi Sunak in his latest budget declared £2.5 billion in funding for “apprenticeships and further improvements for employers”.

Organisations are eligible for a cash sum of up to £3,000 for taking on an apprentice at any age. This, combined with added National Insurance savings if an apprentice is under 25, can total up to £5,000 in financial incentives. A further £1,000 incentive payment is available for hiring 16-18-year-olds and some up to 25.

Apprenticeships are a great facilitator where hiring can complement structured development around an apprenticeship opportunity – especially after the last 12 months in which organisations looking to do more to support and develop their people, often with squeezed budgets.

Included in the reform is a pledge to create a new system that will enable levy-paying employers to transfer unspent Levy funds in bulk to other organisations and an online service to match levy payers and non-levy payers with similar strategic priorities. These changes are expected from August 2021.

What next?

If you'd like to find out more about apprenticeships, get in touch with Tom Pearce.

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