Changes to Apprenticeship Schemes Understanding and … · 2018-01-03 · Changes to Apprenticeship Schemes Understanding and Readiness Consultation (Interim Findings) Prepared By

Changes to Apprenticeship Schemes

Understanding and Readiness

Consultation (Interim Findings)

Prepared By

SMSR Ltd, Wellington House, 108 Beverley Road, Kingston-Upon-Hull, HU3 1XA

Tel: 01482 211200

www.smsr.co.uk / [email protected] / @SMSRLtd

September 2017

http://www.smsr.co.uk/

mailto:[email protected]

Apprenticeship Consultation. Humber LEP. 2017 2

Contents Page

1.0 INTRODUCTION ..................................................................................... 3

2.0 METHODOLOGY .................................................................................... 4

3.0 SUMMARY ............................................................................................. 6

4.0 FINDINGS ............................................................................................... 8

APPENDICES .................................................................................................. 31


1.0 Introduction

In May 2017, the Humber LEP commissioned an independent research company (SMSR Ltd)

to measure the perception and preparedness of Humber SMEs regarding apprenticeship

reform and the subsequent new opportunities for employers.

The changes driven by national government (Skills Funding Agency) will affect employers on

a number of levels including funding and training opportunities.

The specific objectives of the research were as follows:

Measure current levels of apprentice take-up

Previous levels of take-up

Rationale for employing apprentices

Identifying information sources on apprenticeships schemes

Attitudes towards apprentices

Awareness of the new apprenticeship levy

Awareness of other key changes

Perceived benefits of new changes

Barriers to apprentice schemes

Training methods

Interest in interventions/information on the changes

Included in the report is a set of topline findings which provides quick reference to all of the

questions asked throughout the survey. In addition all questions have been analysed by size,

industry and location and any significant differences in opinion across the demographic

variables are commented on throughout the report.

It should be noted that when the results are discussed within the report, often percentages

will be rounded up or down to the nearest one per cent, therefore occasionally figures may

add up to 101% or 99%.


2.0 Methodology

The consultation was undertaken using a questionnaire which was designed by SMSR

Ltd in conjunction with the LEP.

The methodological approach for the consultation was an initial telephone call to each

organisation to ascertain the best person to interview based on the subject of

apprenticeships. Once identified and contacted, the vast majority of the surveys were

undertaken via interviewer-led completion. A small number of individuals requested an

online format, which was provided if requested.

The fieldwork was conducted between 8th May to 28th July 2017 (with the majority of

surveys conducted in May and June). All telephone interviews were undertaken by trained

and experienced SMSR staff.

In total 175 surveys were completed and the breakdown by area, size and industry can be

seen below:

Area

Area Number Percentage

East Riding 37 21%

Hull 57 33%

North East Lincolnshire 42 24%

North Lincolnshire 40 23%

Size

Area Number Percentage

Micro (1-9) 60 34%

Small (10-49) 96 55%

Medium (50-249) 20 11%


Industry

Industry Number Percentage

Business & Retail 37 21%

Manufacturing 37 21%

Digital/Creative 27 15%

Other* 75 43%

*Chemicals, Construction, Engineering, Food and Agriculture, Health and Social Care Ports

and Logistics, Renewables


3.0 Summary

Just less than a third (32%) of the businesses interviewed currently employed an

apprentice

72% said they employed an apprentice to improve the skills of their workforce and

63% said they wanted to invest in young people. Cost was a driver for more than a

quarter of organisations (28%).

Information on apprenticeships was most frequently accessed through a training /

apprenticeship provider (58%) or a government website (47%). Just over a tenth

(12%) said they access apprentice related information through a school, university or

college and 9% mentioned a trade association.

70% that currently employ an apprentice agreed that it is easy to access information

relating to apprenticeships and 77% agreed that it was easy to locate a provider,

with just 12% that disagreed.

78% found their provider helpful and 80% said apprenticeships provide value

for money.

Whilst 63% agreed that it was easy to recruit an apprentice, almost a quarter (23%)

disagreed and 14% had a mixed view.

The vast majority of businesses (95%) said they are planning to continue using

apprenticeships in the future.

For those that had never employed an apprentice; their main rationale was due to a

lack of qualifications or experience, a lack of need or because they currently use an

agency.

Organisations that no longer employed an apprentice had been put off due to a bad

experience in the past.

Training, time and availability were the most frequently identified barriers;

this was especially true of the micro and small organisations.

All businesses were asked if they had received any information about

apprenticeships in the last three months; 62% said they had received no

information.


36% of all organisations were aware of the introduction of the apprenticeship levy; the remaining 64% were not aware.

34% were aware that employers with fewer than 50 employees will have all costs

covered when training a 16-18 year old; 31% aware that employers would receive a

£1,000 payment for every 16-18 year old apprentice they take on and 14% aware

that they would receive £1,000 payment if they take a 19-24 year old who is leaving

acre or has a Local Authority Education Healthcare Plan.

26% were aware that employers are not required to pay National Insurance

contributions for apprentices under the age of 25 if they are earning less than £827

a week and 22% were aware that organisations with over 50 employees but with a

payroll less than £3m will be required to contribute 10% of the training and

assessment costs.

More than a tenth (14%) were aware that businesses will be able to access the

‘Apprenticeship Service’ whilst the vast majority (86%) were not aware of this

service and its purpose.

The majority said that the changes discussed would encourage them to recruit or

train an existing member of staff through an apprenticeship (46%); just less than a

third (32%) said the changes would not encourage them and 22% were unsure.

14% are aware of the changes allowing employers to design apprenticeship

programmes specific to their business.

A fifth were aware that changes to the apprenticeship programme include enabling

employees to achieve qualifications at higher levels including degree levels and the

vast majority (90%) said this was a good idea.


4.0 Findings

4.1 Employing Apprentices

Overall, just less than a third (32%) of the businesses interviewed currently employed an

apprentice either through a third party or directly, therefore 68% of did not currently

employ an apprentice.

Micro businesses were the least likely to currently employ an apprentice (79%) with just 21%

that do. The bigger the organisation, the more likely they are to currently employ an

apprentice with 60% of medium sized businesses that said they do employ an apprentice at

the moment, this then drops to 39% for small organisation.

Manufacturing was the more prominent industry with 47% of these organisations suggesting

they currently employed an apprentice. The creative and digital companies were less likely

with just two in every ten businesses that said they employed an apprentice currently.

32%

68%

Does your organisation currently employ any staff who are on an apprenticeship programme either

directly or through a third party?

Yes

No


Of those businesses that do not currently employ an apprentice, 28% had employed an

apprentice within the last 5 years, whilst the remaining 72% had not.

Taking those that currently employ an apprentice into account and those that have

employed an apprentice in the last 5 years; there is a total of 51% that have had a level of

apprenticeship activity within the last 5 years. Therefore 49% of all business interviewed

have not employed an apprentice within the last 5 years.

Similar to the current employment of apprentices, the larger the organisation the more

likely they were to previously employ an apprentice ranging from 50% with medium sized

companies to 21% of micro businesses.

28%

72%

Has your organisation previoulsy employed any staff through an apprenticeship programme in the last 5

years either directly or through a third party?

Yes

No


What are the main reasons why you have not employed any staff through an apprenticeship programme either directly or through a third party?

Role requires experience / qualifications / licences

Do not require staff

Use agencies / temps / other training methods

Small business / start-up

Role is age specific

The table above show the main five reasons provided by the organisations that have never

employed an apprentice with the most frequent response suggesting that they do not feel

an apprentice would be qualified or experienced enough for the role. No requirement for

new staff and a reliance on agencies were also mentioned multiple times.

What are the main reasons why you no longer employ through an apprenticeship programme either directly or through a third party?

Bad experience in past with apprenticeships

Do not require staff

Apprentice left as soon as training ended

Cost / lack of funding

For those organisations that had previously employed an apprentice but no longer do, the

main rationale for this policy is due to a bad experience in the past. A lack of need was also

mentioned.


4.2 Number of Apprentices

When asked how many people the business currently employed on an apprenticeship

programme, more than two-fifths (44%) said that they employed just one apprentice.

A quarter employed 2 or 3 apprentices (16% employing 2 and 9% 3), with less employing 4 to

5 (19%), 5 to 10 (14%) or more than 10 (2%).

It is no surprise that the larger the organisation the more likely they are to employ multiple

apprentices.

44%

25%

19% 14%

2%

1 2 or 3 4 or 5 5 to 10 10+

How many people do you currently employ on an apprenticeship programme?


4.3 Current Provider

Which provider(s) do you currently use to train your apprentices?

Bishop Burton College Hull Tech

CERT Hull Training & Adult Education

Cityworks Hull University

CT Assessments John Leggott College

East Riding College JTL Training Ltd

Franklin College KAPLAN

Grimsby Institute MacArthur Dean

HETA NLT Training Services

Hull & Humber Chamber of Commerce North Lindsey College

Hull Business Training Centre Scarborough College

Hull College YH Training

There was a wide variety of providers identified by those businesses that do employ an

apprentice, which are highlighted in the table above.


4.4 Rationale for Apprentices

Those organisations that currently employed an apprentice were asked to provide the main

reasons were they utilised an apprenticeship programme and almost three-quarters (72%)

said it was to improve the skills of their workforce and 63% said they wanted to invest in

young people.

Cost was a key factor for more than a quarter of organisations (28%) and the image and

ethics of the company was cited by 16% of respondents. Less than a tenth of businesses

mentioned increased productivity, lack of applicants, retaining staff or being approached by

a provider.

Small organisations were more likely to say the rationale was to improve the skills of

the workforce, whilst medium sized companies were more likely to say that it was to

invest in young people.

The most frequently mentioned responses when answering other were needs of the

business, previous links to apprentices/used to be an apprentice, to ensure best practice /

standards.

30%

7%

9%

9%

9%

16%

28%

63%

72%

Other

Approcahed by provider

Retain staff

Lack of applicants for vacancies

Increase productivity

Company image / ethic

Cost

Invest in young people

Improve skills of workforce

What are the main reasons that your organisation employs people on an apprenticeship programme?


4.5 Information Sources

Organisations that employed an apprentice predominantly accessed information about

apprentices through a training / apprenticeship provider (58%) or a government website

(47%). Just over a tenth (12%) said they access apprentice related information through a

school, university or college and 9% mentioned a trade association.

Five per cent or less mentioned any other specific organisation, including the LEP (2%) and

the local council (2%).

It is clear that the micro and small organisations are more likely to depend on information

through training or apprenticeship provider (53% and 67% respectively).

The main two other responses were general online internet searches and internal HR

departments.

12%

0%

0%

2%

2%

2%

2%

5%

9%

12%

47%

58%

Other

Job Centre Plus

HABS

Local Council

Humber LEP

Other businesses

SFA

HMRC

Trade Association

Univeristy/College/School

Government website

Training / apprenticeship provider

Through which sources do you access information about apprentices?


4.6 Attitudes towards Apprenticeships

Accessing Information

Over half of the organisations (54%) that currently employ an apprentice agreed that it is

easy to access information relating to apprenticeships with an additional 16% that strongly

agreed. Just less than a quarter (23%) neither agreed nor disagreed, just 7% disagreed with

this statement.

16%

54%

23%

7% 0% 0%

Strongly agree Agree Neither agreenor disagree

Disagree Stronglydisagree

Don't know

To what extent do you agree or disagree that it is easy to access information relating to apprenticeships?


Locating a Provider

Over three-quarters of respondents (77%) agreed (58%) or strongly agreed (19%) that it was

easy to locate a provider of apprenticeships, with just 12% that disagreed that it was easy to

locate a provider. Less than a tenth (9%) said they neither agreed nor disagreed with this

statement.

Helpfulness of the Provider

Almost a quarter (23%) strongly agreed that their apprenticeship provider has been helpful

during the process and 56% agreed with this. Less than a tenth (9%) disagreed to some

extent that the provider had been helpful and 12 had a mixed opinion, neither agreeing nor

disagreeing.

19%

58%

9% 12% 0% 2%

Stronglyagree

Agree Neither agreenor disagree


Don't know

To what extent do you agree or disagree that it was easy to locate a provider of apprenticeships?

23%

56%

12% 2% 7% 0%

Stronglyagree

Agree Neitheragree nordisagree


Don't know

To what extent do you agree or disagree that the apprenticeship provider has been helpful during the

apprenticeship process?


Value of Apprentices

The majority either agreed (56%) or strongly agreed (26%) that apprenticeships provide

value for money; 7% disagreed and 12% neither agreed nor disagreed.

Ease of Recruitment

Just less than half (49%) of the organisations that currently employed an apprentice agreed

that it was easy to recruit an apprentice and 14% strongly agreed. However almost a

quarter (23%) disagreed to some extent and 14% had a mixed view.

26%

56%

12% 7% 0% 0%

Stronglyagree



Don't know

To what extent do you agree or disagree that apprenticeships provide value for money?

14%

49%

14% 16% 7% 0%

Stronglyagree



Don't know

To what extent do you agree or disagree that overall, it is easy to recruit an apprentice?


Future Recruitment

The vast majority of businesses (95%) said that their organisation is planning to continue

using apprenticeships in the future, with 51% that agreed with the statement and 44% that

strongly agreed.

4.7 Barriers / Challenges

Are there any barriers / challenges in relation to the recruitment and employment of apprentices?

Training and time required for apprentices

Availability of suitable apprentices

Lack of support / communication from training provider

Attitude / reliability of apprentice

Fitting apprenticeship around the company needs

Unrealistic expectations of apprentices

Training, time and availability were the most frequently identified barriers, this was

especially true of the micro and small organisations.

44% 51%

2% 2% 0% 0%

Stronglyagree



Don't know

To what extent do you agree or disagree that my organisation is planning to continue using apprenticeships

in the future?


4.8 Information Provision

All businesses were asked if they had received any information about apprenticeships in the

last three months and whilst 62% said they had received no information, 38% had. The

majority of the information had emanated from a training or apprentice provider. A tenth of

the businesses interviewed said they had received information from the LEP and 3%

mentioned the Skills Funding Agency.

Micro businesses said they had received no information (68%) more frequently as did North

East Lincolnshire businesses (79%), those in business and retail (78%) and organisations that

do not currently employ apprentices (72%). East Riding organisations cited the most sources

of information with just 56% that said they had not received any information.

The most frequent other responses included general emails, schools, colleges or

universities and the council.

7%

1%

1%

2%

2%

3%

10%

25%

62%

Other

HABS

Get in Go Far Camapaigns

Job Centre Plus

TV, Radio (marketing campaigns)

SFA

Humber LEP

Training / Apprenticeship provider

None

Have you recevied any information from the following sources in relation to apprenticeships over the last three months?


4.9 Awareness of Levy

Over a third (36%) of all organisations were aware of the introduction of the apprenticeship levy in April 2017; the remaining 64% were not aware of the new levy. More than 70% of the following groups were unaware of the new levy:

Micro businesses (73%)

Business and Retail businesses (73%)

Digital and Creative businesses (75%)

Those who do not employ an apprentice (75%)

North East Lincolnshire businesses (71%)

36%

64%

Are you aware that the government is introducing an apprenticeship levy on 6th April 2017? The levy requires all

employers opertaing in the UK, with a wage bill over £3million each year, to invest in apprenticeships?

Yes

No


4.10 Awareness of Key Changes

Awareness that employers with fewer than 50 employees will have all costs covered when

training a 16-18 year was fairly high as 34% said they knew about this aspect of the

apprenticeship programme. Two-thirds said they were unaware that all costs were covered.

The smaller the organisation the less aware they are of these costs being covered with 21% of micro businesses aware of the change compared to 48% of medium sized organisations.

Almost half of manufacturing organisations were aware of this change (47%) and those who currently employed an apprentice were far more likely (56%) to indicate a level of awareness when compared to those who do not (24%).

34%

66%

Are you aware that employers with fewer than 50 employees will have 100% of the costs covered when

training a 16-18 year old?

Yes

No


Over two-thirds of organisations (69%) were unaware that employers would receive a

£1,000 payment for every 16-18 year old apprentice they take on, with 31% that said they

were aware of this payment incentive.

Awareness was lower within the following groups:


Business and retail business (81%)

Digital and creative businesses (88%)

Those not currently employing an apprentice (75%)

31%

69%

Are you aware that all employers will recieve a £1,000 payment for every 16-18 year old apprentice they take

on?

Yes

No


The majority (86%) were unaware that they would receive £1,000 payment if they take a 19-

24 year old who is leaving acre or has a Local Authority Education Healthcare Plan. Less than

a fifth (14%) were aware of this payment plan.

The East Riding businesses (26%) interviewed and those who currently hire an apprentice

indicated higher levels of awareness (19%).

14%

86%

Are you aware that employers will recieve £1,000 if they take on a 19-24 year old leaving care or who has

a Local Authority Education Healthcare plan?

Yes

No


Almost three-quarters of organisations (74%) were not aware that employers are not

required to pay National Insurance contributions for apprentices under the age of 25 if they

are earning less than £827 a week. Therefore 26% were aware of this particular point.

Awareness was higher within manufacturing (47%) and the larger organisations. Almost half

of those that currently employ an apprentice said they were aware of this criterion (44%).

26%

74%

Are you aware that employers are not required to pay National Insurance contributions for apprentices under

the age of 25 on earnings below £827 a week?

Yes

No


Over a fifth of businesses were aware that organisations with over 50 employees but with a

payroll less than £3m will be required to contribute 10% of the training and assessment

costs, 78% were not aware of this requirement.

Again the smaller the business the less they knew of the changes ranging from 88% of micro

businesses to 70% of medium sized businesses. Just less than a third (31%) of those who

currently employ an apprentice had awareness compared to 18% of those that do not.

22%

78%

Are you aware that employers that have more than 50 employees but a payroll of less than £3m will be

required to contibute 10% of the cost of training and assessment costs?

Yes

No


Just 14% were aware that businesses will be able to access the ‘Apprenticeship Service’

whilst the vast majority (86%) were not aware of this service and its purpose.

Awareness was higher with medium sized businesses (50%), East Riding businesses (23%)

and with those that currently employed an apprentice (28%).

14%

86%

Are you aware that employers that businesses will have access to an online service called the 'Apprenticeship

Service' where you will be able to advertsise apprenticeship vacancies, training and providers?

Yes

No


4.11 Impact of Changes

The majority said that the changes would encourage them to recruit or train an existing

member of staff through an apprenticeship (46%); just less than a third (32%) said the

changes would not encourage them and 22% were unsure.

46%

32%

22%

Yes No Don't Know

In general, would any of these changes encourage you to recuit or train an existing memeber of staff through

an apprenticeship?


4.12 Training

When asked about how organisations up-skill their employees the vast majority (93%) said

they utilised in house training, 57% also adopted external training, 41% said they used E-

learning and 39% said an apprenticeship programme.

93%

57%

41% 39%

In house training Extrenal training E-learning Apprenticeshipprogramme

What methods does your organisation employ to up-skill employees?


4.13 Awareness of New Opportunities

There was fairly low awareness (14%) on the changes allowing employers to design

apprenticeship programmes specific to their business with 84% that were unaware of this

new opportunity.

Awareness was significantly lower within micro businesses (95%).

16%

84%

Are you aware that changes to the apprenticeship programme will include allowing employers to

design apprenticeship programmes specific to thier business?

Yes

No


A fifth of all businesses were aware that changes to the apprenticeship programme include

enabling employees to achieve qualifications at higher levels including a degree levels. The

remaining 80% were not aware that this was a possibility.

When asked if the respondent thought this was a good idea, the vast majority (90%) said

that it was a good idea, just one tenth said it was not a good idea.

More than eight tenths of the following were unaware of this opportunity:


North East Lincolnshire Businesses (81%)

Business and retail businesses (84%)

Creative and digital businesses (85%)

Those who do not currently employ an apprentice (87%)

20%

80%

Are you aware that the changes to the apprenticeship programme will include enabling employees to attain qualifications at higher levels including degree levels?

Yes

No


Appendices

1 Questionnaire









Documents

Changes to Apprenticeship Schemes Understanding and … · 2018-01-03 · Changes to Apprenticeship Schemes Understanding and Readiness Consultation (Interim Findings) Prepared By