OPINION: APPRENTICESHIPS AND MILLENNIALS – MAKING THE LEVY WORK

Today’s 30 and 20 somethings are less loyal than their ‘Baby Boomer’ or ‘Gen X’ counterparts, leaving a role if they do not feel appreciated, engaged or don’t receive adequate support to continuously develop and progress.

MILLENNIALS: THE ANSWER TO FAILING APPRENTICESHIP FIGURES?

IT was widely reported last week that the introduction of the Apprenticeship Levy was behind the 59% fall in the number of Apprenticeship starts.

Indeed, ever since it was introduced six months ago it has caused disruption in the Apprenticeship and Training sector, with some firms viewing it as an additional tax and choosing to ignore it, whilst others have simply channelled it into a raft of management qualifications to kick start their Levy spend.

The latter is demonstrated by the 75% drop in intermediate level training, compared to just a 48% drop in the number enrolled on advanced level courses. Although this was the ESFA’s intention – to raise aspiration and see a greater take up of advanced level Apprenticeships – in October FE Week reported that DfE would be ‘watching it closely’ to make sure intermediate Apprenticeships continued to offer the social mobility they were intended to.

THE CHALLENGE

The challenge with the 3million Apprenticeships target is two-fold: employers with a PAYE bill of more than £3million pay 0.5% of anything over this into their Levy pot. Firms initially seeking value from the scheme will of course choose to fund management qualifications to initially recoup their investment.

Secondly, the message that Apprenticeships are for all existing staff is wrong. An Apprenticeship Standard is essentially a programme of study which embeds a series of skills and behaviours, which may or may not include a qualification. Verifying existing staff who already have the prerequisite skills and behaviours is neither useful nor cost effective, especially when so many first-time managers and those in fledgling careers are in need of shaping and moulding to become productive and capable team members.

Little over six months ago, I sat in a room full of representatives from large national providers who predicted this would be the very pattern we would see within the first year of the Levy – contrary to the DfE’s assumptions and initial modelling. Many reported large Levy payers insisting the best way to gain value for money from the scheme was to funnel all of that cash into advanced level qualifications, until they drove their Chevy to the Levy and the Levy was dry. This is echoed by AELP CEO, Mark Dawes, who warned that level two qualifications could become a thing of the past if we don’t use them to provide access higher levels of study.

MILLENNIALS AT WORK

The short-term Apprenticeship focus on Management, although admirable, is perhaps short sighted. In case you missed it, it has been reported for a while now that Millennials are the least engaged generation at work.

Millennial ‘job hopping’ – the process of changing careers, roles, or industries on average every three years – is a common phenomenon. Today’s 30 and 20 somethings are less loyal than their ‘Baby Boomer’ or ‘Gen X’ counterparts, leaving a role if they do not feel appreciated, engaged or don’t receive adequate support to continuously develop and progress.

Although this may sound like investing in Millennials through Apprenticeships is a bad idea in light of ‘job hopping’, it might just be the answer to the Government’s falling Apprenticeship starts target – particularly in the Financial Services industry.

MILLENNIALS AND APPRENTICESHIPS

Let me explain: although firms are required to pay 0.5% of their pay bill into their digital account, the Government will top up this account by 10 per cent. This presents a much more appealing prospect and larger fund which can be used to hire and train a more diverse workforce, improve retention, and employee engagement. As Apprenticeship funding is open to anyone of any age, whether they are a new employee or not – even if they have a degree – this gives HR and L&D Directors a much broader spectrum of training, roles and individuals who can be up-skilled through an Apprenticeship. Not to mention that intermediate Apprenticeships are less expensive than advanced level study, meaning you can train more people for the equivalent of one Chartered Management Degree Apprenticeship.

Millennials – those born between 1980 and 2000 – are disillusioned with the corporate post-recession world and are seeking constant engagement at work through regular feedback, encouragement and continued expansion of their skills base. Apprenticeship training in its very nature is work-based, must encompass blended learning and digital tools which allow for continual engagement with peers and tutors, and sees a consistent stream of instant feedback, constructive criticism and the implementation of new skills.

A LOYAL CAPABLE AND SKILLED WORKFORCE

It isn’t difficult to see that marrying up lower level, role specific Apprenticeship training, with a disengaged Millennial workforce, could provide a solution to both the Government’s failing figures and industry’s productivity and engagement conundrum.

As PWC’s report rightly points out, firms who encourage Millennials and nurture their talents to engender loyalty could see a culture change from the ground up, not the top down. The speed with which information travels, rapid progression and development of individuals, and the advent of flexible and agile corporate structures would be the result of investment in this disillusioned and disengaged workforce.

APPRENTICESHIPS AND CHALLENGES IN THE FS SECTOR

So why would this have an impact on the FS sector? As we all know, the sector has a number of challenges: the rise of disruptive technologies and threat of FinTech firms to the FS market; a ‘male, pale and stale’ workforce; regulatory challenges in the form of Mifid II and the Senior Managers Regime; Brexit.

Apprenticeships offer the chance to train a diverse Millennial workforce of hungry employees who are digital natives and constantly seeking the next innovation, simultaneously expanding their rapidly growing skills base to see off the threat of future skills gaps. New employees can be trained to ensure regulatory changes are embedded from day 1 and form part of their understanding of the industry. Surely this is something we should encourage and harness to see off the challenges which currently threaten the sector’s established players?

SPEND ON MANAGERS VS MILLENNIALS

After all, no-one is a fully-formed employee from the moment they join the company and we will all need some polishing, shaping and moulding at some point in order to be able to progress in our careers. Of course we know that this ‘shaping’ must be continuous, but logic dictates that there should be a greater emphasis on on-boarding and skills development when changing industries or roles, not when you know the industry, company and role inside out.

With ‘populist’ movements changing how Millennials think about the way in which they live their lives, their deeply held belief that there is more power in the many than the few will breed a lack of loyalty if we are only seen to train managers, leading to a protest vote to leave roles and move on.

In summary, we must do more to engage everyone when it comes to training. Invest only in advanced training through the Levy today and miss out on a more loyal, capable and engaged workforce tomorrow.

In 1776 Adam Smith declared that “England is a nation of shopkeepers”. If the current trend continues, by 2020 England will be a nation of management apprentices.

About Alicia Clow

Alicia is the Marketing Manager at DSW. Her background is in Marketing within the Apprenticeships and Training sector, where she has been heavily involved in market research connected with the Government's Apprenticeship reforms. Her experience in analysing market trends and content creation sees her lead DSW's digital channels, providing industry specific insight and comment to inform and engage.
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