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How to use the apprenticeship levy to build a future workforce

Posted on by from KPMG

What does the new apprenticeship levy mean for your business and how can you utilise it when planning for the future?

If your company already runs an apprenticeship scheme, it’s tempting to assume you have a head start with the new apprenticeship levy. Perhaps you’re planning simply to scale up your existing programme, so you can draw down the maximum amount from the new national fund.

The danger with this approach is that you’ll be expanding a programme that works for your business now. It fails to take account of the type of business you’ll need or want to be, in five years’ time. 

A simple expansion of an existing early years programme could also create more immediate practical problems. For some big organisations, expansion could bring hundreds of new apprentices into the workplace. Few businesses are set up to recruit in these numbers, and many have not considered the need to scale their operations to provide the additional support services such as pastoral care and peer mentoring that have been shown to maximise the benefits of apprenticeships for the learner and the organisation. 

Now is the moment to step back and consider the bigger picture. Apprenticeships now offer a new toolset for addressing strategic workforce challenges. So, if you want to spend your levy fund wisely, you should be thinking more laterally about how you can use apprenticeships to solve your current and future skills challenges.

To start that process, consider the following questions: 

What kind of organisation will we be in five years’ time?

The workplace is changing fast. Digitisation is having a profound impact on how businesses operate and what they do. Meanwhile new technologies, such as robotics and artificial intelligence, are set to become commonplace, making human workers more efficient and, in some cases, even replacing them. 

You need to think about where your industry is heading, how your organisation plans to compete and what skills your workforce will need to get ahead. You can then design your apprenticeship training around these objectives.

What are the gaps in your organisation?

A future-focused expansion of apprenticeships is good. But new training, funded by the government apprenticeship levy, can also help address current skill shortages in your existing workforce.

Many organisations, for example, find that strong people managers are in short supply. Management apprenticeships at intermediate, advanced and higher level are already approved for funding through the apprenticeship levy. They provide an immediate opportunity to skill up current employees and establish a supply of effective managers.

How could you tackle skill shortages using apprenticeships?

The UK is suffering severe skill shortages in areas including science, technology, engineering and maths. If your business depends on these skills, offering high-quality apprenticeships can help you compete more effectively for talent.

Your core business doesn’t even need to be built around the STEM (science, technology, engineering and mathematics) disciplines to make this relevant. The growing challenges around cyber security, for example, means every business needs cyber security technologists. Could bringing cyber apprentices into your IT organisation help you grow required skills in-house rather than competing for them in the market?

How can you attract and retain talent using apprenticeship programmes?

Apprenticeships are no longer just for school leavers. Degree apprenticeships offer funded training that leads to a bachelor’s or even a master’s degree. This means you can use apprenticeships to address a wide range of talent challenges, from attracting graduate trainees to recruiting experienced hires.

You could also implement apprenticeships to tackle issues such as high attrition rates or poor engagement. For example, for a long-standing employee looking for an opportunity to take their career in a new direction, funding for a new qualification mid-career makes a great incentive to stay. 

Is it all about the money?

If it is, it shouldn't be. With so much focus on the financial cost of implementing the apprenticeship levy, ramping up an existing programme feels like a quick way to make sure your organisation doesn’t miss out on funding. But, in the long term, a more considered approach will pay off. Pausing to think about how apprenticeship can help you address strategic workforce challenges is one of your best routes to maximising returns.


KPMG and The Open University (OU) are joining forces to launch an apprenticeship service that enables employers to identify and fulfil their future training needs. Read more.

Eoghan  Thompson

By Eoghan Thompson

Eoghan is a senior manager within the People Powered Performance division at KPMG. His role is to show how large-scale digital learning programmes, paired with a strong cultural vision, can drive positive change in organisations. He is currently leading the development of a range of apprenticeship services that help employers build their apprenticeship strategies and programs. Before joining KPMG, he championed business-led change as a lead technology consultant at Linklaters. He has an MBA from London Business School with a focus on leadership and organisational behaviour.

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