Using the Apprenticeship Levy to digitally transform

Although the UK is 5th in the world for availability of technology, 72% of large companies and 49% of SMEs[1] are reported to be suffering from a large digital skill gap. This technological disconnection is only further highlighted by the fact that 50%[2] of SME businesses do not even have a website. Companies are indeed falling behind in the technological revolution. A reason for this is due to a lack of supply of skilled digital employees. Even though most of today’s young population were born into a digital world they still lack the basic digital skills for work.

One of the ways the government has decided to address this skills gap is by introducing the Apprenticeship Levy. From the 6th of April 2017, companies with a payroll of over £3,000,000 have been placing 0.5% of their employee earnings into a “pot” which they can either use to upskill existing employees or use to employ new trained apprentices. Although the funds can be used on multiple different apprenticeships, it has been noted that 64% of companies plan on using this Levy for IT training and 51% of firms plan on using it on digital training.


A real opportunity

Despite the Apprenticeship Levy only affecting 2% of businesses in the UK, funding for apprenticeship training is readily available to all businesses. Employers, with fewer than 50 staff members, will get 100% of the apprenticeship training costs for 16-18 year olds paid for by the government. On top of this, if a company exhausts their Levy pot, they can buy further apprenticeship training at a 90% discounted rate. The Levy indeed represents the biggest single shake-up in vocational and professional training in the last 25 years. It is now up to employers to come up with a comprehensive strategic plan to best utilise this and help their business push forwards through digital transformation.

How can you turn the Levy into a digital opportunity? As mentioned beforehand, the Levy can be used in multiple ways. You can either upskill your current experienced staff and get them ready for any future digital changes you are planning. Alternatively, you can use the Levy to bring in fresh, enthusiastic, new blood with the right talent and training to help further grow your business. Either way, using the Apprenticeship Levy can effectively help nurture digital and IT expertise within your workforce as well as help produce operational change to improve productivity. Furthermore, apprenticeships in general provide positive economic and social benefits for businesses, such as reducing staff turnover and providing a more motivated and satisfied workforce.

Over the years, Arch has helped businesses train and recruit the right apprentices to enable them to keep up with the ever changing digital landscape. To find out how your business can positively use apprenticeships, please contact Arch today.


[1] Source: Huffington Post.

[2] Source: