The new Apprenticeship Levy, to be introduced on 6th April 2017, aims to deliver new quality Apprenticeships and boost productivity with the government providing structured training for Apprentices. But how will this affect the hospitality industry?
The Apprenticeship Levy is soon to be in full swing in April and many of employers still don’t fully know what this means and what impact it will have on the hospitality industry.
Before we get into that, we will start with the facts on the Apprenticeship Levy.
Who will be paying in?
Only around 2% of UK employers will be paying into the Apprenticeship Levy, and these are businesses that have annual pay bills in excess of £3 million. The Levy will be charged to these businesses at 0.5% of their pay bill, with an allowance of £15,000. So if an employer’s rate of 0.5% was £20,000, their allowance would take their payment down to £5,000.
What is an Apprenticeship and who classes as an apprentice?
An Apprenticeship is set out to provide an individual with a structured programme that will teach them the skills and knowledge of the job and give them access to practical work in their chosen role. The role has to be a real job and have an approved Apprenticeship framework.
So who classes as an apprentice?
Well, they can either be an existing employee or someone new. Apprentices can be any age, but it is great if businesses can hire students and encourage young people to pursue their career.
For the affected businesses, some may never feel the benefit of paying in, due to not having an Apprenticeship heavy sector. However, businesses in the hospitality sector, whether they’re paying in or not, may well see a significant benefit of the Levy.
There has always been a huge conversation in the availability and promotion of Apprenticeships in the hospitality industry and more specifically a feeling that there is not enough emphasis that this kind of career development in the sector is available. Now with the Levy coming into place, we will hope to see a massive rise in a number of programmes on offer, therefore creating more jobs and seeing more workers up-skilling.
The Levy will also take the pressure caused by uncertainty around how the hospitality industry will cope after Brexit, due to it becoming harder to employ migrant workers in the UK. If more young students choose to get into Apprenticeship Levy, then the jobs that are typically undertaken by migrant workforces may now be relieved by them.
A positive impact this should have will be the improved retention rate of chefs. Chef shortages are apparent and there needs to be something in place to encourage the development and retention for the professionals. With the help of the Apprenticeship Levy, employers will have the funding to enable them to put current employees on a programme to train them to a higher level. With accessibility to training for all employers, even smaller businesses can get involved. Chefs should, therefore, get the development needed to improve in their career and therefore improve the retention rates in kitchens.
For more information on the Apprenticeship Levy, visit the government website https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work