Rockborn Associate Colin Gordon has produced a blog post on his experiences of the Apprenticeship Levy. Colin goes onto say….
“It’s been an interesting first year with the new Apprenticeship Levy. I’ve found it fascinating listening to the various views on whether this is better or worse than previous iterations; how poor the uptake has been; some training providers and businesses looking at ways to circumvent the legislation; alleged handouts and paybacks; long-established providers going under… the list appears to be endless. I’ve also spent time speaking with training providers and colleges who really want to make it work for their learners and employers, but are finding it very challenging adapting to this new regime, particularly finding it difficult to work out a viable commercial model to make it work for them. Part of their challenge and difficulty is that their internal teams have been used to working in a similar way for many years, with just minor tweaks and revisions, and are not experienced at making the swift and substantial change required into a new commercial model.”
The reality is that colleges and training providers are now having to work in a much more commercial way than ever before.
Budgets are tighter and more closely scrutinised; the new Apprenticeship Levy has seen control move from the organisation giving the training (whether that be a college or private training provider) to the business receiving it. Competition has significantly increased with the advent of the RoATP and the influx of new providers, and employers are becoming much more demanding in what they want from their apprenticeship solutions. Every penny now really does count.
The result is that many college or training providers are not staffed or equipped to deal with this new commercial reality that the apprenticeship levy world brings. They need support and guidance to help them create and manage the optimal commercial model for them to take advantage of these new commercial realities and opportunities, and ensure they don’t become one of the casualties.
“There are numerous recent examples of long-standing and previously very successful organisations who have struggled to get to grips with the new world and are now paying a very heavy price, for them organisationally as well as for many hundreds of their staff. New ways of thinking need to be put in place; new business acquisition strategies and ways of targeting, attracting, and building relationships with employers; tough decisions around which sectors they should work in and which apprenticeships they should offer; new pricing models to understand the actual cost of the solutions they offer (including development, sales, marketing, delivery, and support); and innovative ways of devising learning solutions that don’t fall foul of the guidelines and yet deliver valuable and impactful learning to both the learner and the employer. Gone are the days when a single-solution approach to designing and delivering apprenticeships will deliver the financial incomes and commercial outcomes needed.”
One starting point is for colleges and training providers to be clear about their Apprenticeship Levy strategy:
What it is, and where, why, and how it fits with their overall organisation and business strategy. It can be all too easy in our busy and pressurised schedules to overlook this step and get carried away with just doing the same things as before in the hope they work, but it really pays to take this step back to re-evaluate. Organisations also need to ensure they have up-to-date levy knowledge within the business, with a clear understanding of the difference between standards and frameworks (delivery, assessment, quality), the new financial model – cash flow is critical, resource planning, assessors to trainers, timetabling, viable delivery models, and critical learner numbers.
In addition, as well as working out how best to incorporate EPA and any switch from sub-contracting to self-delivery, or vice versa. They should also be clear about their target levy employer and learner demographics, otherwise, they may fall foul of trying to be ‘all things to all men’ and could struggle to deliver effective and efficient caseloads and quality solutions. They may also need to review and possibly revise their business development strategy. This new world requires a significant shift in building and managing employer relations to become a chosen provider.
Finally, they should also ensure they have clear processes to ensure they can fully cost and understand all of the elements of the solution they are offering. How profitable is each apprenticeship, from initial acquisition, scoping, and development right down to each employer and learner grouping? How do they calculate and monitor this? Sadly, I and Rockborn Management Consultants have seen too many organisations run their departments with a ‘basket’ P&L and hope that they get enough numbers of the higher margin, low cost apprenticeships to balance the basket rather than having a clear methodology for determining and managing each product within the basket (sometimes the right commercial answer to a client request is ‘No’, but at times this seems too difficult for organisations to say and as a result their commercial success is often times compromised).
Adopting a strategic commercial approach should help training providers meet the challenges of the new world and enable them to develop a sustainable commercial model that allows them to focus on what they do best, delivering high quality and role-impactful learning.
Colin is a professionally qualified senior business executive with over 20 years experience, the last 12 of which have been within the education sector as a Managing Director and Director of Business Development. He also brings a wealth of previous experience working across a wide range of service businesses in diverse sectors where he specialized in organizational strategy, business planning, team culture, sales development, transformational change and business turnaround. His recent accomplishments have been around establishing successful commercial models and processes for education and training businesses to maximize financial returns within government-funded initiatives (e.g. levy) and full-cost recovery provision.
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