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Degree-level apprentices prove game-changer for small business

11-02-2019

Stuart Brocklehurst needed little convincing in 2014 when offered the chance to quit a career in finance and become chief executive of technology business Applegate. The online marketplace for corporate supplies is based in Barnstaple, the north Devon town that Mr Brocklehurst likes so much he has had a second home there since 2001.

His problem, however, at a time of record employment and rising wages nationally has been convincing digitally savvy young people to work for his small business rather than going to university.

“North Devon effectively has full employment,” said Mr Brocklehurst, noting that there are plenty of alternatives — with jobs at the local Royal Marines base and district hospital. Much of the local population does not need to work, having moved to Barnstaple to retire.

What has saved Mr Brocklehurst from a skills crisis is degree-level apprenticeships, devised as part of the government’s overhaul of workplace training funded by an apprenticeship levy introduced in April 2017. The levy requires any company or public-sector organisation whose salary bill exceeds £3m each year to set aside the equivalent of 0.5 per cent of their payroll for an approved list of apprenticeship courses.

It has been widely criticised for being too restrictive on what it can be used for and the speed with which it must be spent before the money is taken as tax but for Mr Brocklehurst it has been a gamechanger.

Eight of Applegate’s 31 staff are employed as chartered management degree apprentices, the most popular of these workplace training courses under the levy. Applegate’s degree apprentices commit to five years with the company during which time they study for a business degree one day a week at the University of Plymouth, which has a campus site next to Applegate’s office.

“If it was not for this programme I would not find the talent I need,” Mr Brocklehurst said. Applegate also benefits as a small business because under the levy scheme it only pays 10 per cent of the degree apprenticeship costs. The rest is funded from public funds and the overall levy pot funded by larger companies.

Those employers paying into the scheme can spend up to the total they have paid in so in theory this could mean the apprenticeship levy pot could be overspent. But so far the bigger trouble has been getting employers to spend their levy contributions because many do not have a culture of
running such workplace training. Convincing young people to sign up for the scheme does not seem to be the problem, rather persuading their parents that an offer of debt-free degrees and earning while you learn is actually possible.

“The conversation goes along the lines that this is clearly too good to be true, so what is the catch,” Mr Brocklehurst said.

London-born Jack Richards had offers of degree places at five universities in the Russell Group, the premier league of UK higher education. But in the summer of 2017 he jumped at the chance of applying to Applegate, after spotting a post about the degree apprenticeship programme on Facebook, despite having never visited Devon.

“I just thought: ‘Why not give it a go?’” the 19-year-old said, noting that unlike his friends at university, he can start saving to buy a house. “Two weeks after finishing my A-levels I was down here in a B&B seeing what the town was like.” Apprenticeships are also a valuable recruiting tool for much larger companies. Inmarsat, the London-based satellite telephony business, employs 1,700 people globally, including 800 in the UK.

It has no problem attracting scientists and engineers, according to Sandra Rutten, the company’s diversity and inclusion lead.

But Inmarsat has struggled to attract people, who are not from a science background and so are not so fascinated by space, to work in other roles, such as marketing and finance.

It now has 18 staff on apprenticeships, 14 of whom are taking the MBA-style masters anagement degree courses. Others are on non-degree apprenticeships, which have also proved effective recruiting tools, according to Ms Rutten.

“We are still trying to understand how the apprenticeship levy works,” she said. “But we have found it is a great way to encourage people to join the space industry, who would not have previously considered it.” One of those is Jasmine Riggs Bristow, who joined Inmarsat 12 months ago on a technical sales apprenticeship. She spends the equivalent of a day a week in formal training, learning skills like project management, as well as shadowing colleagues to learn sales techniques.

Previously Ms Riggs Bristow had been in brand marketing and licensing. She was looking to make a career change, but admits she would not have considered the space sector if she had not heard about Inmarsat’s apprenticeship programme. “It adds that extra dimension of job security,” she says. “I felt I was not just being taken on as a new employee, but someone they wanted to train up properly for the long term.”

Source: FT Business News