The Apprenticeship Levy: Are You In The Know?

Recruitment And Retention Are Notoriously Tough In The Hospitality Industry, Yet Initiatives Such As The Apprenticeship Levy Are Still Not Being Fully Utilised. Why Is This And What Can Be Done To Encourage More Employers In Hospitality To Take Advantage Of The Scheme?

Challenges In The Hospitality Industry

The number of job vacancies in the hospitality industry has risen by 32,000 since before the start of the pandemic according to the Office for National Statistics (ONS). There were 121,000 unfilled roles in the sector between July and September 2023, which marks a 36% rise from the 89,000 job vacancies recorded before the coronavirus lockdown began in January to March 2020.

These hard-to-fill vacancies hit our industry particularly hard, as staff turnover in Hospitality is double the UK average of other industries and 43% of Hospitality staff leave within their first 3 months of employment. Not only that, we also have experts leaving the industry altogether, leaving not only a gap in skills but also experienced talent passing on their knowledge to the next generation of professionals.

According to the latest UKHospitality Quarterly Sales Tracker (Q2, 2023), turnover was up 6.7% in the last year to £137 billion but, compared to 2019, remains almost 20% behind in real terms, when accounting for inflation.

How Apprenticeships Can Help

Any business paying over £3 million in wages annually is already paying 0.5% of these wages into the Levy fund. The money has been ringfenced for 24 months, waiting to be used. If this money does not get spent within this time, it goes back into HMRC and funds other businesses and their apprenticeship schemes. Employees in Hospitality earn on average £25,000, for example, a business employing 1000 staff members, could amount to a Levy fund of £125,000, sitting waiting to be used each year.

Not only could Apprenticeship training upskill the workforce within hospitality, but it also improves retention. Retention rates of Apprentices in our sector were 75.4% in 2019, with an average of 65% securing permanent positions with their employer after qualifying.

Apprenticeships are not just for attracting new employees. Existing employees can also gain qualifications and enhance their professional development with their current employer. Qualifications start from level 2 (GCSE equivalent) to level 7 (equivalent to a master’s degree). Not only does this equip employees with the knowledge and tools to perform their roles, but individuals can progress through as many levels as they wish. With the cost of the apprenticeship programme being recouped from the levy, therefore reducing financial pressure on the employer too.

Challenges Faced By Employers

So, with all these benefits for both employers and employees, why do so few businesses take advantage of this scheme? This is TEAL Learning Solutions take on the matter:

Admin overload: The main issue is that it’s admin heavy and not all companies have the knowledge, experience or capacity within their Learning & Development or HR function… Finding the right college or training provider is critical. You need to find the right fit for your business’s needs.
20% of Working Hours: Many employers are put off by the 20% of working hours which must be dedicated to training. However, even though the training must take place during working hours, there is some flexibility. It can be completed on or off-site and can take many forms to suit the business needs. As with all job-specific training, it’s a worthwhile investment in the business as well as the employee.

Enhancing The Perception Of A Career In Hospitality

Hospitality is often seen as temporary or casual work, but investing in Apprenticeships can help promote opportunities for a career in Hospitality. Offering a range of Apprenticeships widens the pool of potential candidates, from school leavers to mature students or those looking to reboot their careers. Apprenticeships tick all the right boxes, they offer school and college leavers the ability to gain invaluable and much-needed hands-on experience, whilst providing our next generation of aspiring chefs with hospitality industry-recognised qualifications from entry-level positions right up to Degree & master’s level to elevate their future job prospects.

Historically, Apprenticeships have not been actively promoted within schools, but they are viable qualifications for in-demand jobs and skills. Apprentices provide an incredible opportunity to have a taste of the wonderful world of Hospitality, offering a much higher level of support than you would get if you simply stepped into your first job. Students can get a real feel for the working environment whilst also gaining a qualification and the valuable on-the-job experience that they need for their CV.

Qualifications are available from level 2, which is equivalent to GCSEs, and may not require qualifications to apply, depending on the subject. Others require a GCSE in Maths and English or ask applicants to complete an assessment when they enrol, which could be an ideal option for some school leavers. But there is no upper age limit for Apprenticeships, you can apply as long as you’re over 16 years old. This may be a great option for those considering a career change but can’t afford the course fees or to study full-time, such as working parents, those on a low income or wanting to enter a new industry.

Postgraduates can apply for level 5 to 7 Apprenticeships, as long as they are working in a role which applies to their chosen course. Once qualified, they can potentially earn even more, becoming more desirable to other companies as the qualification demonstrates their level of experience and knowledge.

What It Means For The Future

University students who graduated in England in 2021 accrued an average student loan debt of £45,000. At a time of increased cost of living costs, rising inflation and an uncertain economy, financial stability is at the forefront of many people’s minds. This is another reason there may be even more demand for Apprenticeship places. Why? Because you are being paid to learn; unlike university, you will have money in your pocket with no student debts to have to repay.

From April 2023, Apprentices over the age of 18 will earn a minimum of £7.49 per hour and those over 23 years old will earn a minimum £10.42 per hour. Although most employers pay more or are in line with their permanent employees. Additionally, the majority of, Apprentices are offered a permanent position with their employer after they graduate. This is not something that most postgraduate students can depend on.

Progression Opportunities

Hospitality has a poor reputation for low pay, and little progression, but this simply isn’t true. The average wage is £25,800 for an apprentice chef, on average a Head Chef earns £41,625 while an Executive Chef earns on average £52,325 and with experience upwards of £70,000.

A career in Hospitality can take you anywhere with the transferable skills you gain. Just because you start in the FOH or Kitchen, does not mean you’ll stay there. Most Senior positions are held by individuals who started at entry level and worked their way up. Apprenticeships are available across all sectors of Hospitality from Restaurant, Hotel or Bar Managers. Even the Head Office roles require skilled professionals in Finance, Marketing, HR, and L&D and benefit from those with experience in frontline operations of the business.

Summary

An Apprenticeship in Hospitality offers an exciting role for those who prefer hands-on learning and social interaction to sit in offices. Apprenticeships can set people on the road to further exciting opportunities such as travel, networking, social events and the most influential entrepreneurs of the future.

It is always humbling to watch new apprentices gain new skills, grow in confidence and develop within their teams. It is up to us to invest in and inspire the Head Chefs of the future. These young new chefs are the heartbeat of our restaurants and our industry and they deserve to be championed and celebrated!

It’s clear that maximising the apprenticeship levy in Hospitality holds valuable potential for supporting our sector and can develop future professionals in our industry.

How Can We Help?

If you would like to learn more about how TEAL Learning Solutions can support your business or if you need help capitalising on your apprenticeship levy and implementing programmes into your business then please get in touch with our Apprenticeship expert Chiara HERE!