Superdrug has called on the government for greater flexibility in its apprenticeship levy rules to ensure funds are not wasted.
As part of its ‘Rise Up to Level Up’ campaign, the retailer pledged to employ 500 apprentices this academic year, focusing on London, Norfolk, Suffolk, Essex and the south coast, where youth unemployment is high.
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Currently apprenticeship levy rules require employers with an annual wage bill of over £3 million to invest 0.5% of their payroll costs into a training fund.
The funds must then be used on courses longer than a year and on external training providers.
The British Retail Consortium (BRC), which is supporting the campaign, said £3.5 billion of apprenticeship levy funds have expired under the scheme, because businesses were unable to meet the requirements to draw on their levy funds.
In a letter sent to the government in February this year, the BRC and three other trade bodies called for businesses to be allowed to spend their funds on a wider range of courses, saying the government is holding back investment in critical training that will increase productivity and boost economic growth.
Amy Davies, people director at Superdrug, said reforms to the levy would enable the company to recruit more young people and applicants from disadvantaged backgrounds, and help the retailer support apprentices.
Speaking to HR magazine she said: “Within the last year we have had to turn away 7,200 great applicants who have not met the strict criteria and our drop-out rates have increased to 30%, as we can’t be flexible enough with our programmes or afford the right support when apprentices are in a scheme.”
According to the Office for National Statistics (ONS), 770,000 young people are out of work or education.
Meanwhile, grades are lower than previous years. This year, 26.5% of grades issued were at A or above, down from 35.9% in 2022 and 44.3% in 2021, according to the Joint Council for Qualifications (JCQ).
Davies said apprenticeships are becoming an increasingly attractive option for young people leaving school and HR needs to maximise use of the levy to attract this talent.
She said: “Apprenticeships are such a great choice for young people as they leave school, and statistics show they are needed now more than ever.
“My advice to other HR leaders would be to do your research and get a solid understanding of how the apprenticeship levy works and how it can be spent to ensure you are taking full advantage of those funds.
“It is also important the HR teams have the support and buy-in from senior business leaders on their apprenticeship programmes to maximise the impact on both the business and employees.
“Apprentices are an investment and need the ongoing support and commitment from mentors to help them succeed and to reduce the drop-out rates we are currently seeing across the board.”
She added that when outsourcing apprenticeship programmes, HR should ensure apprenticeships are still getting the necessary support.
She said: “It’s important to work with someone who understands your business objectives and what you are wanting to achieve by upskilling the workforce.
“Our apprenticeship programmes are specifically designed to help, support and train every apprentice whilst they earn, to rapidly get where they want to in their careers and to cultivate and nurture the next generation of leaders in retail.”