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Crunch time: Over half of hospitality businesses risk losing their apprenticeship levy fund

Posted on 30 November, 2018

With under six months to go until some Apprenticeship Levy funding starts to expire, new research shows less than half of businesses have used up the majority of their funds – meaning thousands of pounds will potentially be lost*.

The research, commissioned by HIT Training, revealed that despite two thirds [66%] of hospitality professionals being aware that their Apprenticeship Levy funding will start to expire in May 2019, only 49% have currently used most of it.

The top reason [37%] given for why businesses have not used their funding was that they are taking time to ensure they are investing in a high-quality programme. Other reasons included:

  • 22% don’t have enough time to set up or extend an apprenticeship programme
  • 18% don’t understand the legislation
  • 18% haven’t found the right training provider to work with

Speaking about the survey results Jill Whittaker, Managing Director of HIT Training, said: “With the second anniversary of the landmark Apprenticeship Levy approaching, we wanted to understand just how aware hospitality businesses are that their Levy funding has an expiration date and to establish if they are maximising its potential. It’s really concerning that after 18 months of the legislation being in place, 40% of hospitality professionals admit they still only have a poor or very poor understanding of the Apprenticeship Levy.

“With contributions expiring after 24 months, businesses are at crunch point to start using or losing some of their funding pots. Not only will it directly benefit their own business, the hospitality industry as a whole is facing a skills shortage and so it’s more pertinent than ever for businesses to seize the opportunity to upskill their workforce, attract new talent and improve their staff retention.”

The Levy requires all companies with a pay bill of more than £3m to contribute 0.5% of their payroll costs to the scheme, which they then claim back for apprenticeship training. This amount is then topped up by 10% from the Government. Businesses with pay bills below £3m don’t pay into the fund but they still have access to Government subsidies of 90% of the cost of the apprenticeship, with the employers co-paying the additional 10%.

With an estimated 375,000 positions to be filled across restaurants, cafés, bars, pubs and clubs, it is clear the industry continues to thrive, yet employers often struggle to recruit and retain the talent they need. 

Jill Whittaker continued: “We’re encouraging hospitality employers to take full advantage of the Apprenticeship Levy to upskill their entire workforce and can provide advice on the best way to maximise the funds available. After all, investing in training programmes helps to motivate employees, create a dynamic and enthusiastic workforce and position the operator as an employer of choice.”

*Survey of 250 HR managers or senior figures working in hospitality. 3GEM in collaboration with HIT Training, November 2018

Testimonials

McMullen’s chose HIT as its sole external provider for Apprenticeships and vocational qualifications in early 2015 and since then we have found them a pleasure to work with.  Their expertise in this sector is superior and they have proven to be a professional and supportive partner who have a passion for learning and development, which matches our own organisation.

Amanda Walden – Training & Recruitment Manager, McMullen's

Encouraging our staff to improve their skills set and supporting them through apprenticeships and training programmes underlines our commitment to help them further develop their own careers. Offering the Level 4 Higher Apprenticeship also gives the Brend Group a point of difference which I’m convinced will help attract new members of staff in the future.

Andrew Mosedale - Group HR Manager, Brend Hotels

Our partnership with HIT has certainly made recruitment much easier in a very difficult labour market and gives us a point of difference in an increasingly competitive environment.  Kew Green has also benefited enormously from well trained, skilled and competent staff who contribute significantly to the ever improving and high levels of customer experience that our guests expect and deserve.

Andrew Tregenza - HR Business Partner, Kew Green Hotels

Apprenticeships allow us to give people a great opportunity to develop a career with us and learn a skill or trade that will accompany them throughout their career and life. We see progression to the Level 4 qualification as key to our strategy of providing development at all stages of an employee’s career with Harrison.

Alex Taylor - Training Manager, Harrison Catering Services

We chose HIT as our training provider not only because of their specialist knowledge of the hospitality industry, but also because of their genuine passion for our brand and their understanding of our company culture. We believe that they can deliver our training to a very high standard whilst passing on our company ethos and values. Their attention to detail is second to none.

Charlotte Thoms, Talent Manager, Jamie Oliver Restaurant Group

There is a shortage of skilled chefs within in our industry at present and any organisation that truly believes in the value of training and development of bright future stars will enable themselves to be in a strong position for the years ahead. Investing in smart training and development is at the heart of what we do within WSH, so it has been refreshing to work alongside HIT within our Baxterstorey Chef Academy. 

Rik Razza - Head of Chef Development, BaxterStorey

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